Austin Energy Signs Two Wind Power Mega-Deals, Negotiating Another

September 15, 2011

North American WindPower Staff

The Austin City Council has approved two new wind contracts totaling 291 MW and has authorized Austin Energy to negotiate a third wind contract for an additional 200 MW. If the latter contract is approved, it will allow Austin Energy to meet 30% of its power needs by the end of 2012, which the utility says is well within reach of its 35% by 2020 goal.

The new wind farms will be located near the Texas coast and will produce their highest output during peak-demand times, Austin Energy explains. In addition, the projects will be located in an area with sufficient transmission infrastructure, so Austin Energy does not foresee transmission congestion issues similar to those experienced in West Texas.

The first contract is a 25-year purchase power agreement (PPA) totaling $675 million with Duke Energy Generation Services for 200 MW from the Los Vientos project, located in Cameron County. The second 25-year PPA, worth $375 million, is with MAP Royalty Inc. for 91 MW from the White Tail project in Webb County.

The council also authorized Austin Energy to negotiate a 25-year PPA with Iberdrola Renewables Inc. for 200 MW from the Penascal III project in Kenedy County. The cost of the contract is estimated at $725 million and is scheduled to be considered by the council on Sept. 22.

The Duke and Iberdrola projects are within 15 miles of the coast, while the MAP project is 75 miles from the coast. The contract prices are on a per-megawatt-hour basis, are fixed and will not change over the term of the agreements. Austin Energy is only obligated to pay for the energy produced.

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