Energy purchases contradict citys goals move in wrong direction
By State Rep. Paul Workman
AUSTIN Texas (Texas Insider Report) The Austin City Council has recently taken action to approve the purchase of a
large amount of solar power running
contrary to their stated goals on affordability. City energy policies should be driven by affordability economic realities and the need to deliver reliable electricity to customers. Instead these policy decisions are
being driven by social engineering.
City leaders have tried to make the argument that their recent solar purchases carry the cheapest cost per kilowatt-hour (kWh) of solar power in the nation. And perhaps they are.
However the spot market prices for traditional sources of energy are much less than the long-term KWh cost of solar power. The city also attempted to justify the purchase by saying that when natural gas prices increase the purchase of the solar power at 3.8 cents/KWh will turn out to be a better deal for the Austin rate payer.
The problem is there is no anticipation of natural gas prices increasing any time soon. Solar prices will continue to fall and perhaps someday will be as competitive as traditional sources of energy.
If we need to purchase power now we should be purchasing it at the lowest possible cost to the ratepayers.
Furthermore the Citys outrageous cost per kWh (about 15 cents/KWh) for its Webberville solar plant and the nearly-never-used biomass plant (which costs around $54 million per year) have increased cost burdens paid by ratepayers. Both of these purchases by previous councils were based purely on the desire to be green" without regard to the cost to the ratepayers of Austin Energy.
They are unnecessarily increasing rates for Austin Energy customers both inside and outside the city limits when power could be purchased for as little as 2.5 cents per kWh.
My concerns remain deep even after meeting with the Mayor his staff and Austin Energy leadership. The meeting which was requested by the Mayor to help me understand failed to convince me that the decision was about affordability.
Austin Energy ratepayers know current costs are unaffordable. City Council has made matters worse with their recent decisions adding to the already-high costs shouldered by captive ratepayers. The City needed to at a
minimum establish a plan to move Austin Energy rates into at least the lower fifty percent of Texas electric rates.
I believe the increasing cost burden to the Austin Energy ratepayer will result in the loss of jobs and decisions by job-providing companies to decline to expand or locate in Austin.
Why are the actions of a city-owned utility the concern of the state legislature? Austin Energy is a division of the Austin city government and its ratepayers are captive customers to a state-law approved monopoly.
During this past legislative session I advanced a measure that would have helped alleviate the cost burden to Austin Energy ratepayers. This bill and a companion Senate bill were not pursued further after the Mayor committed to moving to end the practice of charging rate payers for expenses that might be hard to defend as being ones appropriately paid by rate payers (April 28 2015 Letter from Mayor Adler).
City Councils recently adopted budget and dramatically increasing solar purchases are arguably in conflict with this commitment.
Austin Energys own presentation to the
Austin City Councils Austin Energy Utility Oversight Committee makes it clear the Mayor and City Council know the risks of increasing the costs to Austin Energy ratepayers: any cost additions on AEs part risks further erosion of our competitive position and could invite legislative intervention.
I will continue to closely watch these and other actions to assess what adjustments will be needed to state law to help Austin Energy customers to purchase reliable affordable electricity.
State Representative Paul Workman represents House District 47 which includes most of western Travis County as well as portions of southern Travis County. Workman is Vice Chairman of the House Select Committee on State & Federal Power & Responsibility is a member of the Committee on Natural Resources the Committee on Insurance and the Select Committee on Transportation Planning.
