In Texas, A City Goes Green (For The Money)
Friday, November 25, 2016
Donald Trump’s victory and the impending Republican majority in Congress mean the Obama administration’s initiative to cut greenhouse gas emissions — the Clean Power Plan — is almost certainly DOA.
It's currently before a federal appeals court under challenge by 24 states, but the new administration is expected to spike the plan before the court rules. Yet one conservative Texas city has decided to do what the plan was meant to help promote. It's going 100 percent renewable— wind and solar — in a state largely defined by oil and gas.
There are environmental benefits to the switch, but the decision is all about the money.
In the Central Texas city of Georgetown, the droning sound of natural gas powered industrial air conditioning represents unpredictability. Natural gas prices are low now, but historically that market is like a yo-yo. This city of 55,000 is on the cusp of joining Burlington, Vermont, population 42,000, as the country's only sizable cities buying 100 percent power from renewable energy.
Liberal Burlington is a far cry ideologically from fiercely conservative Georgetown. But they're fellow travelers in energy.
"So we begin the conversations of what the future might look like," Georgetown’s utility chief Jim Briggs said.
The city had been buying power from a utility that was expanding its coal-fired power plants. But when the Obama administration began pushing back against new coal plants, Briggs decided to go all green. And it had nothing to do with the environment.
"It was regulation and legislation coming out of Washington," Briggs said.
Then there was the money.
"We wanted the least risk, most cost effective option we could get for the community," Briggs said.
In Texas, the country's leading wind generation state, wind is now competitive with fossil fuels. But unlike oil and gas, costs don't fluctuate. To gain some insight into the economics of renewables, I spoke with Fred Beach, assistant director for energy and technology policy at the Energy Institute at the University of Texas, Austin.
"You're locking in that rate and 10 years from now, wind and solar many be even less yet," Beach said. "But if you're happy with locking in today's rate for the next 20 years with certainty, that's an unbelievably powerful hedging opportunity."
Now Jim Briggs can tell customers, both businesses and residential, about that hedge, about a price that's fixed. He said businesses in particular tell him they don’t like the historically wide swings of electricity powered by coal or gas. Right now, both are very low. But that can and will change.
"We received a lot from customers saying, 'Ya know you don't have to be the cheapest. You just definitely need to be consistent,'" Briggs said.
Wind is economical here because the state has invested in transmission lines to bring wind power from sparsely populated west Texas to cities like Georgetown in the center of the state. History's full of examples of sending resources across large distances, from Roman Empire aqueducts to the Hoover Dam. Hoover sends power from Lake Mead on the Arizona-Nevada border to Los Angeles. Texas has taken a page from that playbook, deploying $7 billion of taxpayers’ money on those transmission lines.
"We've done this kind off stuff in the past but now it's like, 'Oh well, you're doing that for environmental reasons, you're doing it for tree hugger reasons,'" Beach said.
But now there’s a strong economic rationale.
"It's not going to cost more tomorrow, or five years or 10 years from now, we’ll lock it for 20 years," Beach concluded.
The city will be powered exclusively by wind and/or solar in 2017 said Chris Foster, Georgetown's resource planning manager.
"As you add more renewables to the grid, eventually those renewable plants get paid off. And once they're done being paid off, they have an operating margin of almost zero," he said. "So if you can own these assets super long term, you see the cost of power should be continuing to decline."
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