HOME: DECEMBER 5, 2003: POLITICS: NAKED CITY

Naked City

AE drops a solar bomb

In a near-complete turnaround from its public position just a week ago, Austin Energy has announced plans to adopt specific, highly ambitious, and undeniably expensive goals for adding solar energy to the Austin electric and economic mix. At a town hall meeting held Tuesday night to discuss the AE plan -- also the subject of a public hearing at City Council today (Thursday) -- AE's Roger Duncan announced the utility's commitment to develop 15 megawatts of solar generating capacity by 2007, escalating to 100 megawatts by 2020. The AE plan also calls for a study of the "comprehensive value" of solar power -- putting a dollar amount on the economic and environmental benefits to Austin, in addition to the cost of solar-generated electricity itself. This would determine the price Austin Energy would pay for electricity generated by privately owned solar installations, just as AE now buys wind power from third parties.

"Austin Energy has been a national leader in conservation and has become a national leader in using wind power," Duncan told the packed house at the Clean Energy Incubator's digs in the MCC building in Northwest Austin. "We have not been a national leader in solar. And we intend to change that." (On Wednesday, City Council Member Daryl Slusher announced that he, Jackie Goodman, and Raul Alvarez were proposing a set of amendments to the AE plan that were nearly identical to the measures proposed by Duncan -- suggesting that the utility would have been pushed into adopting solar goals if it hadn't done so voluntarily.) Brewster McCracken -- the emcee of the town hall meeting -- and Mayor Will Wynn were both in attendance to reiterate their support for making Austin the "home of the international clean-energy industry" (in McCracken's words) -- a goal toward which, advocates feel, AE's solar commitment is a giant first step.

To get a sense of how big -- and abrupt -- a turnabout this is, the AE strategic plan had included no defined solar goals at all, and utility leaders had for months suggested to advocates (organized as the Solar Austin Campaign) that even a modest goal -- to create 3 megawatts of solar capacity annually -- would be too expensive. The goals announced by Duncan, however, move past that benchmark (and prompted a standing ovation from the audience, at an event that many observers had expected to instead be a bit confrontational). The proposed solar goals will be in addition to AE solar initiatives already included in the strategic plan -- demonstration projects in every Austin neighborhood, an entire affordable subdivision of zero-energy solar homes, and the highest rebate in the country for customers with solar PV installations. All told, noted Michael Kuhn, vice-chair of the city Resource Management Commission, the AE commitment represents a "major cultural change." (It's also part of a big change to AE's traditional utility business model, a shift Duncan described as "both my dream and my nightmare." The AE strategic plan talks about "diversified revenue sources" -- products and services other than electric sales.)

An AE solar commitment of this size is large enough to satisfy not only those who support clean energy for environmental reasons, but also those who see Austin Energy as the primary player in bootstrapping an Austin clean-energy industry. One major solar employer currently eyeing Austin as a manufacturing site -- California-based integrator PowerLight -- has told the city it would need 6 megawatts of potential market in Texas to consider coming to town; the new AE goals meet that target all by themselves. By 2020, if Austin Energy meets its goals, solar energy would account for one-quarter of the utility's renewable energy portfolio (which is currently nearly 100% wind power), and renewables would comprise 20% of Austin's total generating capacity -- among the highest standards of any electric utility in America. "We will try to meet 100 percent of new load growth" -- that is, customer demand -- "with conservation and renewables if at all possible," said Duncan. "We're trying to get off natural gas entirely."

Even McCracken and Wynn -- both of whom have eagerly embraced Austin's potential as the clean-energy capital of the world -- appeared a bit surprised by Duncan's announcement. (The AE plan was first presented to the City Council in executive session last week.) And Wynn reminded the audience that any idealistic goals for AE must be tempered by the realities of a competitive marketplace and the utility's essential role in supporting civic services. "When Roger was on the council, it was a lot simpler," Wynn said, referring to Duncan's term in office in the 1980s, before he became the city planning director and then an AE exec, back before AE's customers and Austin's voters became two distinct groups. "It's easy -- during campaigns, especially -- to talk about renewable energy and solar goals. It's a lot harder to tell the management team how to make that happen."

Duncan -- who last week told the Chronicle that an expensive AE solar incentive could "drive up everybody's electric bills [and] tarnish renewables for everyone" -- openly acknowledged that AE's new solar goals could require either raising rates, cutting services, or both. But market and opinion research, both by AE and by Solar Austin members -- as well as the success of the utility's Green Choice program -- suggests that Austinites are willing to pay more to give renewables a major boost. (Wynn noted that it will likely be residential ratepayers, rather than commercial customers, who end up shouldering the added costs.) And the prospects for developing a clean-energy industry are bright enough, advocates say, to offset the potential burdens. "All I can say," noted Vinson & Elkins' Mike Tomsu, an active clean-energy industry player, "is that Christmas came this year on December 2."