Austin Energy’s Proposed Resource Plan Blows Up the City’s Climate, Clean Energy Commitments
By Kamil Cook and Kaiba White
Over the last year and a half, Austin’s municipally owned electric utility, Austin Energy (AE), has developed an update to the Austin Energy Resource, Generation, and Climate Protection Plan, the utility’s master blueprint for meeting the city’s energy needs.
Last week, AE released its final draft, proposing new methane gas-burning power plants. This would violate the utility’s commitments in the current plan to continually reduce carbon emissions to zero by 2035 and not add any carbon-emitting resources. Between expanding fossil fuel investments and moving away from specific clean energy goals that allow for accountability, the draft plan is a huge step backward.
The Austin City Council is scheduled to vote on this new proposal on December 12. The council will make a major climate policy decision, determining whether we stay on track to meet our climate goals or be locked into carbon emissions for the next 30 to 40 years.
AE modeled several resource portfolios – the term used for the mix of energy resources a utility uses to meet customer needs – including a few developed by the Electric Utility Commission (EUC). This city body recommends Austin Energy policies and programs to the council. Most of the models used fossil fuels in some capacity, and the only ones that would completely phase out fossil use and replace it with green technology were developed by the EUC. AE didn’t put forward a single portfolio that would have achieved the existing carbon-free goal, including a commitment to eliminating AE’s fossil fuel generation and replacing it with carbon-free energy. The green models performed well and offer a path to a future where AE isn’t contributing to climate change or local air pollution, yet AE continues to push for new methane gas plants.
AE wants these peakers for reliability, claiming they would support Austin during peak demand or another Winter Storm Uri scenario. The utility says it would only run the new methane units when demand on the grid is high and would get rid of them when no longer needed. However, AE does not make solid commitments to back up those claims. There has been no pledge to limit the time the new peakers or any of AE’s other fossil fuel generators would operate.
While peakers would support the city during peak demand, the green portfolios that contain a mix of local solar, local batteries, energy efficiency upgrades, and demand response would also do this. Long-duration batteries will be needed to fully phase out AE’s existing methane gas plants, but the type of batteries being deployed throughout Texas and the world right now would be able to address AE’s existing challenges, especially when local solar is added. These clean energy resources could be available faster than a methane peaker, so we’d get the reliability and affordability benefits sooner. And focusing more on energy efficiency upgrades would keep Austinites’ homes comfortable (or at least livable) for much longer—meaningfully improving the average experience of a long-term winter power outage.
Adding polluting fossil fuel generation to the Austin area will worsen local air pollution problems, especially in the summer heat when local ozone air pollution is at its worst. Austin’s air is already polluted beyond health-based federal standards for ozone. We pay for the cost of that pollution in the form of asthma and other illnesses that cause kids to miss school and adults to miss work and medical bills to stack up. Adding to that burden isn’t affordable or right.
There’s also the fact that the operator of the state’s electric grid, ERCOT, has the final say over when a power plant runs. If ERCOT says they need to run, AE has to do it. This has happened with AE’s existing methane gas power plants. Even if AE wants to shut these new peakers down in the future (which is very unlikely once it has made the investment), ERCOT can reject that. We see this in San Antonio where that city’s utility wants to shut down its oldest methane gas plants, but ERCOT is forcing at least one to stay open.
Austin would greatly benefit from investing in green energy. Building out local solar, installing local batteries, and making homes and businesses more energy efficient create many jobs and bring sales tax revenue to the city.
Not only does Austin Energy’s draft plan state that it will add new polluting methane gas peakers, it also abandons the goal to shut down AE’s existing methane gas power plants, some of which are very old and even more polluting and costly to maintain. This contradicts the Austin Climate Equity Plan and the Austin Energy Resource, Generation and Climate Protection Plan. The Austin Climate Equity Plan – adopted by the Austin City Council in 2021 – set a goal for the entire Austin community to achieve net-zero greenhouse gas emissions by 2040 and reduce emissions by about 75% by 2030. It was assumed that AE’s operations would be carbon-free by 2035 because that’s what the utility committed to in 2020. Many other specific clean energy goals are either eliminated or watered down in the proposed plan. Here is a comparison:
| Metric | Existing Commitments | AE Proposal |
| Carbon-free AE generation | 86% carbon-free by end of 2025, 93% carbon-free by end of 2030, and 100% carbon-free by 2035
Use pricing mechanism to reduce emissions by 8% per year |
No commitments, except to use pricing mechanism on Fayette coal plant |
| No new carbon-emitting resources (including fossil fuels) | Yes | No – new plan explicitly says AE will expand fossil fuel resources |
| Fayette Coal Plan Retirement | By end of 2022 | No specific date or plan or metrics to guide a decision – just stop burning coal eventually |
| Carbon-free energy to meet demand |
Yes: 86% carbon-free by end of 2025, 93% carbon-free by end of 2030, and 100% carbon-free by 2035 | Yes: 100% by 2035 |
| Renewable Energy Goals | 65% by 2027 and then increasing to fill gaps of retired fossil fuel generation (approx. 76% by 2030 and 80% by 2035) | 70% by 2030 – no earlier or later goals |
| Local Solar Goals | 375 MW by the end of 2030, of which 200 MW will be customer-sited |
405 MW by 2035 – no earlier goals |
| Energy Efficiency | 975 MW peak demand reduction by 2030; reduce projected energy use (MWh) by 1% per year; 30 MW of local thermal storage by 2027 and 40 MW of local thermal storage by 2030 | 975 MW peak demand reduction by 2027 – no later goals, no energy use reduction goals, no thermal energy storage goals |
| Demand Response | 225 MW peak demand response capacity by 2030 | 270 MW peak demand response capacity by 2035 – no earlier goals |
| Serving Community | Target serving at least 25,000 residential and business customer participants per year with all energy efficiency, Austin Energy Green Building, demand response and solar programs, with at least 25% of those customers being limited-income customers | No commitment |
It’s also important to contextualize this plant within Texas. Hundreds of megawatts of natural gas power plants are proposed to be built over the next five years across Texas. With taxpayer subsidies from the Texas Energy Fund, billions of tons of climate change- emissions will go into the atmosphere. We are lucky to have a utility that we have a voice in. We must act locally and ask the Austin City Council to improve or reject this disgrace of an Austin Energy plan. By saying no to new fossil fuels in Austin and investing in clean alternatives, we can do our part to demonstrate how a climate-friendly future is possible.
We encourage you to use this simple action page to email the Austin City Council now.
Cook and White work on energy policy for the Texas office of Public Citizen and are based in Austin.