Expensive wood waste power plant to push up Austin electric bills

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Austin Statesman:

At a small ceremony amid the tall pines of East Texas, a handful of Austin officials watched one of the most unpopular investments in Austin Energy's history rumble to life Wednesday.

 

A power plant fueled by wood waste held its official opening after briefly coming online a few weeks ago. The privately owned plant will sell $2 billion worth of electricity to Austin Energy for the next 20 years at a price well above the going rate for competing power sources. It will add $1.94 to the average home's monthly bill of about $100, according to Austin Energy estimates.

 

The city-owned utility signed its deal with the "biomass" plant owners in 2008 as part of a plan to aggressively invest in renewable energy and curb the city's contribution to global climate change. But the deal was based partly on the expectation that federal taxes would raise the price of carbon-based fuels, making wood waste seem like a more attractive option. That has not happened.

 

Even as the plant was being debated in 2008, environmental activists, business lobbyists, open-government watchdogs and fiscal curmudgeons complained it would not deliver the promised benefits and that the contract was rushed to unanimous City Council approval.

 

"As a green-power advocate, I think we would have been better off investing in other things," environmental activist Paul Robbins said.

 

"It was a bad deal. It's way overpriced."

 

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Glad I'm not getting power from Austin. What a boondoggle.

[Pepper]

But it was a good idea at the time...

Austin's $2.3B biomass deal not so great anymore

 

"“When the contract was initially brought to Council it appeared to be a good deal to help us reach our adopted goals for renewables,” City Council Member Mike Martinez said."

 

 

 

 

Note, this is clearly Bush's fault. He was in office at the time.

 

s/

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Some comments from back in 2008...

 

 

McCluskey stood behind utility estimates that the project would raise customer rates no more than $2.50 per month, and could in fact cut rates by $1.50. He also allayed concerns over the availability of the plant's fuel supply, saying Nacogdoches Power expects to have the first 10 years of wood-waste fuel under contract and that economics make subsequent competition for the fuel very unlikely.

 

Asked why the city chose to negotiate directly with Nacogdoches Power, as opposed to opening the biomass contract to competitive bidding (which some observers claim state law requires), McCluskey said, "Nacog­doches Power was the only game in town." He said that in terms of scale and readiness to break ground, "they were the only ones we were aware of who could've bid this project to us." He also explained that the city lost multiple opportunities to buy power following a 2005 open bid for renewable energy after taking too long to negotiate contracts, leading AE to favor direct negotiations with one firm.

 

Council Member Lee Leffingwell at last week's meeting said that we need this 100 megawatts of power by 2013. "It is a choice of either renewable energy, natural gas-powered energy, or coal energy," he said. "I think the pros so heavily outweigh the cons that the action we need to take is very clear."

[Pepper]

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Cripes, Sun_shades of Solyndra