Item 3: Presentation by Task Force member Mike Sloan — original pdf
Backup
Mike Sloan on Austin “Generation Planning” Generation Resource Planning Task Force Austin, Texas May 28, 2014 Mike Sloan Virtus Energy Austin, Texas (512) 476-9899 / sloan@vera.com Presented to: By: VERA! What does Austin Want ? Key Structural Issues 1. AE Mission & Priorities 2. Business Model 3. Organization 4. Oversight What is AE's Mission ? "Deliver clean, affordable, reliable energy and excellent customer service." … make $$$ for city government ….maximize long-term benefits to people of Austin In practice, other influences are: Current Model GROWTH Business Model Reform for "Clean & Affordable" % Better Model REDUCE FIXED Utility Revenue (Customer Bills) General Fund Transfer (GFT) seek lower revenue requirements / stable GFT Austin Energy currently seeks GROWTH in burning fuel & selling kWhs: bad for affordability and environment; change to a FIXED fund transfer allows City to reduce energy use Owners Basic Utility Structure Customers Board Regulator Policy Utility Austin City Council serves all major functions as Austin's Board, Regulator & Policy-maker In General: Utility owners make money from customers on prudent actions approved by a regulator A Community-owned utility (such as AE) should have no conflict of interest since owner & customer are the same: the community Is Oversight of AE Sufficient ? Transparency: Secret stronger oversight trust the utility Governance: Oversight Staff: full-time professionals independent of utility? city council, board, etc Transparent Austin Energy is likely the largest utility in the world governed by a city council, yet council has no full-time, professional energy advisors independent of the utility; many types of information on AE are no longer available to the public that previously were available. Suggestions for Net Zero Carbon 1. De-Carbonization Plan 2. Seek Low-Cost, Clean Resources 3. Maximize Efficiency & Local Solar 4. Be Flexible (use market, voluntary rates, etc) As a general rule: Low-Cost is better than Expensive Lowest Cost Options: wind solar DSM natural gas AE Resource Cost Estimates Source: Austin Energy, Generation Plan update materials (extract), 2014 There should be many DSM options at much lower cost than the range shown above This graph is levelized cost only – it does not take into account the timing/value of resources Source: Navigant Consulting, “Benchmarking and Program Review” Dec 2010. http://www.austinchronicle.com/media/content/1292117/ae_benchmarking_and_program_review_2.pdf this source is illustrative of contrasting info from third party sources that differs from info provided by AE This slide is from proprietary report on AE released to the public in 2012 (redacted form) ERCOT market prices are generally very low with some high price spikes: low cost generation (e.g wind & best solar) and flexible low-cost resources capable of responding during peaks (e.g. demand response) are well suited to this market Big Ideas (use AE to help solve Austin Problems) Water: manufacture fresh water using de-salinization operated as energy "storage" for AE Traffic: electric mass transit with electric car carriers Lake Levels (% of full) severe water shortages upstream from Austin De-Salinization operated for Energy Storage http://www.waterdatafortexas.org/reservoirs/statewide Austin Energy owns / owned about 1,000 railroad cars for transporting coal AE can help spearhead Electric Transportation Photo Source: U.S. EIA Austin could sell this coal asset & re-invest in higher priorities, such as EV programs or electric mass transit