SPECIAL CALLED MEETING OF THE ELECTRIC UTILITY COMMISSION December 2, 2024 6:00 PM AUSTIN ENERGY HEADQUARTERS/SHUDDE FATH CONFERENCE ROOM 4815 MUELLER BLVD AUSTIN, TEXAS Some members of the Electric Utility Commission maybe participating by videoconference. Public comment will be allowed in-person or remotely by telephone. Speakers may only register to speak on an item once either in-person or remotely and will be allowed up to three minutes to provide their comments. Registration no later than noon the day before the meeting is required for remote participation. To register contact Amy Everhart, at Amy.Everhart@AustinEnergy.com or via phone at 512-322-6087. Members: Dave Tuttle, Chair Kaiba White, Vice Chair Ayo Akande Raul Alvarez AGENDA Lauren Bellomy Cesar Benavides Jonathon Blackburn Randy Chapman Chris Kirksey Cyrus Reed Joshua Rhodes CALL MEETING TO ORDER PUBLIC COMMUNICATION: GENERAL The first 5 speakers signed up prior to the meeting being called to order will each be allowed a three-minute allotment to address their concerns regarding items not posted on the agenda. DISCUSSION AND ACTION ITEMS 1. Recommend approval of Austin Energy’s Resource, Generation and Climate Protection Plan to 2035, which provides a flexible management framework to meet changing conditions, and strategies for energy needs, generation supply, demand response, energy efficiency, and equity. Funding: This item has no fiscal impact. 2. Approval of a recommendation on Austin Energy's Resource, Generation, and Climate Protection Plan. FUTURE AGENDA ITEMS ADJOURNMENT
Electric Utility Commission Resolution 20241202-XX on Austin Energy Resource, Generation and Climate Protection Plan WHEREAS, on August 8, 2019, the Austin City Council adopted a resolution declaring a climate emergency and calling “for an immediate emergency mobilization to restore a safe climate” and directing the city manager to take a number of steps to accelerate local greenhouse gas emissions reductions, including from Austin Energy; and WHEREAS, in 2020, the Austin City Council adopted the Austin Energy Resource, Generation and Climate Protection Plan to 2030, which states that “Austin Energy will maintain an energy supply portfolio sufficient to offset customer demand while eliminating carbon and other pollutant emissions from its electric generation facilities as rapidly as feasible within the limitations set by the Austin City Council.” and states that “and all generation resources will be carbon-free by 2035;” and WHEREAS, the Austin Energy Resource, Generation and Climate Protection Plan to 2030 also states that “Austin Energy will no longer purchase, contract for or build long-term generation or storage resources that emit new carbon”; and WHEREAS, in 2021, the Austin City Council adopted the Austin Climate Equity Plan, which includes community-wide greenhouse gas reduction goals to achieve net-zero emissions by 2040, with about 75% reduction by 2030; and WHEREAS, electrification is a key strategy for reducing and eliminating greenhouse gas emissions in many sectors and Carbon-Free electricity is needed to achieve those goals; and WHEREAS, on June 8, 2023, the Austin City Council adopted a resolution endorsing the Fossil Fuel Non-Proliferation Treaty and a plan for “transitioning to a 100 percent clean energy economy, phase out fossil fuel production, and invest in communities on the frontlines of environmental injustice;” and WHEREAS, ground level ozone and particulate matter air pollution in the Austin region already exceed the health-based standards set by the U.S. Environmental Protection Agency and CAPCOG has identified that increased NOx emissions from electric generating units, including Austin Energy's power plants, as highly correlated with high local ozone measurements; and WHEREAS, the Austin Energy Resource, Generation and Climate Protection Plan to 2030 references an affordability goal and affordability remains important to many customers, but the workshops that Austin Energy hosted as part of this process to update the Austin Energy Resource, Generation and Climate Protection Plan revealed that a large majority of participants are supportive of allowing rate increases beyond the current goal of two percent per year, so long as …
Austin Energy Generation Across Texas Wind Solar Natural Gas Coal Nuclear Biomass Because Austin Energy participates in the ERCOT market, it’s critical for us to recognize and adapt to changes and trends in this system. Right now, we’re seeing a dramatic change to ERCOT’s power supply mix. Significant growth in wind, solar and battery energy storage; energy demand increases; transmission issues; and retirements of coal and gas generation are leading to fluctuating prices and significant changes in the way power is balanced to meet Texas’ energy needs. ERCOT Demand Growth There are two key factors in the energy landscape — supply and demand. Supply must meet demand, so predicting future demand is crucial for planning resources. ERCOT expects power demand to increase going forward. According to ERCOT’s 2023 forecast numbers, which we incorporated into our modeling, peak energy use increases from 83 gigawatts (GW) in 2025 to 99 GW in 2035. 14 | Austin Energy Resource, Generation and Climate Protection Plan to 2035 Return to Table of Contents Predicting future demand helps ERCOT plan how to meet the growing needs of the system. For Austin Energy, this helps us better understand the market while we outline future resource strategies to meet our customer and system needs. New Generation and Retirements in ERCOT On the supply side of the energy equation is generation. ERCOT expects significant growth in this area as well. Following the national trend, many of these proposed new generation projects in ERCOT are renewable energy sources. While these sources provide clean energy, their weather-dependent nature has led to growing operational and reliability risks. Meanwhile, a significant portion of older power plants in the ERCOT market are nearing the end of their operational life. ERCOT also manages retirements to ensure grid reliability, potentially intervening to keep critical plants online when absolutely necessary. As ERCOT works to balance supply and demand on the statewide system, it’s important for Austin Energy to factor that information into our resource planning. The 2035 Plan incorporates the most up-to-date, official information related to announced plant additions and retirements from ERCOT. This gives us one look to the future for the modeling process. ERCOT and Transmission Congestion Because many new generation sources are located far from the end users, ERCOT is seeing a significant increase in transmission congestion. When transmission lines need to transport more power than they can carry, they can become overloaded, causing …
» Affordability — Stakeholders continued to talk about equity in their affordability discussions. The concept of energy burden should be considered when looking at affordability. » Reliability — Predictability is just as important as reliability, especially with the understanding that perfect power isn’t attainable. Though 100% reliability may not be possible, there are those for whom energy supply is critically important, like those with medical needs. • Workshop #2 — Building Foundational Understanding The second stakeholder workshop had two main goals: to provide an introduction to the ERCOT market and have Dr. Michael Webber with the University of Texas at Austin provide his expert insight into energy market trends, resource options and potential risks and tradeoffs. Some top themes from the ERCOT 101 presentation included: » By law, Austin Energy is bound to the ERCOT market and its rules. » The ERCOT market, like any market, has benefits and risks. Decisions made in the marketplace have tradeoffs. » Decisions in the 2035 Plan will affect what tools are available to maximize benefits and minimize risks in the ERCOT market. Some top themes from Dr. Webber’s presentation included: » Electric utilities, Austin Energy included, need to prepare for an era of unprecedented electricity consumption. and carbon management. » “Do your best, clean up the rest” — through a combination of efficiency, electrification » The key lens through which energy options should be considered: trade-offs. The group was able to ask presenters questions and dive deeper into the topics. • Workshop #3 — Input on Values and Objectives The main focus of the third stakeholder workshop was the Resource Planning Trade-offs Exercise. This exercise allowed participants to highlight the trade-offs they were comfortable making around the values of reliability, affordability and environmental sustainability. Participants prioritized the three values with scores ranging from 5 to 10, with 10 being the highest priority. After prioritizing the values, participants held group discussions to hear from each other. Then, they reallocated their priorities if they wanted. The score range shows the lowest and highest ranking a value received. Here are the results of the exercise: Value Reliability Affordability Environmental Sustainability 9.08 7.91 7.95 9.21 7.91 7.82 8 to 10 7 to 10 6 to 10 Original Allocation Reallocation Score Range The exercise showed that, across the board, reliability was the community’s top priority. The discussion around objectives also started in Workshop #3. Participants filled out a …
Broadening the Picture with Ascend Analytics’ Portfolios Along with Austin Energy’s model and analysis, we also contracted with Ascend Analytics to get additional portfolios and broader insights. They use a different type of model, which gives different outputs. With our approach, the resource mixes are human designed while in Ascend’s approach, those mixes are computer designed. For example, we can tell Ascend’s model that we want a portfolio that achieves carbon-free by 2035, hits a 65% renewable energy target by 2027 and has sufficient local resources to minimize the risk of load zone price separation. The model uses this information to forecast a lowest-cost solution within those parameters. We are then able to compare the outputs from Ascend’s modeling to our results and use the combined information to find better resource mixes. Another advantage with Ascend is the ability to generate a range of expected outcomes instead of a single data point. They do this by running their portfolios through 100 future situations to generate a range of outcomes. This range includes the average outcome as well as the 5th and 95th percentiles to represent the outer edge possibilities. This is helpful in understanding uncertainty and the significance of variability in events. Refining the Information and Portfolios With all the scenarios and sensitivities in the modeling analysis, we are able to study dozens of approaches to meeting the community’s energy needs. Based on that analysis, Austin Energy worked with the EUC to fine-tune four additional portfolios. We wanted to maximize strengths and resolve issues. For example, we talked with the EUC about the number we used for transmission import capacity. As a baseline in the model, we included ERCOT’s information on future transmission projects and upgrades. This includes all known projects for Austin Energy as well as every other transmission provider in ERCOT. This information, though, only goes out five years. We know we’ll still add in projects and upgrades beyond that window. In discussion with the EUC, we decided to add more import capacity as we enhance the modeling to account for that continued work. These are the refined portfolios: Portfolio Description Porfolio #14 Porfolio #15 Porfolio #16 This portfolio maxed out DSM projections and then added in just enough local storage and natural gas peaker units to reach near-term local reliability. It included increased transmission capacity. This portfolio was similar to #12 except with increased transmission capacity, DSM …
..De Posting Language ..Title Approve adoption of Austin Energy’s Resource, Generation and Climate Protection Plan to 2035, which provides a flexible management framework to meet changing conditions, and strategies for energy needs, generation supply, demand response, energy efficiency, and equity. Funding: Approving the 2035 Plan does not have immediate fiscal impact. The future financial impact will be determined as specific projects are presented to City Council to implement the plan over the next few years. Lead Department Austin Energy Fiscal Note Approving the 2035 Plan does not have immediate fiscal impact. The future financial impact will be determined as specific projects are presented to City Council to implement the plan over the next few years. Prior Council Action: December 1, 2022 - Council approved a resolution regarding updates to the 2030 Austin Energy Resource, Generation, and Climate Protection Plan. March 26, 2020 - Council approved the Austin Energy Resource, Generation, and Climate Protection Plan to 2030. For More Information: Lisa Martin, Deputy General Manager and Chief Operating Officer 512-322-6457; Amy Everhart, Director, Local Government Affairs 512-322-6087. Council Committee, Boards and Commission Action: November 19, 2024 – Council’s Austin Energy Utility Oversight Committee considered the briefing by AE on the Resource, Generation and Climate Protection Plan to 2035. December 2, 2024 – AE’s Resource, Generation and Climate Protection Plan to 2035 to be reviewed by the Electric Utility Commission. Additional Backup Information: Austin Energy requests approval of the Austin Energy Resource, Generation and Climate Protection Plan to 2035 (“Resource Plan”). Austin Energy is currently operating under the resource plan adopted in March 2020 and seeks adoption of the Resource Plan due to market changes, increased load growth, and reliability concerns. This Resource Plan retains the overarching goal of being carbon free by 2035 and provides Austin Energy additional operational flexibility to achieve success in light of changed conditions. Austin Energy seeks to build on its reputation as a national leader on renewable energy, energy efficiency, and demand response investments while ensuring its energy portfolio can endure extreme circumstances and remains affordable and reliable for customers. The Resource Plan recommendations were developed via input from the community utilizing a customer survey with 7500+ customer respondents and diverse Community Stakeholder meetings as well as extensive work with the Electric Utility Commission. Reliability was considered the highest priority by the respondents to the survey and by participants in the stakeholder meeting followed by affordability …
Amendments offered by Commissioner White and Commissioner Reed To offer in this order 1. On page 2 and on page 10, add the following to the list of bullet points: “Aligning with City of Austin climate goals - With the climate crisis worsening, it is critical that Austin Energy do everything possible to reduce and eliminate greenhouse gas emissions at point sources and upstream to align with the goals of the Austin Climate Equity Plan, which is heavily reliant on electrifying other sectors with carbon-free electricity to be provided by Austin Energy.” (White) 2. On page 3, make the following edits: “Lead with Energy Efficiency -Austin Energy will lead with energy efficiency as the first priority to reduce energy needs during peak times. With more than 40 years of industry-leading experience, we will continue to expand award- winning programs and promote energy efficiency that lowers customer energy use, sustains customer comfort and reduces electric bills. Austin Energy plans to save 9751,000 MW by 2027. In 2027, we will addshift to tracking avoided greenhouse gas for our energy efficiency programs. Austin Energy will continue to report on the MW reduced from energy efficiency programs in all sectors.” (Reed) 3. On page 3, make the following edit: “Move from Megawatt Reduction toAdd Greenhouse Gas Avoidance — Austin Energy will add atransition to focus on greenhouse gas avoidance as a primary goal, in addition to megawatt reduction, for many of our demand-side management programs, in support of decarbonization.(Reed) 4. On page 3, make the following edit: “ Incentivize Customer-Sited Batteries — Austin Energy will develop and provide incentives for customer-sited battery storage to maximize benefits to customers and the electric grid, including adoption of a tariff that allows all customer classes to provide the utility access to customer-sited batteries. (White) 5. On page 4, make the following edits: “Avoid Retiring Local Generation Prematurely (Sand Hill and Decker) — If needed, Austin Energy will maintain our existing generation capacity at Sand Hill and Decker while seeking opportunities to replace these polluting resources with clean energy resourcesincrease efficiencies, reduce emissions and reduce costs for customers. Every effort will be made to replace all AE’s natural gas generation capacity with clean energy resources by 2035.” (White) 6. On page 4, strike the following text: “Pursue Additional, More Efficient Natural Gas 7. Peaker Units — Austin Energy should build or contract for additional peaker units in support …
EUC Amendments and Results to Resource Generation Plan 1. On page 2 and on page 10, add the following to the list of bullet points: “Aligning with City of Austin climate goals - With the climate crisis worsening, it is critical that Austin Energy do everything possible to reduce and eliminate greenhouse gas emissions at point sources and upstream to align with the goals of the Austin Climate Equity Plan, which is heavily reliant on electrifying other sectors with carbon-free electricity to be provided by Austin Energy.” (White) NOT OFFERED 2. On page 3, make the following edits: “Lead with Energy Efficiency -Austin Energy will lead with energy efficiency as the first priority to reduce energy needs during peak times. With more than 40 years of industry-leading experience, we will continue to expand award- winning programs and promote energy efficiency that lowers customer energy use, sustains customer comfort and reduces electric bills. Austin Energy plans to save 9751,000 MW by 2027. In 2027, we will shift to tracking avoided greenhouse gas for our energy efficiency programs. Austin Energy will continue to report on the MW reduced from energy efficiency programs in all sectors.” (Reed) NOT OFFERED (see item 24 modified version) 3. On page 3, make the following edit: “Move from Megawatt Reduction toAdd Greenhouse Gas Avoidance — Austin Energy will add atransition to focus on greenhouse gas avoidance as a primary goal, in addition to megawatt reduction, for many of our demand-side management programs, in support of decarbonization.(Reed) NOT OFFERED (see item 24 modified version – added reporting but not MW goal) 4. On page 3, make the following edit: “Incentivize Customer-Sited Batteries — Austin Energy will develop and provide incentives for customer-sited battery storage to maximize benefits to customers and the electric grid, including adoption of a tariff that allows all customer classes to provide the utility access to customer-sited batteries. (White) NOT OFFERED (corresponding item adopted) 5. On page 4, make the following edits: “Avoid Retiring Local Generation Prematurely (Sand Hill and Decker) — If needed, Austin Energy will maintain our existing generation capacity at Sand Hill and Decker while seeking opportunities to replace these polluting resources with clean energy resourcesincrease efficiencies, reduce emissions and reduce costs for customers. Every effort will be made to replace all AE’s natural gas generation capacity with clean energy resources by 2035.” (White) NOT OFFERED (corresponding item adopted) 6. On page …
