Item 8- Briefing: Resource Generation Plan — original pdf

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Resource, Generation and Climate Protection Plan to 2035 Electric Utility Commission Update Lisa Martin Deputy General Manager and Chief Operating Officer November 18, 2024 © Austin Energy Building a Bridge to Our Energy Future 2 Mission for the 2035 Plan We must meet Austin’s rising energy needs while enabling an equitable clean energy transition reflecting our community’s values of reliability, affordability and environmental sustainability. 3 33 Current Day Challenges The problems we need to solve are immediate Increases in extreme weather & climate risk Growth in population and energy consumption Replacing local power generation lost from plant retirements ERCOT market changes and increasing costs Transmission congestion and volatile pricing to import energy Financial Risk 4 How Did We Get Here? Summer Peak Demand Record August 2024 3,135 MW Winter Peak Demand Record January 2024 2,700 MW Retire Decker Steam Unit 1 September 2020 300 MW Retire Decker Steam Unit 2 March 2022 425 MW Summer Peak Demand Record August 2023 3,067 MW 2020 2021 2022 2023 2024 Plan to 2030 Adopted March 2020 Winter Storm Uri February 2021 Congestion Costs $135 Million Congestion Costs $150 Million ERCOT Market Changes & Increased Energy Costs ERCOT Market Telling Us: • Local Reliability Issues, Increased Outage Risk • Transmission Congestion, Increased Cost 5 Our Responsibility Austin Energy must adapt to a changing energy landscape to expand achievements of previous resource generation plans and further our mission to safely deliver clean, affordable, reliable energy and excellent customer service. 6 Community and Industry Expert Driven 2 Community Stakeholders Rifeline Facilitation Energy Research Webber Energy Group (UT) Demand Side Mgmt. & Solar Study* DNV Energy Insights 1 4 Portfolio Modeling* Ascend Analytics & Austin Energy Requests for Proposals Carbon-Free & Renewable Developers *Scope informed by EUC Industry Research Group Support E Source & EPRI 7 City of Austin District 2 Residential Customers Tri-City Region Solar and Storage Coalition CCARE Homeowners United for Rate Fairness (HURF) 8 Community Value Statements Reliability Providing consistent and predictable electric service that will power our community as it continues to grow Assessing the impacts and promoting fairness of costs for customers while continuing to provide the public-power benefits that enhance our community’s quality of life Affordability Environmental Sustainability Maintaining flexibility in support of clean and innovative technologies and programs while taking a holistic assessment of the community and environmental impacts Evaluating and expanding access to the services Austin Energy provides so they can reach those who need them most while reducing any negative impact of our operations on the community Energy Equity 9 2035 Plan Objectives Reliability Prioritize reliability and resilience. Mitigate the risk of long-duration statewide and localized system outage events and provide timely communications. Limit the exposure of vulnerable populations to outages. Affordability Limit the impact of bill increases to the most vulnerable customers, while allowing acceptable and predictable increases of greater than 2% for other customers in support of reliability and environmental sustainability. Environmental Sustainability Reduce emissions and other environmental impacts as much as possible. Mitigate any remaining emissions, while supporting affordability and reliability. 10 Modeling So many models, so much data, so many hours . . . to understand tradeoffs and resource plan needs 11 Transition to Plan Development Resource Modeling Resource Planning 12 Key Insights from Modeling Results EUC Summary Investment is Needed Increase Transmission Capacity Do Not Prematurely Retire Existing Generation Peakers, Batteries, and Carbon-Free Insights 13 Key Insights from Modeling Results – EUC Investment is needed Increase Transmission Capacity • • • • “Nearly all portfolios show that real problems begin in a few years in the 2029-2032 period pointing to the need to make some investments” "Affordability is very important given the nature of the statewide grid" “It's going to be expensive” “Nearly all portfolios show costs being above the 2% affordability goal” • • • • “The additional 250 MW of import capacity reduces the reliability risks” “We can't control everything such as extreme weather but we can make our risks lower with important investments in local generation but especially transmission” “Somewhere around 250 MW of import capacity or local generation seems to be the amount needed to reduce risk on the system and keep price separation away” “Local transmission upgrades are key for improving reliability, affordability and sustainability for Austin Energy” 14 Key Insights from Modeling Results – EUC Do Not Prematurely Retire Existing Generation Peakers, Batteries, and Carbon-Free Insights • • • “We should not plan to retire our existing gas units at this time” “Keeping the gas units at some level over the next 10 years is important, though it is possible to run them less” “Portfolios 16 & 17 have the same number of reliability risk hours and 17 does not include the extra import capacity so it seems that keeping Sand Hill and Decker available through 2035 has a similar reduction on reliability risk.” • • • • • “If we need some peak capacity that is seldom used, then we should see if the benefits of that outweigh the costs. And maybe those carbon emissions can be offset in some way.” "I'm not in favor of new combined cycle plants, but I'm okay with as many natural gas peaker units as needed as part of a balanced generation mix." “I think we're underestimating the local battery storage capability … need to coordinate with transmission planning as a solution to congestion/load zone pricing.” "I think batteries are important and should be in the mix, but battery heavy isn't going to be viable financially." “It looks like a carbon-free future will be possible once some key technologies (most notably long-duration energy storage) mature a bit more.” 15 Key Insights from Modeling Results EUC Austin Energy • We have immediate challenges we need to solve • Model results are very sensitive to high load growth scenario Investment is needed Increase Transmission Capacity Do Not Prematurely Retire Existing Generation Peakers, Batteries, Carbon Free • • • Addition of 250 MW import capacity beyond known transmission upgrades significantly reduces reliability risk and net costs Loss of generation capacity from Decker and Sand Hill significantly increases reliability risk and net costs • High levels of new energy efficiency, demand response, local solar and storage plus existing generation manage reliability and liquidity risk – at a high cost, and pace of adoption exceeds estimated feasibility Local solar, battery storage and additional natural gas peaker units managed reliability and liquidity risk while maintaining low overall use of the peakers. All peakers ran less than 12% of the time 16 Developing the 2035 Plan Values Objectives Toolkit Developed with the community Provides flexibility to manage tradeoffs and changing conditions Effective policy design keeps tradeoffs in mind and is outcomes based, rather than prescriptive. — Observations from Dr. Michael E. Webber 17 Most Important Characteristics to Reflect in 2035 Plan EUC Survey Summary Flexible, Multifaceted Portfolio Demand Management and Energy Efficiency Carbon Reduction and Renewables Reliability and Affordability Infrastructure and Policy Leadership Adaptability The plan needs to allow AE flexibility to adjust the portfolio components if any of those turn out to be not feasible due to cost, schedule, reliability effectiveness, etc., or if demand and market forecasts change significantly Resource Investments The high congestion costs, reliability issues and price separation mean we must make investments in several resources … the exact mix and timing is difficult to determine Battery Storage A market driven approach to local storage Customer Energy Solutions Energy efficiency, demand response, local solar and storage can help meet our needs, lower costs and help make our system more reliable, though the appropriate and most efficient amounts are difficult to predict Flexible Targets “[for demand-side management] … Setting a primary goal over the 10- year period of the Gen Plan, along with some stretch goals could be helpful. … City Council could set the first numbers as the goals to meet in the plan, with the others being stretch goals if affordability and technology allows. Full Survey Responses included in Appendix Clean Energy Commitment Carbon-free and emissions / pollution-free generation and resources Opportunity Costs We need to consider the opportunity costs of paying for congestion versus building local Carbon Free by 2035 Maintain the current goal to get to 65% renewable energy by 2027 as envisioned in the 2030 plan, and then work toward a goal to achieve 80-85% renewable energy by 2035, which should include local solar Emissions Controls Modeling has revealed the need to keep the local gas units operational over the next 10 years, both to provide ancillary services and as a physical and financial hedge against high prices. However, … limit the amount of gas that is burned and lower our NOx and CO2 equivalent emissions over that time period Affordability Goals Council should consider a slightly higher affordability metric, 3.5%. Mitigating Congestion Maximize renewables … in a way that mitigates risk of having to overpay for power during times of high congestion. That is why I am open to the possibility of maintaining existing peakers or building newer, more efficient ones Reliability Assurance Austin Energy should continue to look at backup power packages and Reliability As A Service ... consider how to use RAAS as part of the gen plan Transmission Committing to additional transmission upgrades to increase import capacity by at least 250 MWs by 2030 Building & Energy Codes Continue to be a leader on green building codes and energy code development by adopting the latest IECC codes soon after they are published that incorporate new technologies such as EVs, solar, electric appliances and demand response Emerging Technologies An "all of the above" approach which does not prematurely retire existing assets that are already paid for and which allows for emerging technologies especially nuclear 18 Managing Our “Toolkit” Prioritize Customer Energy Solutions Leverage Local Solutions Achieve Decarbonization Foster a Culture of Innovation 19 Action Categories – Our “Toolkit” Prioritize Customer Energy Solutions • Energy Efficiency • Demand Response • Greenhouse Gas Avoidance • Beneficial Electrification • Customer-Owned Batteries • • Rooftop Solar Virtual Power Plants Achieve Decarbonization Exit Coal and Reaffirm REACH Remote Wind and Solar • Carbon Free by 2035 • • • Geothermal • Nuclear • Carbon-Free Technologies Leverage Local Solutions Transmission Import Capacity • Maximize Demand Side Management • • Utility-Scale Batteries • More Efficient Peaker Units Used Only When Needed • Maintain Black Start Utility Status Foster a Culture of Innovation • R&D Partnerships • Grant Opportunities • Solar for All • Solar Standard Offer • Pilot Geothermal Generation • Nuclear Technologies • Carbon Capture • Vehicle to Grid 20 What Are These Tools? Battery Storage Natural Gas Peaker Units 150 MW Tesla Battery facility in New South Wales, AUS 200 MW Decker Peaker Units • Store and discharge energy (2-4 hours) • Balance short fluctuations in energy supply & demand • Utility scale or substation size installations • Small modular units to improve reliability • Used when demand is high, minimizing emissions • Ready to support during a grid emergency Photo by: Jeffrey Phillips 21 Tradeoffs With These Tools Batteries Peakers (+) Highly Dispatchable (+) Can be Cleaner (-) Duration-Limited (-) Mineral Mining Practices (-) Regulatory Risks (Tariffs) (+) Highly Dispatchable (+) Black Start Capable (+) Newer Units Produce Less Emissions (-) Upstream Methane Leakage (-) Carbon & Other Emissions Both Batteries and Peakers (+) Batteries Used First to Minimize Emissions (+) Batteries Support Short-Duration Needs (+) Peakers Support Long-Duration Needs (+) Diversity of Tools in the Toolkit Improves Response (+) Less Vulnerable to the Disadvantages of a Single Tool 22 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Tradeoffs – Normal Conditions Over 10-Year Period 9.4 245 9.1 9.0 6.2 6.8 117 300 250 200 150 100 50 0 I S R U O H K S R Y T I L I B A I L E R 7.1 81 325 MW Batteries 300 MW Peakers 125 MW Batteries 200 MW Peakers Baseline for all: maximum energy efficiency, demand response, local solar & customer-sited batteries, 1,800 MW wind/solar PPAs, 250 MW import capacity increase, do not retire existing gen 23 Reliability Risk Hours – Normal Conditions 2027: +155 MW Batteries 2030: +155 MW Batteries s r u o H k s R y t i l i i b a i l e R 50 45 40 35 30 25 20 15 10 5 0 2027: +110 MW Batteries +100 MW Peakers 2027: +200 MW Peakers 2030: +100 MW Peakers 2031: +250 MW Import Capacity 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2030: +100 MW Peakers Both 14 Batteries 18 Peakers 19 24 Final Steps to Adopting the 2035 Plan Nov. 18 — EUC Nov. 19 — AEUOC Nov. 27 — Proposed 2035 Plan Posted Dec. 2 — EUC Recommendation (Vote) Dec. 12 — Council Consideration (Vote) 25 The 2035 Plan – Powering Our Future ✓ Cleanest energy portfolio in Texas ✓ Industry-leading customer energy solutions ✓ Promotes reliability, affordability and sustainability ✓ Protects our most vulnerable ✓ Resilient to extreme weather ✓ Flexible and innovative ✓ Built to adapt to changing conditions ✓ Community-informed plan 26 ©Austin Energy. All rights reserved. Austin Energy and the Austin Energy logo and combinations thereof are trademarks of Austin Energy, the electric department of the City of Austin, Texas. Other names are for informational purposes only and may be trademarks of their respective owners. Appendices EUC Survey Responses 28 EUC Survey Responses Most Important Characteristics You Would Like to See Reflected in the 2035 Plan • "An "all of the above" approach which does not prematurely retire existing assets that are already paid for and which allows for emerging technologies especially nuclear." • • • • • • • "A market driven approach to local storage" "The plan needs to allow AE flexibility to adjust the portfolio components if any of those turn out to be not feasible due to cost, schedule, reliability effectiveness, etc., or if demand and market forecasts change significantly" "We do want to maximize renewables (solar, wind), storage and demand management but in a way that mitigates risk of having to overpay for power during times of high congestion. That is why I am open to the possibility of maintaining existing peakers or building newer, more efficient ones." "Carbon-free and emissions/pollution-free generation and resources" "The portfolios need to be multifaceted and the effectiveness of each component of the portfolios needs to be well understood. " "Impact on price separation and emissions." "We need to consider the opportunity costs of paying for congestion versus building local" 29 EUC Survey Responses Most Important Characteristics You Would Like to See Reflected in the 2035 Plan • “Continue our commitment to stop using 600+ MWs of coal as soon as possible.” “Committing to additional transmission upgrades to increase import capacity by at least 250 MWs by 2030” “The high congestion costs, reliability issues and price separation mean we must make investments in several resources … the exact mix and timing is difficult to determine” “Investing in resources that can be stacked over time is useful.” “Energy efficiency, demand response, local solar and storage can help meet our needs, lower costs and help make our system more reliable, though the appropriate and most efficient amounts are difficult to predict.” “[for demand-side management] … Setting a primary goal over the 10-year period of the Gen Plan, along with some stretch goals could be helpful. … City Council could set the first numbers as the goals to meet in the plan, with the others being stretch goals if affordability and technology allows.” “Setting a 10-year battery goal could be useful, but the duration, types and location of batteries is difficult to predict. Setting an overall goal but giving flexibility to Austin Energy on how to meet it will be important.” "Everyone values reliability and the longer the outage, the more the negative impacts and dangers to our community. Affordability and Sustainability are also both very important. Some would place sustainability above affordability, others affordability above sustainability. We must balance all three." • • • • • • • 30 EUC Survey Responses Most Important Characteristics You Would Like to See Reflected in the 2035 Plan “Modeling has revealed the need to keep the local gas units operational over the next 10 years, both to provide ancillary services and as a physical and financial hedge against high prices. However, … limit the amount of gas that is burned and lower our NOx and CO2 equivalent emissions over that time period.” “Austin Energy can still commit to phasing out gas by the end of 2035, and reevaluate in 2030 if storage, including long- duration storage can be used to replace them by 2035 in a cost-effective and reliable manner.” “Austin Energy should maintain the current goal to get to 65% renewable energy by 2027 as envisioned in the 2030 plan, and then work toward a goal to achieve 80 to 85% renewable energy by 2035, which should include local solar. By meeting this goal, plus our use of storage and the nuclear plant, that would mean near-zero carbon by 2035 measured on a load basis.” “Continue to invest in thermal storage, such as chilling stations. Aiming for an even higher goal than our current goal of 40 MWs of thermal storage would help shift our peak and make our system more reliable.” “Continue to be a leader on green building codes and energy code development by adopting the latest IECC codes soon after they are published that incorporate new technologies such as EVs, solar, electric appliances and demand response” “Continue to investigate ways to utilize other technologies that can help either reduce peak use or increase energy to meet peak demand such as geothermal technologies, both at utility scale and community scale, or fuel cells.” • • • • • • 31 EUC Survey Responses Most Important Characteristics You Would Like to See Reflected in the 2035 Plan • • • • • “Certain portfolios did show the financial and reliability benefit of adding additional gas peaker units - such as 100 to 200 MWs - over the next 10 years; however, those peakers would come with increased emissions ... A decision to invest in additional gas resources should be studied further because of these concerns especially as new technologies are being developed which could avoid these emissions. Studying this option more and coming back in 2026 or 2027 to see if such an investment would be needed before 2030 and also comparing other technologies could be useful to all stakeholders.” “The current affordability metric - that rates on an average residential bill would not rise by more than two percent per year - will be very difficult to meet because of increasing ERCOT costs, inflation, energy prices and more extreme weather.” “Council should consider additional affordability metrics such as looking at average residential bills as opposed to average residential rates, as well as considering a slightly higher affordability metric such as 3.5%.” “Austin Energy should continue to look at backup power packages, and RAAS (Reliability As A Service), Austin Energy should consider how to use RAAS as part of the gen plan - it might be possible that customers can provide reliability services that might lower the need for Austin Energy to invest in their own plants.” "Reliability: but this will be mostly driven by the distribution hardening plan, and not by this resource plan. The portfolios must mainly balance economics, financial risks, technology readiness, and continued support for meeting the environmental goals" 32 Modeling Tradeoffs Batteries, Peakers, and Hybrid Portfolios 33 Reference Guide to New Portfolios REF # DESCRIPTION 18 19 14 325 MW local storage (300 MW 4-hr, 25 MW 2-hr), 250 MW import capacity increase, 100% DNV projections (431 MW local solar, 270 MW demand response), 65% RE (1,800 MW wind/solar PPAs), REACH on gas, Decker/Sand Hill run through 2035 300 MW local peakers, 250 MW import capacity increase, 100% DNV projections (431 MW local solar, 270 MW demand response), 65% RE (1,800 MW wind/solar PPAs), REACH on gas, Decker/Sand Hill run through 2035 125 MW local storage (100 MW 4-hr, 25 MW 2-hr), 200 MW local peakers, 100% DNV projections (431 MW local solar, 270 MW demand response), 250 MW import capacity increase, 65% RE (1,800 MW wind/ solar PPAs), REACH on gas, Decker/Sand Hill run through 2035 34 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Tradeoffs – Normal Conditions Over 10-Year Period 9.4 245 9.1 9.0 6.2 6.8 117 300 250 200 150 100 50 0 I S R U O H K S R Y T I L I B A I L E R 7.1 81 325 MW Batteries (Portfolio 18) 125 MW Batteries 200 MW Peakers (Portfolio 14) 300 MW Peakers (Portfolio 19) Baseline for all: maximum energy efficiency, demand response, local solar & customer-sited batteries, 1,800 MW wind/solar PPAs, 250 MW import capacity increase, do not retire existing gen 35 Monthly Bill Impact by Year - Normal Conditions ($/Month) 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 $70 $60 $50 $40 $30 $20 $10 $- $(10) $(20) 2% Affordability 16 17 18 14 19 36  n e d r u B y t i c i r t c e E l 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2035 Estimated Customer Assistance Program (CAP) Electricity Burden (Normal Scenario) 14 16 18 19 17 Portfolio # 2035 Estimated CAP Customer Electricity Burden 2023 Estimated CAP Customer Electricity Burden 2023 State of Texas Average Low Income Customer Electricity Burden 37 Stress Test Results - Total Liquidity Need ($mm) m m $ 600 1200 1000 800 400 200 0 14 15 16 17 18 19 Portfolio Number Uri Backcast 5k HCAP Total Liquidity Need ($MM) Uri Backcast 5k HCAP + EPP Total Liquidity Need ($MM) Summer 2023 Backcast Total Liquidity Need ($MM) 38 39 Round II Modeling Results – Supplement – Portfolio 14 Austin Energy Resource, Generation and Climate Protection Plan to 2035 Michael Enger Vice President, Energy Market Operations & Resource Planning The following slides were not available for the Oct. 21 EUC meeting due to a late error identified in the Portfolio 14 model. This supplement was provided to EUC via email, posted on the Speak Up Austin website, and is now available with EUC materials. October 28, 2024 © Austin Energy Important Context for this Discussion Models provide information not a specific plan or recommendation The following slides show data results associated with preliminary modeling efforts for the Resource, Generation and Climate Protection Plan to 2035. These results do not reflect a recommendation, and they do not reflect a plan. These results are for informational purposes only. All modeling reflects the input assumptions coordinated with the Electric Utility Commission earlier this year. 41 Round II Portfolios Austin Energy and EUC selected four new portfolios to improve our understanding of risks and tradeoffs 14 • Variation of Portfolio 10 with incremental new local storage + gas • Tests “floor” level of local resources needed to maintain reliability 15 • Variation of Portfolio 12 with more local solar + storage + DR • Tests cost/reliability of aggressive mix of DSM + storage only • Variation of Portfolio 12 with larger ratio of storage to solar + more DR • Tests relative performance of different solar + storage mixes • Maintains Decker/Sand Hill past 2034 • Identical to Portfolio 12 with Decker/Sand Hill operating past 2034 16 17 42 Reference Guide to New Portfolios REF # DESCRIPTION 10 14 12 15 16 395 MW local storage, 100% DNV projections, 65% RE (1,800 MW wind/solar PPAs), REACH on gas, Decker/Sand Hill run through 2035 125 MW local storage (100 MW 4-hr, 25 MW 2-hr), 200 MW local peakers, 100% DNV projections (431 MW local solar, 270 MW demand response), 250 MW import capacity increase, 65% RE (1,800 MW wind/ solar PPAs), REACH on gas, Decker/Sand Hill run through 2035 525 MW local storage (300 MW 12-hr, 200 MW 4-hr, 25 MW 2-hr), 700 MW local solar, 300 MW demand response, 100% RE as % of load (2,500 MW wind/solar PPAs), 100% CF, REACH on gas, retire Decker/Sand Hill 2034 625 MW local storage (350 MW 12-hr, 250 MW 4-hr, 25 MW 2-hr), 960 MW local solar, 325 MW demand response, 250 MW import capacity increase, 100% CF, 100% RE as % of load (2,500 MW wind/solar PPAs), REACH on gas, retire Decker/Sand Hill in 2034 725 MW local storage (400 MW 12-hr, 300 MW 4-hr, 25 MW 2-hr), 860 MW local solar, 400 MW demand response, 250 MW import capacity increase, 100% RE as % of load (2,500 MW wind/solar PPAs), REACH on gas, Decker/Sand Hill run through 2035 17 Same as 12 except Decker/Sand Hill run through 2035 43 Round II Portfolios Demand-Side Management vs. DNV Market Potential Study DSM targets in Portfolios 15-17 exceed the maximum economic market potential from recent DNV market potential study Max Economic Market Potential from DNV Study Portfolio 14 Portfolio 15 Portfolio 16 Portfolio 17 540 540 540 360 325 269 400 300 431 960 860 700 1200 1000 800 W M 600 400 200 0 Energy Efficiency Demand Response Local Solar 44 Net Present Value of 20-Yr Annual Net Costs ($B) B $ 6.0 12.0 10.0 8.0 4.0 2.0 0.0 14 15 16 17 Portfolio # UPLAN - Normal Conditions Ascend - Mean Ascend P5-P95 Spread 45 Net Present Value of 20-Yr Annual Net Costs ($B) – All Scenarios - UPLAN B $ 25.0 20.0 15.0 10.0 5.0 0.0 14 15 16 17 Portfolio # High Fuel Cost Growth Scenario Extreme Weather Scenario High Congestion Scenario High Load Growth Scenario Normal Conditions Average All Scenarios 46 2035 Average Monthly Residential Bill Increase Austin Energy 2% Affordability Target is not adjusted for inflation. Monthly bill impact data provided in nominal dollars Avg Monthly Bill Impact by Year ($/Month) Portfolio # 15 16 17 14 2 (Reference - BAU) 2% Affordability 47 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 DISCLAIMER: These are representative results based on modeling for the 2035 Resource Generation Plan and are not projections of Austin Energy's future prices. The results are not inclusive of factors beyond the scope of this Resource Generation Plan modeling. $80 $70 $60 $50 $40 $30 $20 $10 $- 2035 Electricity Burden 2035 Estimated Customer Assistance Program (CAP) Customer Electricity Burden (Avg of Scenarios) 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% n e d r u B y t i c i r t c e E l 2035 Estimated CAP Customer Electricity Burden 2023 Estimated CAP Customer Electricity Burden 2023 State of Texas Average Low Income Customer Electricity Burden 14 15 Portfolio # 16 17 48 Stress Test Results – Liquidity Risk Based on 2035 portfolio mix 1200 1000 800 M M $ 600 400 200 0 14 15 16 Portfolio Number 17 Uri Backcast 5k HCAP Total Liquidity Need ($MM) HCAP = ERCOT High System-wide Offer Cap Uri Backcast 5k HCAP + EPP Total Liquidity Need ($MM) EPP = ERCOT Emergency Pricing Program Summer 2023 Backcast Total Liquidity Need ($MM) 49 Stress Test Results – Total Liquidity Risk Based on 2035 portfolio mix Reference Portfolios M M $ 1800 1600 1400 1200 1000 800 600 400 200 0 1 2 3 4 5 6 7 11 12 13 14 15 16 17 8 9 Portfolio Number 10 Uri Backcast 5k HCAP Total Liquidity Need ($MM) Uri Backcast 5k HCAP + EPP Total Liquidity Need ($MM) Summer 2023 Backcast Total Liquidity Need ($MM) 50 Reliability Risk Hours – Ascend Portfolio 14 Portfolio 15 +250 MW import capacity 0 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 0 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 P5 MEAN P95 P5 MEAN P95 Portfolio 16 Portfolio 17 *Import capacity increase not included in UPLAN for P17 400 300 200 100 s r u o H k s R y t i l i i b a i l e R 400 300 200 100 400 300 200 100 400 300 200 100 0 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 0 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 P5 MEAN P95 P5 MEAN P95 51 Reliability Risk Hours – UPLAN Normal Scenario 500 400 300 200 100 0 s r u o H k s R y t i l i i b a i l e R s r u o H k s R y t i l i i b a i l e R 500 400 300 200 100 0 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 14 15 16 17 High Load Growth Scenario * 2,288 Risk Hrs (for P15 in 2035) Peak Load is 21% Higher in 2035 in High Load Growth Scenario 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 14 - High Load Forecast 15 - High Load Forecast 16 - High Load Forecast 17 - High Load Forecast 52 Normal vs. High Load Growth Reliability Risk Portfolio 14 Portfolio 15 * 2,288 Risk Hrs (for P15 in 2035) s r u o H k s i R y t i l i b a i l e R 500 400 300 200 100 0 s r u o H k s i R y t i l i b a i l e R 500 400 300 200 100 0 s r u o H k s i R y t i l i b a i l e R 500 400 300 200 100 0 s r u o H k s i R y t i l i b a i l e R 500 400 300 200 100 0 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 14 14 - High Load Forecast 15 15 - High Load Forecast Portfolio 16 Portfolio 17 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 16 16 - High Load Forecast 17 17 - High Load Forecast 53 Capacity Factor of Peakers Capacity Factor (P14) Sand Hill Peakers Decker Peakers New NG Peakers Capacity Factor (P15) Sand Hill Peakers Decker Peakers Capacity Factor (P16) Sand Hill Peakers Decker Peakers Capacity Factor (P17) Sand Hill Peakers Decker Peakers 2025 0% 0% 2026 1% 0% 2025 0% 0% 2025 0% 0% 2025 0% 0% 2026 1% 0% 2026 1% 0% 2026 1% 0% 2027 3% 0% 5% 2027 3% 0% 2027 3% 0% 2027 3% 0% 2028 4% 0% 6% 2028 4% 0% 2028 4% 0% 2028 4% 0% 2029 4% 0% 7% 2029 4% 0% 2029 4% 0% 2029 4% 0% 2030 5% 0% 7% 2030 5% 0% 2030 5% 0% 2030 5% 0% 2033 2034 2032 2031 9% 10% 10% 10% 7% 0% 0% 0% 0% 9% 11% 13% 12% 12% 0% 2035 2031 7% 0% 2031 7% 0% 2031 8% 0% 2034 2033 2032 9% 10% 10% 0% 0% 0% 0% 0% 2035 2033 2034 2032 9% 10% 10% 9% 0% 0% 0% 0% 2035 2033 2034 2032 9% 11% 11% 10% 0% 0% 0% 0% 2035 Decker peakers cover Ancillary Services obligations more often which results in low capacity factor 54 Modeled Austin Energy Stack CO2 Emissions By Year vs. Historical 2 O C s n o T c i r t e M 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 - 5 0 0 2 6 0 0 2 7 0 0 2 8 0 0 2 9 0 0 2 0 1 0 2 1 1 0 2 2 1 0 2 3 1 0 2 4 1 0 2 5 1 0 2 6 1 0 2 7 1 0 2 8 1 0 2 9 1 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 8 2 0 2 9 2 0 2 0 3 0 2 1 3 0 2 2 3 0 2 3 3 0 2 4 3 0 2 5 3 0 2 Historical 14 15 16 17 55 Modeled Austin Energy Stack Emissions Total CO2 Emissions (Million Metric Tons) 2025-2035 Total NOx Emissions (Metric Tons) 2025-2035 2 O C s n o T c i r t e M s n o i l l i M 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 - 6.8 14 4.2 15 x O N s n o T c i r t e M 800 700 600 500 400 300 200 100 0 711 14 437 15 4.8 4.9 503 511 16 17 Portfolio # 16 17 Portfolio # 56 P12 vs. P15-17 (2025-2035) 1,482 $10.9 $10.9 $10.8 $10.6 4.3 4.2 371 4.8 4.9 12 15 104 16 115 17 N O I L L I B $ $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0 1,600 1,400 1,200 1,000 800 600 400 200 0 I S R U O H K S R Y T I L I B A I L E R 57 N O I L L I B $ $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0 P10 vs. P14 (2025-2035) 416 $9.8 $9.1 6.3 6.8 10 117 14 450 400 350 300 250 200 150 100 50 0 I S R U O H K S R Y T I L I B A I L E R 58 P14-17 (2025-2035) $10.9 371 $10.8 $10.6 4.2 4.8 104 16 15 4.9 115 17 N O I L L I B $ $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0 $9.1 6.8 117 14 400 350 300 250 200 150 100 50 0 I S R U O H K S R Y T I L I B A I L E R 59 ©Austin Energy. All rights reserved. Austin Energy and the Austin Energy logo and combinations thereof are trademarks of Austin Energy, the electric department of the City of Austin, Texas. Other names are for informational purposes only and may be trademarks of their respective owners. Appendices 61 REF # PORTFOLIO Reference Guide to Numbered Portfolios DESCRIPTION No New Commitments Existing DSM commitments, no new generation 2030 Current Plan 100% Carbon-Free by 2035, 65% Renewables by 2027, existing DSM commitments, REACH on gas Local Gen/Storage + Margin 575 MW new local peakers and combined cycle starting 2027, 275 MW local storage, 100% DNV projections*, replace PPAs, Decker/SHEC run through 2035 Local Dispatchable + Margin 1,100 MW new local peakers & combined cycle starting 2027, 50% DNV projections, REACH on FPP, Decker/SHEC run through 2035 Meet Env Goals + Expand DSM Aggressive DSM + Storage + Keep PPAs Aggressive DSM + Storage + 65% RE Goal Retire Decker in 2027, 100% DNV projections, 100% CF, 65% RE, REACH on gas, retire SHEC 2034 Aggressive DNV projections, replace PPAs,100% CF, REACH on gas, retire Decker/SHEC 2034 Aggressive DNV projections, 65% RE, 100% CF, REACH on gas, retire Decker/SHEC 2034 Hydrogen-Capable Local Plant 1,100 MW local hydrogen-capable peakers starting in 2030, 100% DNV projections, 100% CF, 65% RE, REACH on gas, retire Decker/SHEC 2034 Hydrogen + Local Storage 550 MW local hydrogen peakers, 395 MW local storage, 100% DNV projections, 100% CF, 65% RE, REACH on gas, retire Decker/SHEC 2034 Keep Existing Gas + Local Storage Decker/SHEC run past 2035, 395 MW local storage, 100% DNV projections, 65% RE, REACH on gas Replace FPP in 2028 w/Gas FPP retire end of 2028, 575 MW new local peakers and combined cycle, 100% DNV projections, 65% RE, REACH on FPP and gas EUC – 1 (Working Group Recs) 525 MW local storage, 700 MW local solar, 540 MW new EE, 300 MW DR, 100% RE as % of load, 100% CF, REACH on gas, retire Decker/SHEC 2034 EUC – 2 925 MW local storage, aggressive DNV projections,100% RE as % of load, 100% CF, REACH on gas, retire Decker/SHEC 2034 62 1 2 3 4 5 6 7 8 9 10 11 12 13 2035 Modeled Installed Capacity 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Portfolio RESOURCES NG CC NG CT NG-H2 CT Local 2-hr Local 4-hr Local 12-hr Local 100-hr Decker CT Sand Hill CC Sand Hill CT FPP Coal STP Nuke NAC Biomass Non-Local Wind Non-Local Solar Customer-Sited Solar Community Solar Demand Response Import Capacity Improvement Non-Local Solar (New) 700 118 700 118 700 700 700 700 700 1000 1000 700 1,000 1000 1000 Non-Local Wind (New) 1100 1100 932 1100 1100 1100 1100 1100 1500 1500 1100 1,500 1500 1500 932 225 350 25 100 150 200 315 280 430 105 864 826 371 60 270 600 500 200 315 280 430 105 864 826 330 51 195 25 100 150 120 430 105 864 826 439 60 325 25 100 150 120 430 105 864 826 439 60 325 430 105 864 826 371 60 270 200 315 280 430 105 864 826 290 42 120 430 105 864 826 290 42 120 1100 430 105 864 826 371 60 270 360 550 25 100 150 120 430 105 864 826 371 60 270 360 25 100 150 120 200 315 280 430 105 864 826 371 60 270 360 225 350 200 315 280 430 105 864 826 371 60 270 360 200 25 100 250 200 315 280 430 105 864 826 371 60 270 360 25 200 300 25 360 540 430 105 864 826 640 60 300 540 430 105 864 826 371 60 270 360 25 250 350 250 430 105 864 826 900 60 325 540 25 300 400 250 200 315 280 430 105 864 826 800 60 400 540 25 200 300 200 315 280 430 105 864 826 640 60 300 540 63 Energy Efficiency (additional) 360 360 360 360 360 360 360 Summary UPLAN results Round II Portfolio 20-yr NPV ($B) 2035 Bill Impact ($/Month) 2035 Electricity Burden (%) Total Liquidity Need - Winter Event ($MM) Total Liquidity Need - Summer Event ($MM) Total Reliability Risk Hours (Hours) Total 3+ Hour Reliability Risk Events (Count) Total CO2 Emissions (Million Metric Tons) Total NOx Emissions (Metric Tons) Total SOx Emissions (Metric Tons) Total PM Emissions (Metric Tons) $9.1 $49 3.9% $444 $274 117 $10.9 $75 4.7% $879 $228 371 $10.8 $70 4.5% $290 $65 104 14 15 16 17 20 56 19 20 6.8 4.2 4.8 4.9 711 437 503 2 <1 <1 184 113 130 $10.6 $67 4.5% $312 $118 115 511 <1 132 64 P14 - Installed Capacity (MW) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 - 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Demand Response Energy Efficiency STP Nuke NAC Biomass Sand Hill CC Sand Hill CT Decker CT NG-H2 CT NG CC Customer-Sited Solar Community Solar Non-Local Solar FPP Coal NG CT Non-Local Solar (New) Non-Local Wind Non-Local Wind (New) Local 100-hr Local 12-hr Local 4-hr Local 2-hr 65 P15 - Installed Capacity (MW) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 - 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Demand Response Energy Efficiency STP Nuke NAC Biomass Sand Hill CC Sand Hill CT Decker CT NG-H2 CT NG CC Customer-Sited Solar Community Solar Non-Local Solar FPP Coal NG CT Non-Local Solar (New) Non-Local Wind Non-Local Wind (New) Local 100-hr Local 12-hr Local 4-hr Local 2-hr 66 P16 - Installed Capacity (MW) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 - 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Demand Response Energy Efficiency STP Nuke NAC Biomass Sand Hill CC Sand Hill CT Decker CT NG-H2 CT NG CC Customer-Sited Solar Community Solar Non-Local Solar FPP Coal NG CT Non-Local Solar (New) Non-Local Wind Non-Local Wind (New) Local 100-hr Local 12-hr Local 4-hr Local 2-hr 67 P17 - Installed Capacity (MW) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 - 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Demand Response Energy Efficiency STP Nuke NAC Biomass Sand Hill CC Sand Hill CT Decker CT NG-H2 CT NG CC Customer-Sited Solar Community Solar Non-Local Solar FPP Coal NG CT Non-Local Solar (New) Non-Local Wind Non-Local Wind (New) Local 100-hr Local 12-hr Local 4-hr Local 2-hr 68 20-year NPV of Net Cost – All Portfolios NPV of 20-Yr Annual Net Costs ($B) Reference Portfolios B $ 14.0 12.0 10.0 8.0 6.0 4.0 2.0 - 1 2 3 4 5 6 7 8 10 11 12 13 14 15 16 17 9 Portfolio # 69 Net Cost ($B) - Battery Forward Price Sensitivity Analysis ) B $ ( t s o C t e N 12.0 10.0 8.0 6.0 4.0 2.0 - 14 15 16 17 AE 20-yr NPV Net Cost (2% inflation) AE 20-yr NPV Net Cost (Flat) NREL Forward Cost Estimate - 20-yr NPV Net Cost Average difference between AE 20-year NPV (with 2% inflation) and NREL forward cost curve = $352M or 3% 70 Total CO2 Emissions (Million Metric Tons) 2025-2035 Reference Portfolios 2 O C s n o T c i r t e M s n o i l l i M 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 - 1 2 3 4 5 6 7 8 10 11 12 13 14 15 16 17 9 Portfolio # 71 Reference Portfolios Total NOx Emissions (Metric Tons) 2025-2035 x O N s n o T c i r t e M 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 1 2 3 4 5 6 7 10 11 12 13 14 15 16 17 8 9 Portfolio # 72 2035 Estimated Customer Assistance Program (CAP) Customer Electricity Burden (Avg of Scenarios) Reference Portfolios 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% n e d r u B y t i c i r t c e E l 1 2 3 4 5 6 7 11 12 13 14 15 16 17 8 9 Portfolio # 10 2035 Estimated CAP Customer Electricity Burden 2023 Estimated CAP Customer Electricity Burden 2023 State of Texas Average Low Income Customer Electricity Burden 73 Ascend Emissions Trends P14 - CO2 Emissions (1000 MTon) P15 - CO2 Emissions (1000 MTon) 800 600 400 200 800 600 400 200 800 600 400 200 800 600 400 200 0 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 0 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 FPP Coal Sand Hill CC Sand Hill CT Decker CT NG-H2 CC NG-H2 CT FPP Coal Sand Hill CC Sand Hill CT Decker CT NG-H2 CC NG-H2 CT P16 - CO2 Emissions (1000 MTon) P17 - CO2 Emissions (1000 MTon) 0 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 0 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 FPP Coal Sand Hill CC Sand Hill CT Decker CT NG-H2 CC NG-H2 CT FPP Coal Sand Hill CC Sand Hill CT Decker CT NG-H2 CC NG-H2 CT 74 % of load matched with carbon-free energy 2035 - range accounts for curtailment Reference Portfolios d a o l f o e e r f - n o b r a C % 120% 100% 80% 60% 40% 20% 0% 1 2 3 4 5 6 7 10 11 12 13 14 15 16 17 8 9 Portfolio # 75