Recommendation regarding Gas Peaker Units v2 — original pdf

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ELECTRIC UTILITY COMMISSION RECOMMENDATION 20260112-12 Revised January 12, 2026 Subject: Recommendation regarding consideration of gas peaker units for Austin Energy Motioned By: Seconded By: Recommendation: The Electric Utility Commission recommends to the City Council that the full process for evaluating carbon-free alternatives and engaging the community committed to in the Austin Energy Resource, Generation and Climate Protection Plan to 2035 is conducted in a robust and transparent manner before any action is taken regarding the purchase or commitment to purchase any natural gas peaking generators. This includes: 1. A full review of the results of the all-resources RFP at the Electric Utility Commission and City Council to consider all alternatives for both generation and energy management within the Austin load zone that could avoid the need for gas peakers. 2. Commitment to the identified implementation process that must include feasibility, pre-development, development and construction phases. Each phase should include the presentation of detailed results to the City Council, including incorporation of City Council feedback and community input. 3. The process includes robust community engagement with potential evening meetings to solicit feedback on possible sites for any possible additional local resources, including gas peakers, if identified as necessary. 4. Continued analysis and work on projects that increase local transmission capacity to increase reliability, reduce congestion costs and bring more power into Austin Energy’s service area, including the reduction in the need to add local power generation. 1 of 3 Item 12 v2The analysis of all the alternatives, including any potential gas peakers, shall include, but not be limited to, 1. Economic modeling of the most viable alternatives over a twenty five-year timeline. 2. Modeling of the carbon emissions and other air pollution emissions of each of the options. 3. Analysis of important changes in the ERCOT market and infrastructure since the 2023 and 2024 Generation Plan modeling, including, as appropriate, approval of the 765 KV grid backbone, implementation of Real-Time Co-Optimization Plus Batteries (RTC+B), other completed and planned transmission upgrades, solar and energy storage deployment in ERCOT, additional loads on the system, volatility, and regulations that could affect Austin Energy’s load zone requirements and potential costs from 2025 to 2035. 4. Review and analysis of the Austin Energy utility scale batteries to be installed by 2027 as to their effectiveness in providing significant in-load zone power requirements. 5. Capability of new resources to provide ERCOT black start capability that are currently provided by the existing Decker gas peakers, including the potential for Sand Hill gas units or storage units to provide black start requirements. Rationale: It is the Electric Utility Commission’s job to advise the Austin City Council on matters relating to Austin Energy, including implementation of the Austin Energy Resource, Generation and Climate Protection Plan to 2035. The world is visibly suffering the damaging effects of a heating climate, human caused by burning fossil fuels. The Paris Climate agreement established a goal of limiting global temperature increase to a maximum rise of 1.5 degrees C. That amount of warming is already being reached in just ten years and continues heating on a dangerous trajectory. Mayor Watson attended the COP30 Conference in Belem, Brazil, representing the City of Austin in support of the need for effective action by major international cities as critical to the climate solution. The Austin Energy Resource, Generation and Climate Protection Plan to 2035 commits the utility to achieve 100 percent carbon-free energy by 2035. Reaching our shared goal of meeting our load with 100 percent carbon-free energy will require implementing bold plans with the best available renewable energy, storage, energy management, and transmission technologies during the transition period from 2025 to 2035. Austin Energy has just completed the purchase of a 100 MW x 4-hour battery and is in negotiations for additional batteries to be operational by 2027. 2 of 3 Battery technology has the potential to replace most of the functionality of the Decker peakers, although further analysis will be needed. Transmission projects to allow the import of more carbon-free energy sources outside of Austin Energy's load zone are still being developed. The Austin Energy Resource, Generation and Climate Protection Plan to 2030 states, “As part of the implementation process, City Council approval is required before any new utility-scale resource could be developed. This process has four phases — feasibility, pre-development, development and construction. These phases will incorporate regular updates to City Council, with a report to the City Council following the feasibility phase prior to moving forward to the pre-development phase, and subsequently gathering Council feedback, and incorporating community input, prior to bringing a project forward for approval. Further, should Austin Energy seek Council approval for any peaker units, we will show any analysis performed demonstrating why a carbon-free alternative was not available and how the requested action will impact the utility’s ability to reach the goal of 100% carbon-free by 2035.” The Austin Energy Resource, Generation and Climate Protection Plan to 2030 states, “Incorporate Equity into Siting Considerations: When considering site locations for any future local generation solutions, Austin Energy will explore the feasibility of sites across our service territory. Site requirements vary for different resource types and include energy equity, land access, permitting restrictions and access to infrastructure — including transmission, water and fuel. Austin Energy is committed to applying the energy equity framework used in developing the 2035 Plan, which includes procedural, recognition and distributional equity. Site selection will aim to avoid historically impacted communities, and any future local solutions will involve collaboration with our community.” Vote: Against: Abstentions: Absent: Attest: 3 of 3