Item 17- Recommendation regarding Gas Peaker Units — original pdf

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ELECTRIC UTILITY COMMISSION RECOMMENDATION 20260511-017 May 11, 2026 Subject: Recommendation regarding 2030 focused analysis of possible gas peaker units and alternatives for Austin Energy Motioned By: Seconded By: Recommendation: The Electric Utility Commission recommends to the City Council that a full economic modeling of any additional gas peaker units, battery, solar, energy management solutions and other options that could contracted now for service by or before 2030 be presented to EUC and AEUOC for review prior to any financial commitments. Include the 2030 projected ERCOT and Austin Load Zone operating conditions, loads, generation sources and transmission capacities as well as energy management capabilities on the reliability, affordability and environmental impacts for Austin customers. Consider the impacts and contributions of ERCOT transmission and system operating improvements, Austin Energy transmission improvements, additions to Austin Energy renewable portfolio, local and remote battery deployments, local solar, aggregated Distributed Resources and Demand Management, beneficial EV integration, as well as the economic impacts of the many operating restraints to be placed on the peakers by neighborhood pollution concerns and climate Guardrails imposed by Council policy. Consider the carbon emissions and air pollution emissions of each option. Consider the important changes in the ERCOT market and infrastructure since the 2023 and 2024 Generation Plan modeling, including, construction 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, 1 of 3 additional loads on the system, volatility, and regulations that could affect Austin Energy’s load zone. Review the Austin Energy utility scale and distributed batteries to be installed by 2027 and others potentially installed by 2030 as to their effectiveness in providing significant in-load zone power requirements. Evaluate the potential for Black Start capability to be maintained through upgrading Sand Hill gas peaker units to serve those 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 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.” 2 of 3 Vote: For: Against: Abstentions: Absent: Attest: 3 of 3