20260520-005, Austin Energy Gas Peakers and Alternatives Recommendation — original pdf

Recommendation

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RECOMMENDATION TO COUNCIL Environmental Commission Recommendation 20260520-005: Austin Energy Gas Peakers and Alternatives WHEREAS, it is the Environmental Commission’s responsibility to advise “on projects and programs which affect quality of life for the citizens of Austin”, and WHEREAS, it is Austin Energy customers who will bear the financial risk of any capital investments that become stranded assets or become economic liabilities; and WHEREAS, innovation and competition are projected to result in continued declining renewable energy and energy storage costs, and sources such as Bloomberg’s Levelized Cost of Electricity 2026 report project the cost of battery storage to decrease by 25% and the cost of solar to decline by 30% by 2035; and WHEREAS, natural gas prices can be volatile and EIA and Wood Mackenzie project significant increases to Henry Hub natural gas prices over the next year and through 2035; and WHEREAS, the greenhouse gas emissions reduction goal established by the Austin City Council in the Climate Equity Plan is to achieve “net-zero community-wide greenhouse gas emissions by 2040, utilizing a steep decline path followed by negative emissions” that translates to approximately 75% reduction in emissions by 2030; and WHEREAS, meeting the greenhouse gas reduction goals adopted by the Austin City Council in the Climate Equity Plan isn’t possible without significant emissions reductions by Austin Energy in the near, medium and long-term; and WHEREAS, any increase in greenhouse gas emissions does not align with the Climate Equity Plan or the greenhouse gas reduction goals adopted by the Austin City Council; and WHEREAS, reducing and eliminating local air pollution, especially in and near historically and currently marginalized and lower-income parts of the community, is an important equity and community health priority reflected in the Climate Equity Plan; and WHEREAS, the American Lung Association’s 2026 State of the Air Report assigns Travis County an F grade for ozone pollution, a D grade for short-term particle pollution, and a failing grade for annual particle pollution; and . WHEREAS, methane - the primary component of natural gas - has 86 times more global warming potential than carbon dioxide over a 20-year time horizon when emitted directly into the atmosphere, which is important because of high leakage rates in the Texas natural gas production system; and WHEREAS, the Austin Energy Resource, Generation and Climate Protection Plan to 2035 includes a commitment to “incorporating community input, prior to bringing a [natural gas peaker] project forward for approval”; and WHEREAS, the Austin Energy Resource, Generation and Climate Protection Plan to 2035 states “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”; and WHEREAS, the Austin City Charter states that all purchases greater than $5,000 must be let through a competitive bidding process; and WHEREAS, Texas state law requires municipalities to use competitive purchasing for purchases over $50,000; and WHEREAS, Austin Energy is requesting authorization to develop and execute a contract to purchase 400 megawatts of gas-burning peaker power generation without issuing a request for proposals or a bids and without revealing to the public the cost, who the contract would be with, where the peakers would be located, how the financial impact of peakers compares to batteries and other clean energy options, or resulting emissions, NOW THEREFORE, BE IT RESOLVED, by the Environmental Commission that the Commission recommends that the Austin City Council: • Reject the authorization of Austin Energy to develop and execute any contract to purchase gas peaker power generation; and • Direct the city manager to conduct a thorough and well-promoted public engagement process on the choice between gas peakers and a combination of zero emissions alternatives; and • Ensure that input and feedback from the public (especially from residents nearby the proposed peaker plants) are incorporated into subsequent plans for procuring energy resources; and • Direct the city manager to use the established transparent competitive purchasing processes for all procurement, in accordance with the Austin City Charter; and • Be fully transparent with the community about the cost of any Austin Energy resources and the financial risks associated with potential stranded assets; and • Direct the city manager to conduct an independent economic analysis to evaluate the feasibility of implementing zero emissions technologies and energy management (such as having Austin Energy build solar panels on residential and commercial properties . that they can generate energy from) compared to gas peakers, including the financial impacts of the added greenhouse gas emissions and local air pollution; and • Direct the city manager to conduct an independent environmental impact analysis on developing these gas peaker facilities versus implementing zero emissions technologies and energy management; and • Fully fund the development of a robust resource generation plan that can achieve reliable and carbon-free energy delivery by 2035; and • Prioritize implementing zero-emissions technologies to achieve zero carbon emissions from Austin Energy’s generation sources by 2035. Date of Approval: May 20, 2026 Motioned By: Secretary Qureshi Seconded By: Commissioner Sullivan Vote: For: 8-0 Chair Krueger, Secretary Qureshi, Commissioners Brimer, Changsut, Fierro, Fleury, Morrison, and Sullivan Against: None Abstain: None Off the dais: None Absent: Vice Chair Bristol and Commissioner Luecke Attest: _____________________________________________ Mariana Krueger, Chair