Dispelling Green Choice Myths

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Since the Austin American Statesman published a couple of articles on the less-than-stellar sales of Austin Energy's Green Choice program, many media outlets have picked up the story and the takeaway message is something like “liberal Austin finds out the hard way that renewable energy is too expensive”. It's really regrettable that this message is permeating throughout the country because it's just not true.

Austin Energy's sales of the most recent GreenChoice batch have been low, but I hope that folks will understand that the blame lies not with wind energy itself but some serious underlying problems with the rate structure of this program and the way the energy market is regulated in Texas (hint: it isn't).

The high cost of GreenChoice highlights the failure of the deregulated market. Consumers are now unfairly burdened with the transmission costs to get wind energy from West Texas to the center of the state. Wind has to pay a toll to drive the power transmission highway, but coal, gas, and nuclear get a free ride.  Not all utilities charge similar transmission costs, and in many places that would be factored into the simple cost of doing business, but in Austin consumers are asked to foot that bill. Then there's the fact that coal, gas, and nuclear power currently have priority on the transmission grid.  If the wind can provide 300 MW of energy at a given time and coal can dispatch 300 MW, but there is only room for 400 MW of power to run through the lines, coal gets to move 300 MW and wind can only move 100 MW.

Another problem with Green Choice is that in addition to paying for 100% wind, customers are forced to pay the maintenance and capitol costs to upkeep Austin's dirty power sources. That just isn't fair – folks shouldn't have to pay a premium for clean energy and then be asked to foot the bill for polluters too.  Folks argue that GreenChoice customers should pay a portion of the upkeep for traditional dirty power sources when the wind isn't blowing, but they shouldn't pay the same full capital and maintenance costs that average customers pay. If anything, GreenChoice customers should be offered a pro-rated charge for those costs, so that they only pay the maintenance costs for when they are actually getting power from those dirty sources.  Right now, Austin Energy is asking GreenChoice customers to pay an Equal share of maintenance and upkeep for an Unequal share of power – not fair.

Then there's the fact that Austin Energy got a bad deal on this contract. They bought into a ten year power purchase agreement when natural gas prices, and energy prices in general, were at an all time high (remember $4/gallon gas?).

Austin Energy could easily restructure this program so that it is more affordable. GreenChoice wouldn't be so expensive if wind was operating on a level playing field with fossil fuels. Austin Energy can make that happen.

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  1. just another vet on

    In Austin
    Does the same company own the power generation and the transmission lines? I am pretty sure in north Texas the transmission grid is separated from generation, and everyone pays the same rate for transmitting power through the lines.

    I also thought the whole point of the CREZ project was to increase wind energy transmission on the Texas grid.  

    • citizen.sarah on

      generation versus transmission
      In all of Texas the grid is owned by ERCOT, the Electric Reliability Council of Texas, whereas generation facilities are owned and operated by a variety of different energy corporations.  You've got that part right.  But you're wrong that everyone pays the same rate for transmitting power — that's what I'm saying is not fair.  Wind buyers have to pay extra for their share of the lines, and purchasers of traditional dirty energy don't.

      Once the CREZ lines are built out, that will help with the transmission/congestion problem — but they are just mapping out the course of those lines now, and won't have them built for another 3-5 years.  And since the lege approved the middle of the road CREZ scenario as opposed to a plan that created significantly more capacity for transmission, the majority of those lines will be filled up by energy from turbines currently in existence.  

      But won't more turbines be built in the next 3-5 years, putting more stress on those lines? Probably so. Whoops :/

      • citizen.sarah on

        correction
        The grid is CONTROLLED by ERCOT, but they don't actually own anything. Different pieces of the grid are owned by many different sources.  Wires companies are either private, like Austin Energy or PEC, LCRA, which is a special entity that we've more or less inherited from the federal government, or investor-owned utilities like ONCOR or Centerpoint.

        Sorry for the mistake, but this stuff is COMPLICATED.

        All generation is either public or private — wires investor owned utilities can't own generatation.  But sometimes those private companies own both transmission and generation.

        My head hurts.

  2. Wind Power
    We have a similar program in San Antonio, and there is only a slight premium for wind, and at certain times even a discount for wind because we lock into a one year contract.  Did Austin really negotiate a much worse contract than CPS in San Antonio?

    • citizen.sarah on

      coastal wind
      San Antonio bought most of their wind from projects around the coast, where the transmission problem doesn't exist because there are plenty of lines and they aren't congested.  Another cool thing about coastal wind is that it blows hardest during the day, when energy demand is higher, as opposed to out West when the wind really gets kicking in the middle of the night when most people are asleep.  That's why we need some heavy R & D into energy storage, so we can sock away the energy produced during the night and dispatch it throughout the day when its needed most.

  3. Energy is fungible
    GreenChoice, as a separate program, makes very little sense to me (I get the political reality of setting it up in the first place — billing it as Zero Cost to those that don't opt-in).  The energy that is coming to Austin Energy, whether it be by wind or natural gas or coal yields electrons that look an awful lot a like.

    By setting up a two-tiered system — Green and Not-Green — and then requiring people to buy into green (but not necessarily everyone can buy into the green choice — only so many slots are available), Austin Energy is not really doing what it can to provide its customers with the cleanest, most sustainable and (ultimately in the long run) best power sources.  

    Instead, because of the whims of the energy market, customers will often fight tooth and nail to get into the program  when traditional energy costs are high (such as the OP notes when gasoline was $4/gal) and stay away from the program when those costs are lower (such as now).  This may lead Austin Energy to falsely reconsider the next major purchase of renewable energy when such an opportunity arises, believing that its customers aren't interested.

    Austin Energy should combine the programs and let everyone collectively share the benefit or cost of one price of energy being cheaper than the other.  This will ensure that when a new source of cleaner, more sustainable energy comes online and is available for Austin Energy's procurement, it can be snapped up without worry of selling enough subscribers.  Plus, it is consistent with the City's message of working for a better environment.

    • citizen.sarah on

      my bills
      Unfortunately I rent out half a house and not a separate unit, so my land lady handles the bills and I pay a fixed rent.  But at my place of employment, Public Citizen — where I learn all these nifty facts about clean energy and the nuts and bolts of our utility's programs — we are signed up for this past batch.

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