Naked City

When it comes to utility restructuring, Austin has managed to hold onto its bragging rights over Dallas-Fort Worth. At last year's deregulation hearings in the Texas Legislature, consumer advocates and environmentalists voiced concern over Dallas' power delivery infrastructure, which is provided by privately owned TX Utilities (TXU). In contrast, Austin Energy (AE), Austin's municipally owned utility, has worked for years to pave the way for Smart Growth by ensuring that consumers will have a reliable source of electricity even with record demand.

What's more, the utility has initiated several "green" alternative energy initiatives; the latest of these is a program to build a facility that will sell chilled water, providing a newfangled cooling system for the new Austin City Hall, Austin Museum of Art, and several downtown office buildings. Similar technology has been used in Houston to cool Enron Field, the new home of the Astros. A spokesman for AE indicates that his company's commitment reflects an ongoing push to match the utility's goals to the needs of the city, as well as its residential and commercial electrical consumers. John Baker, director of customer care and marketing at AE, says the chilling facility will cost about $13.4 million and provide the cooling capacity of nearly 2,400 average home air-conditioning units; it should also be about 40% more efficient than systems that rely on forced air. "Since we are locally owned," Baker explains, "our focus is on Austin. We are not distracted by other business opportunities, and we're not into activities that larger, privately owned utilities are getting involved in right now."

Tom Smith of Public Citizen of Texas says that right now, Austin Energy is doing right by consumers. Although he's concerned about a new resolution that might provide the company a legal shield from public review of its finances, Smith praises AE for its continued commitment to energy conservation and community responsibility. "Not only do 'munis' tend to supply power at much less cost," says Smith, "but they have also tended to be much more innovative when it comes to these sorts of issues." In a city such as Dallas, he says, the need to replace and update power plants could provide a perfect excuse to rectify the problem of having the power grid dissociated from urban planning.

Smith adds that he would like to see AE and other Texas utilities begin to add facilities that could generate energy for both heating and cooling, a concept known as co-generation. Baker says that AE has begun to look at the economics of such a program, although it has yet to make a firm commitment. Smith maintains that TXU power lines crisscrossing the Metroplex have caused reliability to suffer and created air pollution problems. "They have failed to build an adequate number of lines from outlying areas into the city," he says. "They have many of the oldest power plants and some of the dirtiest in the state. Co-generation would be easy to do in the Dallas area because of the troubles they already have."

These same problems drew the attention of a national coalition called Lighten the Load, which is studying issues surrounding electric restructuring in Texas and other states. Members of the coalition addressed a July meeting of the state Legislature's Joint Committee on Oversight of Electric Utility Restructuring. A press release from the group suggests that by using "the right combination of incentives and standards, Texas can meet the dual goals of reliable power and safe, breathable air by reducing summertime peak energy demand, and helping utility customers get more from the energy they consume."

This is the gospel preached by Smith and others in the Austin community who hope a variety of initiatives across the state might prompt utilities to boost their energy-conservation programs and combat pollution as the population -- and demand for electricity -- grows and the deregulation process continues.

Baker fears that one obstacle to all this could be if AE and the city decide to allow the utility to opt in to the competitive marketplace, which might increase the local load. "If consumers in Austin were to elect to go with deregulation, we would still be locally owned," he says. "But there some of the costs associated with the transition would have to be made up in some way."