Then There's This: Excuse My Biomass

Wouldn't you know it. Nearly four years after the Austin City Council unanimously approved a $2.3 billion deal to build a biomass plant in East Texas, the contentious issue has again reared its head – emerging this time in the midst of a council election season and an electric rate case. The 100-megawatt facility near Nacodoches is scheduled to fire up for the first time this summer, officially joining Austin Energy's alternative energy portfolio of solar and wind power.

The facility will provide 100 megawatts of energy fueled by wood waste, sawmill scraps, and broken pallets. The city has committed to an ambitious climate protection plan, with a goal of drawing 30% of its electricity from renewable sources by 2020. To meet this goal, the city entered into a 20-year agreement with Nacodoches Power (aka American Renewables) in August 2008. The following year, American Renewables sold the biomass project to Southern Power Com­pany, which is one of the largest wholesale energy providers in the Southeast, according to its website.

There are a few reasons biomass is a topic of concern these days. Envi­ron­mentalists who opposed the biomass plan on grounds that it was too expensive and not all that green point to the fact that natural gas prices have gone from high to low since the deal was signed. "They thought gas prices were going to go up," said renewable energy consultant Mike Sloan. "By the time City Council approved the contract, the economy was already starting to crash – that's not the time to lock into something really expensive." Added enviro activist Paul Robbins: "When people make decisions based on fear, they are often wrong in hindsight."

It All Happened So Fast

On the campaign trail, several candidates have criticized the current council for moving too quickly to approve the biomass agreement with limited input during a month – August – when few people are paying attention to how their tax dollars are being spent. The council was responding to the common hurry-hurry-rush-rush tactic from the folks trying to sell the deal to various Texas utilities.

"The biomass plant is a decision I would love to have the opportunity to revisit," Mayor Lee Leffingwell (a council member at the time of the vote) told News Editor Michael King last week following remarks made by opponent Brigid Shea at a candidates' forum a few days earlier. Shea was among those who had sent a letter to council members asking them to delay or reject the vote because the proposal carried too many "caution flags."

Despite the current state of unhappiness over the biomass project, there's still one person who remains convinced it was the right decision: former AE General Man­ag­er Roger Duncan. "The price of energy from the biomass plant is well below the price of energy from the solar plant," he said, referring to the recently opened 30-megawatt Webberville operation hailed by local enviros. "The total energy bill is higher because we are getting far more energy from the biomass plant. The solar plant ... operates somewhere between 20 to 30 percent of the time, while the biomass plant ... will be operating 80 to 90 percent of the time."

He went on, "Wind and solar both operate just a small percentage of time compared to the biomass plant, and it's very hard to reach the renewable energy targets that we have set for ourselves without a high-capacity factor renewable energy plant. So no, I don't think it was a bad deal, particularly since it allows us to diversify our renewable energy sources, and the price of energy was between wind and solar."

Fuel Charge Overlooked

While renewable energy advocates have been blamed for Austin Energy's need to raise rates, biomass and solar actually play a small role in the rate debate. But their costs are both drivers in the utility's separate fuel charge, which increased by 16% in January – with no approval from council.

Electric Utility Commissioner Barbara Day, who has spent her entire legal career advocating on behalf of consumers in utility rate cases, said she was shocked to learn there is no council oversight of the fuel charge increase reflected on ratepayers' bills (with the exception of GreenChoice customers). But because the rate case is consuming much of the council's time, the fuel-charge matter isn't exactly a burning issue right now.

"Austin has no process for making Austin Energy account for any changes [in fuel charges] or for getting them approved," Day said.

If and when the fuel-charge issue ever catches fire, the city will likely want to reexamine how, exactly, it intends to pay for the admirable goals laid out in the 2007 climate protection plan that former Mayor Will Wynn rolled out with much fanfare.

Addressing biomass as a driver of the fuel cost increase, Duncan said the council was informed that the fuel charge would go up in 2012. "Certainly, part of the current increase is due to the biomass plant," he said. But, "Everyone who's against the biomass plant because it cost so much ... I don't hear that comment about a more expensive fuel, which is solar, and they're both important renewable energy resources," he added.

Still, it's important to remember that biomass was a rush job, opposed by the very people who support renewable energy.