Why Austin Can’t Seem to Quit Its Despised Coal Plant

Locals continue to get coal for Christmas

Art by Zeke Barbaro / Getty Images

For decades, Austinites have been calling for the closure of the Fayette Power Project, the coal plant responsible for about a quarter of our city's greenhouse gas emissions. It would seem an achievable goal: Austin Energy is a public entity, controlled by our elected City Council, and the electorate has voted time and time again for climate-conscious candidates. As a result, the city of Austin has committed to be fully carbon-free by 2035. That requires rejecting coal. So why is 13% of our energy still coming from Fayette?

The answer lies in the plant's two owners, Austin Energy and the enigmatic state entity called Lower Colorado River Authority. Council can put pressure on AE to kick coal to the curb, but without LCRA's cooperation, Fayette will likely keep chugging along. And indeed, negotiations between LCRA and AE that would have allowed the city to quit Fayette years ago stalled to a halt in 2021. That's despite the fact that Fayette's operations interfere with LCRA's and Austin's shared water problems. Eventually closing Fayette would free up a massive amount of water in our increasingly drought-stricken region.

There will be a new opportunity for Council to put pressure on Austin Energy to quit coal early next year when it considers an update to the public utility's 2030 resource plan. But that pressure, and even an updated plan, might not be enough. In the 2020 rendition of that plan, AE committed to withdrawing from its share of the coal plant by 2022, but missed that deadline when AE and LCRA couldn't agree on an affordable price for AE to buy its way out. Both parties declined to define what price that was. Two years later, there appears to be have been zero movement on the issue despite increasing public pressure and protests from environmental advocates.

Meanwhile, good reasons to get out of the coal business have been mounting. Climate change-related drought conditions have been severe, and researchers from UT-Austin and Harvard University recently found that coal plant emissions are more dangerous to humans than previously thought. Their Nov. 23 study shows that particulate matter from coal plants specifically carries twice the mortality risk of all other sources of that pollution. More tangibly, it notes that in the last two decades, coal emissions killed at least half a million people in the United States – and that's a conservative estimate.

Still, AE told the Chronicle there is currently no revised timeline for withdrawal in its upcoming update to the 2030 resource plan, which City Council will consider in February 2024. In anticipation of that process, consumer advocacy group Public Citizen has urged Council to pressure AE to part ways with LCRA: "Until council members decide to exercise their authority as the governing and regulatory body of the city's electric utility, Austin will continue to have coal on its hands." In a statement to Council last month, Sierra Club's Shane Johnson urged Council members to consider their legacy: "This City Council has the opportunity to be remembered as the leaders who finally shut down the last remaining coal plant used by Austin."

When asked if she'll support withdrawal from Fayette, Council Member Leslie Pool (who chairs the Austin Energy Utility Oversight Committee) said she is "eager to review Austin Energy's proposed updates. ... I expect the City's long-standing, fundamental goal to reach zero carbon emissions by 2035 to remain unchanged."

Fayette Power Project near La Grange (Photo by Imjeffp / CC BY-SA 4.0)

Cleanin' Up

Even if Austin pulls out of Fayette, LCRA will likely continue to operate it. But Environment Texas' Luke Metzger says Austin rejecting Fayette would be "more than symbolic. We would have to make up that generation somewhere – Austin Energy would invest in new wind or solar that the grid wouldn't otherwise have. The coal plant won't shut down, but the grid ultimately becomes cleaner by Austin getting out of it."

Energy experts have suggested that there's little financial incentive for AE to pull out of Fayette, which allows AE to sell energy to the market to keep utility bills reasonable for ratepayers. The exit price is a factor – "certainly if we have to pay LCRA billions of dollars, that would ultimately come down to ratepayers," says Metzger. Plus, Austin Energy would also have to increase its dependence on transmission line infrastructure – notoriously lacking in Texas – to get energy from renewable projects elsewhere in the state. But Metzger says replacing Fayette with renewable power would not have to be more expensive, "especially with the Inflation Reduction Act – there's all this money to facilitate decommissioning of coal plants and replacing [them] with clean energy."

So why doesn't LCRA do that?

Hill Country Honcho

To answer that question, one must understand what all LCRA actually does. A governmental entity beholden only to the Texas Commission on Environmental Quality and the climate-skeptical Texas Legislature, LCRA has no emissions reduction plan and no plans for shutting down Fayette as long as it continues to be a cheap and reliable source of power. Judging by the last legislative session's frenzy of investment in nonrenewable energy, our state is unlikely to force LCRA to drop Fayette.

Though energy is the main moneymaker for LCRA, it also holds senior rights to water in a region that is rapidly desertifying. It manages the Colorado River from Lake Buchanan to Matagorda Bay, a stretch that supplies our fair city's drinking water through the Highland Lakes. LCRA also produces and sells electric power, manages transmission lines, and owns several public parks. It's also 100% funded by its own revenue. As climate change and development continue to put pressure on Central Texas, its decisions will affect not only the region's greenhouse gas emissions but the longevity of its water supply as well.

This last legislative session, lawmakers were set to hire LCRA to build a $10 billion fleet of gas plants to use as backup power during times of grid strain – that bill ultimately failed, but it indicates how much power LCRA has in the state's energy sphere. Like all governmental agencies, they undergo a comprehensive Sunset review every few years. The last one in 2019 made transparency the focus of its recommendations, finding that battles over LCRA's groundwater pumping had severely eroded public trust. The Sunset report noted that LCRA was "on the defensive, working uphill against a public trust shortage it might have alleviated with more preemptive public engagement."

This sets them apart from public utilities like Austin Energy, which City Council holds accountable to its ratepayers. Metzger says, "We've got kind of direct influence on [AE], by electing the mayor and City Council. LCRA doesn't have any direct customers itself." That lack of public influence also means that it's up to the Legislature to mandate any climate goals. "[LCRA's] job is to sell water and sell power, so they don't have a financial incentive then to conserve, and [there's] no overriding mission that directs them to do that, either."

If the Legislature won't compel the closure of Fayette, then financial deterrents could help convince LCRA. Fayette, like most coal plants, is not excessively clean – in 2010, several environmental groups sued LCRA for tens of thousands of Clean Air Act violations, and in 2012 LCRA was sued successfully by the Environmental Integrity Project for violating state-issued air pollution permits. Since then, LCRA has installed sulfur dioxide pollution controls called "scrubbers," but a new Environmental Protection Agency standard this year requires another control for nitrogen oxide pollution, which will cost LCRA approximately $200 million to install.

Those federal controls may make continuing to operate Fayette less desirable for LCRA: In May of this year, Austin Energy's Pat Sweeney told the Chronicle that "the rule would put significant cost pressure on maintaining and operating the plant going forward." In a statement to Council last month, Metzger warned, "Austin and LCRA may soon have to pay $200 million in pollution controls to Fayette to comply with federal clean air rules. Rather than do that, let's take that money and use it to buy our way out."

La Loma Community Solar Farm in East Austin. If we replaced energy from Fayette with solar or other renewable energy, it would free up enough water to serve Leander. (Photo by Jana Birchum)

Running Out of Water

Net-zero goals aside, there's another really good reason to shut Fayette down: The plant uses about as much Colorado River water as the city of Leander per year, and more than the city of Pflugerville. Amid increasingly dire droughts and booming development, a coal plant is competing for our drinking water.

In terms of water management, LCRA both solicits pumping permits from groundwater conservation districts (GCDs) – regulatory bodies created by the Legislature – and doles out shares of surface water, like the Highland Lakes. Those sources are under a lot of pressure: According to LCRA's own data, water use from the Highland Lakes more than doubled from 2021 to 2022. LCRA is thus managing a lot of competing interests for a scarce resource: farmers who need water for crop irrigation, Austin and other communities that need drinking water for ever-growing populations, the Central Texas Water Coalition (a group of lakefront property owners on Lake Travis that want to maintain lake levels for recreation and property values), and last but not least, environmental advocacy groups that want to maintain healthy flows in surface waters to preserve Texas ecosystems. A series of pending lawsuits in the last few years around groundwater pumping in Bastrop exemplifies those competing interests and LCRA's role among them.

In 2018, LCRA applied to the Lost Pines Groundwater Conservation District for eight wells that would allow them to pump 25,000 acre-feet a year from the Simsboro Aquifer, to be sold to customers in Bastrop, Lee, and Travis counties. (For comparison, the city of Austin uses around 125,000 acre-feet a year.) The district granted the permit in November 2021, but only for 8,000 acre-feet a year, and added a requirement that LCRA monitor the impact the groundwater pumping would have on surface water. LCRA didn't like either of those decisions, and sued Lost Pines GCD over it. A series of responding suits and appeals shot back and forth between LCRA and several local stakeholders, including the city of Elgin, private water utilities, and nonprofit Environmental Stewardship. Per the Statesman's reporting, amidst the ongoing ordeal, lawyers have dubbed the LCRA a "water pirate" and an "insatiable leviathan."

Steve Box, executive director of water conservation advocacy group Environmental Stewardship, has another name for LCRA: "the recalcitrant steward." He says the case calls into question how seriously LCRA takes their role in protecting water, flagging specifically their reluctance to monitor the effects pumping will have on surface flows: "In all these appeals LCRA have declared themselves the stewards of the Colorado River, right? Well, as the steward of the Colorado River, they should be taking damn good care of it. Not avoiding it or turning their back on it."

Every five years LCRA makes a new water management plan, but none have included closing Fayette to free up a whole suburb's worth of water. Instead, conservation pressure has been passed on to consumers – this summer Austin had to abide by Stage 2 watering restrictions when the Highland Lakes dropped below 900,000 acre-feet due to the lowest inflows on record. LCRA had to cut off Highland Lakes water entirely to agricultural customers downstream. (Right now, the lakes are 42% full, at about 841,000 acre-feet.)

Next summer, if the combined storage of the Highland Lakes falls below 600,000 acre-feet, LCRA will require customers to pull back 20% of their water use. Under current predictions, El Niño conditions this winter should provide enough rain to keep us around 800,000 acre-feet by May. But Jennifer Walker of the National Wildlife Federation points out that May is just the beginning of peak watering season. "If we don't get rain this winter, and if we have another really hot, dry summer, we might drop down that low" – enough to trigger the next stage of drought controls.

These two issues – increased pressure to close Fayette and the ever-depleting amount of water for new permits – may in fact dovetail at some point. Though LCRA says it "intends to operate FPP as long as it continues to be a reliable, cost-effective source of power," more media and political attention, along with looming expensive pollution control requirements, have put pressure on LCRA to close the plant. "As water supplies become more strained in the region," says Walker, "and as we have different sources of energy out there that are cleaner, taking a good look at the amount of water that could be gained from closing Fayette is something that I expect that folks are very interested in."

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Fayette Power Project, Austin Energy, Lower Colorado River Authority, Highland Lakes

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