On Thursday (Jan. 28), City Council discusses Austin Energy‘s 2020 generation plan proposal, hoping to establish the right mix of traditional and renewable energy resources to power Austin’s homes and businesses through the next decade. Despite nearly two years of deliberation on the plan – and support for AE’s proposal from the Electric Utility Commission, the Resource Management Commission, and the Austin Generation Resource Planning Task Force – council is unlikely to be making any quick decisions. While the proposal fulfills Austin Climate Protection Plan goals, critics have charged it doesn’t go far enough, especially when it comes to phasing out coal; others have balked at the potential costs. As public debate has focused on balancing these issues, officials looking ahead to the next legislative session have hit upon yet another troubling concern: potential deregulation of Texas’ municipally owned utilities.
If publicly owned utilities such as AE were to some extent privatized and forced to compete in Texas’ energy market, the city of Austin could lose a substantial chunk of its income. (About 20% of the city’s money comes from utility fund transfers; it’s unclear whether deregulation would affect the entire AE amount or just a portion.) Rumors began circulating last fall that generation-plan skeptics might support deregulation efforts in 2011, in retaliation for passage of the plan, but supporters held their ground. “There certainly are always rumors about the industrials going to the Legislature asking for Austin to be deregulated,” said Public Citizen‘s Tom “Smitty” Smith at the time. “And we fully expect they will, whether or not” AE takes a position favorable toward them, he added. Meanwhile, John Sutton of the Building Owners and Managers Association – a member of both the AE task force and the Coalition for Clean, Affordable, Reliable Energy, one of the most vocal critics of the plan – says he knows of no such efforts. “That [deregulation] was one of the things that we [at CCARE] threw out there as a possibility,” said Sutton recently, referring to discussions last fall, “but it didn’t really go very far.”
City staff and council members couldn’t point to a specific person or group professing to support deregulation, but several said the possibility can’t be ignored. City Council Member Bill Spelman said such opposition has “largely been motivated by folks who don’t realize our costs are going to go up anyway.” Still, he said, there’s reason to believe that the Lege is watching Austin. Last week, Lt. Gov. David Dewhurst issued interim charges to the Senate Business and Commerce Committee to “study the generation costs of municipally owned electric utilities’ planned generation portfolios.”
“It doesn’t say, ‘Let’s talk about opening Austin up to competition.’ I think that’s what everybody’s reading into it, and I’m not even sure whether that’s appropriate. Maybe we shouldn’t be reading anything into it,” said Spelman. Nonetheless, he said, “I think we need to take it very seriously.”
While the generation plan remains on council’s regular Thursday agenda, the deregulation issue may stay behind closed doors for now, as council has also scheduled an executive session “to discuss or take action on a ‘competitive matter’ of Austin Energy.” The generation plan debate is likely to drag on for at least another month; city staff are planning a public forum on the plan for mid- to late February.
This article appears in January 29 • 2010.