Austin, Texas approves (another) 150 MW solar contract

Austin has long shown a different kind of face to the world than the rest of Texas. A blue city in a deep red state, Austin has reveled in being different, as captured in the “Keep Austin Weird” campaign.

Austin, along with San Antonio, has also been a leader in moving the oil and gas state of Texas to solar, by signing a series of power purchase agreements with large solar projects in Central and Western Texas. Yesterday the city expanded on that leadership, with the City Council approving a 15-year contract with Intersect Power for the output of a 150 MW solar project.

This will bring the solar capacity that municipal utility Austin Energy has under contract to 792 MW, and along with 1.4 GW of wind this will allow the utility to source an estimated 51% of the electricity it provides to one million residents of Austin and surrounding areas from renewable energy by 2020.

While Austin Energy did not reveal the price, it did state that it expected the contract to have a beneficial impact on customer bills based on current market prices and future forecasts. This is not surprising as the earlier contracts signed by the utility showed extremely low prices. Cyrus Reed of the Lone Star Sierra Club noted that this contract will be the first one that Austin Energy signs wherein its customers will begin saving money the first year.

“This is really a watershed moment and so I want to salute the city council for the generation planning you did and for making the decision to actually delay a few years this particular purchase to look at those lower prices because we’re now seeing the results of those prices,” stated Reed in his comments before the Council.

Austin Energy will also be allowed to purchase another 30 MW provided that it has the same economics. The new contract also follows Austin Energy’s plan for a 1.25 MW community solar project in East Austin, 50% of which will be dedicated to low-income customers.

And these will not be the last solar or wind contracts that Austin Energy signs, as in August the city set a goal to reach 65% renewable energy by 2027 – a timetable similarly ambitious to the renewable energy mandates in the leading states of Vermont and Hawaii. The utility estimates that at least 150 MW more solar will be part of reaching that goal.