Georgetown Renewable Energy Plan
The following are edited excerpts from the Eco-Capitalist Podcast.
Steven Rosenberg: My name is Steven Rosenberg and welcome to The Eco-Capitalist. We’ve got Dave Dixon and Chris Foster with Georgetown here in Texas. Why don’t you introduce yourself and tell the world a little bit about what you do?
Chris Foster: Absolutely. So I’m the city’s manager of Resource Planning and Integration. It’s a long title for basically an economist. Most of my job during the day is buying and selling wholesale energy for the electric utility.
Rosenberg: And what’s special about Georgetown?
Foster: So what makes us different than other utilities here is everything we do is based upon economic electric models and those models led us to purchasing renewable energy for our wholesale supply for every customer of our utility. We have about 70,000 people who live in town, a lot of different businesses, city facilities, and every single one of them are now renewable-powered.
Rosenberg: Excellent. And Dave, why don’t you introduce to the people out there that might not know who you are?
Dave Dixon: Sure. I am Dave Dixon. I’m with NATiVE. We’re a zero net energy home builder and solar installer in Austin, and we also work around the state. I’m also on the board of Solar Austin. We are always looking to promote the solar industry and solar policies in Austin and surrounding communities.
Rosenberg: Excellent. So tell me what the last couple of years has been like here in Georgetown and what the next years from here are going to look like.
Foster: The last couple of years have seen a lot of explosive growth here. In the last three years in a row, we were ranked number one, number two, and then number five of the fastest groups, at least, in the nation. There’s a lot of new people which gives the utility the advantage of being one of the few utilities that’s also growing. We came out of some old power contracts and…we timed the market really well. I say we timed it, we were very fortunate, and when we went to the market to go get energy, the renewable power prices were very cheap and cheaper than the fossil fuel bids and the nuclear bids which allowed us to go grab those long-term contracts. And because we overbuilt them, we now have excess RECs to settle against all our power usage. So our utility had the plan to get 30% renewables by 2030, but due to the timing of the market and the growth in the last couple of years, and the way Texas is growing, we hit 100% officially this past April.
Rosenberg: If you can make that happen in Texas, especially in a conservative town like Georgetown, or Texas in general, that’s a really big deal.
Foster: It was very shocking around the world to have a city in the middle of the fracking boom in Texas, and say, “No, we’re just going to go all-renewable power.” We didn’t do it for a political statement. We knew in 2008, our old contracts were going to end by 2016. We knew we had to transition to something new. We were in a very unique position as a utility where once those contracts ended, we actually lost the rights to every power plant. Which is different than Austin. Austin owns power plants that are paid off, and so when they run those, it’s cheaper just to keep them–we didn’t have that.
So we bid everything brand new, and those bids came back very cheap for renewable power. The long-term stability is good for the community, and we also have industries here that have very long lead times when they bid out products, so for them, they don’t have to have the cheapest electric rate but they have to know exactly what it is to get the cheapest bids, right? So it’s very important for business communities, since those two interests wind up exactly, it matched the renewal portfolio and made it easy to bring it in economically, and it was only after all that work was done that we went back and said, “Are we going to tell anybody that we have all renewable power and we don’t have fossil fuels anymore?” And we thought about that for a while which is why the announcement wasn’t made until two years ago. And we were just thinking, “Should we tell anybody? Does it matter? Are people going to care?” And so when we told council and we asked, the council said, “You know what? People probably won’t care but at the very minimum, our economic development is definitely thinking, if they have that as a pitch, maybe we can help bring in some other businesses,” and so they said, “Let’s just say it and see what happens.” And then, it just exploded.
Dixon: So, looking at the adoption of solar, in the last 10 to 15 years in Texas and in the US, it was very much driven by an environmental movement, and now it’s much more of a financial investment. We’ve seen this change as that price point has come way down, and when you guys were looking at solar, you were kind of on the front end of that —what year did you get started? 2014?
Foster: Yes. 2014. And that time, ERCOT had 148 megawatts of solar utility scale for the entire state, which is a blip. Our bid was for 150MW, and ERCOT didn’t have a great plan for solar at the time and weren’t sure how it was going to integrate but that was the signal to them that said, more of this is going to come, and what’s happened since then is prices have continued to crash at utility scale. Now ERCOT’s got up to 20,000 megawatts of solar. They’re looking at, they have to potentially plan for that over the next five to ten years. And that’s a big game changer for so many like ERCOT which is why they’re working on other kind of rules around demand response and how to integrate batteries.
Batteries have actually a very unique advantage that because of that, they are considered both a load and a resource, so when you’re moving energy, you have zero congestion charges because you don’t have to go from the resource through the hub, to the load zone, financially. It’s all considered the same spot. ERCOT is looking at all those things and the implications for other types of generation and they have realized the advantage of having those resources on the market. I don’t know when battery is going to make sense for homes, but for the utility, it’s actually financially there now. There’s places I can drop them on the grid today that have an instant return.
Dixon: A lot of the feasibility of a battery at a home depends on what kind of rate structure you’re dealing with. If your utility rate plan offers no advantage to move a load around from night to day, there’s really no value to having a battery, assuming they’re giving you value back for the electricity that you export back for the grid. While there may not be value in one jurisdiction, there might be a lot of value in another. So in places like Hawaii and California, there’s places where because of the rules and rates, there is a value proposition for batteries.
Foster: Yes, this is the truth. So on our grid, we don’t have time of use rates in the Georgetown area. But we do net meter and true up at the end of the year —so there is a good incentive for people who use solar up here. However, there is no incentive for battery.
Dixon: So I wanted just to take you back to 2014 when you guys were presenting this proposition to council. What kind of push back or acceptance there was among council members and among the general public? These large renewable contracts were a big deal.
Foster: There was a lot of support, beginning in 2008. We had both the council and the utility board. They didn’t come out and specifically say, “We want renewables over everything else.” What they said was, “We’re okay if you get to at least 30% renewables because we need this as a product for businesses, but what we really want you to do is, find long-term power at a reasonable cost.” It doesn’t have to be the cheapest in the market, but we just wanted to be relatively competitive, and find something that mitigates our exposure to regulatory risk, as everybody’s worried about what the EPA is doing. With the conservative stereotype you get out here, you would think they wouldn’t naturally be on board with renewables, but they were far more concerned about over regulation than they were about what kind of power we have.
When we brought back all the bids and said, “Okay, these are all your different power types. These are the advantages and disadvantages to them.” We had bids from coal, gas, and solar, and wind. When I looked at, in particular, the wind bids, we did our own calculations on the production, verified numbers, made sure the economics were there, and we picked the stuff that had the best economics. We also looked at the risk profile of each bid. There’s a value in renewables and that they don’t tie up water rights, and as we grow and we hit 250,000 people, we’re going to need more water rights, so you have power that doesn’t need water.
When council read details of the contracts they said, “You know what? They are the cheapest deals and they make the best sense for us a city, so we’re going to take those,” and they were all on board, nobody objected to it. Nobody sat there and went, “Oh, these are renewable deals, we should back away from them on principle.” So it was really fantastic conversation.
After we made the announcement, and said, “Hey, you’re 100% renewable,” there were a handful of people that came out and their primary fear was actually that if there was cloud cover and no wind, the city would go dark, and so we had some communication campaign to let people know that that’s not how ERCOT grid operates. It’s a balancing act of power. So the power doesn’t shut off just because the weather changes, and so once people got comfortable with that, all the opposition went away. We’ve had thousands of people calling us and saying, “You guys are doing a great job, we’re proud of you. We didn’t know you were working on that.” So it’s been very, very overwhelming, supportive community, and really, from around the world.
Dixon: So really, I’m curious. I think this is a question you probably would get from people is what happens if all three power plants are not operating? Do you then have to buy energy in the spot market? Additionally, how much energy did you model you would have to buy in the market? How does that reconcile with the reality?
Foster: Yeah, no, no, it’s worked out really well. So the farm in the Panhandle produces about 600,000 megawatt hours a year. The one in the West Texas is about 50,000 megawatt hours a year, and the solar farm is going to be about 420,000. As a city, last year, we only consumed about 610,000. This year, we’re actually going to be on pace for 670,000. But we’ll have enough power out of the units on an annual basis to give us 100% renewable power.
But most of my days are actually spent developing plans to hedge around the financials and I probably spent half the time manipulating the grid supply and the other half the time, just taking straight power. Financially speaking, yeah, we’re market every day. But that was expected.
Dixon: Okay, interesting. One thing that’s also fascinating about this is that you say that you were not sure if to or how to market Georgetown as a 100% renewable utility. I’m sure it’s probably a surprise to you just how much attention that you got being the first in Texas.
Foster: Yeah, I was one of the many people that said, “Nobody will probably even notice.”
Dixon: And how did that work out?
Foster: When we look back on this 100 years from now, people will remember that we were the first to go 100% renewable. That will be our legacy, but if you try to add on the advertising value that’s come from making the announcement, it’s immeasurable at this point. I had family members in New Zealand that heard about it before my mother did. There’s been hundreds of millions of views of this story across various media. I’ve had reporters come to here, everywhere from Germany and France, like you would typically think, all the way to Indonesia, Kazakhstan, Brazil, Argentina, China have sent people up here. There’s been a lot of news from a lot of different areas. So yeah, very amazing response, certainly not something I thought I would be involved in.
Dixon: There’s a lot of businesses right now that have sustainability mandates. They are looking to locate places where they can get renewable energy very easily. I’m curious if you see any kind of effect from that?
Foster: Oh, yes. Absolutely, so we have a site that can handle 100-megawatt data center powered and ready to go, and our team has been trying to pitch that at the state level because the state gets involved in trying to win data centers from big companies like Google, Facebook, and Amazon. So when those companies are out there trying to site, we’re on that list. Before we talked about renewable energy, nobody ever talked to us, nobody. Since we made the announcement, every year, there’s at least two or three of them that come through and say, “We want to talk about your site.” And we haven’t sold it yet but the first question right