Back in 2008, Austin Energy (the city’s electric utility) made a deal with Nacogdoches Power LLC to purchase the entire output of a proposed new power plant. The key here was that the new power plant would produce electricity from burning “wood waste”, a renewable resource, and thus would avoid potential federal taxes on carbon-based fuels.
This was not a popular decision at the time. Even the local environmental activists were opposed to the plant. Many people felt the city wasn’t releasing all the relevant information and was rushing into the deal.
The plant went live yesterday.
The privately owned plant will sell $2 billion worth of electricity to Austin Energy for the next 20 years at a price well above the going rate for competing power sources. It will add $1.94 to the average home’s monthly bill of about $100, according to Austin Energy estimates.
More:
But when the deal was unveiled publicly, open-government activists said the city was not releasing relevant details, such as the cost. It was later revealed to be a little more than 9 cents per kilowatt-hour to start, then gradually increasing to around 16 cents per kilowatt-hour. The average is about 15 cents per kilowatt-hour over the life of the contract.
That is well above the current cost of natural gas and wind, and probably above what the utility would have paid for a proposed nuclear plant expansion that city leaders repeatedly turned down.
Austin Energy is currently paying “a little more than” 4 cents a kilowatt hour for “coastal wind” power. If I’m reading the article correctly, natural gas is running at about 2 cents per kilowatt hour.
This entry was posted on Thursday, July 19th, 2012 at 3:00 pm and is filed under Austin, Clippings, Politics. You can follow any responses to this entry through the RSS 2.0 feed.
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