Summary

The Austin City Council approved three new wind contracts totaling 570 megawatts. Even with a short-term wind contract expiring in 2015 this will bring Austin Energy’s total wind portfolio to 1,225 MW and puts the utility four years ahead of schedule for meeting its 35% renewable energy resources goal by 2020. This is one of the most aggressive targets for renewable energy in the U.S. and makes Austin Energy among the greenest utilities in the country.

These projects have terms up to 25 years and fixed pricing between $23 and $33 per megawatt-hour (MWh) which is comparable to wind pricing 10+ years ago. These prices are also competitive with natural gas generation. As a result, the new wind farms align with Austin Energy’s affordability goals and are expected to have a favorable impact to the Power Supply Adjustment charge (fuel) when they come online.

“This is a very attractive time for Austin Energy to invest in more wind energy,” said Austin Energy General Manager Larry Weis. “The extension of federal Production Tax Credits (PTCs) for wind developers, combined with the recent decline in power prices and lower demand for new wind generation means we are able to keep costs down while expanding our renewable portfolio to meet our goals ahead of schedule.”

How Does it Work?

Two contracts with Duke Energy Renewables, Inc., each for 200 MW, will buy power generated in Starr County in the Rio Grande Valley about 30 miles northwest of McAllen. The Los Vientos 3 wind project is expected to be online at the end of 2014 and Los Vientos 4 is expected to be complete by mid-2016.

The third contract buys 170 MW of generation from E.ON Climate and Renewables North America, LLC, in Nueces County. The Patriot Wind project, located 25 miles southwest of Corpus Christi, is expected to be online by the end of 2014.

All three wind farms are located in South Texas and will take advantage of coastal wind patterns which tend to produce energy more closely aligned with peak customer demand, compared to West Texas and Panhandle wind projects that typically produce more energy overnight.

Austin Energy’s other utility scale renewable energy resources are a 100 MW biomass plant in Nacogdoches and a 30 MW solar farm in Webberville. An additional 11.7 MW is generated from solar installations on public and privately owned properties in the Austin Energy service area. Austin Energy has a goal to include another 200 MW of solar energy in its renewable portfolio by 2020. Currently, about 27 percent of the utility’s energy comes from renewable resources.