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Peaker units are seen last month at the Austin Energy Sand Hill Energy Center. The City Council last month approved a contract for a new natural gas peaking plant at a location yet to be disclosed.<\/p>\n
Jay Janner\/Austin American-Statesman<\/p>\n
Another day older and deeper in debt<\/p>\n
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\u2014 \u201cSixteen Tons,\u201d Merle Travis<\/p>\n
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Most\u00a0Austinites do not participate in city government. Some are too busy with jobs and families. Some have contempt for the way government functions (and sometimes, does not function). And many feel intimidated by a system that often discourages public participation.<\/p>\n
But to this observer, who has participated in Austin\u2019s civic affairs for almost 50 years, the May 21 City Council meeting hit a new low.<\/p>\n
The council met in executive session \u2014 away from public view \u2014 to approve one of the most expensive and misguided projects in Austin\u2019s history. Under the cloak of \u201ccompetitive matters,\u201d they approved a contract for a natural gas peaking plant<\/a>, which would be turned on to provide power in periods of peak demand.<\/p>\n They did not disclose the amount of money approved, who would receive the undisclosed money, or even tell the public how each council member voted.\u00a0<\/p>\n Article continues below this ad<\/p>\n Though the official cost is undisclosed, estimates presented in public<\/a> were about $2,500 per kilowatt, which comes out to $1 billion for 400 megawatts of peak power. That\u2019s a significant\u00a0jump from prices just a few years ago:\u00a0Respected benchmark studies<\/a> placed the cost of such units at less than $1,000 per kilowatt in 2023.\u00a0Industry analysts say<\/a> much of the exorbitant increase stems from competition for gas-plant components as power providers rush to meet soaring electricity demand from data centers<\/a>.<\/p>\n Even after adjusting for inflation, that suggests Austin\u2019s new gas-powered plant will cost about $610 million more than a comparable plant would have cost\u00a0in 2023. With debt financing and insurance, this is the equivalent of a \u201cdata center tax\u201d of more than $1,200 over the plant\u2019s 30-year life for every person in the Austin Energy service territory.<\/p>\n TWO VIEWS: Does Austin Energy need new gas peaker plants?<\/a><\/p>\n This rivals Austin\u2019s most expensive mistakes: the poorly built hydroelectric dam that broke in 1900; the South Texas Nuclear Plant with its 460% overrun; and building a fourth water treatment plant a generation before it might be needed.<\/p>\n Article continues below this ad<\/p>\n Testimony prior to the secret vote was civil but polarized. Speakers against the gas plant accurately stated the dangers of global warming, urging a vote against the plant so Austin could make a local contribution to greenhouse gas reduction. However, some of them were overly optimistic about the near-term economics of energy storage batteries as an alternative.<\/p>\n Plant proponents, including business leaders, advocated for a balanced energy portfolio of\u00a0natural gas, renewables and battery storage. However, since some of the pro-business supporters were relying on what they were told by the utility rather than their own analysis, they missed two big points.<\/p>\n