GEORGETOWN, TEXAS — There’s a fast-growing city in Texas that also has one of the most progressive energy programs in the country — and it’s not Austin.
Located about 30 miles north of the Texas capital in a deeply conservative county, the city of Georgetown will be powered 100 percent by renewable energy within the next couple years. Georgetown’s residents and elected officials made the decision to invest in two large renewable energy projects, one solar and one wind, not because they reduced greenhouse gas emissions or sent a message about the viability of renewable energy — but because it just made sense, according to Mayor Dale Ross.
This was a business decision and it was a no-brainer.
“This was a business decision and it was a no-brainer,” Ross told ThinkProgress from his office along one of the city’s main thoroughfares. “This is a long-term source of power that creates cost certainty, brings economic development, uses less water, and helps the environment.”
In a state better known for what it prospects for underground, Texas has one of the best aboveground renewable energy profiles in the country — especially west Texas, where the wind blows hard and consistently and the sun shines unabatedly. Texas also has its own electricity grid, which allowed state lawmakers to build the thing often lacking in the development of major renewable energy projects: transmission lines. As part of the state’s Competitive Renewable Energy Zone program, or CREZ, Texas has spent around $7 billion building transmission lines to make far-removed wind and solar projects accessible to population centers in the central and eastern parts of the state.
By bringing nearly 150 megawatts of wind energy from north Texas and another 150 megawatts of solar from far west Texas, Georgetown is taking full advantage of what the Lone Star State has to offer. And in doing so, it is getting some of the cheapest, most reliable, and most sustainable energy in the country.
“Here in the great state of Texas — better known for oil derricks — here’s this rather smallish city going and doing this,” said Ross. “Burlington, Vermont was one of the first cities to go renewable, that didn’t surprise many people.”
Late last year, Burlington, which is about one-third smaller than Georgetown, announced it had enough renewable energy to run the city — however the energy mix is quite different. The city will be relying about equally on biomass, hydropower, and wind and using little, if any, solar. Vermont also has a statewide goal of getting 90 percent of its energy from renewable sources by 2050. In Texas, there is no equivalent climate change-driven policy pressure to go renewable.
While Georgetown may be small, it is growing in influence. Located at the perimeter of the Austin metropolitan area, according to the latest U.S. Census from this May it is the second-fastest-growing city in the country. After a year of 7.6 percent growth, it now has a population of around 60,000.
Ross said that a lot of “folks don’t really care what kind of electrons are flowing down the transmission lines,” they just don’t want to pay more for power. Once he explains the new setup to residents, even the most skeptical and politically conservative, they tend to come around.
“The main criticism I’ve heard about green energy is the worry that the tax credits might go away,” said Ross. “Well that doesn’t impact us because they are contractually obligated to deliver energy at that price for 25 years.”
Ross, who is a Certified Public Accountant by trade, took this idea one step further.
“And if you are really looking into that — in the tax code which industry gets the most deductions and credits of any industry out there? That would be fossil fuels. Renewable energy credits are minuscule compared to fossil fuels,” said Ross, who was elected as a Republican mayor earlier this year.
While the cost of both wind and solar power are trending downwards quickly, Georgetown was able to get such a good deal in part due to timing. According to Chris Foster, Georgetown’s Resource Planning & Integration manager and the one responsible for working through all the logistics of the city’s energy needs, wind prices were particularly low at the time the city locked in the 144-megawatt, 20-year deal with EDF Renewables in early 2014. Foster said that in late 2013 wind energy bidders were worried that tax breaks wouldn’t be renewed, and because of this they offered extremely cheap rates in exchange for a long-term contract. Foster was not allowed to disclose the exact rate.
The wind power Georgetown is getting from EDF’s farm is just a small push in the much larger rush of wind power taking place across Texas. Around 2,200 megawatts, enough to bring power to some 400,000 homes, are expected to come online in the state before 2017. According to the American Wind Energy Association, Texas leads the country in both under-construction wind capacity and installed wind capacity, of which it has over 14,000 megawatts.
Even though wind power has brought some 17,000 jobs and $26 billion in capital investment to the state, lawmakers came remarkably close to repealing key renewable energy policies in this year’s legislative session, which ended in early June. The Senate passed legislation that would have done away with the state’s renewable portfolio standard, which has already been surpassed anyways, and — more harmfully — frozen the CREZ program that is responsible for the bulk of the new transmission lines. The bill never made it out of the House. Advocates of both programs argue that they have worked, and Georgetown appears to be the model example.
“We asked everybody in the state to show us the cheapest power at the longest terms,” Foster told ThinkProgress. “We looked at nuclear, coal, gas, some solar, and wind — and wind was by far and away the cheapest form of power.”
Foster, who came to Ross’s office for the interview, said that natural gas prices were competitive but that the providers were only willing to offer five- or six-year contracts.
A year or so after signing the wind contract Georgetown went looking for additional long-term power. During this time Foster realized that solar would nicely complement the profile of wind energy, which blows most overnight. While solar power is less developed in Texas, as costs drop the potential is sky high. Texas is ranked first in solar energy potential according to the State Energy Conversation Office but only tenth in installed solar capacity. In 2014, Texas installed 129 megawatts of solar, ranking it 8th for the year nationally.
“Between 2012 and 2014 the solar market came down almost 80 percent in cost,” said Foster. “So once again we had great timing, as the solar providers wanted long-term contracts in order to help break into the Texas market.”
In February, Georgetown’s City Council approved the final agreement with California-based SunEdison to provide up to 150 megawatts of solar power to the city between 2017 and 2041. It is the largest SunEdison solar agreement in Texas to date. While Texan leaders such as former-governor Rick Perry have made California out to be an entrepreneurial desert, where it’s “next to impossible” to build a business, the California solar industry is far outpacing Texas in solar development. In 2014, California led the country in solar installations adding 4,316 megawatts of solar electric capacity to the grid.
For the most part, Texas lawmakers seem more focused on banning local fracking bans rather than incentivizing solar power when it comes to creating a business-friendly energy environment.
Part of what really shocks most people is that we did this in the middle of a shale gas boom.
Georgetown was able to eschew any industry pressure in making its energy decisions, which Foster said were “easy” once it was determined that they met three main criteria: they were the lowest-cost source of power, they eliminated the risk of long-term price fluctuation, and they helped the city increase its renewable energy portfolio. Originally Georgetown had a target of getting 30 percent of its power from renewables by 2030.
According to Ross, making decisions based on these factors helps the city plan for a prosperous future, in which it can both continue growing rapidly and maintain its small town values.
“A lot of times these discussions are framed around either choice A or choice B,” said Ross. “But I’m always looking for choice C where you have the best of both possible worlds and I think that’s what we’ve done with green energy.”
Ross hopes the renewable energy will help attract large companies, especially in the tech industry, that have established renewable energy policies. He said the city has received “many phone calls” from high-tech companies since announcing the solar farm in March. The cheap and reliable prices also appeal to companies that want to avoid any price volatility associated with the international fossil fuel market or potential greenhouse gas regulations such as the Obama administration’s Clean Power Plan, which aims to limit carbon dioxide emissions from power plants.
Nearby Austin is a well-established tech hub. Dell started there, and Facebook and Apple both have operations in the area. While Austin Energy has been at the forefront of renewable energy generation, the utility is unable to go 100 percent renewable due to their prior investments in fossil fuels, according to Foster.
“They own coal and gas generation that’s been steel in the ground for years and a lot of it is paid off,” said Foster. “So they are in a conundrum where if they really want to go renewable they will have to scale back on their cheapest assets that they already own, thus increasing their prices.”
Alternatively, after ending an energy contract with the Lower Colorado River Authority in 2012, Georgetown didn’t own any generation, allowing the utility to build its energy portfolio from scratch.
“Part of what really shocks most people is that we did this in the middle of a shale gas boom, with energy coming from gas plants being really cheap,” said Foster. “But none of the suppliers at that price were willing to do long-term contracts — they don’t believe it will stay cheap for so long.”
While it is impossible to really know which electrons come from where along the transmission lines crisscrossing the state, Foster said it’s important to note that not only is Georgetown contracting the energy, but also the rights to transmit the energy physically along the transmission lines.
“If we didn’t do that we would be selling the energy into the western grid and buying someone else’s energy in the southern grid,” he said. “We wanted the 100 percent green moniker to be more than a paper deal though, so we’re renting the capacity of the transmission lines we need to move it here from the western part of the state.”
Foster said that in the first five years of the contracts there is less than a two percent chance the that city will need to use generation other than the two big renewable farms — at anytime, including cloudy days and quiet nights.
While most of Texas’ current solar power is located in the sun-drenched west, the rest of the state also catches pretty good rays. Austin gets around 300 sunny days a year. If small and residential solar really booms in the area, it could be real game-changer.
In Georgetown for instance, if residents want to install rooftop solar the city utility will fully net meter the energy, allowing solar producers to get paid for the excess energy they put back into the grid. With many utilities running scared from the impact of cheap and distributed renewable energy on their business model, Georgetown’s net metering policy is far more progressive than the industry standard.
Foster said more rooftop solar in Georgetown will actually help the current utility-scale wind and solar farms function more efficiently and last longer.
“If residential homes can integrate solar panels and have some sort of storage technology to levelize the load they can bring down electricity costs for everyone,” he said.
Home solar installations produce the most power during the afternoon and evening. With more of this energy coming from residential installations, the power from the utility-scale wind and solar farms can be used for other purposes, making the locked-in cheap rates go even further.
To keep fully powered, right now Georgetown requires around half of the 300 megawatts of renewable energy in its long-term contracts. Foster said this adheres to the typical utility planning process in which you “build twice what you need and grow into it.” He said the two power plants will equal load demand in about 10 or 15 years. For now the company is selling off excess energy to places like nearby Round Rock.
After listing all the benefits of the clean energy for Georgetown, Ross said he was preparing to meet with a group of politically conservative constituents in the near future. He said on these occasions he encounters a lot of “non-factual” criticism about the energy deals, but that once he explains the process the reaction is commonly ‘oh I get it now, that makes sense.’
He said he sometimes asks the skeptics if they think wind and solar are going to stop producing energy before fossil fuels.
“Fossil fuels are a finite resource right?” he said. “Seems to me that the wind and sun will be out in Texas for many, many years. I don’t have a degree in environmental science or anything, but if I had a choice and the costs were the same I would want something without stuff coming out of a smokestack.”