Austin Energy
Summary
Utility to retain ownership of Fayette coal plant; Decker 2 steam unit to shut down in March 2022; Nacogdoches biomass plant to run year-round
After extensive, multi-year negotiations with the Lower Colorado River Authority (LCRA), Austin Energy has been unable to reach mutually agreeable terms that would allow the utility to affordably retire its share of Fayette Power Project (FPP) coal plant as originally envisioned. Austin Energy co-owns FPP with LCRA and will continue to run its portion while still meeting its carbon reduction goals. However, the utility will shut down its 44-year-old Decker 2 steam unit in March 2022, in line with previously announced plans, and make its Nacogdoches biomass plant available to run year-round. Austin Energy continues to evaluate the timeframe and approach to replace current fossil fuel resources with carbon-free energy while maintaining grid reliability and customer affordability.
Negotiations stall over Fayette Power Plant
Austin Energy’s Generation Resource Plan (2030 Plan) outlined retiring its share of FPP (570 MW) by the end of 2022 to reduce carbon emissions. Austin Energy is unable to take such action unilaterally because FPP is jointly owned by Austin Energy and LCRA. The terms of the joint ownership arrangement with LCRA are set forth in a Participation Agreement that does not provide a clear path to unilateral shutdown for any of the units at FPP. No agreement has been reached to retire any of FPP’s generating units at this time.
Austin Energy will continue to maintain a diverse generation portfolio (currently 66% carbon free) consisting of:
- Contracts with six solar farms (645MW)
- Contracts with eight wind projects (1425 MW)
- Four quick start gas turbines at Decker (200 MW)
- The Sandhill Energy Center (570 MW), which consists of a combined cycle natural gas unit and six quick start natural gas peaking turbines
- The South Texas Nuclear Project (430 MW)
- The Fayette coal plant (570 MW)
- The Nacogdoches biomass plant (100 MW)
Austin Energy will continue to run its portion of FPP but will minimize the scheduled output through use of the successful Reduce Emissions Affordably for Climate Health (REACH) Plan. This strategy considers the cost of carbon in Austin Energy’s offers to sell generation from FPP. Use of the REACH strategy will significantly lower carbon emissions from Austin Energy’s share of FPP and takes a substantial step toward meeting the carbon reduction goals outlined in the 2030 Plan. Austin Energy will continue to negotiate with LCRA to retire its share of FPP while maintaining reliability and affordability for its customers.
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