Texas Town Goes All In on Renewable Energy

A Central Texas city is waving goodbye to fossil fuels.

Georgetown’s municipal utility on Wednesday unveiled plans to abandon traditional electricity sources like coal and gas power plants, instead exclusively tapping wind and solar energy to meet all of its customers’ power needs. It is the state's first city-owned utility to make that leap.

The city announced a 25-year deal with SunEdison, the world’s largest renewable energy company, to buy 150 megawatts of solar power beginning next year. The company said it would build a solar farm in West Texas to meet the demand.

Last year, Georgetown signed a contract for 144 megawatts of wind energy through 2039. That electricity comes from an EDF Renewables wind farm 50-miles west of Amarillo.

(On average, a megawatt of solar energy can power as many as 100 Texas homes on the hottest summer days. During average temperatures, it can power many times more.)

City officials touted a number of benefits of scrapping fossil fuels, including protecting air quality and curbing water use. But ultimately, the deal made financial sense.

“It was really primarily a price decision,” said Keith Hutchinson, the city’s spokesman.

Hutchinson said the deals locked in cheaper electricity than what the city's expired contract with the Lower Colorado River Authority guaranteed, and it would hedge against any future spikes in coal or natural gas prices – whether because of new regulations or other market shifts.

“We don’t know what’s going to happen in the future for regulations for fossil-based fuels,” he said. “This really removes that element from our price costs going forward.”

Because of its size and intense radiation, Texas leads the nation in solar energy potential, but the solar industry has long struggled to get a foothold in the state, as policymakers have provided fewer incentives than other states, and solar energy currently makes up a tiny percentage of the state’s energy portfolio.

That’s beginning to change.

Improving technology has driven down the price of solar power, making it more competitive with other resources­ — even without extra incentives, developers say. That trend has sparked what some industry experts describe as a small “land rush” in West Texas, and it’s increasingly convincing utilities that solar power is workable. 

San Antonio’s CPS Energy, which plans to retire one of its oldest coal plants ahead of schedule, has set a goal of using renewable energy to meet 20 percent of its electricity demand by 2020, with at least 100 megawatts from renewable resources other than wind. Once completed, its Alamo Project is expected to deliver 400 megawatts of solar power to the area.

And last May, Austin Energy signed a deal with a California company to build a 150-megawatt solar farm in West Texas, to help meet its ambitious renewable energy goal.

But in completely cutting ties to fossil fuels, Georgetown, a city of roughly 55,000, is alone in Texas and has little company elsewhere. Burlington, Vt.; Palo Alto, Calif.; and Aspen, Colo., are among the few U.S. cities in the group.

Most Texas cities don’t run utilities. In those areas, residents purchase electricity from competing retailers – some of which offer 100-percent renewable plans.

Not all leaders in Texas have emphasized solar as a path forward for Texas. In a report last fall, for instance, former Texas Comptroller Susan Combs derided renewable energy sources such as wind and solar as unreliable (the sun doesn't always shine and the wind doesn't always blow) and too expensive, saying that long-term contracts for solar energy could lock utilities into rates that might look too high in the future.

Hutchinson said Georgetown’s wind and solar contracts complement each other on reliability issues, since wind turbines typically churn out more power at night, and solar panels generate more energy during the day. 

“It’s a good time to move on solar,” said Carey King, assistant director of the University of Texas at Austin’s Energy Institute. “You can debate, whether if you wait another year or two, if it’s a little cheaper,” he said, but locking in rates now could ultimately pay off in the long term.

Disclosure: The University of Texas at Austin is a corporate sponsor of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.