Solar power to shine light on GeorgetownWhen the city-owned Georgetown Utility Systems begins using only renewable resources to provide power to its electric customers, the city will become the second in the country to do so, Mayor Dale Ross said.

“Here we are in this red state with oil derricks everywhere, and yet Georgetown, Texas, is leading the way on green energy,” Ross said. “I think it’s pretty cool. [The city is] second in the country behind Burlington, Vermont, to be 100 percent green.”

In February, City Council approved an agreement with California-based SunEdison that will provide a daily maximum output of 150 megawatts of solar-generated power to the city from 2017 through 2041. The agreement will complement a 144-megawatt wind power agreement signed in 2014 that begins in 2016 and will continue through 2035.

“We’ve been working for a while to secure very competitively priced energy for the long term, and we also wanted a commodity that was low-risk,” said Jim Briggs, general manager for utilities and assistant city manager. “Essentially what we’ve done ... is locked that price at a very reasonable rate for a fixed period of time.”

SunEdison is building a solar farm, which is expected to be operational in late 2016, in West Texas.

“The importance of this deal cannot be overstated. It will allow Georgetown to go [to] 100 percent renewable energy, which will help the city cut down on pollution, save water and enjoy stable energy prices through the year 2041,” said Matt Kearns, vice president of Development for North America Utility and Global Wind at SunEdison. “In addition, going fully renewable puts Georgetown at the forefront of leadership and inspiration during the coming of age of clean energy, making it a model for cities all over the world to emulate and aspire to.”

Rate stability

Briggs said the city-owned utility was looking to find a competitive, fixed-rate energy source.

“A lot of people assume we are doing this because [the power source is] green and we have some mandated initiative,” he said. “We did this as a part of a business decision. … It truly was a business decision that we are going to be able to take advantage of.”

The city first began to explore new fixed-rate energy contracts in 2012 during a lawsuit between the city and the Lower Colorado River Authority over the city's long-term energy contract, said Chris Foster, Georgetown Resource Planning & Integration manager.

Solar power to shine light on Georgetown GEO-2015-05-01-1L2After the lawsuit was settled, Foster said the city requested proposals from energy providers to find the lowest-cost power supply available.

“The coal deals were not only expensive, but because everybody was so worried about carbon legislation, the producers wanted to write a contract as such that if we bought their power we took 100 percent of the risk,” Foster said. “We said we couldn’t do business that way because then we couldn’t guarantee rates [for our customers].”

During the process, the wind providers were able to offer a fixed rate at a better price, and since then, Foster said innovations in solar panels and financing has made solar more affordable as well.

“Once we realized the prices were essentially the same [as other sources] but we got all of the environmental benefits, it wasn’t a hard decision,” Foster said.

Along with protecting ratepayers against unknown future regulations that could increase customer rates, the two power contracts will protect city ratepayers from increasing costs for oil and inflation as well, Ross said.

“The decision that the council made was to take some of the volatility out of the pricing, so we have contracts for the next 25 years,” he said. “With the regulatory environment on fossil fuels, regulatory changes out of Washington can change the pricing, which the ratepayers pay.”

Since 2013 the price of residential and commercial solar energy system installations in Texas has decreased by 20 percent, according to the Solar Energy Industries Association.

“In the last six years the cost of solar panels has simultaneously dropped 75 percent while performance has risen 50 percent,” Kearns said. “This makes solar energy less expensive than coal energy in large parts of the world.”

Excess energy produced by the farm will be sold on the open energy market, which could help the city generate more revenue to offset costs, Foster said.

“There will be times where both [wind and solar farms] are operating at full capacity, so we will be selling a lot of energy,” he said.

Foster said depending on policy decisions by City Council, the lower energy costs could mean the city could cash fund utility infrastructure projects without issuing debt or decrease customer rates.

“The worst-case scenario is that you pay the same amount [for electricity] in 20 years,” he said.
Ross said he credits City Council with taking the risk to go green.

“First and foremost it was a business decision but this is what I think you need to do in government. You have these decisions that have double benefits—one, we are protecting our ratepayers against unnecessary increases because we have cost certainty now, and [two] we have wind and solar [power], which is great for the environment,” he said. “Who says you can’t have both? We think you can.”

Energy reliability

Foster said a few GUS customers have expressed concerns about the reliability of renewable energy sources.

“[There are some who are] worried that when we get in 2017 they will flip on the light switch, and nothing will happen because there will be a cloud in West Texas,” he said. “That will never happen. We operate in [the Electric Reliability Council of Texas] grid. … They’re in charge of making sure that even if our farms get cut off there is still voltage on the lines. It will come from somewhere.”

However, Foster said having both farms be offline at the same time would be extremely rare.

“Typically if there is a thunderstorm, the solar is not operating, but the wind is going [fast], and the vice versa is true,” he said. “The same reliability you’ve had over the last 10 years is the same that you’ll get over the next 10 years.”

Foster said the solar farm’s peak hours of production during the day would balance with the wind farm’s off-peak times.

Wind farms typically produce the most energy throughout the night and early morning hours when solar farms are not producing energy, he said.

According to the State Energy Conservation office, Texas is ranked first in the nation for its solar resource potential because of the high levels of direct solar radiation, which is 75 percent higher in West Texas than in East Texas, making the region more suitable to support solar power plants.

“As for the technology responsible for capturing the solar energy, it, too is extremely reliable,” Kearns said. “Solar panels have no moving parts and are guaranteed for 25 years. They can be used in the most extreme climates.”

Foster said in addition to the technological improvements that have made solar a more financially viable option, research into batteries that would help store the power is continuing.

“There is strong belief in the market  that with fuel cell technology there will be a 30 percent cost reduction in the next few years,” he said, adding that a project to convert the city’s metering system to an advanced metering system will help handle that added storage capacity in the future.

“We had our strategic plan years ago that said we wanted to be in a position that no matter what happened we could make the best economical decision, and we would be at the forefront of utilities,” Foster said.

“Obviously, there are a lot of moving pieces to that, and we’ve nailed them all so far.”

The amount of solar and wind energy available on the Texas power grid is also expected to increase, he said.

“In 2014 there was [184] megawatts of solar on [the state’s power grid],” he said. “We’re putting on 150 megawatts with our contract, and ERCOT expects 6,500 [megawatts] to be put in over the next few years.

Nobody really knows where the ceiling is on all of that growth.”

Foster said the city has already had several inquiries from companies located outside of Texas interested in learning more about the city’s utility system and its rates.

In addition to serving its current customers, GUS leadership said using 100 percent renewable resources-generated power could be used to draw new commercial development to the city, Briggs said.

“It will absolutely be an economic development tool,” he said. “We are trying to have a greater stewardship. … With this, we are able to offer that. Once we start taking delivery [of this energy in 2017], we can promote our businesses as being green.”