When 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.
After 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.”
