Watson calls on Austin Energy to focus on getting out of Fayette Power Plant in update to utility's 2030 planning

AUSTIN (Talk1370.com) -- Austin Mayor Kirk Watson is calling on the city's owned and operated electric utility to hit the brakes on its long-term planning, and make sure it includes a "very real and robust focus" on shutting down the city's part of a coal power plant in Fayette County.

Austin Energy is expected to bring an update to its 2030 Resource, Generation, and Climate Protection Plan to the Austin City Council soon, acting on a council request from late 2022.

At issue is the city's share of the Fayette Power Project - a coal-fired plant operated by the Lower Colorado River Authority near La Grange that produces roughly 1,600 megawatts of electricity. LCRA and Austin Energy co-own the project's first two units, which were built in 1979 and 1980. Those two units each produce 600 megawatts; a third unit, built in 1988, is solely owned by LCRA and produces about 400 megawatts of electricity.

The 600 megawatts that Austin owns represent about a third of Austin Energy's "owned" generation capacity, which also consists of gas turbine plants. The utility also owns a share of the South Texas Nuclear Project.

"The Fayette Power Plant is our single biggest contributor to greenhouse gas emissions," Watson wrote in his Watson Wire newsletter last week. "It represents three-quarters of Austin Energy’s emissions and about a quarter of Austin’s overall emissions. The plant is also a huge consumer of our limited water supply."

According to LCRA, the Fayette plant is powered by low-sulfur coal from the Powder River Basin in Wyoming.

Extricating the city from the plant has been a goal of environmental activists and city leaders alike for many years - in 2014, City Council approved a goal of shutting down Austin's portion of the plant by the end of 2022, though the plan was "subject to maintaining affordability and competitiveness." That date came and went, with the utility saying it was unable to reach an agreement with LCRA on an affordable price to sell its share of the plant.

Ultimately, LCRA and ERCOT, the state's electric grid operator, must sign off on any plans to shut down capacity at the FPP site - and LCRA has options to utilize the city-owned capacity if Austin Energy doesn't use it. The city would also have to deal with millions of dollars in debt service tied to the plant.

"The community and Council priority is to get out of the coal business, and Austin Energy needs to examine the next iteration of the generation plan through that prism," Watson wrote. "Of course, affordability and reliability will continue to be part of our decision matrix, and we always have to recognize that we’re part of the state grid. But the primary principle for decision-making needs to be how we get out by January ’29."