Austin Energy 14% Price Hike
- Thread starter Monahorns
- Start date
hornpharmd
5,000+ Posts
well it is the long-term AE vision and plan that most Austinites agree with. I guess you are either not an austinite or don't agree with the vision of being a leader in sustainable green energy. And like I mentioned they had not increased rates since 1994. Long overdue.
No utility takes polls of what 'resident experts' think they should do- that's just how it works. They have paid professionals to decide- and as much as it is tempting to think they are plotting of ways to raise rates- they actually aren't. Utilities generally don't have significant upside- they are designed to break even most years.
We have to repeat this because it keeps getting ignored- but AE went 17 years without hiking rates. This is not due to green energy as the link provided above shows only about 15% of the portfolio is wind. AE has bought wind electrons for about 10 years. And besides- wind provides a 25 year hedge against increasing prices, whereas coal and gas do not. And, wind doesn't create or make worse any health related issues- which also are a real cost.
You know what? CPS in San Antonio is doing the same thing AE is. And so is NRG, and AES- and dozens of other utilities across the country.
We have to repeat this because it keeps getting ignored- but AE went 17 years without hiking rates. This is not due to green energy as the link provided above shows only about 15% of the portfolio is wind. AE has bought wind electrons for about 10 years. And besides- wind provides a 25 year hedge against increasing prices, whereas coal and gas do not. And, wind doesn't create or make worse any health related issues- which also are a real cost.
You know what? CPS in San Antonio is doing the same thing AE is. And so is NRG, and AES- and dozens of other utilities across the country.
Son of a Son
1,000+ Posts
Wind should be used to augment other generation. It is far too fickle to be heavily relied upon. All of the giant west-texas wind farms are great, right up until the summer. During the time when demand is highest, those farms are producing their lowest levels of generation.
All that said, one rate increase in 17 years seems somewhat reasonable to me. If they start hiking their rate every year or two, that's when I think it is time to be concerned.
All that said, one rate increase in 17 years seems somewhat reasonable to me. If they start hiking their rate every year or two, that's when I think it is time to be concerned.
hornpharmd
5,000+ Posts
accuratehorn
10,000+ Posts
You should read the material provided by Austin Energy before making knee-jerk reactions to the rate increase. It is not a rate increase made to be able to buy alternative energy projects.
The rates haven't increased for many years (18-19?). There is a certain cost to provide any energy to a home, and the main increase is the base cost to each home, regardless of energy use. Unfortuneately, this increases the burden on low income people and those who use low amounts of energy each month. The increase will be used for debt service, as the utility is now operating at a loss. This must be corrected by a rate increase.
I believe Austin Energy is well-run, with many good ideas and programs to encourage conservation, several of which I have taken advantage of electric lawnmower, zero interest loan for A/C replacement). Austin citizens are lucky to own their own utility, instead of buying on the open market, IMO.
The cheapest electricity comes with hidden problems, as we witnessed last year. The low cost contracts had the provision that when a certain peak usage was hit, the supply to those companies could be cut off. Blackouts occurred because of this problem.
There ain't no such thing as a free lunch. Cheapest isn't always the best.
The rates haven't increased for many years (18-19?). There is a certain cost to provide any energy to a home, and the main increase is the base cost to each home, regardless of energy use. Unfortuneately, this increases the burden on low income people and those who use low amounts of energy each month. The increase will be used for debt service, as the utility is now operating at a loss. This must be corrected by a rate increase.
I believe Austin Energy is well-run, with many good ideas and programs to encourage conservation, several of which I have taken advantage of electric lawnmower, zero interest loan for A/C replacement). Austin citizens are lucky to own their own utility, instead of buying on the open market, IMO.
The cheapest electricity comes with hidden problems, as we witnessed last year. The low cost contracts had the provision that when a certain peak usage was hit, the supply to those companies could be cut off. Blackouts occurred because of this problem.
There ain't no such thing as a free lunch. Cheapest isn't always the best.
msd-
It's easy to get mad when you have your own set of facts. You think the raise is only happening because suddenly wind energy is incorporated. If you ignore the fact that AE has had wind for over a decade, it's been 17 years since the last rate hike- and most importantly we have no evidence other than a few complainers that this hike is from wind energy.
Look- you don't want clean energy "shoved down your throat" while other people you live nearby don't want carbon, sulfur, mercury and NOx shoved down their lungs. So, you can't please everyone. But try not to get upset when you really have no idea if your thesis is true, and while most utilities around the country are doing something similar (because it makes economic and health sense to do so- and health costs are also costs!)
It's easy to get mad when you have your own set of facts. You think the raise is only happening because suddenly wind energy is incorporated. If you ignore the fact that AE has had wind for over a decade, it's been 17 years since the last rate hike- and most importantly we have no evidence other than a few complainers that this hike is from wind energy.
Look- you don't want clean energy "shoved down your throat" while other people you live nearby don't want carbon, sulfur, mercury and NOx shoved down their lungs. So, you can't please everyone. But try not to get upset when you really have no idea if your thesis is true, and while most utilities around the country are doing something similar (because it makes economic and health sense to do so- and health costs are also costs!)
Monahorns
10,000+ Posts
Any informed reader,
Could you point me in the direction of an article or reference material that details the health effects of
carbon, sulfur, mercury and NOx produced from burning coal?
I would readily admit that I don't want to breath pollution. At the same time, I also understand how regulation and chemistry works. There are critical concentration of each below which pose no health issue at all and above which do with increasing urgency.
There are all kinds of materials in the atmosphere and earth, natural and synthetic that can harm us when the concentration gets too high. If levels of those pollutants can be held low enough, there shouldn't be any issue. If coal power plants can't reliable maintain low enough levels, then I am all for shutting them down. But if they can, shouldn't they be encouraged?
Back to my original question. I am interested in technical articles, newspaper articles, or case studies describing the threat of coal burning to our heath. I am indifferent to coal power plant currently, but am willing to change my position, positively or nefatively, as I learn more about them.
Could you point me in the direction of an article or reference material that details the health effects of
carbon, sulfur, mercury and NOx produced from burning coal?
I would readily admit that I don't want to breath pollution. At the same time, I also understand how regulation and chemistry works. There are critical concentration of each below which pose no health issue at all and above which do with increasing urgency.
There are all kinds of materials in the atmosphere and earth, natural and synthetic that can harm us when the concentration gets too high. If levels of those pollutants can be held low enough, there shouldn't be any issue. If coal power plants can't reliable maintain low enough levels, then I am all for shutting them down. But if they can, shouldn't they be encouraged?
Back to my original question. I am interested in technical articles, newspaper articles, or case studies describing the threat of coal burning to our heath. I am indifferent to coal power plant currently, but am willing to change my position, positively or nefatively, as I learn more about them.
Euro-
Your post, while true, is from the perspective of the utility. They are only incentivized to sell electrons which often is an inefficient format from a macro perspective. It's like telling people they should waste energy so we can make money. From the consumer perspective, be it residential or commercial, energy efficiency programs are no-brainers that offer 6 month to 3 year paybacks and huge cash savings thereafter. E.g- if I buy a more efficient water heater, spend 20% more upfront, and get it back 10 months later, and save thousands thereafter I did quite well. It's difficult to dispute that regardless of one's feelings on numbers or clean energy. If every single business embarked on projects like this- it would create jobs and eventually tons of extra capital that could be spent on better areas aside from wasted energy.
Mona- here you go:
Effects on Health from Coal Plants
Coal Plant impact on health and costs
Mercury in food
Coal Ash is radioactive
Your post, while true, is from the perspective of the utility. They are only incentivized to sell electrons which often is an inefficient format from a macro perspective. It's like telling people they should waste energy so we can make money. From the consumer perspective, be it residential or commercial, energy efficiency programs are no-brainers that offer 6 month to 3 year paybacks and huge cash savings thereafter. E.g- if I buy a more efficient water heater, spend 20% more upfront, and get it back 10 months later, and save thousands thereafter I did quite well. It's difficult to dispute that regardless of one's feelings on numbers or clean energy. If every single business embarked on projects like this- it would create jobs and eventually tons of extra capital that could be spent on better areas aside from wasted energy.
Mona- here you go:
Effects on Health from Coal Plants
Coal Plant impact on health and costs
Mercury in food
Coal Ash is radioactive
accuratehorn
10,000+ Posts
The true costs of producing and consuming energy should be factored into any discussion of same, but they are not. Health effects, pollution clean-up costs-these are borne by taxpayers and consumers, but not directly in their cheap energy bill.
Austin Energy is somewhat forward thinking without ignoring market conditions, which is perfect for me, and I would venture to say most Austinites. We want to convert to renewable energy, but not too far ahead of the rest of the market, at too high a price. But we are educated enough to realize modernization and conversion to renewable energy sources is a necessity for many reasons, and don't mind some expense for it.
Austin Energy is somewhat forward thinking without ignoring market conditions, which is perfect for me, and I would venture to say most Austinites. We want to convert to renewable energy, but not too far ahead of the rest of the market, at too high a price. But we are educated enough to realize modernization and conversion to renewable energy sources is a necessity for many reasons, and don't mind some expense for it.
Monahorns
10,000+ Posts
Thanks mcbrett, for the links I can't say a read every word of them but I read as much of each as I could while trying to function at my job.
I didn't disbelieve the problems before, but they do seem more concrete now.
Following are my thoughts after reading through these articles. First, i think coal plants around the world must be equipped so that their pollutants are captured and disposed of properly. That undoubtedly would increase the cost of the energy. It would be interesting to see the cost comparison of energy from a "clean" coal power plant.
Second, one of the articles mentioned setting the air quality regulation based on the capabilities of current pollution abatement equipment. That sounds like a common sense approach that balances increasing cost with increasing air quality. Putting current plants on a plan to achieve these requirements over a certain period of time I think is just a smart thing to do. I also suspect the $/kwh will still be very competitive AND we have lots of coal available so it would be a good investment in our economy.
Third, I think one weakness of these studies is that they report the mass or weight of pollutants emitted from a source but I didn't see any discussion of pollutant concentration. I admit I might have missed that part. I would think the power plants have reached some kind of steady state where the concentration gradient over an area could be measured. That would be very interesting to see a graph showing typical pollution levels around a power plant so you could see the level and the geographic extent. One study did mention that most problems were within a close vicinity to the plants. I think we would all agree that any mercury in the air, soil, or water is scary but I would like to know what is the concentration existing and the amount that constitutes a health risk. That would aid in regulating the coal plants and putting solutions into place. It is probably out there somewhere. Then we could answer the question "What is good enough". At some point more regulation and pollution control equipment doesn't really help our health anymore and only increases the cost of powering our country. Maybe that information is impossible to get. I don't know. This is just how I think.
I say some of this because I have worked in Industrial Waste Treatment before. I found it strange when I learned that the regulation we had required "pollutant" levels lower than what was naturally occurring in the area. So these are the types of questions I always ask.
I didn't disbelieve the problems before, but they do seem more concrete now.
Following are my thoughts after reading through these articles. First, i think coal plants around the world must be equipped so that their pollutants are captured and disposed of properly. That undoubtedly would increase the cost of the energy. It would be interesting to see the cost comparison of energy from a "clean" coal power plant.
Second, one of the articles mentioned setting the air quality regulation based on the capabilities of current pollution abatement equipment. That sounds like a common sense approach that balances increasing cost with increasing air quality. Putting current plants on a plan to achieve these requirements over a certain period of time I think is just a smart thing to do. I also suspect the $/kwh will still be very competitive AND we have lots of coal available so it would be a good investment in our economy.
Third, I think one weakness of these studies is that they report the mass or weight of pollutants emitted from a source but I didn't see any discussion of pollutant concentration. I admit I might have missed that part. I would think the power plants have reached some kind of steady state where the concentration gradient over an area could be measured. That would be very interesting to see a graph showing typical pollution levels around a power plant so you could see the level and the geographic extent. One study did mention that most problems were within a close vicinity to the plants. I think we would all agree that any mercury in the air, soil, or water is scary but I would like to know what is the concentration existing and the amount that constitutes a health risk. That would aid in regulating the coal plants and putting solutions into place. It is probably out there somewhere. Then we could answer the question "What is good enough". At some point more regulation and pollution control equipment doesn't really help our health anymore and only increases the cost of powering our country. Maybe that information is impossible to get. I don't know. This is just how I think.
I say some of this because I have worked in Industrial Waste Treatment before. I found it strange when I learned that the regulation we had required "pollutant" levels lower than what was naturally occurring in the area. So these are the types of questions I always ask.
Mona-
First I have to say how refreshing it is to see posts from someone here who has an open mind based on reading new information from credible sources (as opposed to blogs etc.) A decade ago I was a big proponent of solar- until I learned how costly it was and then gave up on it. And now- because of recent developments with solar technology significantly improving the costs may begin supporting it again. (See the Quackenbush Board).
Re: your point- the EPA under the GWB administration required plants to reduce pollutants to a certain % per million by 2012. To adhere to the standards it required for many plants between $50MM and $200MM of enhancements in the form of filters. The math worked out such that for older plants it was more economic to close them and for younger plants to fix them. It effectively shifted generation to cleaner coal plants, gas, renewables and nuclear- exactly what it was designed to do. And yes, before someone else says it, there would be a small cost temporarily paid for by rate payers and also a small decrease in cost paid by health providers. A net positive however when all is factored in.
Concentration is a tough topic- I am not qualified to speak well on it but I do know each particulate matter is treated differently, and every plant is different given its unique geography with wind, proximity to cities and temperature affecting how many people are affected. It's probably a case by case basis.
First I have to say how refreshing it is to see posts from someone here who has an open mind based on reading new information from credible sources (as opposed to blogs etc.) A decade ago I was a big proponent of solar- until I learned how costly it was and then gave up on it. And now- because of recent developments with solar technology significantly improving the costs may begin supporting it again. (See the Quackenbush Board).
Re: your point- the EPA under the GWB administration required plants to reduce pollutants to a certain % per million by 2012. To adhere to the standards it required for many plants between $50MM and $200MM of enhancements in the form of filters. The math worked out such that for older plants it was more economic to close them and for younger plants to fix them. It effectively shifted generation to cleaner coal plants, gas, renewables and nuclear- exactly what it was designed to do. And yes, before someone else says it, there would be a small cost temporarily paid for by rate payers and also a small decrease in cost paid by health providers. A net positive however when all is factored in.
Concentration is a tough topic- I am not qualified to speak well on it but I do know each particulate matter is treated differently, and every plant is different given its unique geography with wind, proximity to cities and temperature affecting how many people are affected. It's probably a case by case basis.
accuratehorn
10,000+ Posts
The Link
Here is a story about the new regulations for coal-fired power plants.
Austin gets thirty something percent of its power from the Fayette County coal plant, but it has already installed scrubbers to clean up its emissions, and the article states that this plant probably will not be in violation of the new emission standards.
There have been years elapse between the proposal to tighten the standards and now, and plants have had plenty of time to prepare. Some did, some lobbied for extensions.
Also, re Austin Energy's green energy purchases-you can sign up to receive "green energy" from wind, solar, or other green sources under one of Austin Energy's special programs. The rate is higher but guaranteed not to change for a certain length of time, I believe it is five years. We signed up for this. There is only a certain percentage of the energy that comes from these sources, and at one point there was a wait to get on the list, although with the poor economy that may no longer be the case.
But the point is, the higher cost of acquiring the green energy is at least somewhat, if not completely, offset by those willing to pay a little more for that energy.
Here is a story about the new regulations for coal-fired power plants.
Austin gets thirty something percent of its power from the Fayette County coal plant, but it has already installed scrubbers to clean up its emissions, and the article states that this plant probably will not be in violation of the new emission standards.
There have been years elapse between the proposal to tighten the standards and now, and plants have had plenty of time to prepare. Some did, some lobbied for extensions.
Also, re Austin Energy's green energy purchases-you can sign up to receive "green energy" from wind, solar, or other green sources under one of Austin Energy's special programs. The rate is higher but guaranteed not to change for a certain length of time, I believe it is five years. We signed up for this. There is only a certain percentage of the energy that comes from these sources, and at one point there was a wait to get on the list, although with the poor economy that may no longer be the case.
But the point is, the higher cost of acquiring the green energy is at least somewhat, if not completely, offset by those willing to pay a little more for that energy.
6721-
Electrons can't be separated by source. This program and many dozens other like it around the country (I'm in a similar program) work by adding up the aggregate amount requested and ensuring that the same amount or more is generated by clean sources.
On a side note- the company I work at had a project near Lubbock come across our desk yesterday. Wind turbine prices have fallen 20% due to the global recession and new chinese imports- this project will produce electrons at about 8 cents /kwh making it competitive with coal and gas, if not cheaper, and the price stays constant for 25 years. If you stripped away the incentives, it still is about the same price as coal/gas factored over 25 years.
If our firm invests, it will suggest GE turbines made in Florida and California.
Electrons can't be separated by source. This program and many dozens other like it around the country (I'm in a similar program) work by adding up the aggregate amount requested and ensuring that the same amount or more is generated by clean sources.
On a side note- the company I work at had a project near Lubbock come across our desk yesterday. Wind turbine prices have fallen 20% due to the global recession and new chinese imports- this project will produce electrons at about 8 cents /kwh making it competitive with coal and gas, if not cheaper, and the price stays constant for 25 years. If you stripped away the incentives, it still is about the same price as coal/gas factored over 25 years.
If our firm invests, it will suggest GE turbines made in Florida and California.
Monahorns
10,000+ Posts
accurate, the Fayetteville coal plant is going to be shut down by AE so that they can purchase more wind energy, so even those that are "clean" are being decomissioned.
I heard on the radio a couple of weeks ago that the green energy option is going away because not enough people signed up. The ending of that option will coincide with the base rate increase. Mere coincidence?
I heard on the radio a couple of weeks ago that the green energy option is going away because not enough people signed up. The ending of that option will coincide with the base rate increase. Mere coincidence?
accuratehorn
10,000+ Posts
Obviously, the power all goes into the same grid. The idea is to get support for looking forward to the day when all energy comes from renewable sources.
I would love for Austin (and everywhere else) to quit buying coal energy, but it may take a good while.
I would love for Austin (and everywhere else) to quit buying coal energy, but it may take a good while.
hornpharmd
5,000+ Posts
www.statesman.com/news/local/austin-energy-transferring-more-every-year-into-citys-2132997.html
I read this article not too long ago and it reminded me of this thread. I was not aware of the general fund transfers in which the City is taking money away from AE's revenue and funding other city programs with it. According to this AAS article the general fund transfer was about $105 Million this past year and AE net earning are projected at $76 Million. Thus if you don't have this transfer or this large of a transfer, then AE isn't losing money and isn't needing to raise rates. Very simple.
And it gets worse:
I read this article not too long ago and it reminded me of this thread. I was not aware of the general fund transfers in which the City is taking money away from AE's revenue and funding other city programs with it. According to this AAS article the general fund transfer was about $105 Million this past year and AE net earning are projected at $76 Million. Thus if you don't have this transfer or this large of a transfer, then AE isn't losing money and isn't needing to raise rates. Very simple.
And it gets worse:
Thanks for this follow up HornPharm.
So, this many millions of dollars to subsidize City of Austin programs is a deeper look, and not as easy to think about as it is to say "AE is raising my rates because of damn, green energy."
In fact- an institutional study I remember reading over a year ago cited AE as one of the top utilities in the US for efficiency, rates, lowering pollution and customer service. I'm sure they have their flaws, but as utilities go they are not that bad.
So, this many millions of dollars to subsidize City of Austin programs is a deeper look, and not as easy to think about as it is to say "AE is raising my rates because of damn, green energy."
In fact- an institutional study I remember reading over a year ago cited AE as one of the top utilities in the US for efficiency, rates, lowering pollution and customer service. I'm sure they have their flaws, but as utilities go they are not that bad.
hornpharmd
5,000+ Posts
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