Austin, TX 78736
June 9, 2012
KEYE TV News
10700 Metric Blvd.
Austin, TX 78759
You interviewed me a few weeks back about Green Water Treatment Plant land sale and how Austin ratepayers will not be given the profits.
While I was grateful for the opportunity, I have to convey my concern about your stories on Austin's solar rebate program. I found several facts and issues that were out of context. In an effort to be constructive, I will briefly discuss them below.
1. You reported that two neighboring utilities do not have such programs. However, San Antonio's municipal utility, City Public Service, has a very extensive solar effort that in some respects is more aggressive than Austin.
CPS has signed a partnership with a solar manufacturer to locate a facility in their city that will build 400 Megawatts of solar panels for the utility over an eight-year period. The plant will provide 800 jobs each year with an average salary of $50,000 per year and a total annual payroll of about $40 million. See "CPS names two firms in mega solar project."
CPS also has a solar rebate program for buildings. See: CPS Solar Photovoltaic (PV) Rebates
2. The cost of solar is not that large relative to Austin's total electric bill. Solar cells, including the rebate program (about $4 million in 2011) and the Webberville PV plant (about $8 million more than conventional fuel costs per year), are responsible for about 1% of Austin Energy's total budget. The solar rebate program by itself is 3/10ths of 1% of the total utility budget.
3. Both of your stories stated that the poor helped pay for this program. To the extent that low-income customers pay bills, this is correct. But again, the percentage is tiny.
What you may not realize is that Austin Energy has a specific program designed for poor people, called the Free Weatherization program. It has upgraded about 500 homes a year over the past several years, with a budget of about $800,000 a year. With the influx of federal grant money in 2011, the number exceeded 1,000. This program was specifically designed to reach people who could not afford to participate in other incentive programs.
4. You are correct that Austin's solar programs are currently higher than the average cost of power. If a homeowner borrowed the money to finance PVs at 4% interest, these systems would cost about 15-19¢ per kwh. However, for various reasons, including the economies of scale from rebate programs, installed residential solar in Austin has come down 46% since 2006. Adjusted for inflation, the costs have fallen 53% in this time period. That is one of the purposes of this program – to lower the cost.
This is not so different than what happened to semiconductors in the 1950s and 60s. The main purchasers of microcircuits in these decades were NASA and the Department of Defense, and they were originally more expensive than the equipment they replaced. It was not until the 1970s that consumer sales of semiconductors exceeded government sales. What solar rebate programs are trying to do is very similar.
5. The seemingly high cost of solar energy is actually a bargain at certain peak hours. ERCOT, the systems operator that coordinates power sales and dispatch for most of Texas, currently caps its highest peak bidding price at $3 per kwh. The Texas Public Utility Commission is considering an increase on this cap to as much as $9 per kwh. See this Statesman article "Texas Regulators Look at Raising Wholesale Electricity Prices." And solar energy operates during many of these peak summer hours.
I am not implying that peak summer power will usually be this high. However, this is an example of how PVs can lower the high cost of summer peak demand for the entire electric system.
6. Another goal of Austin's solar rebate program is to create local employment. A survey released by Public Citizen of Texas a few months ago showed that there were over 600 jobs related to solar in the Austin area. This is detailed in this Statesman Article "Solar industry pushes Austin Energy to put major emphasis on solar power."
7. The secret about Austin Energy's renewable energy programs that most people do not understand is that most of its renewable energy is at little or no cost to people that do not want it. As previously discussed, solar is about 1% of the bill. Most wind power is sold through GreenChoice, which is a voluntary subscription program. Those who want to participate pay for it.
The expensive part of Austin's renewable program is the biomass plant in East Texas. But what is interesting is that the biomass plant was a project most environmentalists did not want.
If you go back and look at the recording of the public hearing on this project held August 28, 2008, most environmentalists did not support this type of green power, either because of its high cost, or because there was not enough information provided about it. (I was among the critics.) This recording is probably available from the City's Channel 6. It is also on file at the Austin History Center.
Austin's environmental community has a record of being fiscally responsible. I agree with your station's goals of rooting out waste in large institutions. But please call me or others that work on these issues when you pursue stories. We can give you alternative information that can make your investigations more comprehensive.
I also urge you to expand your coverage to include waste in both the public and private sectors. It is bureaucracy, not government, that creates waste.