Austin's $2.3B biomass deal no longer sweet
Southern Company
Austin Energy has a 20-year contract to buy power from the Nacogdoches Generating Facility.
The nation’s largest biomass plant has gone online and it will supply all its renewable power to Austin Energy, but the same deal would probably not be approved today.
The Austin City Council approved the $2.3 billion, 20-year contract in August 2008 for all the output from the Nacogdoches Generating Facility — a 100-megawatt, wood-waste-fueled biomass power plant.
“When the contract was initially brought to Council it appeared to be a good deal to help us reach our adopted goals for renewables,” City Council Member Mike Martinez said.
The high price of natural gas, the possibility of Congress passing an additional tax on certain forms of energy and creating a balanced renewable energy portfolio that includes a firm source of energy available anytime were all strong factors when the contract was signed four years ago, said Austin Energy spokesman Ed Clark.
However, the price of natural gas is at its lowest in decades and the law was never passed.
If this same contract came up now, Martinez said he doesn’t think he would support it. Representatives from Austin's solar industry criticized Martinez and other council members up for re-election earlier this year, saying Austin should have bought energy from the sun and wind rather than a plant that burns waste. On the upside, the biomass plant doesn't generate power intermittently like solar and wind sources.
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