The City of Austin recently disclosed that it realized an estimated net profit of $54 million on the resale of its energy during Texas's great freeze last month.
What the city did not say publicly was whether the windfall was possible because of Austin's reliance on a steady flow of coal and nuclear power. That power comes from Austin's one-third interest in the Fayette Power Plant (FPP), which burns coal, and its 16% interest in the South Texas Project (STP), a Bay City nuclear power plant.
"When we need energy during these extreme events, we can't always rely on the sun or the wind, but we can rely on things that are on site—that would be uranium at nuclear plants, that would be coal at coal plants," said Philip White, a graduate research assistant at the University of Texas at Austin's Webber Energy Group.
The Electric Reliability Council of Texas, which maintains around 90% of the state's grid, projected that the bulk of the grid's winter capacity would come from natural gas, coal and some nuclear power, as reported by the Texas Tribune. Because many of these generators failed due to the weather, ERCOT mandated days-long blackouts to avoid a total grid collapse.
These mandates left more than 40% of Austinites without power amid subfreezing temperatures. But Austin Energy's power supply outperformed many of the state's other providers.
In a recent Municipal Securities Rulemaking Board filing, which detailed Austin Energy's successful generation experience during the four days of the big freeze, the City of Austin did not include any reference to coal or nuclear power. "Austin Energy generation largely stayed online during the 2021 Weather Event," according to the filing.
Austin City Council Member Alison Alter and State Rep. Donna Howard, D-Austin, defended the city's current mix of generation sources as well as its financial strategy, which have left the utility in good financial standing despite the havoc wreaked by the storm. Austin Mayor Steve Adler and Council Member Greg Casar, who have also supported Austin Energy's ongoing shift toward more renewables, declined interviews.
The Fayette Power Project in La Grange, Texas, is co-owned by Austin Energy and the Lower Colorado River Authority. (City of Austin)
Austin City Council voted in 2017 to retire the city's interest in FPP by 2022 and to commit to long-term plans to get out of nuclear power as well. Both are key components of the city's determination to go green—eliminating carbon-based power in the future and depending only on renewables like wind and solar.
As a result, some question whether it is prudent for Austin Energy to put all of its eggs into the renewables basket. Others, however, say it is just as risky to rely on fossil fuels given their failures last month.
A cautionary tale
Robert Cullick, who was the utility's communications director from 2014 to 2019, worries that a fully renewable portfolio would leave Austin Energy, and the city by extension, open to future losses.
"Across the state, what we saw was that all resources were somewhat hindered by the deep freeze," he said. "No power source was perfect. The question, I think, is, 'What if we go to just two power sources: just solar and just wind.' I think we would be far worse off financially."
Cullick pointed to the city of Georgetown, which reached its goal of 100% renewable energy in 2018 after purchasing excess power at fixed rates in 2015. The city's decision to buy a surplus amount of power when rates were high, in the hopes of selling it back to the ERCOT grid, backfired, leaving its own utility customers with higher bills. The winter storm exacerbated its already precarious financial situation: the city plans to take out a $47.8 million loan, to be paid from electric revenue over 10 years, to cover its wholesale power bill from the storm.
Like its counterpart in Georgetown, Austin Energy is a municipally-owned utility that both distributes power to customers and generates it. Because of a 1999 state law that deregulated the state energy grid, Austin Energy must purchase energy to distribute to its customers from ERCOT and sell the energy it generates back into the same grid.
Because its generation assets—a mix of natural gas, coal, nuclear, wind and solar—largely stayed online during the storms and because of ERCOT-mandated blackouts that lowered customer usage, Austin Energy generated more power than it bought. Although this made little difference to the 40% of Austin Energy customers who went without power, it led the nonprofit to an estimated net revenue of $54 million—which will benefit customers in the form of lower fixed rates.
"If citizens of Austin understood how much prior decisions to have a diverse power portfolio protected them during this freeze, they would not let the city of Austin divest without serious, serious consideration," Cullick said.
Austin Energy declined an interview request. In an email to Austonia, a spokesperson wrote that it would be impossible to speculate how an entirely renewable portfolio would have performed during the recent storms and what financial impact it may have had on the utility.
Austin Energy purchases energy from the East Raymond Wind Facility near the South Texas coast. (Austin Energy/Facebook)
The fight for renewables
District 9 Council Member Alison Alter, who led the city's declaration of a climate emergency in 2019, supported a plan, passed in 2017 and updated last March, which includes a stated goal to achieve zero carbon emissions by 2035 and plans to retire the FPP and natural gas-powered Decker Power Plant by 2022.
Austin Energy currently sources around 58% of its annual power supply from renewable sources, according to its website. Around 23% comes from natural gas plants, and the remainder is a mix of coal and nuclear sources.
Alter agrees that it is important for Austin Energy to have a diverse portfolio of generation sources to ensure affordability for its customers and safeguard its own financial health, but she disputes the notion that the city's plan to achieve a carbon-free future is at odds with this goal.
"One of the things that we're doing is we are shifting over time, and we're not doing it all at once," she told Austonia. "The technology is not there to go 100% renewable and have the reliability because we don't have the battery storage capacity that would be necessary to maintain reliability."
State Rep. Donna Howard, D-Austin, agrees. "A diversified load, like the one AE has and deployed during the storm, is essential for the current state of technology," she said in a statement to Austonia. "Most scientists would also say it's those very fossil fuels that are contributing to the climate change leading to events like this winter storm."
Alter also argues that the same financial planning that helped Austin Energy earn surplus revenue due the winter storm is being used as the utility navigates the path to a carbon-free future.
"We do that in many different ways, but we do it also with a very sophisticated financial model that hedges things and does precisely all the things that led us to be in this very difficult situation in a position where our ratepayers are not going to be on the hook for huge amounts of dollars like you see even in other types of municipal utility situations," she said.
This is not to say that the storm has had no impact on how council and Austin Energy plan to move forward.
"I think the storm raises questions about the reliability of our energy network and means that we need to pay extra attention to what we're doing when we purchase generation to make sure that it's reliable, no matter the type of energy," Alter said. "It was our natural gas and our nuclear and our coal that failed on a spectacular level, but not necessarily the ones that were under Austin Energy's auspices because we had done some of the weatherization and we managed those resources because we have a goal of reliability, not just making money."
Although Austin Energy's decision to invest in renewable energy sources and divest of carbon-emitting ones may have financial implications during the next winter storm, experts say the utility's responsibility is to ensure it can produce about as much energy as its customers consume on a year-to-year basis. (Renewables might also prove lucrative during the peak usage on hot summer days, which are more common.)
"During something like the sustained cold snap we had for about a week, it's not Austin Energy's job to balance the grid," White said. "That's ERCOT's job."
ERCOT didn't plan to rely on wind or solar during the storm; instead, it projected the state would lean heavily on natural gas. So when natural gas wells froze up and icy roads made it impossible to transport natural gas, the grid nearly collapsed.
"I think the moral of the story is, rather than pointing a finger a certain fuel type or renewables, it's thinking, 'What do we value on our grid?'" White asked, setting up two options: a grid that is reliable 99% of the time with lower rates or a grid that is reliable 99.9% of the time that has been weatherized at a significant cost.
Cary Ferchill, chairperson of the working group that drafted the 2030 plan, said Austin Energy invested in its legacy generators—FPP, STP and its natural gas plants—when it made economic sense to do so. "All of the new investments that we're making now in renewable energy are all being made with the idea that they will pay off over the long term that we have invested in them," he told Austonia.
Ferchill questions the motives of those who oppose Austin's investment in a carbon-free future in the wake of last month's storms. "A lot of people look at it and take any crisis as an opportunity to argue for their political position or their economic position," he said. "It wasn't the renewable plants that caused most of the problem. Most of the problem was caused by the things that were the lion's share of the market that didn't show up."
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Former Minneapolis police officer Derek Chauvin was found guilty on three charges—second- and third-degree murder as well as manslaughter—in the killing of George Floyd, an unarmed Black man whose final moments were recorded by onlookers, sparking a global protest movement over police violence and racial injustice. He faces up to 40 years in prison.
Jurors deliberated for 10 hours over two days after an intense, three-week trial before reaching a verdict Tuesday afternoon, four days shy of the first anniversary of the Austin police killing of Mike Ramos, an unarmed, 42-year-old Black and Hispanic man whose name became a rallying cry—along with Floyd's—for Austin protestors, who marched en masse last summer, prompting some police reforms.
Austin Police Department Officer Christopher Taylor was charged with first-degree murder—an unprecedented charge in Travis County—in the case of Ramos' death on March 10. But Warren Burkley, community outreach director for the Austin Justice Coalition, was measured in his response to the Chauvin verdict. "It's highly visible accountability, so it will give people hope in the system," he told Austonia. "But it's just one innocent life taken. And even in this city, this happens regularly, and it doesn't make national news."
Local elected officials, community leaders and residents also responded to the news as APD officers spent their second day on tactical alert, prepared to respond to any protests or demonstrations, and City Council heard recommendations from a task force on how to reimagine public safety.
Chauvin guilty on three charges!!!!
— Chas Moore (@iGiveYouMoore) April 20, 2021
Full justice would mean that George Floyd was still with us. But today's guilty verdict represents a historic step toward justice and for his family. So important now for the Senate to approve the House George Floyd Justice in Policing Act.https://t.co/9zUOgZYg4L
— Lloyd Doggett (@RepLloydDoggett) April 20, 2021
For the first time we saw accountability in the courts for the murder of an innocent Black person.
Derek Chauvin murdered George Floyd on camera.
This prosecution is historic. People are feeling temporary relief. This is more than Justice, this is #AccountabilityforGeorgeFloyd. https://t.co/HlBqW7sScx
— Rep. Eddie Rodriguez (@EddieforTexas) April 20, 2021
Many of us have been afraid for days that Derek Chauvin would be found not guilty, despite what the video so clearly showed in broad daylight. The guilty verdict today provides important accountability, but it does not provide real justice. (1/5) ⬇️
— Gregorio Casar (@GregCasar) April 20, 2021
George Floyd's murder led to national protests and calls for the enactment of policing and social justice reforms, including here in Austin. We have made a commitment here to holding police officers accountable and to implementing social justice and policing reforms.
— Mayor Adler | 😷wear a mask. (@MayorAdler) April 20, 2021
Derek Chauvin's conviction is only one step towards providing healing/justice for George Floyd's family + for our nation as a whole. It's up to us to honor Mr. Floyd + the many others lost to police violence by transforming public safety and making our communities safe for all. https://t.co/RVgQmcAf6I pic.twitter.com/hCHLibYjoy
— Council Member Alison Alter (@ALTERforATX) April 20, 2021
No person should be above the law. If you transgress the law you should be held accountability.
Derek Chauvin- GUILTY
— Emmanuel Acho (@EmmanuelAcho) April 20, 2021
George Floyd's murder heightened the long-overdue national conversation on systemic racism. Derek Chauvin has been found guilty, but this is just one step on a long road towards racial equity. We must enact significant systemic changes in order to achieve justice.
— Every Texan (@EveryTxn) April 20, 2021
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Californians love Texas, and Austin—with its liberal politics, relatively affordable housing and job opportunities—is particularly adored. In fact, the Lone Star State was the main recipient of departing Californians in 2019, according to the latest available U.S. Census Bureau data.
But other states, including Florida, are seeing increased interest. Miami Mayor Francis Suarez has made a name for himself on Twitter recruiting techies and hyping up his city, which has a lot in common with Austin—with the added benefit of a beach and sans the "Don't California my Texas" attitude.
California expats and industry experts say Austin remains the bigger draw for Californians, especially those in the tech sector, but warn that this advantage could shift to Miami if the city doesn't address the policy challenges that prompted the migration in the first place: housing affordability.
"If Austin doesn't accommodate this influx, I think all the talent will come to Miami," said Peter Yared, a tech entrepreneur who moved to Miami from San Francisco in September. "I think Miami's going to be the one that sucks it all up."
Both Texas and Florida promise business-friendly state tax policies, and their governors tout the relocations of companies such as Tesla and Oracle from California. But Darien Shanske, a law professor at the University of California Davis whose specialties include taxation, said this is a red herring because corporate taxes are based on where sales occur rather than headquarter locations.
This is not to say other state policies are irrelevant. "The area in which California regulatory policy has been, in my opinion, not a complete failure but problematic … is housing policy," Shanske said. Austin and Miami can offer "not cheap, just cheaper" housing than what is available in Silicon Valley. Plus, both cities are developing a critical mass of talent, which further draws Californians in. "If you're a software engineer, you want to live near other software engineers," he added.
But not every Californian is motivated to move. "San Francisco is a fantastic place to live if you can afford it," said Brandy Aven, a professor of entrepreneurship at Carnegie Mellon University's Tepper School of Business. As a result, it's more common for what she called the labor—engineers, programmers and even company founders—to relocate to cities such as Austin and Miami than the monied venture capitalists. Burgeoning tech cities may find that they need to develop homegrown investor networks to support local ventures in the absence of Californian transplants, but she believes this is doable.
Paul O'Brien, CEO of the Austin-based MediaTech Ventures and a startup veteran, moved to Austin from California in 2009, during the Great Recession. "I'm a firm believer that the world has been seeking an alternative to Silicon Valley for a long time," he said, pointing to Austin as the natural heir for myriad reasons.
Austin has regional appeal as the epicenter of three of the country's largest cities—Houston, Dallas and San Antonio—and their respective industry niches. Tech entrepreneurs could cater to the local consumer goods industry or Houston's oil and gas sector. Plus the city has cultural appeal, thanks to the Red River District and South by Southwest, which made it attractive to job seekers. "The whole reason everyone moved to Silicon Valley is opportunity," O'Brien said. "The whole reason people are now looking beyond Silicon Valley to somewhere else is opportunity."
It's less clear what Miami's key industries are, O'Brien said, but the city offers other selling points, including the mayor's buy-in and "a tremendous depth of wealth" to support a technology and startup ecosystem.
Although Yared didn't consider moving to Austin, he is aware of its appeal to engineers, especially now that their hero, Elon Musk, has moved there, shunning California. "Austin has a lock on tech," he said, but Miami draws a different crowd, including financiers from New York. This parallel migration, coupled with the city's more outwardly pro-growth building policies, gives him hope that Miami could supplant Austin in the coming years. "In the end, communities get to choose what they want," he said.
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In the days after Austin FC's inaugural match against LAFC on Saturday, Head Coach Josh Wolff says he's watched the game "a number of times, to say the least."
In the match, Wolff and over 500,000 other viewers looked on as Austin FC took to the pitch for the first time, held their own in the first half against LAFC and eventually fell 2-0 to a team that's sometimes regarded as the best in the league.
Austin FC had the largest television audience of any soccer match in the U.S. over the weekend, surpassing even the USWNT. In a showcase of the club's dedicated fan base, dozens of Los Verdes fans were spotted in green and black around the stadium—even with the match limited to 20% capacity.
Salute the support. 👏
It's only the beginning for @AustinFC. pic.twitter.com/TduorqYr2y
— Major League Soccer (@MLS) April 18, 2021
While the team lost their first-ever match, they didn't make it as easy as some expected.
Wolff said that the team did relatively well offensively, holding possession for 48% of the match and keeping a solid passing game. Once they got to the box, however, Wolff said they could use some work on creating scoring opportunities.
"We saw a lot of good connections, good spacing (and) good speed of passing," Wolff said. "I think we can obviously have more presence centrally to have more numbers in between lines. I just want us to create more chances. There's a lot on both sides of the ball that we still need to work on."
LA pulled some dramatics and slowly gained more possession throughout the half, but ATXFC's defense wasn't initially as shaky as it seemed in preseason. Later on, however, the team gave up some goals and seemed to struggle with endurance. Wolff said the backline did "okay" and that the club, including young center back Jhohan Romana, are still getting conditioned to play a full match.
"It's a lot of information for a young player," Wolff said. "I think as he fatigues then the decision making, as with most players, becomes a little bit more cloudy and then thus the execution becomes cloudy."
An honor to represent this city and y'all. We're just getting started. 💚🖤 pic.twitter.com/tmOqCfbXvs
— Austin FC (@AustinFC) April 18, 2021
Goalkeeper Brad Stuver had his work cut out for him, fending off 24 shot attempts, 11 of which were on goal.
Going into the match, Stuver and fellow goalkeeper Andrew Tarbell were neck-and-neck, with both labeled potential starters. However, it was Stuver, who many thought signed as a backup, that wore the goalkeeper's jersey on the field for the first time.
"I think both Andrew and Brad did relatively well in preseason, but we decided with Brad just based on how we felt preseason went," Wolff said. "I thought he performed pretty well to be honest. I think he and Andrew are similar in some aspects... it's being mindful of where their strengths and weaknesses are."
Five starters made their MLS debut in the match, including midfielder Daniel Pereira and forward Rodney Redes. While Wolff said Pereira held his own in the match, he saw a weak spot in the team's right side, making it difficult for Redes to make offensive plays.
"For Pereira, I think it was a solid day for a young kid coming in his first MLS game against that opponent," Wolff said. "Obviously there's there's a different physicality to MLS and I think those are things that all these guys are going to acclimatize to.
Now, the club looks to put the ball in the back of the net for the first time as they head to Colorado. Austin FC will face the Colorado Rapids at 8 p.m.on Saturday. The match will stream on the Austin FC app and be broadcast on the CW Austin. Austonia will keep an eye out for potential weekend watch parties.
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