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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Atop one of Austin's signature rolling hilltops, 1501 Ridgecrest Drive is similar to one of the plush palaces that one might find in Calabasas. For $10.9 million, the home has four bedrooms, four-and-a-half bathrooms and caps at 10,498 square feet.
Park in the massive, fully air-conditioned garage before walking in, where you'll have eight full spaces to park your collection of cars. If you're not a collector, the garage makes an excellent studio space.
The wide-open living spaces will draw your eyes to the two-story ceilings, glass catwalk, integrated fireplace and wall of floor-to-ceiling windows that overlook the pool.
Though the house was built in 2011, it doesn't show its age. Sleek, clean lines lead seamlessly from the formal living area to an elite open-plan kitchen. Separated by a 25-foot waterfall island that can seat at least eight people, the kitchen is fitted with only the finest Miele and Subzero appliances. The custom cabinets are just as pricey as the rest of the place, finished with custom high-gloss Aston Martin (you read that right) paint.
Upstairs in the sprawling master's suite, there are enough amenities to never have to set foot outside again. Armani tile floors, space for living and a walk-in showcase closet lead into the resort-style bathroom, where you'll find dual vanities, a walk-in shower and a lounging bathtub.
The bedroom is a quick elevator trip away from the "party" room, complete with a bar, wine room and movie theater, only the best for entertaining. If your guests are staying over, rest assured they'll be comfortable with the kitchenette, washer and dryer and spa-like bath in their suite.
Though summer has passed, you can still enjoy the grand lap pool's unobstructed Hill Country views, many private lounging areas, grill a homemade snack at the outdoor kitchen or shoot some hoops at the newly-added court.
The listing is held by Compass' Gary Dolch.
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In what could be one of their least energetic showing to date, Austin FC was outperformed by home team San Jose in a 4-0 road loss late Wednesday night.
As the first team officially out of playoff contention in a loss on Saturday, the team seemed defeated from almost the moment they hit the pitch as Quakes standouts Chris Wondolowski and Javier "Chofis" Lopez scored on the team.
A 10th-place San Jose maintained a clean sheet in the match as they inched closer to a last-minute spot in playoffs.
Just as they did in their 1-0 loss Saturday, it was Austin FC who struck first in the match. Captain Alex Ring forced a save from Quakes keeper JT Marcinkowski in just the second minute of play, while star forward Sebastian Driussi followed soon after.
A little over 10 minutes later, San Jose responded with a shot of their own as Austin keeper Brad Stuver was forced into action with a diving save. But with a failing backline and a lack of energy throughout, a frustrated Stuver wouldn't be enough to stave off the home team Quakes in their four-goal triumph.
After a slow first half, San Jose star Chofis was the first to strike after sneaking past Stuver to make it 1-0 for the home team to kick off the second half.
Just five minutes later, Quakes midfielder Benjamin Kikanovic broke free with a fast-paced drive in a play that saw two Asutin FC players hit the ground to double the lead. Stuver and other players were immediately outraged in the controversial call after an apparent handball in the box.
MLS' top all-time scorer Chris Wondolowski capitalized on the slow Austin defense next, taking a pause in the box to score the third goal unmanned in the 59th minute.
Finally, Carlos Fierro clinched the win for the home team after placing a header from six yards out off of a cross and corner kick to end the match 4-0 for San Jose.
Austin Head Coach Josh Wolff attempted to staunch the wound with a series of subs starting at the beginning of the second half, subbing in native Austinite McKinze Gaines for Moussa Djitte and Rodney Redes for Cecilio Dominguez. But no subs were enough to push back against the 'Quakes as the team lost their second match in a row.
Austin FC has four final matches to end the season, including two remaining home matches against the Houston Dynamo at 4 p.m. on Sunday and a final match at Q2 Stadium against Sporting Kansas City at 8 p.m. on Wednesday, Nov. 4.
Here's a live blog of the match:
85' San Jose makes it 4-0
Austin FC once again can't plug holes in the box as San Jose scores their fourth goal of the match off a set piece and header to make it 4-0 in the 85th minute. The Quakes' Carlos Fierro scores on a header from close up after a well-placed cross from Cristian Espinoza as a frustrated Stuver is unable to block the six-yard shot.
Frustrated and sluggish, Austin FC appears to have lost their chance at a win or draw in one of their worst losses by scoring margin this season.
59' Wondolowski scores for the "Quakes
Just a minute after he hits the pitch, MLS' all-time top scorer Chris Wondolowski tacks one more onto San Jose's lead as the home team leads 3-0 in the 59th minute. A beleaguered Austin leaves Wondolowski undefended as he receives the ball in the box, pauses and scores in the bottom right corner of goal.
It's looking to be an especially bad match for Austin, who already sit at the bottom of the West. The Verde and Black continue to be outperformed in their late-season road matches.
53' Austin doubles the lead
After a rough-and-tumble drive that saw two Austin FC players take a fall, San Jose's Benjamin Kikanovic shoots past Stuver to score the second goal of the match for the home team. The play drew ire from Austin FC players including Stuver, who said there was a handball in the box. Austin's defense continues to be outperformed in the match.
47' San Jose scores first
The Earthquakes finally capitalized on a sluggish Austin FC as San Jose's Javier "Chofis" Lopez snuck one past keeper Brad Stuver and a last-ditch dive from Austin's Jhohan Romana to net the first goal of the match. The goal is Lopez' 12th on the season.
40' Romana gets yellow carded
Romaña is trying to play flag football 😂 #AustinFC— Seth Davis (@sethdavis512) October 21, 2021
Austin FC's Jhohan Romana is the first to get yellow carded in the match after grabbing a jersey in the 40th minute of play. Seconds later, Austin nearly gets an opportunity as San Jose keeper JT Marcinkowski fumbles a blocked shot, but he passes the ball off before the Verde and Black can get one in off the rebound.
The Quakes repeat the move in the 41st minute as they nearly get one past Stuver, who is able to hold it down unguarded and grab a shot from Jeremy Ebobisse.
18' Stuver keeps it clean
Just like Saturday, it was Austin who struck first with a shot by Captain Alex Ring in just the second minute of play. Star newcomer Sebastian Driussi came soon after with a shot of his own, but the ball was once again kept out of goal.
Just over 10 minutes later, Austin keeper Brad Stuver got his first big test as the Quakes' Jeremy Ebobisse shot one towards the bottom left corner. In signature fashion, Stuver was able to keep a clean sheet.
Austin's "strongest lineup yet" may not have been able to finish in Saturday's loss, but they created plenty of chances. Wolff seems to have confidence in the starting XI and hasn't changed much for tonight.
Nick Lima is in for right back in Hector Jimenez's stead, while Cecilio Dominguez, Moussa Djitte and Sebastian Driussi lead up front. Center back Matt Besler remains out on concussion protocol.
Tesla's third-quarter profits were released on Wednesday afternoon and current richest-man-on-earth Elon Musk topped the charts since his high-profile transition to Austin.
Q3 held record-high deliveries for the electric vehicle manufacturer, despite chip shortages and supply chain issues. Revenue came in slightly shy of expectations but still yielded the most profitable quarter thus far for Tesla. Plus, adjusted earnings per share are also on the rise.
"A variety of challenges, including semiconductor shortages, congestion at ports and rolling blackouts, have been impacting our ability to keep factories running at full speed," Tesla said in a statement. "We believe our supply chain, engineering and production teams have been dealing with these global challenges with ingenuity, agility and flexibility."
According to Tesla's update, the EV giant's Q3 revenue came in at $13.76 billion—a big year-over-year increase as Tesla recorded $8.77 billion in Q3 of 2020. The expectation was $13.9 billion and though the company came in just a few million lower, it was the company's ninth-straight profitable quarter.
Though earnings were a touch lower than expected, adjusted earnings per share came in at $1.86, where expected had been $1.67, and a year ago was 76 cents per share.
An accomplishment for Tesla this quarter was delivering more than 241,300 vehicles worldwide from its California factory—almost half of what the company delivered throughout all of 2020.
This Q3 update comes on the heels of Tesla's announcement that it would move its headquarters to the capital city. Additionally, the new Gigafactory in southeast Travis County is looking more complete by the day. While full-scale production isn't slated to start until 2022, the factory has already begun testing its robotic assembly line.
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