After competitive bidding on the open market, the price of Austin Energy’s GreenChoice green power program has become cheaper than Austin Energy’s conventional electricity. This appears to be the third time in the last two months that a U.S. utility has found that competitively-bid clean energy is coming in cheaper than electricity generated with a mix of coal, natural gas, and nuclear power.
Austin Energy has the nation’s largest clean energy program of any publicly-owned utility.
Because of the lower price and a limited supply for this newest purchase of clean energy, the Austin City Council voted to hold a raffle for an account in the GreenChoice program. The drawing will take place in March and will be open to all Austin Energy customers.
Escalating natural gas prices have pushed up the fuel charge for electric utilities across the nation. Due to these increases, the fuel charge for Austin Energy’s standard portfolio of coal, natural gas, and nuclear power has increased to 3.63/kWh. By contrast, the price of GreenChoice has come in at 3.5/kWh for residential customers who subscribe to the latest GreenChoice offering. This price comes from competitive bidding on the open market for wind power.
For raffle winners, a residential GreenChoice bill for 1,000 kWh per month will save the customer about $1.30 a month or about $16 a year compared to what a non-subscriber pays for the same amount of electricity. Subscribers to earlier offerings of GreenChoice are saving even more. For example, residential customers who subscribed in 2000 are paying just 1.7/kWh more than a 50% savings over what Austin Energy’s regular customers pay.
The price per kilowatt-hour of GreenChoice stays fixed for the life of the wind energy contracts that Austin Energy signs. These contracts typically are for 10 years. So while the standard fuel charge can go up or down depending on the price of natural gas, coal and uranium, changes to the standard fuel charge do not affect GreenChoice subscribers.
“We have always known that clean energy from wind and solar is pollution-free and unlimited,” said Austin City Council Member Brewster McCracken. “Now, we have confirmation that our investment in clean energy technology is saving customers money, too.”
Since Austin Energy began its GreenChoice program in 2000, the utility has contracted for four “batches” of wind-generated electricity. When one batch would sell out, Austin Energy would sign a contract for another batch. The price for each offering was based on the contract cost of that purchase, plus program costs. The Batch One price in 2000 was 1.7/kWh. Batch Two was priced at 2.85/kWh, Batch Three at 3.3/kWh and Batch Four, the current supply, is priced at 3.5/kWh.
Batch One customers, the first to sign up for GreenChoice in 2000, are now saving about $230 a year compared to non-subscribers, based on average usage of 1,000 kWh per month. Batch Two customers are saving about $95 per year, Batch Three customers save almost $40 a year while Batch Four customers are saving about $16 per year.
The majority of Batch Four has been sold. What remains will supply about 1,400 residential customers and about 200 business customers. Austin Energy has asked that customers apply for Batch Four by post card to facilitate the March drawing, which will be held at City Hall.
The Austin Energy GreenChoice program sells 540 million kWh of green power a year, almost all of it wind power. Almost 400 Austin companies subscribe to the program, 344 for 100% of their annual usage. Subscribers include the Austin Independent School District, Advanced Micro Devices, Dell, IBM, Samsung, 3M, and Whole Foods. Round Rock school district signed up for GreenChoice after it calculated the program would save taxpayers $2 million over the next decade compared to conventional supply.
“We have set a goal that 20% of the electricity from our city-owned utility will come from renewable sources by 2020,” McCracken says. “Now that clean energy is cheaper than polluting energy, we will have to set our sights higher.”
Austin is on track to reach its goal with 6% of the energy produced by the end of this year currently coming from renewable resources, primarily wind-generated energy. Austin’s renewable energy program also includes a small amount of generation powered by landfill gas. The utility has also begun an aggressive solar rebate program with a goal of installing 100 MW of solar capacity by 2020.
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