Hoping to stabilize a $150 million annual electricity bill, Houston officials have negotiated a contract to ensure that a third of the city’s power is generated by wind.
If approved, the contract would make Houston a leader among local governments across the country using renewable energy.
The mandate for wind as part of the annual 1.3 billion kilowatt hours needed to power city buildings, street lights and water plants comes from Mayor Bill White, who has made energy conservation a theme of his tenure.
“It puts us in a definite leadership position,” said White, a former chief operating officer at the U.S. Department of Energy during the Clinton administration. “We are ahead of the curve.”
City Council could consider the contract as soon as next week.
The mayor sought the changes after hurricanes Katrina and Rita disrupted the production and delivery of natural gas – a common fuel at Texas power plants – prompting electricity prices to soar.
The city spent roughly $150 million during the last fiscal year on electricity, paying a rate of roughly $91 per 1,000 kilowatt hours. Wind rates generally are cheaper, experts say.
City officials, who have seen Houston’s electricity bills nearly double since 2004, hope the new source will help control those costs over the five-year deal, starting next summer.
“Since Katrina and Rita, we have been on a mission – a mission to have diversity in our electricity portfolio,” said Issa Dadoush, the city’s building services director who helped develop the plan. “We can no longer do business the way we’ve been doing business.”
In choosing wind, officials said, the city also will get a power source that reduces climate-changing emissions into the air.
Cris Eugster, the mayor’s sustainable growth officer, said relying on wind rather than coal-generated power for a third of the city’s electricity would prevent about 300,000 tons of carbon dioxide emissions.
Wind farm in North Texas
The council is expected to consider an amendment to the current contract with the Texas General Land Office, which supplies the city’s electricity under the State Power Program. Reliant Energy and the investment banking firm Goldman Sachs also were involved in the deal.
Once the contract is approved, the city can lock in a five-year fixed price for its wind power, depending on when market conditions are most favorable, officials said.
Goldman Sachs would offer the city electricity – about a third of the average demand – generated by a Shackelford County wind farm operated by Horizon Wind Energy.
City’s effort gets applause
The city’s move comes as Texas has gained recognition as one of the country’s top producers of wind power, and as federal regulators are predicting that use of the wind to generate electricity will grow substantially across the country over the next 25 years.
Wind-power advocates applauded the city’s effort.
“You’re ramping down more polluting sources, but also sources that are more expensive, so you have a double economic and environmental benefit from using wind,” said Christine Real de Azua, a spokeswoman for the American Wind Energy Association.
Mike Sloan, a managing consultant for The Wind Coalition, a nonprofit that seeks to promote the industry, agreed.
“It’s great to see Houston taking a leadership position on wind, and recognizing the environmental and fuel-cost stability that it will bring the citizens of Houston,” he said.
Once operational, the wind deal would make Houston a leader across the country, according to the Environmental Protection Agency, which lists local governments participating in its “Green Power Partnership.” Boston, for example, gets about 12 percent of its power from the wind.
A national trend
Local governments, including Houston, are following a national trend toward wind power, energy experts say, as more and more residential and commercial customers seek “green” electricity.
“We’re seeing increased demand in our own customers for renewable energy,” said David Coffman, marketing director for Suez Energy Resources N.A., a Houston-based retail electricity provider. “The city is no different.”
The effort is important to White, whose conference room at the U.S. Energy Department had a large map showing wind-power resources nationwide.
“We’ll get more stability in the pricing of electricity used to provide city services,” he said. “We’ll also set a standard for promoting electrical power that emits less into the air. Finally, we’ll help support Texas’ position as a wind energy leader.”
By Matt Stiles
13 July 2007
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