December 3, 2016
Texas

Jilted wind farm company attacks LCRA on clean energy

By Asher Price - American-Statesman Staff | Austin American-Statesman | Dec. 2, 2016 | www.mystatesman.com

Determined to salvage a lucrative electricity deal with the Lower Colorado River Authority, a wind power company is trying to sway public opinion to bolster its cause.

The website KeepAustinGreen.net says the LCRA, which provides wholesale power to electric co-ops and small cities around Central Texas, is “threatening to turn its back on renewable energy and increase our reliance on fossil fuels.”

The site didn’t include contact information and hadn’t identified who set it up, but Patrick Woodson, chairman of North America operations for E.ON – the German company that built Papalote Creek, the wind farm near Corpus Christi that is at the heart of the dispute – confirmed to the American-Statesman that his company was behind it.

“We wanted to raise awareness of LCRA’s conduct and give interested members of the community a forum to express their concerns,” he said.

After an inquiry from the Statesman, the website now has a tag at the bottom that says it is “sponsored by the Papalote Creek II Wind Farm.”

At stake is a long-term 2009 wind power contract between wind development company E.ON and the LCRA, a nonprofit utility.

At the time of the deal, the LCRA locked in a purchase price of $64.75 per megawatt-hour of power generated by Papalote Creek. The utility has paid roughly $45 million a year for the power – but now wind power can be purchased on the open market for as little as a third of that price, prompting the LCRA to want to back out of the deal.

To that end, LCRA officials have said they are willing to pay a $60 million penalty, which will save tens of millions of dollars in the long run. That savings, they say, will be passed on to the wholesale customers they serve. The river authority stopped taking power generated at Papalote Creek in October and recently began paying off the penalty, LCRA officials said Friday.

(Despite the “KeepAustinGreen” website’s name, the LCRA doesn’t actually provide to Austin.)

In an interview in November with the Statesman, LCRA General Manager Phil Wilson couched the decision in terms of dollars-and-cents; environmental issues didn’t appear to be part of the calculus.

“We’re pro-renewable – if it fits what we need to do economically,” he said.

In 2015, about 48 percent of the LCRA’s energy output was generated from natural gas, about 47 percent from coal and about 5 percent from renewable sources, including wind and hydroelectric dams – but the lion’s share of that renewable energy was from the Papalote wind farm.

“We want to deliver reliable power to our customers,” Wilson said in November. “As to the source of that, we’re agnostic.”

At least 1,750 letters have been sent to the LCRA board through the website since it launched about 10 days ago, according to Ted Royer, who is doing public relations work for E.ON.

“I’m writing to express my concern that LCRA is abandoning its commitment to clean energy by cutting 80% of its wind power and increasing our reliance on fossil fuels,” says the form letter. “This decision is wrong for Central Texas families and bad for our environment.”

A court-appointed arbitrator said this summer that under the contract’s terms, the LCRA could break the deal for $60 million.