CPS’ moves to clean energy could slow
Because of hit to cash, utility might build new gas plant
CPS Energy’s top executive said Friday that the utility may have to slow its shift to clean energy — and maybe build another natural gas-fired power plant — because of the financial blow it took from last week’s deep freeze.
“Faster de-carbonization, utilizing technology — those sound great,” CEO Paula Gold-williams said. However, referring to the cost of relying on more green power sources, she added: “They were already going to be hard before we had this weather event.”
Early last week, temperatures that dipped into the single digits knocked CPS’ coal and nuclear plants and renewable energy sources out of commission. The utility had to hunt for scarce, suddenly expensive natural gas on the spot market to keep generating electricity.
CPS officials said they’re still calculating the cost. But it’s likely to be exorbitant.
And ratepayers may have to pay the full bill. If they do, Goldwilliams said, CPS would have little choice but to slow the rollout of the Flexpower Bundle, its planned clean energy initiative. One of the utility’s goals is to shut down the coal-fired generation units at its Spruce plant ahead of schedule and replace them with renewables.
If CPS customers shoulder the hefty cost of last week’s gas purchases, telling them “to get ready for, potentially, rate increases to retire units early, I think, is going to be challenging,” Gold-williams said.
In addition to the Spruce plant, CPS is looking to decommission several aging natural gas plants. To replace the electricity they generate, the Flexpower plan calls for building 900 megawatts of solar power, 50 megawatts of battery storage and 500 megawatts of “firming capacity,” or power available whenever demand is high.
The utility has been evaluating bidders’ project proposals since Feb. 1 but hasn’t released a cost estimate for the initiative.
CPS has said the 500 megawatts of power could come from new energy storage technologies.
But after last week’s power grid debacle, which left millions of Texans without electricity for long periods, Gold-williams said CPS’ five-member board of trustees would be hesitant to make big investments in unproven technologies.
Trustees, she said, “are going to ask us are we sure, when we make these decisions, that we’re also protecting reliability and affordability.”
Instead of putting money into experimental energy storage methods or other cutting-edge technologies, the utility may invest in a new natural gas power plant, though a smaller one than its existing gas plants.
“Making a smaller investment is much more manageable, even if technology creeps up on you,” she said. “That’s the problem we have with Spruce: It’s got $1 billion in cumulative value and debt.”
Greg Harman, a clean energy organizer at the Sierra Club, is concerned about CPS backsliding, rushing to build another fossil fuel plant.
“There’s a real temptation to go with a seemingly muscular response and build new plants,” Harman said. The city of Los Angeles Department of Water and Power “is looking at energy storage solutions that will revolutionize things, like compressed air storage. That’s where we need to be.”
Since the winter storm cleared out of Texas, Gold-williams has warned CPS customers that the utility may have to spread the cost of last week’s gas purchases over several years if it can’t land federal or state aid to pay the bill.
Before the winter blast, CPS said closing several of its fossil fuel-fired plants early and adopting more renewable power could cost ratepayers as much as an extra $12 on their monthly bills on average over the next 15 years.
CPS trustees are scheduled to hold a special meeting Monday to discuss the fallout from last week’s power crisis.
“We will come out of this,” Gold-williams said. “But I think it’s going to be a little bit slower on the resource plan ... until we can answer quite a few questions about what is our path forward on trying to resolve these big financial pressures.”