Denton Municipal Electric formally proposed big changes to its power-buying shopping list Tuesday, hoping to save ratepayers money over the next 15 years.
The city-owned utility has invited the public’s feedback on the new plan that would end Denton’s purchase of electricity made from coal by 2019. DME proposes to buy much more electricity from wind and solar farms and make its own electricity at a new natural gas-fired plant near Denton Enterprise Airport.
Denton hasn’t generated its own electricity since it sold another plant on Spencer Road in 2003.
DME staff estimated the changes could help shave $500 million from the $2 billion in power purchases needed between now and 2030 — and that includes the estimated $220 million cost to build the new power plant, according to General Manager Phil Williams.
Since 1975, DME has been part of a four-city partnership that owns and operates a coal-fired power plant near Bryan. Williams confirmed Tuesday that Denton has begun talks about its financial stake in the partnership, which includes both long-term debt obligations and assets in transmission lines and the coal plant.
The partnership, known as the Texas Municipal Power Agency, recently invested $100 million in new “scrubbers” that cleaned up emissions at the coal plant, Williams said. Coal-fired power plants are known for toxic emissions, including mercury, that drift for miles and contribute to a region’s poor air quality.
The original partnership agreement ends in 2018.
Williams said talks with TMPA had just begun, and he was not sure what the outcome would be.
Without a change in power purchases, Denton’s ratepayers could face higher electric bills that would become increasingly uncompetitive, according to DME staff projections.
Renewable energy is becoming affordable, too. In mid-September, Texas wind farms set new generation records and, for a time, drove the real-time price of electricity on the open market below $0.
Brian Daskam, a spokesman for DME, said some power contracts can foster those conditions in the marketplace.
DME could have contracts with wind and solar farms to cover times when the opposite occurs — when it’s cloudy or the wind isn’t blowing.
But Williams said those agreements tend to be more costly.
DME believes it can reduce the financial risk by “backing up” its renewable power contracts with electricity made at a new power plant, Williams said.
Williams said a new plant could be fired up quickly, with only 15 people operating it, to meet peak demand of Denton customers on a day when wind and solar farms can’t keep up. The utility would consider selling power on the open market, too, he said.
“We want to be there to help our neighbors,” Williams said.
Mayor Chris Watts assisted with the formal unveiling of the plan Tuesday. He said he believed the plan would help maintain the city’s competitive electric rates, but he, too, called for public input.
“We are still in the due-diligence phase,” Watts said.
Some, but not all, council members attended the plan’s unveiling. Neither of the newest council members, Kathleen Wazny and Keely Briggs, attended.
Even though the new power plant would use little water and have fewer emissions than other fossil-fuel power plants, the new 225-megawatt plant could prove controversial.
Currently, Denton’s peak demand — the amount needed during the hottest part of an August afternoon — is about 350 megawatts.
Local activists pointed to Georgetown, about 30 miles north of Austin, as a better example to emulate.
The city of 60,000 recently announced it would purchase all of its power from renewable energy sources beginning next year.
After city leaders get public feedback on the energy plan, the Public Utilities Board will review the matter before making a recommendation to the City Council.
The City Council would make the final decisions on the city’s stake in TMPA, the new energy plan and any contracts or other legal matters that are part of the new plan.
For more information on the plans, visit a special city website on the topic, www.renewabledenton.com.
PEGGY HEINKEL-WOLFE can be reached at 940-566-6881 and via Twitter at @phwolfeDRC.
IF YOU GO
What: Open house on Denton’s energy plan
When: 6 to 8 p.m., Monday, Oct. 19 and Tuesday, Oct. 27
Where: Civic Center, 321 E. McKinney St.
On the Web: www.renewabledenton.com