Denton Municipal Electric can accelerate its purchase of energy from wind and solar farms to reach 100 percent renewables by 2020, a consulting group says.
Enterprise Risk Consulting is scheduled to unveil its 80-page plan, called an "energy portfolio," on Monday morning for the city of Denton Public Utilities Board. The City Council reviews the plan and any comments from the PUB on Tuesday. If city leaders heed the recommendations, Denton would reach 100 percent renewable energy years ahead of previous plans.
The plan makes no projections for customer's electric rates, but the new portfolio includes several major items that should bring the electricity for the lowest possible cost and least amount of risk, which can ultimately keep rates low for Denton.
Enterprise Risk Consulting is based in Austin and Santa Fe, New Mexico. The group helped Georgetown develop its plan to reach 100 percent renewables.
The consultants' main recommendation for DME is to purchase more renewable energy for the time electricity is needed most. Solar farms and coastal wind farms make the most electricity on a hot summer afternoon. If DME signs long-term contracts for solar and coastal wind energy, Denton can reach 100 percent renewable by 2020.
Other recommendations can keep DME from buying and selling electricity on the Texas grid at the same time. Public power utilities tend to make such costly "double buys" more often than they should, the consultants say. The consultants also recommend a special insurance that protects DME from paying a premium for the electricity's transmission.
Two other parts of Denton's energy portfolio could have an adverse affect on rates. The consultants' plan helps address one of them.
"The real wild card is the Denton Energy Center," said Larry Lawrence, an analyst with the consulting group.
The city's controversial $265 million, natural gas-fired power plant is under construction just west of Denton Enterprise Airport. The financing of the power plant has been guaranteed by DME ratepayers.
Lawrence and the other analysts found that even on a hot August day, the Denton Energy Center won't be the lowest cost (or lowest risk) way to make electricity about half of the time. That's because the group that manages the Texas grid, ERCOT, works to keep price spikes in check when the demand for electricity is high.
Instead of counting on making money from price spikes, Denton's new power plant can follow an unusual path to make money in the future. According to the consultants, the plant could also be offered as a financial hedge to other utilities that might need a price guarantee at certain times in the electricity market.
The consultants offered no recommendations for one other part of Denton's old energy portfolio: the Gibbons Creek coal-fired power plant near Bryan. The plan for Denton's new energy portfolio assumes that the coal plant will be decommissioned by 2018.
Denton and its three partner cities in the plant, Garland, Greenville and Bryan, have put the Gibbons Creek plant up for sale. The first offer fell through earlier this year, and the plant is back on the market.
In the meantime, the plant's operator has scaled back its operations to run only in the summertime, when coal-fired power is most likely to be competitive.
PEGGY HEINKEL-WOLFE can be reached at 940-566-6881.