Austin approves $558m wind deal

The city council in Austin, Texas, has approved an 18-year, $558m power purchase agreement proposed by its municipal utility and developer Lincoln Renewable Energy

Under the 300MW contract, Austin Energy would purchase $31m a year of electricity that Lincoln would supply from the Hereford 2 wind farm it is developing in northwest Texas. The facility is scheduled to enter service in fourth quarter 2015.

The contract would replace an earlier one for 170MW that Austin Energy had sought to finalize with developer E. ON Climate and Renewables North America. The city council approved it in June, but E. ON exited the agreement citing finance and tax issues, according to Austin Energy spokesman Carlos Cordova.

He tells Recharge that the utility’s proposed agreement with Lincoln is $2 per MWh cheaper than the $28 per MWh to $38 per MWh range in the E.ON contract, making it comparable to what the utility was paying in 1999.

He notes that the average price of power in Texas in 2013 from all energy sources was $32 per MWh.

Austin city staff selected Lincoln’s supply offer from 70 competing ones from 44 new wind projects or those in operation.

Cordova says council approval of the deal would mean that Austin Energy would be able to meet its 35% renewable portfolio standard in 2016, four years ahead of schedule.

The council in June approved a 400MW power purchase agreement between the country’s ninth largest municipal utility and Duke Energy, covering the full output from the developer’s Los Vientos II and IV projects to be built along the south Texas coast.