Utilities board to discuss NE plant contracts

Published 10:05 am Thursday, February 13, 2014

The Austin Utilities Board of Directors will decide whether to shutter the northeast plant or accept a five-year capacity agreement worth $2.1 million in total revenue for plant operations at a special meeting on Friday.

The decision won’t affect customer rates, according Alex Bumgardner, power production generator for Austin Utilities. Closing the plant could affect employees, however.

The plant is essentially on standby throughout the year as Austin Utilities sells energy produced there on the market, and thus operates on days whenever buyers contact the utilities company.

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The plant also had a contract with another energy organization until 2010, after which Austin Utilities assumed more costs and started to look closely at its options concerning the plant.

Utilities officials have previously discussed closing the plant, according to General Manager Mark Nibaur. Yet utilities directors are considering the option once again as the time limit to accept the five-year capacity agreement on the plant’s available megawatts in the next few weeks.

Directors tabled the issue at their public meeting Tuesday, as there wasn’t enough information on what closing the plant would cost versus keeping it open and running at a deficit.

According to utilities officials, keeping the plant open would entail a loss of $700,000 for the first year losses for the next several years before the plant broke even under future agreements. Closing the plant would take some time, but in a few years Austin Utilities could potentially save between $800,000 and $900,000 a year.

Directors will have more to consider than just costs, however. Nibaur said having a way to locally generate electricity is good for emergencies.

“Northeast gives us a backup to the community,” Nibaur said. “It is a good asset to have for Austin Utilities.”

Utilities directors will discuss the issue and get more info from utilities officials at a special session scheduled for 8 a.m. Friday.