CPS Energy’s board of trustees voted 4-1 Monday to approve a new energy mix, which will see the municipally owned utility phase out its use of coal by 2028.
Under the approved plan, CPS Energy will shut down Spruce 1 by 2028 (assuming the Electric Reliability Council of Texas will allow it) and convert Spruce 2 to a natural gas plant by 2027, which will run indefinitely.
CPS Energy President and CEO Rudy Garza called the vote a historic moment for the utility. He also noted that the timeframe could change, depending on ERCOT, the operator of the state’s electrical grid.
“To clarify, we submit to ERCOT that our plan is to close these units down by this date,” Garza said. “They can flex the actual closure date based on what their [reliability] models tell them.”
Trustee John Steen was the sole vote against the mix, saying it would not be affordable enough for ratepayers, given that the utility is likely facing two rate increases in the next four years and that it is still paying for costs incurred during Winter Storm Uri, when CPS Energy paid almost $1 billion for additional gas and power. Customers are paying those costs in the form of a roughly $1.26 fee on monthly bills for the next 25 years.
Environmentalists, on the other hand, objected that the new mix will rely too heavily on natural gas over the next decade; they want to see the utility phase out fossil fuels entirely.
“I’m happy we’re closing a coal plant, but we still need a carbon-free future,” said DeeDee Belmares, a climate justice organizer with Public Citizen’s Texas office and CPS Energy rate advisory committee member who recently shared her take on the San Antonio Report.
Belmares was one of 27 public speakers to address the board prior to its vote Monday, including one woman who was forcibly escorted out for disrupting the proceedings. The majority voiced opposition to the new mix and urged the utility to quit fossil fuels. A handful spoke in favor.
Others, such as Reed Williams, a former energy executive and currently the chairman of the rate advisory committee, say relying more completely on renewables right now isn’t affordable or reliable enough yet, but could be in a few years’ time. The advisory committee voted last month to recommend the mix the board approved.
Williams reiterated his point Monday, as he did before City Council last week. The rate committee has agreed, he said, that the utility’s generation portfolio must first and foremost be reliable, especially given the unreliability of the Texas grid. The new mix aims to minimize CPS Energy’s reliance on the grid and to ensure that it has plenty of dispatchable energy — meaning it can be turned on or off when needed.
Known as Portfolio #2, the selected mix will expand the utility’s use of renewables and to add new technologies, but natural gas and diesel could still make up as much as 44% of the utility’s generation over the next two decades.
However, CPS Energy officials continued to emphasize that the utility will revisit its portfolio every two to three years, and Portfolio #2 offers enough flexibility that as cleaner technologies come online, they can be added to reduce CPS Energy’s reliance on natural gas.
The plan will add roughly 4,928 megawatts of generation capacity to the utility’s portfolio over the next seven years, including 1,380 megawatts from combined cycle natural gas and about 800 from reciprocating internal combustion engines that run on natural gas or diesel. Another 500 megawatts will come from wind, 1,180 from solar and 1,060 from lithium battery storage.
The plan does not include geothermal, hydrogen or nuclear; those sources may become more available and affordable in the near future, Benny Ethridge, the utility’s executive vice president of energy supply, said last month. The adoption of the new mix will help the city to meet its 2030 Climate Action and Adaptation Plan goals, Ethridge has said, but future generation will need to be cleaner to meet 2040 goals.
Board Chairman Willis Mackey said Monday that CPS Energy is committed to revisiting its mix every two to three years, adding that the utility’s staff has been traveling all over the country to speak with other utility managers about how they are best moving their own portfolios forward.
“Today is a step — you have to take baby steps to get to where you want to go,” Mackey said. “It’s a process we have to go through because we have to talk about affordability and reliability.”
Mayor Ron Nirenberg applauded the board’s decision, calling the transition away from coal a huge accomplishment for CPS Energy.
“When Spruce was brought online in 1992, it had and expected life of 2047,” Nirenberg said. “We’re ending the use of [coal in] that facility 24 years ahead of its technical end of life.”
He added that given potential changes to the state’s energy policy during the legislative session, including potential structural changes of ERCOT, revisiting the utility’s generation mix more often — perhaps even annually — will be crucial.
Garza added that employees who work in the coal plants should not worry about their jobs, as they will either continue at Spruce once it becomes a gas plant or they will be retrained for other positions.
“We’re going to find jobs that meet their needs and that they feel good about,” Garza said. “We want to make sure they know that they will remain part of the CPS Energy family.”