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San Antonio’s electric and gas utility took a step forward on a major solar and battery project the same day its board passed a new renewable energy fee structure for businesses.
On Monday, CPS Energy issued a request for information related to new electricity generation projects that the utility calls its FlexPower Bundle. First announced in July 2019, the package includes up to 900 megawatts of new solar generating capacity, 50 megawatts of battery storage, and 500 megawatts of reliable capacity from an open-ended source.
“The FlexPower Bundle is what the future looks like,” CPS Energy Chief Operating Officer Cris Eugster said at the meeting. “It is bringing more zero-emission resources to our customers, and this is a major step forward in that.”
Eugster also called the issuance of the request a “very meaningful step to support the Climate Action and Adaptation Plan.” The plan, passed in October 2019, calls for San Antonio to effectively abandon fossil fuels by 2050.
Doing so will be a challenge for CPS Energy, whose current generation capacity is made up of 45 percent natural gas and 18 percent coal. The FlexPower Bundle will replace soon-to-be-lost capacity from the utility’s Braunig and O.W. Sommers natural gas units, which are reaching the end of their useful lives.
In late 2019, CPS Energy executives were poised to begin negotiations to lease up to 500 megawatts of capacity from one of a handful of existing natural gas plants on the Texas grid. The utility later changed course and opened its request for information from any energy source that can generate electricity whenever it’s needed, not just in sunny or windy conditions.
“We are looking at this capacity altogether to ultimately replace a power plant, so it has to be available when our customers need it,” Eugster said. “It could be natural gas, it could be long-duration storage, it could be a technology we’re not even aware of right now.”
Major utilities often use requests for information as broad inquiries to find out what kind of technologies and projects are available and for what price. Eugster said CPS Energy intends to use the request issued Monday to “discover global and local players” and “reveal market conditions.”
“CPS Energy and San Antonio look forward to joining forces with global energy innovators to partner on our Flexible Path,” Nirenberg said in a recorded video message to potential respondents. “So we invite you to participate in this [request for information] and provide your ideas on how to transform our generation to power our future.”
The request also seeks ideas about CPS Energy’s next phase of energy efficiency and demand response programs. In January, City Council approved a one-year extension of the utility’s decade-long Save For Tomorrow Energy Plan programs, which include home, solar, weatherization, and other initiatives.
Responses to the request for information are due Aug. 31.
On Monday, the utility’s board also voted unanimously to enact new energy rates for large businesses. The utility’s “green tariff” would allow businesses to rely more on specific renewable energy projects, CPS Energy Senior Director Chad Hoopingarner said. Qualifying projects would rely on solar, wind, geothermal, hydroelectric, waves and tides, and biomass or waste-based energy sources, including landfill gas.
Microsoft has expressed support for CPS Energy’s green tariff. At the utility’s June meeting, Jim Collins, Microsoft’s director of energy markets, said the tariff is “a critical vessel” help Microsoft transition its San Antonio data center to 100 percent renewable energy.
“Microsoft views this green tariff as very innovative and [it] showcases the creativity of CPS Energy,” Collins said, adding that the tariff will “help the City of San Antonio and CPS Energy achieve some of the goals of the Climate Action and Adaptation Plan.”
Supporters of such tariffs say they allow utilities to cover the costs of serving large businesses, even as those businesses buy power from renewable sources.
For the largest commercial customers, 55 percent of CPS Energy’s costs come from variable costs, or “running the power plants, producing energy,” Hoopingarner said. Another 45 percent is tied to fixed costs, “or the infrastructure that we build – generation, distribution, transmission access, just to deliver 1 kilowatt-hour, much less all the kilowatt-hours that a customer needs,” he said.
CPS Energy’s current commercial rates generate more revenue from the variable parts of the bill, which is tied how much energy a customer uses, Hoopingarner said.
“That means the more you use, the higher your bill is,” Hoopingarner said. “With the green tariff, we’ve solved that problem. We’ve increased the fixed components of the bill and decreased the variable components.”
This article has been updated to accurately describe CPS Energy’s green tariff.
Disclosure: CPS Energy is a Rivard Report business member. For a full list of supporters, click here.