With its finances stabilized and its credit ratings secure, CPS Energy officials have shifted their focus to the future of the utility’s generation portfolio.
Facing the closure of some gas and coal units over the next decade, the utility is actively pursuing the replacement of more than 3,000 megawatts.
It must replace that power while also keeping energy prices affordable, interim CEO Rudy Garza told trustees during CPS Energy’s monthly board meeting Monday. “We’ve got to use some traditional technologies while we’re delving into the new technologies as well.”
The utility’s oldest natural gas steam plants — the 1970s-era O.W. Sommers and V.H. Braunig plants — will end their useful lives in this decade. CPS Energy has also committed to closing its 28-year-old Spruce 1 coal unit by 2030. It shuttered the J.T. Deely coal plant in 2018, losing 871 megawatts of capacity. One megawatt is roughly enough electricity for 200 Texas homes on a hot summer day.
To regain some of that capacity, the utility has begun to implement what it calls the “FlexPower Bundle,” to “thoughtfully replace aging generation units while maintaining a reliable, affordable energy supply to our community.”
Exactly what types of generation CPS Energy will choose to replace that capacity is still up in the air. Garza likened it to a puzzle.
In November 2020, the utility issued a request for proposals seeking to partner with companies on new energy generation and storage technologies, as well as energy-efficiency measures.
According to the request, the replacement plan has been broadly designed to add up to 900 megawatts of solar resources, 50 megawatts of energy storage, and 500 megawatts of “reliable capacity” from an “open-ended source.”
That generally means natural gas, which is considered reliable baseload power, available when the sun isn’t shining and the wind isn’t blowing.
Natural gas generation is a proven technology with readily available supply, vice president of energy supply and market operations Kevin Pollo told trustees. Alternative technologies received from the request for proposals came in at a higher price point, offered limited duration capacity, or introduced technology and new construction risk, he added.
Additional generation projects may still come out of the request for proposals. The utility received over 600 responses from over 100 companies, CPS Energy spokeswoman Christine Patmon said. Some included what Pollo termed “technology opportunities.”
These could include geomechanical storage — the utility recently announced a limited partnership to develop this technology — hydrogen generation, compressed air energy storage, and additional wind and solar generation, all technologies with lower emissions than natural gas.
While emissions considerations were not mentioned by Pollo, Mayor Ron Nirenberg urged CPS Energy to work with the city to meet its lowered community emissions targets.
The utility will include community input in the process of deciding its generation future, Garza told reporters following Monday’s meeting. That will include input from the utility’s rate and citizen’s advisory committees and the general public over the next year or so, Garza said.
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