Enlightened Energy Policy in Austin, TX

Michael Lama

Editor Werner Lang Aurora McClain

csd Center for Sustainable Development III-Case Studies

2 3.2 Enlightened Energy Policy in Austin, TX

Enlightened Energy Policy In Austin, TX

Michael Lama

Based on a presentation by Richard Morgan

Figure 1: As of January, 2009 Austin Energy will receive 439 MW of electricity annually from turbines located in West

Introduction Greater demands call for creative solutions It is an old cliche that “everything is bigger in Texas.” In a land known for its extra-large Austin is the 16th largest city in the United panoramas, with personalities to match, the States, with 690,000 residents, and is energy policy formulated by the City of Austin expected to more than double in population demonstrates that this inclination toward within the next twenty years. Faced with the large gestures does not end when it comes prospect of explosive population growth and to passion for protecting the environment or subsequent increases in demand for energy magnitude of ambition. The energy policy and resources, the city government has developed by the city government and its utility committed itself to fostering energy conserva- companies is regarded by many as one of tion and implementing the use of renewable the most progressive guidelines in the nation. energy sources. Austin Energy is the nation’s What began as a pragmatic endeavor to limit 9th-largest municipally owned electric utility, demands on an overtaxed energy infrastruc- serving 388,000 metered customers and a ture, eventually developed into an ambitious population of more than 900,000 in a service attempt to eliminate the city’s contribution area encompassing some 437 square miles.1 to global warming. Austin has been trying Since the early 1980s, Austin Energy has to reduce its carbon footprint by focusing on implemented a variety of measures to reduce reducing energy demand through a number the city’s carbon emissions. These efforts of strategies. These include implementing have not gone unnoticed; in 1992 Austin was conservation programs, developing the first honored to receive the United Nation’s Local system for rating green buildings, rewriting Government Honours Programme Award the building codes, and fostering close relation- Rio Earth Summit. While the City of Austin ships with the community and local building has gained international recognition for its industries. Working to meet the ambitious conservation programs, the initial motivations Austin Climate Protection Plan, the city is now were political and economic rather than purely exploring ways to progressively modify the altruistic. Mindful of the controversy gener- existing building code and develop a portfolio ated by its involvement with a regional nuclear of sources to minimize its power project and hoping to avoid becoming carbon contribution. embroiled in the trying political and regula- tory process of constructing additional energy production facilities, the City sought instead

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to cut consumption aggressively, thereby reducing demand on its utilities. The wisdom of this strategy has only been underscored by recent developments. The cost of energy has increased over the past 10 years, at a faster pace than during any prior period in history. As a result, the cost of building new generating plants has continued to rise at an unprecedented pace.1 Opposition to the siting of new power plants, transmission lines, and substations, coupled with permit protests on environmental grounds, have increased per- mitting and construction costs and reinforced the importance of demand side reduction.

Energy load analysis

Demand for energy fluctuates greatly over the course of a day as well as a season. Energy production companies must configure their power infrastructure to accommodate the needs during the most demanding periods to avoid the risk of potential blackouts or brownouts which could seriously jeopardize the stability of the electrical grid. Minimizing the differential between the highest and low- est demand loads is one of the most efficient ways to reduce the need for additional energy Figure 2: Average energy loads during peak energy demand periods production facilities. Energy demands may be broken into three load types. Base loads repre- sent the minimum amount of electricity a utility or distribution company must make available to meet minimum consumers requirements. In Austin, this consistent daily load averages roughly 1600 MW.2 Intermediate loads are greater than the base and less than the peak but still can be significant, persist for several hours a day, and vary by season. Peak loads represent the few hours a year when electricity demand is the highest. In Austin, summer and winter loads are typically the highest, while fall and spring loads tend to be the lowest. Summer loads peak in the afternoon between 4 PM and 6 PM, while winter loads typically peak between 7 AM and 9 AM. In 2008, record temperatures in Austin helped to set a new peak load record of 2,514 MW.1

Electric utilities typically utilize the lowest-cost resources to meet base load requirements. These resources, such as or nuclear, have the capability to operate at a capacity factor, which measures resource utilization, of 90 percent or higher. Utilities use intermedi- ate resources, such as plants, to meet intermediate load requirements. These resources are generally more expensive to operate: they function with a capacity factor of between 35 and 55 percent. Finally, peak resources are typically fast-responding com- bined cycle natural gas turbine units, which (nuclear) (coal) (natural gas) (natural gas) (mixed) (natural gas) make up the residual demand and operate with a capacity factor of 5-15 percent. While Figure 3: Energy sources utilized by Austin Energy to meet electricity demands. these peak power plants only operate for a

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few days or even hours over the course of a pumps. Businesses can receive rebates of up year, the cost to build, finance, maintain, and to $200,000 per site. Small-business energy fuel peak generation capacity represents a efficiency programs include a turn-key light- significant financial liability to the utilities that ing retrofit program in which 200 companies operate them. The high cost of preparing for participate each year. Austin Energy is the only these peak loads places a great economic utility outside California that provides rebates value on demand side management. for data centers, and they began the first refrigerator recycling program in Texas, which Demand side management (DSM) in four years has collected almost 12,000 refrigerators and freezers.1 Since 1982, Austin Austin Energy (AE) was one of the first munici- Energy efficiency programs have reduced the pal utilities in the United States to establish a need for additional generation by more than demand side management program. AE has 800 MW.1 This is almost as large as the city’s now established some of the most comprehen- share in the South Texas Project, a controver- sive and successful energy efficiency, green sial plant.1 The company refers building, and load-shifting programs in the to the reduction of peak demand through nation. The first conservation programs, spon- demand side management as its “conservation Figure 5: Solar arrays have been installed by more than 577 Austin sored by the City as part of this campaign, power plant” or “NegaWatt” plant. In addition, Energy residential projects as part of the Green Building Program grew out of a straightforward value proposi- AE energy efficiency programs have cut power tion. Energy efficiency is the lowest-cost new plant emissions significantly: carbon dioxide generation strategy for meeting load growth. (CO2) emissions have been reduced by 70,100

On average, Austin Energy spends about $350 tons, nitrogen oxide (NOX) emissions by 53.7 per kilowatt (kW) of peak demand avoided, an tons, sulfur oxide (SOX) emissions by 48.6 expense far lower than the cost of construct- tons, and carbon monoxide (CO) emissions by ing and operating any type of new generation 37.3 tons annually.1 The utility has been work- facility.1 AE energy efficiency programs provide ing on a goal that would reduce peak demand rebates to residential and business customers by an additional 700 MW by 2020. As long as as well as low interest loans to help residential the cost of implementing demand reduction customers pay for energy efficiency improve- through energy efficiency incentives is less ments. The residential program alone provides than the avoided costs, the City will have a rebates that cover about 20 percent of the strong motivation for encouraging conserva- cost of important energy efficiency improve- tion. However, as building codes have become ments, including additional insulation, duct more stringent with time, and new construction repair, solar screens, installation of a radiant became increasingly efficient, the city’s return barrier in the attic, and even swimming pool on investment for interventions and retrofits to Figure 6: Promoting the use of compact fluorescent lights represents one aspect of Austin Energy’s DSM initiative.

Figure 4: Since 1982, Austin Energy efficiency programs have reduced the need for additional generation by more than 800 MW. Figure 7: The Austin Energy residential energy efficiency program helps to monitor building performance.

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existing projects has begun to diminish, and AEGB offers technical assistance for local are built green. More than 8,600 single family these initiatives are becoming less attractive. building professionals who have made a homes and 6,000 multifamily units have been commitment to build green. All single family rated during the lifetime of the program.2 In Developing the first green building rating builders are required to attend a green building fiscal year 2008, peak electricity demand was system orientation before rating a project. AEGB also reduced by 19.2 MW and overall electric con- offers monthly technical training seminars on sumption by 42,039 MWh. This translated into City leaders and energy planners concluded various topics. Program staff work directly a reduction in emissions from Austin Energy that the best way to reduce future demands with designers, engineers, and construction power plants of 27,193.7 tons of CO2, 18.95 on its utilities would be to enact ambitious professionals to share the latest information tons of NOX, and 17.14 tons of SOX.2 In 2008, efficiency requirements targeted at transform- and resources on efficient building materials commercial projects provided over 4,773 kW ing the buildings of the city. Capitalizing on the and systems as well as strategies for reducing of peak energy reduction. success of the Energy Star Homes Program, construction and operations waste. The City of first initiated in 1985, the City set out to Austin and Austin Energy also offer incentives Austin climate protection plan research and design the first residential green for installing energy and water efficient appli- building rating system that would consider not ances and systems. Since 2000 the City of In 2007, emboldened by the success of the only a building’s efficiency but also its environ- Austin has required that all municipally funded Green Building and energy efficiency pro- mental impact. Launched in the early 1990s, new construction projects meet either the U.S. grams, city leaders unveiled the Austin Climate with support from the Austin City Council and a Green Building Council’s LEED Silver rating or, Protection Plan, an aggressive community- grant from the Urban Consortium Energy Task for smaller projects meet the City’s Baseline wide proposal for eliminating CO2 emissions Force, the Austin Green Building Program was Sustainable Building Guidelines. The Public from virtually all municipal activities by the the first system for rating the sustainability of Works Department requires that all architectur- year 2020 through increased energy efficiency a home or building and served as a model al firms working on city projects demonstrate and renewable energy production. Targeting for the formation of the United States Green a strong working knowledge of green building a comprehensive range of city activities with Building Council’s LEED Rating System. While practices. Additionally, AE Green Building five specialized action plans, the ACPP hopes it was initially tailored to single family residen- aims to be a community resource that pro- to make Austin the nation’s leading city in the tial construction, the Green Building Program motes sustainable building through consumer fight against global warming. The municipal eventually expanded its evaluation system to marketing and education. The program aims to component of the plan would require all city include commercial construction, multifamily accelerate integration of sustainable build- facilities to be powered with renewable energy projects, and municipal buildings. With the ing products and practices with mainstream by 2012, make the city fleet carbon-neutral addition of the Commercial and Multifamily building through marketing, education, and by 2020 through use of and Green Building Programs the overall program technology transfer. non-petroleum fuels, and develop a city wide was renamed Austin Energy Green Building employee climate education campaign. It also (AEGB) to eliminate confusion. The program Proven results focuses on developing departmental climate now rates new and retrofit construction on protection plans, including: policies, proce- , water conservation, AEGB is recognized nationally for its expertise dures, targets, and reporting for maximum sustainable materials, health, safety, and com- in green construction and can boast numer- achievable reduction of green house gas munity development. In response to declining ous accomplishments. All new city buildings emissions and energy consumption in all city air quality within the Austin area, the rating in Austin are required to meet green build- departments. The utility component of the plan system will soon expand to track a building’s ing standards. Around 25% of new homes in would strive to achieve 700 MW in savings by impact on air pollution and its volatile organic Austin go through the Green Building Program. 2020 through energy efficiency and conserva- compound (VOC) production levels. Since 1999 AEGB has worked with the Austin tion, meeting 30% of all energy needs through Neighborhood Housing and Community renewable resources and achieving carbon Cultivating community connections Development Office to ensure that all afford- neutrality on any new generation units through able housing receiving subsidies from the City low emission technologies, carbon sequestra- Even as the criteria for evaluation expand, a strong conviction remains that the new ratings should provide flexibility in responding to local needs, policies, and priorities. AEGB works with leaders in the building industry to evaluate products, systems, and strategies, promot- ing those that are most successful and cost effective. As new systems become available to the industry, Austin Energy Green Build- ing incorporates them into the energy code at regular three year intervals. As the city’s building codes have become more stringent, the Green Building rating tools must become stronger to encourage constant innovation. These efforts have resulted in a continuous cycle of improvement which has helped to formulate a progressive municipal energy code recognized as the most advanced and effec- tive in the United States. Figure 8: A zero energy house in north Texas sports a vernacularly inspired design.

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tion, and offsets, as well as establishing a CO2 codes will require disclosure of the results of delivered by renewables to 18 percent in cap and reduction plan for all utility emis- energy efficiency audits and recommenda- 2012.1 In addition, Austin Energy is endeavor- sions. The community component of the plan tions for improvements for existing single ing to reduce its CO2 emissions to 2005 levels would establish a City climate action team to family homes at the point of sale. Exemptions by 2014 through carbon offset purchases. Due inventory green house gas emissions from will apply to new homes, those with historic to uncertainty about the magnitude of the re- community-wide activities and work with stake- features, or those that have already invested in duction in green house gas emissions, Austin holders and technical advisors, reporting to energy upgrades. Energy audits for multifamily Energy has proposed a cap and reduction the Council in one year with recommendations and commercial structures will be conducted plan for the interim years. In the future Austin for short and long term reduction targets and on “time certain” or regular intervals based on Energy will have to comply with federal green implementation strategies for the metro area. the decade in which the project was con- house gas regulations and their associated The go neutral plan would develop an online structed. Structures built before 1970 will be cost. Austin Energy will evaluate this plan for “carbon footprint calculator” for individuals and reviewed two years after the passage of the longer-term emission reduction targets once a small businesses, provide individually tailored ordinance, structures built between 1970 and cap-and-trade bill has been passed and there assessments for complex organizations and 1979 will be reviewed after four years, and is more certainty surrounding the magnitude of entities, develop a menu of local green house structures built between 1980 and 2000 will be mandated greenhouse gas emission reduc- gas reduction strategies, and promote carbon reviewed after six years. These new codes will tions and associated costs. Austin Energy has neutrality among visitors by providing oppor- also require that audit information be disclosed proposed capping its CO2 emissions at 2007 tunities for airport travelers to purchase offset to current and prospective tenants as well as levels, roughly 6.3 million metric tons.1 Austin credits. potential buyers Rebates will be available Energy will account not only for the emis- for older properties and exemptions given for sions from its power plants, but also for the Building code as policy tool properties with historic features, those that emissions associated with power it buys from have already executed upgrades, and new others to meet its customers’ needs. Additional improvements to the building code construction. The new code will mandate that are in the process of being drafted as part all commercial properties must be enrolled in Conclusion of the Austin Climate Protection Plan. These the Energy Star Portfolio Manager Program updates to the code will encompass a host of within 2 years. In addition to establishing a The City of Austin is widely recognized as ambitious resolutions, including the require- timeline for efficiency audits, and enhancing in- having some of the most progressive energy ment that all new single family dwellings be centives and requirements, the Green Building polices and building codes of any municipal- Zero-net Energy Capable Homes by 2015. Program is also developing a “carbon neutral” ity in the United States. Upon recognizing the This ZECH plan, developed by a City Council certification program for new construction. implications of rapid population growth and appointed task force, will be phased into searching for ways to avoid expensive infra- the building code over amendment cycles in Developing a Renewable Energy Portfolio structural expansion, city leaders embraced 2006,’09,’12, and ’15. All new housing built to a strategy that emphasizes demand side the ZECH guidelines must be 65% more effi- Austin Energy has developed a proposed reduction, implementing a series of creative cient than homes built to the 2000 International Energy Resource Plan aimed at meeting initiatives to improve energy efficiency in city Energy Conservation Code. The first phase of both 2020 generation needs and the Austin buildings. This movement led to the foundation regulations, introduced in 2006, focused on the Climate Protection Plan goals set by the City of Austin’s Green Building Program, creating sizing and testing of HVAC units, installation of Council, with the smallest possible impact the first green building rating system, which radiant barriers, and utilization of high efficacy on rate payers. The proposed plan includes would eventually serve as a prototype for the lighting to reduce electric energy consumption several components: continuing to maintain popular LEED system. Through close collabo- by 19%, and gas consumption by 1%. The and operate the current generation fleet, ration with the community and local building second phase of regulations will begin in 2009 conserving 700 MW of new electric demand industries the program’s leaders have been with the adoption of the next generation of the through energy efficiency and load-shifting able to secure strong support for continued 2009 IECC. These ambitious targets are not programs by 2020, adding 300 MW of natural revision of the municipal building codes and limited to domestic structures; the new code gas generation, and adding some 870 MW of subsequent mandates for greater efficiency. will also require all non-residential buildings to additional renewables, including biogas, wind As part of the Austin Climate Protection Plan, 1 be 75% more efficient by 2015. and solar initiatives. The proposed plan also which strives for dramatic carbon production presents approaches to becoming a carbon reductions by 2020, the Austin building code Recognizing that new construction represents neutral electric utility and details on the energy will play an important role as a policy tool that only a small fraction of the existing building efficiency and load-shifting programs required encourages energy efficiency in building. A stock, the new City ordinances will also include to offset 700 MW of peak demand. The new generation of alternative energy produc- provisions for energy audits and efficiency 1,000 MW of proposed generation resources tion facilities promises to keep the city running upgrades to existing structures. Austin cur- outlined in the proposed plan are in addition clean. The City has made great strides toward rently has about 180,000 single family homes, to several generation components that have developing a suite of policy guidelines and with fewer than 5,000 new homes added each already been initiated. Austin Energy has innovative initiatives for executing their lofty year. At that rate, by the target date of 2020, long-term contracts for wind-generated power energy goals. roughly 20,000 homes will be expected to be and a small amount of landfill gas-generated ZECH with another 40,000 built to at least the power that together provide about 8 percent 2000 code standards.2 While this would not be of the current energy needs of the utility. Ad- an insignificant achievement, considering only ditional wind energy coming online this year, a new construction would leave some 170,000 to proposed 30 MW solar array that would come 180,000 homes existing utterly unaddressed. online in 2010, and the Nacogdoches biomass To make improvements to existing structures plant that would come online in 2012, could keep pace, the next generation of building increase the amount of Austin Energy power

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Notes

1. City of Austin “Resource Guide: Planning for Austin’s Future Energy Resources” October 2008 http://www.austinsmartenergy.com/ divison.php?page=learn_more&sub=resource_ guide.

2. Morgan, Richard. “STP to ACPP: Energy Policy and Buildings in Austin” Architecture 350. University of Texas. Austin, 03 Septem- ber 2008.

Figures

Figure 1: http://www.flickr.com/photos/kamel- rock/2423696395/sizes/m/

Figures 2-7: City of Austin “Resource Guide: Planning for Austin’s Future Energy Re- sources” October 2008 http://www.austins- martenergy.com/divison.php?page=learn_ more&sub=resource_guide.

Figure 8: http://www.global-greenhouse- warming.

Resources http://www.austinenergy.com/ http://www.ci.austin.tx.us/acpp/default.htm

Biography

Richard Morgan manages Austin Energy‘s Green Building Program. Green Building includes single family, multifamily and commer- cial green guilding programs and the adop- tion and implementation of the City of Austin Energy Code. Richard is also responsible for Austin Energy’s Manage it Green consulting program, which provides services to other utili- ties and municipalities seeking to develop or enhance green building and energy efficiency programs.

Prior to joining Austin Energy, Richard spent seven years managing not-for-profit, affordable housing initiatives in Austin, and more than 20 years in the private sector building industry as a licensed general contractor.

He is certified by the National Development Council as a Housing Development Finance Professional and is a Project Management Professional. Richard is currently a member of the Board of Directors of the Green Building Initiative.

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