A: No, because [the Austin] City Council has not voted on it.

A: There is significant potential for solar in West Texas, but I am not sure how much. However, with the transmission build out slated for the next five to six years to support 18,000 MW, it is unknown how much solar it can support. Congestion should not be as much of a problem, during the day because wind has a lower output during the day.

A: Not at this time, absent putting more money into it. The time is associated with acquiring right of way and working with landowners. These are very long time lines requiring a lot of equipment ordering and negotiating rights of way.

A: No monetary gain, it is a cost pass-through in the fuel charge to customers. From a CO2 reduction perspective it is several thousand tons.

A: This has been under study for many years (10+ years). Wind is measured at certain heights in various locations and over time a profile emerges. This is done by individual developers who are interested in building wind projects.

A: There is still a timeframe that is inherent in building transmission and generators. These may increase in number but not speed.

A: AE hired Pace Global to evaluate the cost to customers and they are developing the scenario financial impacts. This information is due this week.

A: Today there are no developed technologies for existing coal plants. It is being studied and AE has looked into this. There are a lot of existing plants and researchers are studying but it is a long time away.

A: The intermittency is an issue and being looked at by ERCOT [Electric Reliability Council of Texas], however the harmonics have not been specifically identified as an issue.

A: I don’t know revenue impact. However, AE has done an analysis of impact energy code changes have on energy use.

A: AE has very sophisticated large customers who understand energy and constantly monitor their electricity price. There is a pressure on AE to be low cost and efficient. This has been a driver for AE to look at how they operate today. It causes AE to constantly evaluate how to shift their business. This is a challenge to workforce development.

For many workers who are very skilled their environment is changing. This will require AE to really understand the skills and talents of the employees to see how they can be leveraged to do the jobs of the future before hiring from the outside. Skill building, rotation programs, lateral movement of employees, progression ladders, etc. are just some of the plans for employees. AE is also looking at retirements and how the AE business model for workforce planning is changing to see what new jobs may be created with these changes.

A: Not a definitive answer today. These will evolve as the changes occur. There are examples of how new jobs and departments were created as new mandates came from the City (conservation and energy efficiency are examples).

A: It is not a go until the Council approves it. However, they did get some public resistance. AE slowed down and communicated with the residents of the area and stakeholders, which helped gain support for the project and AE did a better job of communicating to Council what has been done.

A: Not yet known but the negotiation team is working on making sure any benefits are passed through in the contract.

A: Yes, there will be due diligence. Also, AE will not pay any upfront cost and there will be no payments for power until kWh are produced. AE staff felt Suntech had the best package and they are the leading manufacturer of solar panels. As a long-term option, these panels can be replaced if they do not perform as planned. The selection decision was driven by price (75%) however the risk is on the vendor. Again, they don’t get paid unless they produce.

A: This is being evaluated now in load forecast update that is going on now.

A: Load growth is forecast at 2.5 percent in current forecast, but it has not been updated yet in the new forecast.

A: Good idea, this is something that can be evaluated. You are encouraged to submit this to management; very similar to a combined cycle generator.

A: Risk of not producing is valid. If this happens energy will have to be purchased on the market to replace the nonperforming plants. Three quarters of all CO2 comes from the coal plan at Fayette. AE is looking at options such as fueling the plant with a biomass product to replace coal. This is in development stage and not ready for use, being studied. The other challenge is the volume of fuel that would need to be produced to use at the plant.

A: Pace Global is doing an overall cost analysis for the scenarios of the [Proposed] Resource Plan. They will be looking at options and whether it is sustainable. Part of this plan is to start early in the process to see impacts, this includes not just cost of renewables but also the cost of coal emissions.

A: Yes, everything needs to be considered and baseload units continue to be an important part of the generation mix. It is more than just a cost decision. For example, the majority of end user cost is fuel. The evaluation of GreenChoice® renewable power has shown that even though the buyers paid more in the beginning, today they are paying less in their fuel cost. Given the changes in the landscape, other factors such as carbon taxes will increase the cost of coal and gas, which is why AE is looking for other energy sources.

A: The stimulus package that was just approved is being evaluated and impact is not known. There have been production tax credits available to privately held interests and this means that AE they may get the power at a lower price. This is what made projects attractive to developers. However, some of the future incentives may make projects more attractive to AE.

A: AE is working with City staff to evaluate this impact on future budgets. There are a lot of factors that impact the budget, the City is being very conscientious about revenue planning and watching closely. In 1994, there was a surcharge added to rates to pay for energy efficiency programs ($18-$20 mill) which offsets the loss of revenue.  The projections showed an $8 million reduction in revenue annually from conservation measures. [To clarify: Since 1994, 0.134 cents/kWh has been included in our base rates for recovery of Demand-Side Management program expenses]

A: Currently there are no local carbon offset options. If they were available AE would certainly consider them.

A: There is a business incentive for vendor to upgrade equipment because they can maximize the revenues by investing in better equipment which improves output.

A: Yes, this is true but it still is a better deal because the developer takes the initial risk and technology risk. They have the incentive to improve productivity because they can improve sales.

A: Yes, but don’t know, today, what skills staff will need to have to shift work force skills because of technology changes and the time frame for AE developing these plants is unknown.

A: Yes, that is being evaluated.

A: Not in the current communication, however Pace Global is doing that calculation and it will be communicated in the future.

A: This is tied to timing of major outages and increased reliability on gas vs. coal generation, increases the cost during those years. This is just an estimate and a best guess.

A: For the load forecast and analysis shown, weather is normalized.

A: That fee is on your gas provider bill and not on AE bill. It comes through in the fuel charge and not a line item on customer bill. It is a function of gas purchased. Don’t know if the impact on those fees/impacts were looked at in the overall cost.

A:  No.  The 16 percent will not expand but some of the share expenses may increase.   AE will stay at 430 MW.  Percentage over overall capacity will decrease when the plant doubles. Will Sand Hill be combined cycle or simple cycle?

A:  We lost 600 MWs. We will build Sand Hill for 480 MW and will have to add another 100 MW to the mix.  It was costly to close. The change was mandated by Council.

A:  The Sand Hill Energy Center was built with the infrastructure to support additional generating plant. We are going to expand the main power plant by adding a 200 MW generator that will use the waste from the first unit, thus making it a more efficient “combined cycle” plant.

A:  The peak demand savings are embedded in the load forecast as reductions in the generation requirements.  At the end of this process AE will roll out more.  This is a draft plan.  We will need to reach out to the community.

A: The contractors are working up cost per kW and impact on typical bill.

A: AE interested and following it but we do not believe it will be technically and commercially ready before 2020.  We believe that it holds promise.   At the end of November [2008], the City Council passed a resolution to only consider Clean Coal.

A: The overall evaluation out of 15 offers scored Suntech’s proposal the highest. The Sun Tech panel is assembled in China.  Many of the components are made in the U.S. We are not permitted by state law to give favor to local entities. By the way, the module represents less than half of the project.  Construction, cabling, etc will be done locally.  Over half of cost is domestic.  Labor force is 600 construction jobs. We are still negotiating and Council must approve.

A: This plan is part of a buildup. We are adding biomass and proposing to add solar. As technologies mature, some can be sped up. Some technologies are now viable today but very costly.  We look at a lot of things and try to choose the technology at the right time. We will consider some as pilots to lower costs and gain insight.

For instance, wind is strong during the night and not during the peak summer days. The Competitive Renewable Energy Zone (CREZ) projects will have to be coupled with storage systems to make wind and solar really viable.

Compressed air storage can be controlled and make a controllable or dispatchable resource from uncontrollable sources.  The most economical way is to look at the load side and reduce cooling load. We can take the energy e produce at night and use it as air conditioning during the day. We can use energy in the middle of night by chilling water and use the energy during the day during peak periods. This is thermal storage. We now have these systems at the airport, some commercial buildings, and AE control center. The technology exists today to make it effective, but we need to be able to control the discharge cycle better. The cost of solar will come down in the future. Cost per kWh is higher than anything else. It was the same case with wind power. The cost is now reasonable compared to current fuel costs.

A: We are looking for salt domes to use.  600 domes created in East Texas.  Caverns were byproducts of mining salt.  Salt is natural compressed chamber.  You can store natural gas, air and oil.

A:There is geothermal potential in Texas but not like in California or Iceland.  Texas has hot salt water.  When the oil well gives out, then water comes out.  Very hot water.  So far the companies that have made proposals have disappeared disappear.  We have had no serious proposals.  Our best estimate is that there is 2,500 MW of geothermal from various small systems around the state.

A: Not much. We are basing this on costs in Europe.

A:We had a fuel cell on Waller.  Not renewable unless you produce hydrogen with renewable.  AE used natural gas which was relatively clean but expensive.  This technology is five years into future.  Fuel cells are currently not as efficient as the combined cycle gas plants.

A: AE’s take on fuel cells is that we won’t see fuel cells in cars or homes or contributing to mix.  The sticking point is cost.  The stack deteriorated within 5 years.  You have to replace often.  It is a very expensive part of the fuel cell.

A: AE relies on others for large systems.  We do not do research ourselves.  We rely upon proven technology.  We will be beta tester through the Pecan Street Project that we are doing with the high tech firms.  We are using AE as a test bed for smart grid to see what pieces of new technology will fit into the system.

A: John H. Baker, Jr., P.E., the head of the utility’s strategic planning, is in charge of testing for Pecan Street [Project].  John is also going across the organization to put the teams together using AE employees.

A:The solar project is proven technology and is used other places.  The way [we are] addressing the concern, we don’t have funds at risk.  Suntech and partner will own the plant and AE only pays for the power produced.  But still will need the project to work because the energy is part of achieving the goal.  Confident that the product will work and be the same quality of any other solar product producer.  The Japanese companies were leaders, now China is in the lead with solar technology.

One of the questions that AE often receives why not select from our local vendors.  Procurement looked at this but we could not do because state law prohibits preferences for local supplier.  Will have local smaller components and the labor used in construction.  The estimated 600 construction jobs will be mostly local.

A: We measure wind and monitor the wind speeds in Austin, but we need better data. The test results of testing to date are not economical.

A: Yes, but we need more data there as well.

A: Yes, the Council did vote to turn down the offer of participation.

A:  Yes, but the developer won and they are almost finished with the construction.  The advantage of the coast [wind] compared to West Texas appears to match the load better.  The wind along the coast is more likely to blow during the day. In addition, there is less transmission congestion in this area.  However, the construction is more expensive, because the cost of the foundations is higher due to the fact that near the coast they have to go deep to hit solid ground.

We also have an option for a wind lease in Pecos.  AE would have control of the land.  We are thinking of ownership instead of just purchasing.

A: The PUC (Public Utility Commission) recently authorized lines to bring wind up to 345 corridor.  It will be three to five years before they are completed. These lines will allow AE to develop the land in Pecos that we have under an option.  Once the transmission lines are built we will have up to 18000 MW of capacity.

A: Solar costs have decreased and wind has gone up.  Solar is now about two times the cost of a wind turbine cost $800,000 to $1.2 million.  Solar decreased because silicon has come down.   We are doing solar because we respond to the folks who elect council.  Have the rebate, not doing for financial reasons and public preference.  Within the economic explanation the front load cost is low and avoids carbon.

A: Yes, we do have a program for data centers.  We also received a grant from the State Energy Conservation Office to develop and demonstrate best practices for data centers.

A: Yes because they are very popular.  There is also a federal investment tax credit (ITC) which is 30 percent of the cost and had a $2,500 cap.  The 30 percent credit was recently reauthorized and the cap was removed so you can really get more than half the cost of a solar unit from rebates and an ITC.