Analysis San Antonio

CPS Energy’s Rate Committee Readies Recommendation to Swap Out Coal for Gas

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A majority of CPS Energy’s Rate Advisory Committee members are lining up behind a recommendation to dramatically expand the utility’s gas holdings. Image: Screengrabs from December 6, 2022, CPS livestream.

Seeking an early retirement for San Antonio’s last coal plant, the City-owned utility sought direction from its Rate Advisory Committee. On a prayer and a biblical parable, the RAC members are primed to fail a key climate test.

Greg Harman

San Antonians are accustomed to prayers—nearly always Christian prayers—opening meetings of our City Council and utility board. City-owned CPS Energy’s volunteer-led Rate Advisory Committee follows the same format. Last week, the RAC’s guest intercessor called upon Divinity to deliver the “knowledge, capacity, and wise guidance” to help finalize their recommendation—as requested by the CPS Board—on how best to shut down the 1,400-megawatt JK Spruce coal plant by 2030 and slash the City’s carbon emissions by 40 percent.

{UPDATE: 13 RAC members voted for a gas-heavy generation pathway P2; 7 were split between two pathways leaning more heavily on renewable sources. This recommendation for gas expansion was heard by the CPS Energy Board of Trustees on December 19, 2022, and action is expected when they reconvene next month. Deceleration will have detailed pathway comparisons and additional analysis in January}

It’s not clear if members silently requested the discernment to recognize that wisdom when it arrived, but the first guidance offered came as a critique.

Opening the public comments portion of the December 6, 2022, meeting, San Antonio resident Ryan Weber took to the mic and challenged key modeling assumptions and findings, suggesting they unjustly favor traditional fossil fuels to the detriment of cleaner energy options being debated.

“The specific metrics chosen and methods by which they were applied misrepresent the performance of the different scenarios,” Weber said. “This disproportionality creates a misunderstanding as to how these portfolios actually perform in relation to each other and compounded together produce metrics that may not lead CPS or the RAC to decisions that are best informed.”

He alluded to a 12-percent cost gap, for instance, between the most carbon-intensive generation scenario modeled and two alternatives that would eliminate both coal and gas from San Antonio’s energy mix by 2040. It’s a 12-percent gap that results in a whopping 75-point penalty for the renewables-heavy scenarios.

The challenge of this RAC, which has been meeting for more than a year in demanding two- and three-hour meetings pouring over highly (OK, moderately) technical documents, is considerable. Like utilities the world over, San Antonio’s CPS Energy is being challenged to ramp down highly polluting power sources like coal and gas while remaining reliable and affordable—particularly for those most at risk from accelerating extreme weather being caused largely by the combustion of fossil fuels.

It’s a monumental task.

But as was ensured at the formation of the RAC with a less-than-transparent appointing of multiple members beholden to fossil fuels (See: “Fossil Fuels Swamped CPS Energy’s Rate Advisory Committee”), this group on the whole are not feeling the climate emergency.

If Weber’s was the voice of Wisdom chiming in, it was largely ignored in favor of a literalist interpretation of a New Testament parable about (we’re told) the wisdom of hoarding oil.

Woe unto those who fail to fill their jugs with dispatchable fuels.

Buoyed by his reading of the Parable of the 10 Virgins from the Christian New Testament, RAC member Peter Onofre said he favored one of the most gas-intensive pathways among nine modeled for CPS Energy by Charles River Associates.

For the unchurched, the story attributed to Jesus goes something like this:

Once upon a time, a really famous personage was about to get married. And all these virgins came rushing out in the night to greet him and light up the party. But it took a long time for the guy to show. There was ice on the road. In Texas. So, naturally, all these virgins went to sleep with their oil lamps burning. As Texans tend to do. So when the man of the hour finally showed up, half of their lamps were flaming out. Even though they called the Electric Reliability Council of Texas to release some reserves, the energy operators told the virgins that there was a strain on the grid and there just wasn’t enough to go around. So sorry.

“Jesus called them ‘foolish’ because they didn’t prepare,” Onofre said of those virgins. “They didn’t have dispatchable fuel.”

Literal reads of the Bible can be entertaining. And troubling. The meaning here, Onofre suggested, is straightforward. CPS Energy needs more oil, not less, and (it holds) must be ready to burn that oil for a long time to come. (We should note that others practicing theology take away very different meanings from those same red letters.)

As discouraging as this was to witness, this unnecessary, and frequently unproductive, mingling of religious scripture and energy generation planning isn’t new.

San Antonio is home to the Hagees, after all. Some may recall Jr. Hagee a decade ago rejected the global consensus of climate scientists warning about our overloading of the atmosphere with heat-trapping gases. Cornfluffle, the young Hagee spat. “Strange weather patterns,” among which he accounted “mudslides,” only portend one thing: the imminent return of Jesus.

So keep burning that midnight oil, Doomsday Clock be damned.

Following Onofre, the majority of RAC members offering an opinion veered to the same gas-heavy option, labeled Portfolio 2. It is one of two options that CPS staff recommended to RAC members at the meeting, alongside Portfolio 9, which goes harder on renewables but relies more on market purchases.

Nine energy-generation scenarios modeled for CPS Energy by Charles River Associates.

RAC member Dana McGinnis, whose financial company invests heavily in fossil fuels on behalf of “high net worth accounts,” aligned with Onofre’s reading in supporting a high-gas scenario. McGinnis said he was skeptical that CPS Energy could do anything to significantly reduce San Antonio’s climate footprint anyway.

“I haven’t been convinced by anything CPS has said that the actions they are taking with the [Climate Action and Adaptation Plan] have actually reduced emissions in the city itself,” McGinnis said. “I can see how if you close a coal plant or a fossil fuel plant the emission out of CPS would be lower, but it’s not necessarily true that the emissions of the city would be lower.”

Though they fluctuate year to year, depending on what power plants CPS Energy is leaning into the hardest, in reality CPS Energy’s pollution easily represents half of our City’s emissions. COSA’s 2019 Greenhouse Gas Inventory placed energy generation at 44 percent of our 17.3M tonnage total. But in 2021 CPS ramped up power production at Spruce, releasing a whopping 8M metric tons of climate pollution from that single plant alone. To reach our 2030 goal of slashing emissions by more than 40 percent by 2030, there is simply no going around Spruce.

RAC member Jim Berg took his turn with the mic to tell the City of San Antonio, essentially, to stay off CPS Energy’s lawn. (Which we’re left to assume means this whole climate planning stuff, even if the CPS Energy board unanimously adopted it years ago.)

Both the dispatchable fuel of Onofre’s virgins and McGinnis’s discomfort with relying too much on state grid operators for potential future emergency purchases (we didn’t get such a square deal last round) merit hard conversations. Rhetorical wins don’t do anyone any favors at the end of the day. But if Portfolio #2 is the best this group can corral, given the challenge ahead, the CPS Board should slow the train down when it receives the group’s recommendation next week.

It’s true that wind and solar are not available at all hours (same for our coal and gas and nuclear plants, supposed “baseload” or “dispatchable” sources that all failed during Winter Storm Uri). It’s true that technologies like hydrogen, geothermal, and long-term energy storage systems all exist in various states of refinement. It’s also true that unmanaged growth and waste and, Dios deliver us, energy-intensive crypto currencies, are all working to swell the eye of this needle we are attempting to thread. It’s far more than an energy question.

This complexity is precisely why the local environmental community (within which I worked as an organizer from 2017 to 2021) first envisioned and lobbied for the creation of a RAC in the first place—to make this necessary transition while protecting the most vulnerable residents from any potential rate shocks, market-inflicted or of our own creation.

As RAC member after RAC member lined up behind the gas-heavy scenario it became clear that the weight of historical practices are hard to shake, even when a new course is specifically requested.

Portfolio 2: RAC favored, heavy on the gas

Portfolio 2: The proposed energy future garnering the most support burned gas (or a gas substitute, perhaps, such as hydrogen) far into the future.

While RAC members like Anita Ledbetter of Build San Antonio Green and D3 Councilmember Phyllis Viagran tilted their comments toward innovation and renewables, respectively, it wasn’t until climate organizers and RAC members DeeDee Belmares and Anacua Garcia joined the conversation that the group was firmly directed back to its primary objective as laid out by Weber in the meeting’s opening minutes—the necessity of hitting our City’s climate targets.

Garcia reminded her fellow committee members that fossil fuels come with costs to the public health and ignoring those only pushes the costs unto those least able to bear them as well as future generations.

“I will not vote for 2,” Belmares said. “It’s obvious people are concerned about reliability and affordability. I’m also concerned about the habitability of the planet.”

Deceleration requested additional information from CPS Energy to better understand how the various models account for gas’s full climate-warming potential or what the utility expects from a federal price on carbon, but they failed to respond to our before press deadline on Tuesday night.

Weber was available, however. He said he had been pouring over the second generation portfolio recommended by CPS, Portfolio 9, and was finding it convincing.

He wrote Deceleration:

“P9 is the top scoring of all considered portfolios when applying RAC’s category weighting priorities—and it is so by a wide margin. P9 presents the most diverse generation mix, providing greatest flexibility to CPS in its power sourcing and mitigating the risk of any one single commodity or technology becoming expensive or unavailable. It meets the CPS standards for Reserve Margin and Reliability requirements, without unduly relying on ERCOT market purchases. And it hits 2030 and 2040 CAAP interim targets, while putting forecast 2047 emissions within real striking distance of CAAP’s ultimate net-zero 2050 goal. It does all that at the lowest cost of any portfolio in both production (Energy Price) and investment (PV Revenue Requirement).”

Meanwhile, Weber added, P8 improves even upon that while costing a mere 1 percent more than the CPS-approved gas-heavy option, P2.

Portfolio 9: CPS staff-approved alternative

Portfolio 9: An alternative recommendation put forward by CPS Energy last week, heavy on the wind.

So where are we now?

Weber’s critique went largely unaddressed at the meeting. And the comments of Belmares and Garcia were belittled by McGinnis, who followed Garcia by saying: “I don’t know what to think about those last two performances, but let’s move on.”

Little support, in other words, for prioritizing our climate marks beyond a promise from CPS’s leadership deeper in the meeting that their staff would be able to take a faulty plan and still make it work years down the road.

This Thursday, barring some great intervention, expect the majority of RAC members to vote up a generation plan that CPS Energy staff say will meet San Antonio’s carbon-reduction goals of 2030 but swing wildly off the mark, failing both 2040 and 2050, barring adjustments by “future RACs.”

(Considering how much worse emissions from faulty flaring and leaks have been shown to be across the gas industry we’re skeptical about 2030.)

D1’s appointed RAC representative, John Agather, spoke about the hard work getting to this generation recommendation vote. “My hope is once we’re done with this, we go away,” he said. “We don’t live on forever.”

Who’s going to break it to him?

You see, since Mayor Ron Nirenberg decided to task the Rate Advisory Committee with generation planning advice (as opposed to creating a more publicly facing and accessible resource planning process, as the environmental community requested) the RAC has yet to seriously dig in on its core charge of rate reform. Isn’t is about time to asked why San Antonio’s wealthiest residents enjoy their own special rate class subsidizing their opulent lifestyles? The work is hardly begun, and yet … is this team really up for the job?

The gravitation to a heavy gas investment as a solution to the challenge of retiring coal for the sake of climate suggests perhaps not. It’s a moment for everyone up and down the political food chain to note. Because the embrace of a possible decades-long gas commitment as we slide ever nearer to “climate hell” takes us to the threshold of a final collapse of confidence in our utility when we need them the most.

It feels reminiscent of the energy drama that threatened the mayorship of Julián Castro when he was freshly out of his political starting gate in 2009. Back then, CPS going full tilt trying to lead a nuclear-power revival. The hundreds of millions of dollars that CPS and the City of San Antonio lost, ultimately, suing their way out of the misguided fiasco, doesn’t get so much as a footnote on Castro’s Wikipedia page today. But it’s not a trial anyone wants to relive as we march up to global tipping points heralding a very different—and even more challenging—future for humanity.

Poor planning is precisely why we are today forced contending with the early retirement for one of the youngest coal plants in the county. What the RAC has achieved can only be seen as the start of a community conversation leading us back to the roots of our task. The moment is terrifying and complex. If buying deeper into gas is truly going to be our response, there will not only be severe political costs for all those involved, but, tragically, very likely another lost decade in the fight of our lives.


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thu15dec3:00 pmthu6:00 pmRetiring Spruce Coal Plant: CPS Rate Advisory Committee RecommendationMultiple energy futures are being debated for San Antonio.