Denton City Council, from left, Sara Bagheri, Don Duff, Dalton Gregory, Mayor Chris Watts, Gerard Hudspeth, John Ryan and Keely Briggs, voted to switch the city's residents and businesses to renewable energy by 2020. Courtesy of City of Denton. 

March 5, 2018

In 2015, Denton's historic fracking ban was squelched by the state legislature but that hasn’t stopped the city’s green progress.

In early February, Denton city council members voted 6-1 to adopt the Denton Renewable Resource Plan, which will effectively switch the city’s 133,000 residents and its businesses from electricity generated by fossil fuels to power from wind turbines and solar panels by 2020.

In a previous decision, city leaders set a goal of buying 70 percent of Denton’s electric utilities from renewable energy providers. Denton deputy director of public affairs Jessica Rogers says the more recent decision to further reduce the city’s dependence on fossil fuels came about because a variety of factors. 

“For Denton, the recent decision to go 100 percent renewable was about both environmentalism and economics as renewable energy development has expanded, creating enough affordable and clean energy that Denton can set a very realistic and achievable goal to be 100  percent renewable,” Rogers says. “And while our city council has prioritized moving to 100 percent renewable in the future as an environmental effort for some time, it wasn’t economically feasible until very recently.”

Mayor Pro Tem Sara Bagheri cast the opposing vote. Bagheri said she held out because of the plan's inclusion of the Denton Energy Center, a natural-gas power plant near the Denton Enterprise Airport, according to the Dallas Morning News.

City-Owned Utilities vs Investor-Owned

Denton is the second city in the state to set such a goal. Georgetown was the first. Although most Texas residents live in deregulated markets and choose their own electricity provider individually while paying the current retail rate, cities like Denton that own their own utilities and operate outside of the deregulated market have more sway in negotiating large, wholesale contracts with a variety of electric providers and locking in lower prices for their citizens.

“There are only 72 municipally-owned utilities in the state of Texas, and it is those utilities that have become leaders in being responsive to the requests of customers to pursue renewable energy,” Rogers says. “You see that in Georgetown, Austin, San Antonio, and right here in Denton. When you have a municipally-owned utility, as opposed to an investor-owned utility, you have more flexibility to be responsive to the needs, wants and concerns of your customers, because they are the owners.”

The state’s power grid, composed of all the electricity transmissions lines and substations, pools together the electricity from the state’s various power generating companies, whether they’re burning fossil fuels or not. Each home or business then draws power from the same grid. What Denton’s arrangement does is to ensure that the amount of electricity drawn from the grid by Denton population is replenished only by companies that produce electricity from wind turbines and solar panels.

Gas Plant Grumble

Cyrus Reed, conservation director for the Lone Star Chapter of Sierra Club, says he’s optimistic about Denton’s new electricity policy but has some reservation.

“About two years ago, the city had come up with a plan which was to go 70 percent renewable and also build a natural gas peaking plant near Denton. There was a lot of outcry given Denton's history and the concerns about oil and gas drilling near cities. But they did go ahead and contract that gas plant and it's actually being built. So this all has a little bit of an asterix in that they are going to do these renewable contracts and they're also going to own a gas plant which they'll sell into the market when prices are high. So it's kind of a financial hedge,” Reed says.

“Overall it's positive in that it's another city along with Georgetown that's made a 100 percent commitment to renewables. But the work's not done because they’re building the gas plant, and also because there are other local solutions that they could be looking at, like building community solar or local solar with batteries and have basically the same advantage as the gas plant and be able to generate power locally when prices are higher. They've chosen not to do that. But it doesn't mean they can't investigate it and do so in the future. So, I think it’s sort of a missed opportunity but a good first step.”

Renewable's Good Rates

Reed says that although environmental concerns about fossil fuels and their link to climate change is certainly a compelling reason for municipalities to pursue renewable power options, the stability of wind and solar power prices is perhaps the strongest motivation for them to take action.

“For a municipal utility that has a certain number of customers to serve, it makes a whole lot of sense to go renewable because you're locking in long-term power prices at a low cost. So, we're seeing this it's really a combination of grassroots pressure and also just simple economics,” Reed says. “We’ve seen now that Georgetown has done this and Denton has done this, but we also see that the city of Austin has made a commitment to 65 percent renewable energy and this year did a contract for an additional 150 megawatts of solar that came in at the lowest price we've seen in the U.S. thus far – basically at $30 per megawatt hour for a one-term contract and that's that's a tremendously low price, and much lower than you'd get if you were to build a new coal or gas plant. So far the prices have just gotten better and better in the last few years and we've seen wind contracts in the $20 dollar range.”

Rogers says, as part of the DRRP plan, the city will shut down a coal-powered electric plant that the city co-owns with other municipalities. The city is already on course to reach 44 percent of its renewable energy goal by January of 2019 and is evaluating additional contracts to reach the remainder of the goal by 2020.

As to whether customers will see their electricity bills rise or fall when the DRRP is fully in place, Rogers says that the energy plan is designed to provide a buffer against instability in the utility market.

“The energy market is dynamic and prices and can be affected by a number of things outside of our control. However, the DRRP represents the lowest-cost plan for fulfilling our energy needs. Because we are locking in renewable energy at historically low prices, we hope that will mean lower rates for our customers in the future,” Rogers says. “There are risks with any decision. However, the DRRP balances those risks by diversifying the renewable energy supply and locking in historically low prices. Because the DRRP is both environmentally and economically friendly, it is a win-win for the city.”

Reed says that the Trump administration’s imposition of steep tariffs on imported solar panels is a wild card that has recently been dealt to the renewable energy industry. How much that protectionist move will raise solar electricity prices is yet to be seen, but Reed is confident that solar power will remain competitive and that Denton should be able to reach its goal.

"The DRRP represents the lowest-cost plan for fulfilling our energy needs. Because we are locking in renewable energy at historically low prices, we hope that will mean lower rates for our customers in the future,” Rogers says.

Citizen Engagement

Rogers credits Denton’s residents and city leaders for making the switch to renewables a priority and says Denton sees a high rate of citizens participating in the city’s decisions.

“Denton is a very environmentally mindful community. Many of the city’s most popular programs are reflections of and in response to a very active and engaged public,” Rogers says. “Because of those community connections, we have a robust energy efficiency and solar rebate program, significant conservation and education initiatives, a wonderful tree initiative – which is a partnership between the city and Keep Denton Beautiful – and a top-notch recycling program.

“And all of our initiatives are very much designed to provide our citizens with the environmentally-focused, sustainable policies, programs and services that our community has said are important to them. Moving to 100 percent renewable energy is simply another step in our ongoing effort to improve our environment, economy and community.”

“Denton is a very environmentally mindful community. Many of the city’s most popular programs are reflections of and in response to a very active and engaged public,” Rogers says.

Reed says he’d like to see other municipalities follow Denton’s example but that for public policy makers to put such progressive ideas on the table, they need to hear from their constituents.

“I think what this shows is for public policy entities like Georgetown, like Denton and like Austin, this is really a growing movement – that it is possible to make large commitments to renewable energy,” Reed says. “It's from a combination of pressure from people who want to see change and want cities to do something about climate change and protecting the environment, as well as just economics. And I think this is a trend you’re going to continue to see.”

“It's from a combination of pressure from people who want to see change and want cities to do something about climate change and protecting the environment, as well as just economics. And I think this is a trend you’re going to continue to see.”


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Comments (1)

  • anon
    jorenste

    This article is the best I’ve seen since the Denton Renewable Resource Plan (DRRP) approval in terms of trying to explain how Denton can claim to be 100% renewable while running the natural gas powered Denton Energy Center (DEC). However, I would propose that in order to succinctly qualify the view embodied in the statement “What Denton’s arrangement does is to ensure that the amount of electricity drawn from the grid by Denton population is replenished only by companies that produce electricity from wind turbines and solar panels” the arrangement could better be referred to as“100% net renewable using natural gas”.

    In fact, Denton’s demand will be met by purchasing some electricity from fossil fuel generation, including the DEC, at times when Denton’s contracted renewables don’t produce enough and fossil fuel generation is the lowest cost option (such as a hot summer evening right after sunset). As I understand it, this non-renewable energy use is offset to result in a net 100% renewable portfolio over the course of a year, by using some of the Renewable Energy Credits (RECs) from Denton’s contracted renewables at times when the renewables are producing more than Denton is using (such as in temperate but windy fall or spring late night/early morning hours). In this case RECs are the energy market mechanism which allow selling the excess renewable energy while retaining the renewable attributes (and preventing the buyer of the excess renewable energy from claiming the renewable attributes of the same energy production).

    The DEC is an integral part of the DRRP (for better or worse). The direct costs are somewhat clear in terms of construction, operation, and maintenance but less clear in terms of impact on the local environment.

    The direct benefits are less clear because they appear to depend on future costs of energy in the wholesale electricity market which Denton operates in (ERCOT), which in turn appear to be dependent on the future price of natural gas, and because of claims which have not been quantified (that I know of) that having the DEC allows Denton to negotiate better terms for its renewables contracts. Some of these may come out in Denton Municipal Electric (DME) budgets and projections over the coming years.

    There are also indirect costs and benefits linked to transmission infrastructure, generation displaced by DEC operation from older & dirtier power plants “upwind”, and natural gas supply considerations.

    Two more issues which complicate the discussions: energy produced by the DEC which will be sold to satisfy demand outside of DME territory (when DME can profit from doing so / when called to do so by ERCOT market operations) does not appear to be included in the 100% net renewables calculation, and the fact that the upper limit on the DEC annual hours of operation is capped by the air pollution limits in the “minor source” Texas Commission on Environmental Quality (TCEQ) operating permit highlight concerns about emissions.

    A final point is that since DME is in the process of contracting for natural gas supplies for DEC operation, it has the opportunity to become involved in efforts to promote transparency and responsible practices in this area, in addition to the ongoing and future projects involving local renewable generation and demand side solutions.

    Mar 08, 2018