Clean energy firms coming to San Antonio

CPS Energy CEO Doyle Beneby is expected to announce Monday the relocation of several clean energy-related companies to San Antonio, bringing hundreds of good paying jobs and establishing a firm toe-hold in the ?new energy economy? that Mayor Juli?n Castro has been pushing since he was first elected.

Beneby said that together, the companies could bring as many as 800 to 1,000 jobs to the Alamo City by 2015, in areas as diverse as LED lighting, electric vehicles, solar-panel assembly or manufacturing, cleaner-coal technology and home-area networks, which work with smart meters to reduce consumer and utility electricity demand.

The companies have also agreed to make additional investments in local education and research and development, Beneby said Thursday in a briefing to the San Antonio Express-News editorial board.

The formal announcement, planned for Monday afternoon, could also include naming the consortium of companies that bid successfully for the right to build another 50 megawatts of solar in San Antonio. The short list had been whittled down to the final two as of last week, Beneby said.

That contract is also expected to include an economic-development component, likely a solar manufacturing or assembly plant to be located here, as well as additional investments in education, research and development.

Beneby also will likely confirm what he's hinted at for months: that the utility will mothball its two oldest coal plants by 2018, freeing up resources to add cleaner sources of electricity to CPS' current mix. To offset some of that loss, CPS is planning its first investment in a cleaner coal technology.

Clean energy goals

Buzz over the announcement has been building in recent weeks as Beneby has briefed various interested groups; more than 400 people have RSVP'd to Monday's event, which CPS hopes will attract national attention. Last week, he and Castro laid out the utility's plans to U.S. Energy Secretary Steven Chu in Washington, D.C.

The CEO's strategy to leverage CPS' size and status as a publicly-owned utility to attract clean-energy jobs aligns with both the utility's Board of Trustees' Vision 2020, which lays out the utility's path to a lower carbon and more sustainable energy future, and Castro's SA2020, which calls for increased economic competitiveness while embracing sustainability.

?We have an inherent advantage that CPS has not always exploited,? said Beneby, who will mark his first year at the utility in August.

CPS is also a vertically integrated utility ? it owns its own power plants, poles and wires, unlike for-profit utilities like Exelon, where Beneby worked for many years. That means it can ?extract value,? as he put it, at all points within the utility.

Beneby put companies interested in working with CPS on notice last January when he said he'd be asking them, ?What's in it for San Antonio??

From the companies' perspective, the potential to gain access to more than 700,000 CPS customers, plus the many small muni-owned utilities and cooperatives that CPS partners with, was a big draw.

?These businesses want to work with CPS,? he said. ?We have something they want.?

Castro expressed a barely contained glee at the pending announcements.

?I have a feeling that Monday will be my favorite day so far as mayor of San Antonio,? he told the editorial board.

Investing in cleaner coal

Castro's efforts to turn San Antonio into a clean-energy hub have always been one of his top priorities. The goals in SA2020 built on Mission Verde, former Mayor Phil Hardberger's sustainability plan, and CPS' commitment to reducing electricity demand by enough to avoid building a new power plant.

The mayor also hailed the increasingly close collaboration between the utility, the city and the University of Texas at San Antonio. CPS last year pledged $50 million over the next decade for the creation of UTSA's Sustainable Energy Research Institute, which will pursue advances in areas including solar integration, energy efficiency and carbon management.

?This is business, academia and government working together to create prosperity for the region,? Castro said.

Castro also sees Monday's announcement as the culmination of CPS' transformation from a stolid, traditional utility that boasted low rates, but also suffered from a lack of leadership and community support, into a utility that is helping lead the city toward ?a new level of prosperity.?

?What you see here today is the full turnaround of CPS,? he said. ?A very well run, efficient organization with bold aspirations and the ability to deliver on those aspirations for the entire city.?

That turnaround will now include the challenge of replacing about 850 megawatts of dirty coal with cleaner alternatives, including natural gas, renewables and so-called ?clean coal.?

CPS' first investment in cleaner-coal technology comes with an agreement to buy 200 megawatts of power for 25 years from the Texas Clean Energy Project, a 400-megawatt coal gasification plant to be built outside of Odessa.

Currently in development by Summit Energy, TCEP will capture up to 90 percent of the carbon it produces and sell it to the oil industry, which it pumps into the ground to help squeeze out the oil. The plant will also produce and sell urea-based fertilizer.

Shuttering coal plants that are producing abundant and cheap, albeit dirty, power, is unheard of in the industry, Beneby said.

?No one else is doing it.?

But with stricter Environmental Protection Agency regulations in the offing against the pollutants belched out by the nation's coal plants, Beneby believes it makes more economic sense to shut them down rather than spend upwards of $550 million for the necessary pollution control upgrades.

That savings will be used to buy lower sulfur coal for the utility's remaining coal plants, which reduces emissions, and for the increased investments in solar power. Vision 2020 directs the utility to produce 20 percent of its peak power demand with renewables by 2020.

CPS already ranks number one in wind-energy capacity among municipally-owned utilities, and number one in Texas in the amount of solar-generated electricity under contract. That includes the 14 megawatts it buys from Blue Wing, a solar farm located in southeast Bexar County.

New energy economy

Adding to its solar portfolio, Beneby announced in January that CPS would pursue ?big solar? and seek proposals to build an additional 50 megawatts of solar power.

That request for proposals generated interest and bids from companies around the world, and comes on the heels of a deal CPS inked last year for 30 megawatts of solar, to be built and managed by SunEdison. One megawatt can power roughly 200 homes.

That deal was the first in which Beneby successfully coupled additional renewable generation with economic development.

In addition to building three, 10 megawatt solar farms and selling the power to CPS, SunEdison has agreed to open a regional office in San Antonio with at least a half-dozen permanent jobs in addition to roughly 30 temporary construction jobs.

The company also will invest $300,000 to build a renewable energy education center for 2nd-through 9th-graders, and another $300,000 toward research and development at UTSA.

That model, of requiring permanent jobs, educational and R&D investments as a condition for doing business with CPS, will help put San Antonio on the clean energy map, Castro believes.

?This is the nexus between sustainability and economic development,? he said. ?Nobody owns the new energy economy yet. It won't be Portland, it won't be Austin. It will be San Antonio.?

Source: http://www.mysanantonio.com/news/energy/article/Clean-energy-firms-coming-to-San-Antonio-1430170.php

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