It’s all about “green rectangles”—dollar bills—claimed Georgetown’s mayor, Dale Ross, in 2017. He was speaking about the city’s decision to go “100 percent renewable” and the projected savings it would bring. Now, in 2019, the glowing predictions of a cheaper, cleaner future have proven false, and cracks have emerged in the city’s renewable energy edifice.
This week, the City of Georgetown announced that it is raising electric rates effective February 1, adding $12.82 to the average customer’s monthly bill. This increase is a direct result of millions of dollars of losses from the city’s renewable energy power purchase agreements.
While city officials blame unpredictable market conditions, the price increase was an entirely foreseeable result of the renewable policy forced onto Georgetown residents by the mayor and City Council.
According to the city’s website, Georgetown signed agreements to purchase a mix of wind power from the Panhandle for 20 years and solar power from West Texas for 25 years at a fixed cost. The purchases accounted for significantly more energy than consumers would use at peak (and would cover the city’s claim of 100 percent renewable) even during periods of high demand for almost the length of the contracts. The goal was to sell the excess energy back into the market—at a profit, thereby keeping ratepayers’ (and taxpayers’) bills low.
This attempt to outsmart the market was a failure. Georgetown has been stuck with a stabilized rate well above market price. Residents have paid more for their electricity than necessary and the city has had to sell excess power at a loss, cutting into the City’s electric fund by almost $7 million last year. According to the Williamson County Sun, Georgetown’s local newspaper, the three-year overruns total $26 million—a large sum for a city of around 70,000.
Last year, Texas Public Policy Foundation sounded the alarm, drawing a response from the mayor in which he doubled down on the policy’s positive impact. Soon after, the Foundation released a paper on the feasibility of going 100 percent renewable and hosted an event at the Georgetown Public Library. One of the principal issues in those discussions was the lack of information available to the public, which made it difficult for residents to evaluate the city’s policy decision.
A Jan. 23 editorial in the Sun reported that city officials “refused to answer” the newspaper’s questions about cost overruns, emphasizing that the refusal is the city’s choice, not legal requirement. At least two requests under Texas’ Public Information Act (PIA) for documents relating to the move to “100 percent renewable” were met with resistance by the City of Georgetown. Staff instead elected to withhold the power purchase agreements under a discretionary exception under the PIA. However, documents they provided showed that the city’s electric fund was “bleeding” as early as 2016, in Councilman Steve Fought’s words.
The documents also show that the renewable energy initiative was the highlight of many of the mayor’s presentations, and the city often boasted about the media attention it garnered. Unfortunately for residents of Georgetown, media hits don’t pay the bills.
With the city’s refusal to provide analyses about the cost effectiveness of going all-in for renewables, we are left to consider the results. Residents are seeing higher electric bills, a depleted electric fund, and international fame for going green—but not in green rectangles.