The City of Georgetown, Texas, and its mayor, Dale Ross, have become known internationally over the past couple of years due to the city’s claim that its municipal electricity utility uses 100% renewable energy.
But as recent developments show, Georgetown’s proverbial 15 minutes of fame came at great cost to taxpayers and electricity ratepayers. Mayor Ross can get on television. But can he fix a pothole?
Georgetown, home to about 71,000 people, is 25 miles north of Austin, Texas.
Praised by former Vice President Al Gore and featured on a popular German television program, Mayor Ross introduced Gore in 2017 at a renewable energy conference held in Georgetown for the second time. Ross appeared with Gore earlier that year at a renewable energy convention in Las Vegas. Ross, a self-described “conservative Republican” has also appeared in environmental documentaries through which he estimates he’s been seen by more than 500 million people around the world.
Politicians contend with many challenges. Foremost is getting elected. Winning votes is often a process of making promises and, once in office, keeping promises.
Yet there is a multitude of things that may distract an elected official from attending to local voters’ concerns. Unelected staff may have their own agendas that they seek to impose upon the elected officials for whom they ostensibly work. Outside special interests may appeal to them. Popular issues that have little or nothing to do with their office may command their attention—for instance, city councilmembers passing foreign policy resolutions or environmental ordinances that aren’t within their scope of responsibility.
In the City of Georgetown’s case, the distraction from the basic services came in the form of a virtue signaling energy policy cloaked in the guise of responsible fiscal policy.
First, some background about Texas’ electricity market. In 2002, the Texas electricity market moved from a heavily regulated system to a market based system. Most electric customers, except for El Paso and parts of the Panhandle and East Texas, can choose their energy supplier. As a result, millions of consumers have shopped for lower prices, and Texans pay less for the electricity they use than the national average. There are exceptions though: consumers served by electric cooperatives and municipal utilities can’t choose their electric providers.
Residents of Georgetown are captive to the city’s municipal electric utility, with Georgetown Utility Systems providing electricity, water, sewer, and garbage services. As a result, what consumers pay for these services isn’t simply a matter of supply and demand—public policy decisions also factor heavily.
Enter Mayor Ross and Georgetown’s 100% renewable electricity policy.
In justifying making his city 100% renewable (it’s really not, but more on that later), Ross has said, “This is a fact-based decision we made in Georgetown, and first and foremost it was an economic decision…” Ross went on to tout to the German television show, “…we are paying the same amount per kilowatt hour in year one than we are in year 25 with no cost escalation, so that meets the objective of cost certainty. And then in terms of regulatory risk — the knuckleheads in D.C. — what’s there to regulate with wind and solar? It’s clean energy. So this as the perfect solution for the citizens we were elected to serve.”
But there are two big problems with Ross’ statements.
First, Georgetown just announced that it is renegotiating its wind and solar energy contracts after energy costs came in about $23.1 million over budget in 2016 and 2017. This year, the city—meaning the city’s taxpayers—paid $8.6 million more for electricity than expected due to falling electricity prices. The city made up $1.8 million of the shortfall by not spending as much as budgeted on investments in electric infrastructure. So much for getting a good deal for the taxpayer.
Second, wind and solar aren’t without risk from government policy, regulatory or otherwise. In fact, a huge part of the renewable market is entirely artificial—propped up by government subsidies and mandates as well as policies that allow periodic renewable power sources to send electricity to the grid whenever they produce it while the cost of maintaining the grid’s reliability are levied upon others: consumers and reliable baseload generators that pay for fuel in exchange for being able to produce power whenever it’s needed.
Ross went on to boast to the German television crew that, “I make decisions based on facts… unlike the president,” noting that “It was a huge mistake to withdraw from the Paris climate accords…”
Meanwhile, Paris has suffered from weeks of violent unrest, initially triggered by anger over high fuel prices about to be made more unaffordable by a proposed climate change tax of 25 cents per gallon, since rescinded by French President Macron.
As for Georgetown’s claim of 100% renewable electricity, Charles McConnell, executive director of the Energy and Environment Initiative at Rice University, told the Austin American-Statesman in 2017, “It’s not kind of misleading, it’s very misleading, and it is for political gain.”
Bill Peacock, the Vice President for Research at the Texas Public Policy Foundation (and a colleague of the author), told the Austin American-Statesmanlast week that what Georgetown did to make the 100% renewable claim “…was (to buy) more electricity than they could use almost any day of the year.” The city’s policymakers had to buy far more wind and solar energy because those sources are so unreliable. For instance, on days with high electric demand with little wind generation, the city may fall short of power, but, because it’s hooked up to the larger Texas grid, reliable power produced by natural gas, coal or even nuclear plants fill the gap and keep the lights on.
The flip side of 100% renewable claim is that on low demand days with plenty of wind, Georgetown’s contracted wind and solar energy suppliers generate a surplus, selling that power at very low cost into the larger Texas market.
As Peacock observed of the practice of trading electricity on the market, “They knew they would have to buy this and sell it, and that’s not the way most people work. It’s more evidence they are wanting to portray themselves as a green city rather than doing something for their consumers.”
As of today, residents of Georgetown who aren’t pleased with paying more for their electricity for the privilege of making the dubious claim to 100% renewable power have three options: vote in a new set of elected officials who promise to focus on the basics of local governance, convince the legislature to end the electric monopoly extended to municipal government, or move out of town.