Image by Sean Pavone licensed through Canva Pro
By Cyrus Reed
This month, CPS Energy, the state’s largest municipal utility, made two important announcements. First, as it had promised as part of its “Vision 2027” Plan, it let the state’s grid operator - ERCOT (Electric Reliability Council of Texas) - know that it plans to suspend the operations of 894 MWs of gas plants located just south of San Antonio. The three steam units known as Braunig 1, 2 and 3 would suspend operations in exactly one year - March 31, 2025. In making the announcement, San Antonio’s municipal electric and gas utility is giving time for ERCOT and other stakeholders to react to the news, and for ERCOT to determine if the closing of the plants might impact overall resource adequacy or local reliability.
As a market participant, Sierra Club filed comments in support of the plan to close the three old, inefficient plants. The plants are only used occasionally and overall only ran at about 20 percent of their capacity. Even though they ran infrequently, they do contribute to the pollution that creates local smog in San Antonio and also emit millions of metric tons of carbon dioxide. A copy of our comments submitted to ERCOT can be found here.
Even as the utility announced it was closing three plants, it announced it is in final negotiations to purchase three more modern facilities currently owned by Talen Energy. The purchase is expected to be completed in the next few months. Under the agreement, CPS Energy will acquire all assets associated with Talen's 897 MW Barney Davis and 635 MW Nueces Bay natural gas-fired generation facilities, both located in Corpus Christi, as well as its 178 MW natural gas-fired generation facility in Laredo.
Again, given that CPS Energy adopted a resource plan in January of 2023 that said it would close almost 3,000 MWs of coal and gas, but also invest in an even greater amount of newer gas, renewables and storage, the decision is not surprising. Still it is unfortunate that CPS Energy is investing in newer gas plants. However, since these plants were built about 15 years ago, it is a better option than building new gas plants and will not lead to an overall increase in gas resources in the ERCOT market. Simply put: the gas plants are just changing ownership.
CPS Energy is also investing in non-fossil fuel resources. In September, the utility issued an RFP for up to 500 MWs of battery storage, and they are currently also looking at two pilot projects for geothermal energy as part of a goal to invest in up to 25 MWs of geothermal energy. In January, they invested in a new 150 MW solar facility in Caldwell County.
Perhaps of most importance, CPS Energy has committed to ending their use of coal by 2029 by closing one of their units and converting one of the units to gas. However, they have committed to reviewing that gas conversion decision annually to see if new types of technology like battery storage, demand response, and geothermal energy could be a replacement rather than gas.
The Sierra Club will continue to work with CPS Energy and encourage San Antonio leaders to prioritize renewable energy, storage, and reducing demand as the priorities to meet the energy needs of San Antonians.