There has been a lot of discussion about the need for an Energy Policy for our country to provide both a strategy and a roadmap for a secure and strong energy future. The fact of the matter is it really isn’t that complicated. We are charting a course right here in San Antonio that we believe many others could follow. And we are doing it without any federal or state mandates; we are doing it because it makes good business sense and it benefits our community.
The basic tenet of our strategy is one of diversification and risk management. Why put all of your eggs into one basket? It sounds simple, and yet it is hard to practice. We here at CPS Energy, where nearly 80 percent of our energy generation comes from coal and nuclear, have developed a strategy that will result in a cleaner and more balanced portfolio mix: 34 percent coal, 23 percent nuclear, 20 percent natural gas, 14 percent renewables, with the rest offset through energy efficiency programs. Our strategy sets forth key goals for the company to achieve by the year 2020:
- The early retirement of 871 MW of coal units by 2018.
- A renewable goal of 1,500 MW or roughly 20 percent of our generation capacity.
- An energy efficiency goal of 771 MW, equal to not having to build a power plant.
- A low-emission generation goal of 65 percent that incorporates a new natural gas plant.
- An innovative smart grid program that creates a virtual power plant.
We are executing against these goals through a focused business model and a redirection of capital from old to new. As an example, we decided last year not to invest billions of future dollars into aging coal plants but rather invest those dollars into “New Energy Economy” initiatives including solar, the smart grid, and a new natural gas plant. Through our initiatives, we are protecting ourselves from the ever-growing list of compliance requirements, which will likely include a carbon price down the road while at the same time investing in technologies of the future and supporting their growth. We can do this for less cost over the long run and offer a cleaner environment for our customers and community. With this strategy, we will reduce SOx by 90 percent, Mercury by 58 percent, NOx by 30 percent, and Carbon by 25 percent. It is the equivalent of taking one million cars off the road.
This is not just talk. We are aggressively executing this strategy and are already well ahead on many of our goals. With 1,059 MW under contract, we are the largest off-taker of wind power in the state of Texas and the largest in the country among municipally owned utilities. We are the largest solar utility in Texas with 44 MW under contract and the largest active solar field, Blue Wing, spread out over 130 acres right here in San Antonio. We have aspirations to significantly expand our solar efforts and to bring economic development to our city that will support our efforts as well as the growing demand for solar across the U.S.
We are also partnering with our customers around an innovative smart grid program called Energy Guard that makes energy efficiency and management easy for customers and at the same time can help firm up the intermittency of renewables by synchronizing demand with supply in real time.
In summary, we believe others can take similar steps in transitioning to a secure energy future. This is not an “all in strategy” but rather a meaningful broadening and investment into the New Energy Economy. If everyone took on similar goals as we have here in San Antonio, it would make a significant difference to our country.
Let’s not sit on the sidelines on this one!