Austin Energy Stumbles With Green Power Program

(MoneyWatch)  A few years ago, Austin Energy's GreenChoice program in Austin, Texas was rated top in the country for delivering cheap renewable energy to Texan customers who signed up. Since then, prices have skyrocketed, and the utility is considering passing off the costs to its regular customers, a change that could double monthly power bills. So what happened?

After it started GreenChoice, Austin decided to set a goal of using 30 percent renewable energy by 2020, one of the most ambitious plans in the country. For a while, it appeared that they might pull it off. Wind power in the state is fairly cheap. But according to the Austin American-Statesman, an overtrafficked power grid sent prices up.

The root of the problem isn't the higher prices, though. It's one step further down the chain, in new customer signups. While people who have already joined the problem signed up for a set rate, and will continue to use renewables, the updated rates are preventing new customers from joining the program.

It's not a problem that can be overcome with some advertising, either -- only one percent of expected new signups have materialized over seven months.

But rather than change the program or shut it down until they can work the kinks out, it appears Austin's legislators would prefer to eat the higher costs. Not themselves, of course. The city's council plans to meet and discuss the change, and if they choose to go ahead, everyone in Austin will shoulder the cost.

The prospect of a political backlash could dissuade the council members. If fear of losing office doesn't stop them, though, the regular utility customers will be blindsided by drastically higher electricity.

Privately-held utilities like California's Pacific Gas & Electric have shied away from raising rates significantly for regular users on account of customers who want to adopt green energy. So Austin Energy, a government entity, could be providing the first clear instance of painful rate hikes from renewables.

In conservative Texas, such a scenario would provide fertile ground for grandstanding by the local politicians, who generally oppose action on climate change. But it could also spur a look into a problem that needs immediate attention around the country: the current grid's inability to deal withlarge amounts of renewable energy shuttling in from distant regions.