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Austin Energy Enters the Next Phase of Decarbonization

2026-05-13 · 10:09 UTC ·Texas Energy and Power Newsletter ·41 min read

Brief

Austin Energy, the municipally owned utility serving about 1 million people in the Austin area (≈580,000 accounts), is moving from early clean‑energy leadership into a new phase of operational planning to hit 100% carbon‑free generation as a share of load by 2035. The utility reported 65% carbon‑free supply in 2024 and is implementing its Resource, Generation and Climate Protection Plan to 2035. Stuart Reilly (General Manager) and Lisa Martin (COO) describe a hybrid portfolio approach: continued aggressive clean procurement where it hedges costs, combined with local dispatchable capacity, utility‑scale batteries, distributed batteries, transmission import upgrades and demand response to manage local reliability and market exposure inside ERCOT.

Key technical and market details: Austin retired ~725 MW of local gas capacity at Decker Creek (≈300 MW in 2020 and ≈425 MW in 2022), which contributed to the emergence of load‑zone price separation that undermines the hedging value of distant PPAs. Management gives the example of PPAs at roughly $50/MWh becoming ineffective when local nodal or zone prices spike (e.g., $850/MWh during critical ramps). To shrink that local premium the utility is investing in transmission (about $100 million per year in its capital improvement plan for five years) and adding local resources. Recent and in‑flight procurement includes a contracted 100 MW / 4‑hour battery with Jupiter Power, a ~40 MW distributed battery deal with Base Power (paired with a customer program offering a $500 upfront rebate plus ~$300/year performance payments), and authorization to negotiate an additional 100 MW / 2‑hour battery. Austin Energy estimates ~500 MW of credible near‑term new load on a ~3,000 MW peak system (mostly beneficial electrification and infrastructure rather than primarily data centers). Reilly and Martin emphasize the muni model’s community engagement—returning over $100 million to customers after Winter Storm Uri—and the need to communicate trade‑offs among reliability, affordability and environmental goals while using local dispatchable resources (including a proposed gas peaker for black‑start and long‑duration reliability) as a bridge to deeper decarbonization.

Why it matters

Austin Energy reached 65% carbon-free generation in 2024 and is targeting 100% carbon-free supply of customer load by 2035 under its Resource, Generation and Climate Protection Plan to 2035.

Key details

  • The utility is a vertically integrated non‑opt‑in municipal in ERCOT, serving ~1 million people (580,000 customer accounts) and ranking among the largest U.S. public utilities (8th largest publicly owned).
  • Austin Energy is planning for roughly 500 MW of plausible new local load over the next few years on a roughly 3,000 MW peaking system; management says most of that growth is not data centers but diverse electrification and infrastructure projects.
  • To address local reliability and 'load‑zone price separation' after retiring 725 MW at Decker Creek (≈300 MW retired 2020, ≈425 MW retired 2022), Austin Energy is funding transmission import upgrades (~$100M/year in its CIP for five years) and adding local resources including a proposed gas peaker for reliability and black‑start capability.
  • Storage commitments include a signed 100 MW / 4‑hour battery deal with Jupiter Power, a negotiated ~40 MW distributed battery program with Base Power, and an authorization to negotiate another 100 MW / 2‑hour battery; the utility already has ~17 MW of customer‑sited batteries enrolled locally.
  • Market dynamics: distant renewable PPAs (example cited ~$50/MWh) lose hedging value when the Austin load zone spikes (example $850/MWh peaks), so local dispatchable resources (peakers, batteries) can collapse local price spikes and restore the effective value of out‑of‑zone clean PPAs.
Cleaned source text

Listen now (41 mins) | Stuart Reilly and Lisa Martin of Austin Energy on what it takes to hit 100 percent carbon-free generation by 2035, and the resource decisions the utility is making now to get there.

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Austin Energy Enters the Next…

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Listen now

Austin Energy Enters the Next Phase of Decarbonization

Stuart Reilly and Lisa Martin of Austin Energy on what it takes to hit 100 percent carbon-free generation by 2035, and the resource decisions the utility is making now to get there.

Joshua Rhodes and Nathan Peavey

May 13

READ IN APP

Austin Energy’s power generation hit the 65 percent carbon-free level in 2024, and the municipal utility is targeting 100 percent carbon-free load by 2035, one of the most aggressive clean energy targets of any utility in Texas.

Austin Energy is one of the largest municipally owned utilities in the country and one of the few vertically integrated utilities operating inside ERCOT’s deregulated market. As the utility plans for load growth and rising ERCOT market exposure, it is also preparing the community to weigh the trade-offs that entails.

In this episode, Joshua Rhodes speaks with Stuart Reilly, general manager of Austin Energy, and Lisa Martin, the utility’s chief operating officer. Reilly and Martin walk through how the muni model shapes new load evaluation, renewable contract structure, and community engagement. They describe a resource plan that combines local generation with utility-scale batteries, distributed energy deals, transmission upgrades, and demand response.

Joshua, Stuart, and Lisa discuss topics including:

What it means to operate as a vertically integrated muni inside ERCOT’s competitive market.

The 500 megawatts of plausible new load Austin Energy is planning for, and why most of it is not data centers.

How load zone price separation has changed the hedging value of distant renewable power purchase agreements.

Why the resource plan calls for new local generation alongside more clean energy procurement.

A new 100 MW battery deal with Jupiter Power and a 40 MW distributed deal with Base Power.

How the utility returned over $100 million to customers from Winter Storm Uri.

How Austin Energy communicates reliability, affordability, and clean energy trade-offs with its community.

Timestamps

00:00 \- Intro, Stuart Reilly and Lisa Martin

01:11 \- Austin Energy as a Non-Opt-In Utility

05:47 \- Planning for Load Growth, Why Gas Peakers

09:25 \- Sizing Real Load vs the ERCOT Forecast

10:49 \- New Loads, New Costs, Who Pays

12:13 \- Load Zone Separation, Explained

14:02 \- Decker Retirements and Local Generation

16:51 \- PPAs, Hedges, and the $850 Problem

18:26 \- How a Gas Peaker Fits a Carbon-Free Goal

23:53 \- Why Local Power Enables More Renewables

26:43 \- Communicating Complexity to Customers

31:19 \- Jupiter Power, Base Power, and Local Storage

36:08 \- Distributed Batteries and Distribution Costs

40:25 \- Closing Thanks and Outro

Resources

People & Organizations

Joshua Rhodes (LinkedIn)

Webber Energy Group (Website \- LinkedIn)

IdeaSmiths (Website \- LinkedIn)

Stuart Reilly (LinkedIn)

Lisa Martin (LinkedIn)

Austin Energy (Website \- Executive Leadership Team)

Other Oganizations Mentioned

ERCOT (Website)

Jupiter Power (Website)

Base Power (Website)

Company & Industry News

Austin Energy signs Battery Storage Deal, Advancing Climate and Reliability Goals

Austin expands renewable energy push with major solar generation investments \- Community Impact

Texas grid operator’s demand forecast likely an overestimate \- Texas Tribune

Austin Energy 2035 plan sees challenges and successes one year after adoption \- KXAN

Books, Articles & Reports Discussed

Austin Energy Resource, Generation and Climate Protection Plan to 2035

ERCOT Preliminary Long-Term Load Forecast 2026–2032

Aggregate Distributed Energy Resource (ADER) Pilot Project

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Related Posts by Texas Energy & Power

Process is Killing Texas Data Center Projects

Transmission Takes a Decade, Load Doesn’t — with Raina Hornaday

Transcript

Joshua Rhodes (00:04.27)

Hey everyone, welcome to another edition of the Energy Capital Podcast. I’ve got not one but two guests for you today, both from the C-suite of Austin Energy, one of the largest municipal utilities in the country. It actually ranks as the eighth largest publicly owned electric utility in the U.S. and it serves about a million folks in the greater city of Austin. So today we’re going to be talking to Stuart Riley, who’s a current general manager of Austin Energy. Stuart has spent about 20 years in service of the city of Austin, starting as assistant city attorney.

Joshua Rhodes (00:33.4)

before moving up to various roles at Austin Energy. Lisa Martin is currently the Chief Operating Officer at Austin Energy, but she’s also spent times before at SoCal Edison, going through energy supplies and contracts and other types of things. And also from her LinkedIn, found out that she had something to do with subsea surveillance at Shell, which I actually want to just throw out all of the questions I have for you guys and focus just in on that. So sorry, Stuart, if we don’t talk about anything that we were going to talk about, but having found this out today.

Joshua Rhodes (01:02.19)

I’m really excited to have both of you all here to talk about Austin Energy. So Stuart and Lisa, welcome to Energy Capital Podcast.

Stuart Reilly (01:09.666)

Thanks Josh.

Lisa Martin (01:10.52)

Thank you, glad to be here.

Joshua Rhodes (01:11.944)