Action request: City Council will vote on this topic on May 21, 2026.
- Write to your Austin City Council member here to let them know we need more options and research before making a decision.
- Sign up AGAINST item 7 on the Tuesday, May 19 Austin City Council Work Session. Sign up to speak against it if you can.
- Sign up AGAINST item 7 on the Thursday, May 21 Austin City Council Meeting. Sign up to speak against it if you can.
BACKGROUND: What are peakers and why does Austin Energy want them?
The electric grid requires a constant perfect balance of supply and demand to function. Because demand can change quickly and because some energy resources, like wind and solar, don’t produce all the time, flexible energy resources are needed to fill in the gaps. Traditionally, gas-powered peaker power plants that can turn on and off quickly have been used for that purpose. Now, batteries are often filling that need in the ERCOT market. Currently, most batteries are able to discharge energy for 2-4 hours, but 8-hour, 12-hour, and even up to 100-hour batteries are available. Demand response, which is when customers reduce energy usage during times of high demand is also used to balance the grid and is very cost-effective.
- Transparency is essential to building trust with voters. Purchasing and installing 400 megawatts of gas peakers could cost up to $1 billion and just the equipment will be several hundred million dollars. An investment of that magnitude demands full, transparent vetting. The cost of contracts from everything to wind and solar power purchase agreements, battery contracts, and all sorts of equipment and services for Austin Energy and the rest of the City are regularly posted with the company, the amount of the contract and basic information about the timing and what is being purchased. This aligns with the Austin City Charter and state law. Plenty of companies might like to keep their pricing secret, but that doesn’t serve the best interest of voters or Austin Energy customers. How can City Council expect voters to have the trust to approve bonds and future tax rate elections, if massive purchases like this are done in the dark?
- Natural gas peakers come with significant financial risks. The cost of the equipment has increased over 50% just in the last couple years. Austin Energy says it’s a “sellers market” for gas peakers. Maybe this isn’t the best time to buy. The costs of other components and labor needed to install peakers has likewise risen sharply. Natural gas prices are also up and prices in the United States will continue to fluctuate in response to world events, including wars, because we are the leading exporter of natural gas. Some utilities have already experienced hundreds of millions of dollars in added expenses due to natural gas price spikes in recent years. Customers will be paying for those costs for many years. If the Austin City Council approves the purchase of peakers, Austin Energy customers will be on the hook to pay for all these costs. A decision like this deserves careful scrutiny by external entities, which is why Austin Energy needs to release its modeling assumptions and results and why the Austin City Council should require an independent third-party analysis.
- NOTE: In 2014, Austin Energy wanted to spend $5 billion to build a 500 megawatt combined cycle gas power plant, but after the independent analysis that City Council required showed that the plant wouldn’t make any more money than investing in renewables, Austin Energy reversed course and by a couple years later was saying that combined cycle plants weren’t a good investment. Austin Energy doesn’t always get it right.
- RESOURCES: The Institute for Energy Economics and Financial Analysis recently issued a helpful report, with case studies, on this topic, called “The misguided stampede to build gas power plants.” Read the summary and/or report, or listen to the webinar recording.
- Austin Energy committed to 100% carbon-free energy. Right before the “Austin Energy Resource, Generation and Climate Protection Plan to 2035” was adopted, Lisa Martin stated at a City Council work session that Austin Energy wasn’t backing off the goal to transition to 100% carbon-free generation and that the goal would apply to both supply (generation) and demand (serving customers). Two minute clip here. Austin Energy is now trying to say that the way they wrote the carbon-free goal allows the utility to purchase renewable energy to equal customer demand, but also operate fossil fuel power plants to make money.
- Carbon-free energy resources are available. Gas peakers were included as an option in the “Austin Energy Resource, Generation and Climate Protection Plan to 2035” only if carbon-free energy sources weren’t available. They clearly are available – Austin Energy has just been slow to implement them. Austin Energy has asked for approval for 3 battery contracts, but none have had time to be implemented. Austin Energy just recently made changes to 2 local solar programs. These solutions, along with demand response (customers shifting energy use) can be scaled up with Austin Energy support. Austin Energy should pursue medium-duration and long-duration battery storage instead of gas peakers. Austin Energy hasn’t given the clean energy path a chance to succeed and is rushing into buying gas peakers.
- Sacramento’s municipal electric utility is investing in medium-duration energy storage.
- Google and Xcel Energy are building 300 megawatts of 100-hour batteries.
- Gas peakers will add to local air pollution. Austin Energy says that the new peakers will run instead of its older, less efficient peakers. That will likely be true some of the time, but not on the hottest summer days, when air pollution is worst. On those days, Austin Energy is likely to run the new peakers in addition to the older peakers at its Sand Hill Energy Center, creating more pollution on those days. Austin Energy won’t commit to shutting down any units and hasn’t stated any limits on daily air pollution, which is what matters for public health. Austin-area air ground-level ozone pollution and particulate pollution already exceeds EPA standards and is unhealthy. This is a particular risk for children, the elderly and those who work or exercise outdoors. Financial analysis of gas peakers and the clean energy alternatives should include financial analysis of health and climate costs from air pollution.
- Battery Storage for Fossil-Fueled Peaker Plant Replacement: A Maine Case Study “If the most inefficient and aging fossil-fueled peakers in Maine were retired and replaced with new, more efficient gas plants, Maine would see an increase in total emissions of about 104,000 tons of CO2, 12 tons of NOx, and 0.5 tons of SO2. This increase in emissions occurs because the new gas plants would be able to economically run for more hours per year than the existing, aged fossil-fueled plants; and more run-time results in higher emissions, despite the increased efficiencies of the newer plants.”
- Replacing California’s Peaker Plants with Long-Duration Energy Storage “Peakers disproportionately operate when air quality is already most dangerous. During the September 2022 heatwave, emissions from California’s gas plants spiked by 60% compared to baseline summer days, causing an estimated $12.3–$27.8 million in negative health impacts.”
Sites for gas peaker plants haven’t been selected by the City Council. Austin Energy has shared a long list of potential sites, including many in East Austin, but won’t say which sites it wants to install the peakers at. This ignores a commitment in the Austin Energy Resource Plan to incorporate public input on site selection before moving forward with a contract. Site selection should be made before a commitment to purchase equipment that costs hundreds of millions of dollars. What happens if the City Council can’t agree on sites?
Action request: City Council will vote on this topic on May 21, 2026.
- Write to your Austin City Council member here to let them know we need more options and research before making a decision.
- Sign up AGAINST item 7 on the Tuesday, May 19 Austin City Council Work Session. Sign up to speak against it if you can.
- Sign up AGAINST item 7 on the Thursday, May 21 Austin City Council Meeting. Sign up to speak against it if you can.