Dive Brief:

• Municipal power company CPS Energy has turned to its customers in the San Antonio metro area for guidance regarding its next steps toward decarbonization, including the fate of a coal-fired power plant that is merely ten years old.

• CPS has adopted a new "flexible" approach to resource planning with greater public input to adjust to the current rapid pace of technological change and avoid stranded assets, according to company Chief Operating Officer Cris Eugster. The utility introduced its "flexible path" three years ago, which has led the company to consider smaller investments in newer technology as opposed to maintaining a large power plant.

• Invitation for greater public participation is welcomed by the local Sierra Club chapter, which hopes the new public process will result in greater accountability on climate goals.

Dive Insight:

After building one of the nation's newest coal plants just over ten years ago, CPS Energy says the lessons of the past decade call for a new approach to resource planning.

"One of the challenges with utilities is you think about 40-year time horizons, but the next ten years may look very different than the last," Eugster said. "We don't want to be making investments that haven't been very well thought through that we will have to commit to for 30-40 years."

Addressing the city's needs amid a global energy transition, Eugster said, has prompted CPS Energy to adopt a new approach to resource planning. Instead of building out single billion-dollar power plants every few decades, Eugster said CPS has begun to think about installing flexible blocks or "bundles" comprised of mixed resources, such as solar and battery storage.

"We want to be flexible in terms of the technologies we're looking at," Eugster said, making smaller investments in a mix of resources to experiment with new technologies before making major investments in a single resource.

Over time, he said, these smaller experiments will lead to identifying the best resources and strategies for larger investments going forward. But in the short term, it also leaves CPS with the ability to pivot more readily than if they made a single "big bet," Eugster said.

Some of those previous "big bets" have left CPS in its current situation, with a need to not only replace aging infrastructure including five natural gas plants nearing the end of their useful life, but also to determine the fate of the coal-burning J.K. Spruce Power Plant, built in 2010.

"We need to be careful because we don't want to strand that investment and put an economic burden on the community," Eugster said. But how CPS chooses to replace the plant depends on how fast the community wants to eliminate carbon-fired energy entirely, which in turn will impact how much they pay for power in the years to come.

To determine what the community would like to see done with the Spruce coal plant, CPS has requested comment on three proposed alternatives. In the base case, CPS would replace one of the coal plant's two units with a flexible renewable energy resource mix, while the second unit would continue to burn coal. A second alternative would replace both units with renewable resources, while a third would replace just one unit and convert the second to natural gas.

Chrissy Mann, a senior campaign representative in Texas for the Sierra Club's Beyond Coal Campaign, said the CPS Energy call for input on its decarbonization plan "represents a huge step forward."

"We're really excited about the public engagement around these scenarios," she said. "We don't want to dismiss that this is the first time they've written down, 'this is how we're planing to move away from coal,' but we've been working with advocates in San Antonio and ... this is a new day for them. It's clear [CPS is] making a real effort to move forward."

Mann said that based on the Sierra Club's experience in other communities, it is her belief that community engagement and grassroots activism can play a critical role in holding utilities with emissions goals accountable for hitting those targets.

Still, she said, the Sierra Club does have a slate of questions it plans to ask CPS soon about the assumptions and financial data that went into the three proposed resource packages.

"But the big take home is we're going to dig into it," Mann said, "and we're really appreciative, because you can see that the goal is to figure out a way to retire Spruce, take care of resource needs, and have the least impact, or if anything the most positive impact."

"[W]e're really appreciative [of the process], because you can see that the goal is to figure out a way to retire Sprice, take care of resource needs, and have the least impact, or, if anything, the most positive impact," Mann said.