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Solar investment is sound for CPS

Novemer 19, 2010

Editorial Board
San Antonio Express-News

CPS Energy, already a leader in wind-powered generation, is now in the solar energy business. CPS has a contract to buy all the power generated by the new Blue Wing facility in Southeast Bexar County for 30 years. The 140-acre solar farm will generate 14-megawatts, staff writers Tracy Idell Hamilton of the Express-News and Ronnie Crocker of the Houston Chronicle reported.

That's enough to provide electricity for 1,800 homes. But it's only a fraction of the 1,500 megawatts of renewable energy capacity CPS wants to add by 2020. And it's only a drop in the bucket compared to the 6,945 megawatts of capacity the utility currently generates from all sources.

The CPS goal is to boost the renewable energy portion of its portfolio primarily wind, but now also solar from 13 percent to 20 percent. In general, renewable energy is more costly than coal, nuclear power or natural gas, the three biggest components of CPS capacity. And solar energy is costly even among renewable energy sources.

So why sink CPS resources in long-term deals for solar energy when less-costly alternatives exist? That's the question people asked when CPS made the decision to invest in nuclear power generation. And it's the question people asked when CPS was building coal-fired plants while natural gas was relatively cheap.

Despite delays and construction overruns at the South Texas Project three decades ago, nuclear energy has been a boon to ratepayers. When natural gas prices soared in 2005, coal insulated CPS customers from surging rates.

Setting aside the environmental arguments for renewable energy, the diversity of CPS' energy portfolio is its own virtue. Today's energy costs don't necessarily forecast those a decade from now. And today's costs don't reflect additional expenses that will likely be added to coal and gas sources from some form of a carbon tax and more stringent caps on emissions.

Renewable energy can't be considered without regard to cost. CPS must be candid with ratepayers about what trade-offs are involved in its renewable investments. But there's good reason to believe that a modest investment in solar power fits in with the utility's long-standing efforts to diversify its generation portfolio for the benefit of customers.

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