CPS Energy interim president and CEO Rudy Garza, right, shakes hands with board chair Willis Mackey on Aug. 23. Garza said a new agreement to boy solar power is “an extremely critical step” in preparing for the future.

SAN ANTONIO — CPS Energy is adding more renewable power to its generation portfolio with an agreement to buy electricity from a new West Texas solar farm.

The city-owned utility said this week that it would buy 180 megawatts of solar energy from the Tierra Bonita solar farm, which developer OnPeak Power plans to start building next year in Pecos County. It’s to be completed in 2024, but CPS Energy President and CEO Rudy Garza said the utility included financial incentives in the deal for early completion.

“This is an extremely critical step as we look ahead to how we’re going to power our Greater San Antonio community for the future and prepare to replace aging plants,” Garza said.

With Tierra Bonita, CPS has about 550 megawatts of solar capacity and plans to add another 480 megawatts in the coming years. One megawatt is enough to power about 200 Texas homes on a hot summer day.

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The utility began soliciting bids from solar developers in early 2020 through its “FlexPower Bundle” initiative, which is seeking to add 900 megawatts of solar generation, 50 megawatts of battery storage and 500 megawatts of natural gas-fired capacity. In May, it agreed to buy electricity from a 300-megawatt solar plant Consolidated Edison Development is building in Goliad County. It will be completed in 2024 or 2025.

The efforts are meant to replace CPS’ aging Braunig Power Station and O.W. Sommers natural gas-fired plants, which were built in the late 1960s and early 1970s. CPS wants to shutter them by 2026. Beyond that, CPS is likely to retire one of its two J.K. Spruce Power Plant coal-fired power units before 2028 and convert a second Spruce unit to run on cleaner-burning gas.

As part of the shift to cleaner power generation, CPS trustees in May approved $350 million in funding over five years for the utility’s energy efficiency and conservation initiative, which pays to weatherize low-income customers’ homes and provides credits to homeowners who buy efficient appliances.

“We hope next to see the utility move away from coal- and gas-fired power generation, especially by closing the Spruce coal plant,” said Emma Pabst, a campaign representative with the environmental group Sierra Club. “Building a grid of the future is no easy task, but with solar, wind and battery storage, as well as efforts to reduce demand through energy-efficiency programs and better buildings, we have all of the tools that we need.”

Garza said CPS will likely sign a contract in the coming months to buy solar power from another farm. The solar contracts have taken longer to finalize than CPS expected when it began soliciting bids. Shortages of components and volatile energy prices this year have clouded negotiations over pricing with solar developers.

Mission Solar sources most of its components and raw materials from Asian countries, such as Taiwan, Vietnam and Malaysia, before manufacturing solar panels at its San Antonio facility. The company is among the only U.S.-based manufacturers of solar panels in the country.

To get the 500 megawatts of gas-fired electric power, CPS in the next month or so will sign an agreement to buy electricity from a natural gas power plant in Texas for up to 10 years, until zero-carbon generation technologies — such as geothermal or hydrogen storage — are ready to be deployed.

Garza said the recently passed federal Inflation Reduction Act includes provisions that could make it less expensive for CPS to own its own solar farms rather than partnering with private developers. CPS could eye owning solar projects inside the city, or within a small radius around San Antonio.

“We’re going to determine (whether) we want own some of this stuff,” Garza said. “The team right now is sifting through those provisions.”

Diego Mendoza-Moyers is a business reporter covering energy, manufacturing and labor. A native of El Paso, he has previously written for the Albany Times Union, Las Vegas Review-Journal and Arizona Republic. He graduated from Arizona State University with a B.A. in journalism. Call Diego at 210-250-3165 or email diego.mendoza-moyers@express-news.net