Hard choice for 1990s: will energy come from solar, nuclear, or coal?

Cheap energy often gets much of the credit for the Sunbelt's rapid growth during the last decade.

As Austin, deep in the heart of the Sunbelt, tries to cope with its economic expansion, it is also searching for the best way to provide power to meet projected growth.

For the next 10 years, the city appears to be in pretty good shape. According to Austin Electric Light & Power figures, the city's four generating facilities have a 1,950 megawatt capacity. Austin's current peak demand is about 890 megawatts. Another 800 megawatts a year are sold to Houston. Surplus capacity is expected through 1990.

But after that the city will become a net importer of electricity unless capacity is expanded.

This is causing concern in some circles because Austin Electric Light & Power (AELP) is owned by the city. Last year the utility turned over $30 million in profit to Austin's general fund. Without this, city officials estimate that Austin's property taxes would double. And utility bills are a way to ''tax'' otherwise nontaxable state-held property - such as the Capitol.

Dr. Herbert H. Woodson, director of the Center for Energy Studies at the University of Texas, says, ''Within a year we won't be able to fulfill our contract with Houston. That means less income for the city.''

''We are going to need new capacity by 1990,'' says R. L. Hancock, AELP director. ''You have to decide eight years ahead of time what to do. If you undershoot, you're in a mess. If you overshoot a little, you can sell the excess capacity, and that's revenue for the city.''

The challenge Austin faces, he says, is a ''lack of clarity'' about how to provide the capacity needed after 1990. This may reflect the larger doubts in the community over how much Austin should grow and at what environmental cost.

Currently, the city has three options for boosting its generating capacity: nuclear power, coal-fired power, or an ambitious combination of solar energy and conservation.

In 1973 voters gave the city the green light for a 16 percent share of the South Texas Project, a nuclear power plant complex. The city's cost was originally pegged at $161 million, but delays and cost overruns have ballooned that price to $768 million. Moreover, the project's prime contractor was fired last September after the Nuclear Regulatory Commission found the quality control program at the site inadequate.

Last October Austin voters supported a nonbinding referendum that authorized the city to unload its share of the project.

But Dr. Woodson, also a former member of the city's Electric Utility Commission, favors the project. Given Austin's current dependence on gas-fired power stations, he argues that bailing out of the project ''would sentence citizens to pay the price of gas for electricity, (a price) which ultimately is controlled by OPEC.

''Coal, without competition from nuclear plants, will get expensive, especially as transportation charges rise. If nuclear competes with coal, it will help keep coal's price competitive,'' he says.

And coal is Austin's second option: the city could expand its share in a jointly owned coal-fired power station known as the Fayette Power Project.

Austin owns a 50 percent share in the two existing Fayette units. The other half is owned by the Lower Colorado River Authority. The authority is planning to add a third unit. The Texas Public Utilities Commission began hearings this month on whether to approve the project. If and when it does, and authority decides to proceed, the city has 90 days to decide if it wants to participate.

But that may require another bond issue, which must be put to the city voters for approval.

''The last two revenue bonds were defeated by the public, and that makes us a lot less secure about raising the money for the Fayette 3 project,'' says AELP's Hancock.

There appears to be general agreement that the city would have a difficult time supporting both Fayette 3 and the South Texas Project if it can't find a buyer for the latter.

The final choice is one that finds strong advocates within the current city council: using solar energy and conservation to offset the need for new generating capacity. This option was outlined in an Austin Renewable Energy Resources Commission report presented last July and now on the agenda for adoption by the city council.

Roger Duncan, considered by some observers to be the leading energy expert on the city council, says, ''Renewables and conservation can replace one of our generating facilities.''

But developers are expected to oppose the Renewable Energy Development Plan (or RED Plan, as it is called) because of the changes it would make in zoning laws, and the detailed energy impact statements it would require.

The battle will ultimately be fought in the city council, which sets utility policy. The outcome is far from certain. At this time, at least, one observer points out, none of the choices has enough backers on the council to win out over the others.