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NCW gets ready for alternative energy future

By Christine Pratt
Wentachee World

Editor’s note: Welcome to the “Light Switch” series. Over the coming months we’ll examine NCW’s challenge to meet growing demand for electricity, keep costs low and respond to what could be an aggressive new push toward electricity as a means to reduce our country’s dependence on fossil fuels. In Part 1, we set the stage…
WENATCHEE — “Crack power.”

Why would an East Coast energy executive jokingly liken electricity in North Central Washington to a notorious street drug?

Lisa Karstetter, Yahoo!’s Quincy spokeswoman, was on the receiving end of that comment during recent travels to five eastern states.

She didn’t have to think too hard about what he meant — both are cheap and highly addictive.

Tell us about it.

Second only to the ag industry in forging NCW’s regional identity, publicly owned hydropower has become the region’s fix for luring new business, irrigating once-arid regions and creating new opportunities.

Power rates here are about half what Seattleites pay and a third to a fifth of what homes and businesses pay on the East Coast.

We’ve all become cheap-electricity addicts.

Giant fruit packing warehouses that employ thousands depend on it for healthier bottom lines.

Alcoa’s Wenatchee Works smelter needs it to competitively produce aluminum.

Giant data centers that employ thousands of computer servers are here because of it.

Families all over the region have built their household budgets around it.

And it may even cause a few eyes to twinkle that in this stronghold of Republican politics, one of the biggest sources of pride is socialist — a power system owned and operated by the people.

Increasing state and federal regulations, including fish and wildlife protections, are already making it harder to keep costs low for families and businesses, regional PUD officials say.

To meet fish-survival requirements around its two Columbia River dams and Lake Chelan Dam, the Chelan County PUD alone spent $50.5 million last year on programs that include hatcheries, habitat and lost generation through spill.

That amounts to about 15 to 20 percent of the average ratepayer’s power bill or about $173 for each of the 292,689 returning adult fish that were counted last year at Rock Island Dam.

Demand for electricity is growing. The Bonneville Power Administration (BPA), supplier of about one-third of all electricity in the Northwest, estimates that power consumption will increase by at least 40 percent by 2030.

Population is part of the reason, but at least 20 to 30 percent will come from our increased dependence on electronics, like computers and plasma TVs, a BPA spokeswoman said.

The next four to eight years could bring heightened challenges for our region as the Obama administration gears up with an ambitious energy agenda.

The feds’ new push

In a nation where nearly half of all electricity is generated by burning coal, the Obama administration is putting big dollars behind clean ways to produce and transmit electricity.

The president’s 2009 budget sets aside $120 billion for “clean energy” projects that include wind, solar, clean coal and alternative fuels; plug-in hybrid electric vehicles; and biofuels made from ag products like corn and wheat.

Obama hopes to impose national standards by 2012 that would oblige utilities to supply their customers from cleaner-burning sources of electricity. Washington state already has such standards, which currently don’t include traditional hydropower — a wrinkle that the region’s hydro advocates are lobbying hard to protest.

The administration is banking on an emerging market that trades “carbon credits” — permits that allow dirty industries to offset their pollution by investing in cleaner industries. Obama expects such a market to trade some $646 billion in credits between 2012 and 2019.

The president is also turning to the energy sector, in part, to help pull the country out of recession.

The president’s $819 billion American Recovery and Reinvestment Act allocates nearly $50 billion of this “economic-stimulus money” to the Department of Energy alone for conservation, power-grid improvements and projects to get people working and spending money.

On a recent lobbying trip to Washington, D.C., regional PUD officials learned the department will have to allocate some $1.2 billion of these stimulus funds per week to meet allocation quotas by early next year. Local utilities, cities and counties are eager to apply for a share.

Same old same old?

Will new priorities in Washington, D.C., really translate to anything new here on the ground?

Opinions are mixed.

“The Obama budget has less support for coal — except clean coal — oil exploration and nuclear power to support a shift in federal dollars for the next generation in alternative technologies,” said Nancy Hirsh, policy director for the NW Energy Coalition, by phone from her Seattle office. “I see a change in attitude in the new administration. We need to see if this really changes the course over the next four years. We’ll see if he can deliver.”

The NW Energy Coalition spearheaded Washington’s voter-approved I-937, which sets clean-energy quotas for the state’s utilities.

Tim Culbertson, general manager of the Grant County PUD, agrees the region could benefit from the beefed-up earmarks in D.C., especially for improvements to the power grid to carry electricity from new, alternative power sources, such as wind farms.

“The green I heard most about in D.C. was dollar green,” he said recently. “But, yeah, I think it’s really possible for utilities to get money for infrastructure. At the federal level, they’re going to be investing a lot in the grid.”

The challenge, he says, is to make educated decisions about how to do it.

Rich Riazzi, general manager of the Chelan County PUD, expects to see a big push in the coming years toward Obama’s energy agenda. But he, like Culbertson, favors analysis and regional flexibility to federal mandates.

“The Chelan County PUD is an advocate of outcome-based standards, not prescriptive standards,” he said. “Let industry figure out how to best accomplish the goal. The risk we run when we get too prescriptive is we create some inefficiencies in the market.”

Bill Dobbins, general manager of the Douglas County PUD, shares the concern of his regional counterparts that increased federal regulation makes business more expensive.

He points to new federal “reliability standards” that make utilities develop scores of new programs to prepare for federal audits.

“It’s putting a burden on our industry and helping us increase costs,” Dobbins said. “Is this real progress, or just more regulation?”

State and federal quotas for supplying renewable energy also add to costs, the managers say, by forcing them to invest in projects like wind and solar, which cost about three to 10 times more to produce than hydro.

With 22 years at the Douglas PUD, the last 13 in its top post, Dobbins has the region’s longest tenure at the head of a North Central Washington PUD. He’s seen a few presidents come and go.

“Obama’s plan is nothing new,” he said. “Go back to the history of the Department of Energy. It was created in the 1970s to make the U.S. more energy independent. If that was the stated goal, have they even made progress?”

Next in the series: Hydropower — Cheap for how long?

Christine Pratt: 665-1173

Wentachee World
Wenatchee, Wa
March 22, 2009

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