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Experts testify that there is too little power to meet the demand

By Mike Madden
Statesman Journal

WASHINGTON – High electricity prices that outraged residents and businesses across the Pacific Northwest this summer are not likely to come down any time soon because not enough power is available to meet the region’s demand, experts told a Senate panel Thursday.

This past summer, electricity cost more than 10 times the average price from the past few years. Soaring prices may be only the first sign of a burgeoning crisis as the region tries to deal with the turbulent power market in the Western United States, witnesses told a subcommittee of the Senate Energy and Natural Resources Committee.

This summer, extreme temperatures, major plant outages, reduced output from the system and natural-gas prices at an all-time high combined to expose the gap between electricity demand and supply in the Pacific Northwest,” said Steve Oliver, a Bonneville Power Administration vice president. “These factors will converge more and more frequently if the Pacific Northwest does not address them soon.”

With the region’s economy growing – with more businesses and homes needing power – demand for electricity has steadily outstripped supply, witnesses said.

At the same time, moves to deregulate the power industry left most utilities with little incentive to push conservation because they wanted to make sure they sold enough energy to pay for their existing plants before the marketplace shifted, said Tom Karier, a Washington state representative on the Northwest Power Planning Council.

The council is a joint agency of Washington, Oregon, Idaho and Montana.

Also, in the past few years, the Northwest power market has become tightly linked with the rest of the West, including California, Chairan James Hoecker of the Federal Energy Regulatory Commission said. So when supplies run short in the Northwest and utilities need to buy power from other sources, they wind up competing with buyers in California, where prices are higher forcing them to pay more for energy, too.

Combine that with unusual problems that hit the region over the summer extreme heat, high natural-gas prices and low rainfall for hydropower production and a price crunch is inevitable, officials said. Until utilities can build new generating plants, prices are likely to stay high.

Sen. Ron Wyden, D-Ore., called for utilities to find more sources of renewable energy, such as wind and solar power, which several witnesses also said would make sense.

“It seems that almost every day Northwest residents wake up to the dubious pleasure of skyrocketing energy prices,” he said.

To make it easier to find cheap, renewable energy sources, Congress should push the government to relax some regulations, said Kelly Norwood, general manager of Avista Utilities, a northern California firm that is trying to build a geothermal power station not far from the Oregon border.

So far the company has been waiting 4 1/2 years, and Norwood said he sees more waiting ahead.

Sen. Slade Gorton, R-Wash., and Sen. Gordon Smith, R-Ore., both reiterated their opposition to breaching dams on the Snake River to help the area’s salmon, saying that move would only worsen the power crunch.

“You have to understand that the predicate for breaching has always been a fish shortage,” Smith said. “But we have so many salmon coming back in my state that we’re clubbing them to death before they can spawn.”

An administration plan for helping the saimon is expected within the next couple of months. It will recommend leaving the dams intact for several years to see if less drastic measures work according to drafts of the proposal.

Statesman Journal
Salem, OR
October 6, 2000

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