A Senate bill that would require utilities to switch to 100 percent renewable energy sources by 2045 includes an exemption to the rule for Clark Public Utilities.
Under the exemption, the Vancouver-based utility would not have to meet the green energy requirement if the cost of doing so would exceed 5 percent of the utility’s annual revenue.
Clark Public Utilities gets about 60 percent of its electricity through Bonneville Power Administration hydropower and about 35 percent from its natural gas plant on Lower River Road, according to Wayne Nelson, the utility’s CEO and general manager.
“So right out of the box, Clark Public Utilities is over 60 percent green to start with,” Nelson said. “It’s not like we’re chasing 80 percent of our portfolio. We’re pretty green to begin with.”
The River Road plant was the fourth largest emitter of greenhouse gases among Washington power plants in 2017, according to EPA data, releasing an average of about 550,000 metric tons of greenhouse gases annually from 2010 to 2017.
Phased-in rules
The bill, which passed the Senate on March 1 and is now being considered in the House, would require electric utilities to eliminate coal as an energy source by 2025, be greenhouse gas-neutral by 2030 and carbon-free by 2045.
Hydropower already supplies about 75 percent of the state’s power and qualifies as a carbon-free energy source under the bill, which means utilities have about 25 years to make up the difference.
Noncomplying utilities would have to pay $60 in penalties per megawatt-hour of carbon-generating power used.
As the requirements phase in, utilities will be allowed to put money toward renewable energy products, such as replacing fossil fuel-burning power generators or buying renewable energy credits, to work toward their renewable energy requirements.
Cost concerns
Nelson said Clark Public Utilities will have to scale back generation from the River Road plant as it moves to fill the gap, but he said he isn’t confident that prices for power from new, non-emitting facilities, or prices on the wider renewable energy market, will decline suitably to prevent significant cost increases.
Retail power revenues tend to fluctuate, Nelson said, but the utility’s revenues typically hover around $375 million annually. That’s mostly money from ratepayers, and the proposed cap would limit the utility’s additional spending on greener power to about $15 million to $20 million, Nelson said.
“We’re hoping that renewable resources come down in price where it becomes economically feasible to have them,” he said.
Environmental groups, including the NW Energy Coalition, are more optimistic.
“We think it’s exceedingly unlikely that many utilities will encounter or hit the cost cap very often,” said Sean O’Leary, the group’s communications director.
Changing economics
O’Leary said renewable energy costs have been declining and supplies growing.
According to the Department of Energy, the cost of utility-scale solar power has dropped more than 64 percent from 2008 to 2015, and the price of wind power has fallen 41 percent.
“I think what people are going to be really surprised by is how affordable renewables and other clean resources are getting around the country,” said Joni Bosh, senior policy analyst at the coalition.
Furthermore, she added, the utility will likely need to replace the plant, built in 1997, and utilities have time to figure out how their transitions will work.
“There’s a lot of time to figure out how you get there, and how to do it a non-disruptive way,” she said.
‘We’d love to be 100 percent’
Nelson would like to be proven wrong about the utility’s cap provision.
“My response to that is, I hope and pray that you’re right,” Nelson said. “We’d love to be 100 percent renewable. From a socially responsible position, we’d love to be 100 percent renewable.”
Nelson said Clark Public Utilities, and others in the state, are also still working through what other proposed bills might mean for them and their customers.
Along with the bill to move the state toward a renewable energy generation, the Legislature was also hearing other bills, including a per-ton-generated carbon fee proposed as part of a transportation funding package.
“Our concern is we’re going to start getting pancaked with two or three different requirements that all have a cost associated with it,” Nelson said.
