The following is presented as part of The Columbian’s Opinion content, which offers a point of view in order to provoke thought and debate of civic issues. Opinions represent the viewpoint of the author. Unsigned editorials represent the consensus opinion of The Columbian’s editorial board, which operates independently of the news department.
Donnelly: Utility must make reliability, affordability priorities
By Ann Donnelly
Published: April 6, 2024, 6:01am
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January’s cold storm brought an historic peak electricity demand for Clark Public Utilities. The system needed some 200 megawatts more than the planned-for peak requirement, roughly a 20 percent shortfall. Covering the need in the short-term electricity market was expensive. Out-of-region supplies were limited and buyer competition was fierce.
Even as customers conserved and Clark Public Utilities did its best, the service territory experienced some interruptions. The capacity shortfall netted the utility $26 million in unbudgeted expenditures that ultimately contributed to a recent 14 percent rate increase under the utility’s cost-based tariff system.
Such dependence on the short-term energy market risks spiking costs and declining reliability. Those risks did not originate with Clark Public Utilities, but with prevailing state laws.
As attendees learned at a Clark Public Utilities presentation on Feb. 26, the Energy Independence Act (2007), the Clean Energy Transformation Act (2019) and the Climate Commitment Act (2021) construct mandates for resource planning. Under Clean Energy Transformation Act, mandatory targets are set for 2030 when utilities must be greenhouse gas neutral, and for 2045 when 100 percent of generation must come from renewable or zero-carbon resources.
For full disclosure, I have three decades of professional experience in energy planning. I entered that industry in the 1980s as regulatory restructuring of the U.S. energy system began. New rules introduced greater competition and diversity in available resources.
Over the years, utility portfolios met demand with optimum mixes designed for reliability and least cost. Utilities achieved the best of all worlds by integrating firm fossil-fueled, hydro and nuclear resources with interruptible wind and solar, and, where feasible, geothermal power.
Efficient natural gas-fired peakers and baseload plants, such as Clark’s River Road facility, secured reliability and flexibility near load centers. Location within the service territory was crucial to minimize line losses, transmission risks and system stability.
Environmental benefits were achieved but not at the expense of reliability or affordability. During those decades, U.S. carbon emissions dropped as expanding natural gas production displaced oil- and coal-fired power.
Utility resource plans must return to making reliability and affordability top priorities. Utilities, whether public or private, are awarded an exclusive franchise (aka monopoly) in exchange for reliable, affordable service to every customer, 365 days of the year, for every hour.
Failing those standards, vulnerable customers may come to great harm, even die. Industrial customers may relocate to find better service, hurting local workers.
With Clean Energy Transformation Act’s mandates, the state now upends the essential pact between utility and customer, placing carbon policy first.
On Feb. 26, Clark Public Utilities planning staff, at a community forum, walked through its analysis of long-term projected loads and resources. To comply with the Clean Energy Transformation Act, Clark Public Utilities plans to sharply reduce its reliance on its River Road natural gas firm capacity. Doing so will create a shortfall in firm power needed to meet peaks in 2030 and beyond, even as demand peaks are projected to grow in both summer and winter.
Clark Public Utilities’ alternatives to fill the capacity gap have risks of effectiveness, availability, cost, technology readiness and/or timing. Buying more intermittent wind and solar when all other utilities are doing the same will be expensive and not reliable. Battery solutions are yet to be developed. New efficiency programs may be costly and ineffective. Relying upon BPA just adds another layer of uncertainty.
The next governor, the Legislature and the utility commission must address these risks.
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