June 2000 issue

 NWCouncil.org NeWs    June 2000 index

Northwesterners are asking for planet-friendly power

The Supreme Bean in Eugene, Oregon, is a big supporter of wind power. Soon the Oregon Shakespeare Festival will be generating some of its own electricity using the sun. In the San Juan Islands of Washington, electricity customers are powering up with wind from Wyoming, and salmon-safe hydropower and solar energy from their own backyards. Idaho Falls, Idaho, lays claim to some of the most fish-friendly hydroelectricity in the region, and utility customers there are also buying windpower from the Bonneville Power Administration. Montanans around Flathead Lake and elsewhere in the state are using more environmentally preferred power, too.

A lot of people in this region think the Northwest already gets most of its electricity from renewables – from the giant hydropower dams that produce thousands of megawatts of electricity every year. Certainly, in most years the majority of our electricity does come from these dams (which have their own significant and costly environmental impacts). But more than 40 percent of the electricity used in Idaho, Montana, Oregon and Washington comes from power plants that use coal (about 33 percent), natural gas and oil (about 8 percent), nuclear energy (about 3 percent) and a combination of renewables and other resources (another 3 percent). This includes power imported to the four states from plants in Utah and portions of Wyoming and Nevada.

In 1996 representatives of 157 nations adopted the 1995 report of the Intergovernmental Panel on Climate Change, which calls for the restriction of emissions of so-called "greenhouse gases" like those emitted from fossil-fuel-burning plants. The report says greenhouse gasses, particularly carbon dioxides, are the major source of human influence on global climate change like global warming. Additionally, air pollution is one of the major causes of respiratory diseases in the United States according to the American Lung Association.

Northwesterners are beginning to ask their utilities for environmentally superior power – using wind turbines, solar collectors, gas from landfills, geothermal heat from deep underground, low-impact hydropower projects and other resources – even if it costs more than the electricity they’re used to. Why? Because supporting green power accomplishes at least four important things.

1. It helps to clear the air by improving the environmental quality of the mix of resources utilities rely on. Electricity from a variety of resources, including both clean and polluting ones, is blended together on the power grid. If you ask your utility for power from renewable, environmentally superior sources, you’ll be helping make sure that more clean resources go into that blend.
2. It sends the message to utilities and regulators that clean air, healthy fish and wildlife populations and other environmental issues are important to customers. Utilities are listening to the demands of their customers. Buying green power tells them you want to help solve the problem of pollution, not aggravate it.
3. It helps utilities pay the extra amount renewable resources cost to develop. Utilities used to offer their customers electricity with the lowest long-term costs. Today, in a more competitive market, near term costs are paramount to utilities. Renewables could lose out in that comparison because they are more expensive up front, but cheaper over the long term. Without the willingness to pay a bit more for green power – about the cost of a movie or a fast-food meal each month – utilities would most likely go for the cheapest, but not the best, resources.
4. It will help bring the cost of renewable resources closer to more conventional resources. As more utilities develop green power sources, the technology will be advanced, and the price to produce the power will come down. This has already been demonstrated with all renewable power equipment: costs have come down and reliability and productivity have increased significantly.

At The Supreme Bean, a drive-through espresso outlet in Eugene, owner Jean Stover says she decided to accept the offer from her local utility, the Eugene Water and Electric Board, to buy 100 percent of her power from the utility’s wind power program, both for her business and at her home. The wind power costs more, she admits, but "the alternative to not supporting these resources now," she argues, "will be that future generations will be paying far more in environmental problems than what I’m paying for wind power now.

Paul Nicholson, executive director of the Oregon Shakespeare Festival in Ashland, Oregon, one of the state’s premier cultural establishments, expresses a similar sentiment. "We’re getting involved in Ashland’s solar project because we think we need to set an example," he says. "We want our solar project to be very visible, with information provided to help stimulate discussion. It may pay for itself in the long term, but we’re not doing it for financial gain. We see it as an investment in the community."

Portland General Electric, in Portland, Oregon, made the decision to include "salmon-friendly power" – electricity from dams that are endorsed as low-impact – in its portfolio of resources (along with a package of wind power resources) because "salmon and their habitat are Oregon issues. They are important to the people in Oregon," says John McClane, a Portland General employee whose volunteer work on salmon recovery was what led the company to explore the notion. Today, more than 2,000 Portland General customers are buying wind power or fish-friendly electricity. The small premium they pay goes toward encouraging Portland General to continue to seek out safe electricity generating facilities, or help restore habitat through a group known as For the Sake of the Salmon.

"If we had enough customers asking for salmon-friendly power," says Oregon’s Secretary of State Bill Bradbury, one of the founders of For the Sake of the Salmon, "we could change the way utilities supply electricity in the system. So we’d not only be stopping habitat decline by using better resources, we’d be contributing to rebuilding habitat."

Mark Gendron, who manages the municipal utility that serves Idaho Falls, Idaho, says his city council agreed to include renewable resources in their electricity offering because, "Our city wants to send the message that we’re supporting green power."

"We’ve collected 17 consumer surveys from around the Northwest," explains Rachel Shimshak, director of the Renewable Northwest Project, a non-profit coalition of environmental groups, energy developers and public interest organizations. "Customers overwhelmingly want their utilities to invest in renewables."

Shimshak’s coworker, Peter West, notes that: "Many of the surveys we’re looking at are utility surveys. So if you’re a utility, and you’re looking at some form of restructuring coming down the line where they’ll give people choices about what utility provides their power, you might as well do the kinds of things customers want up front."

Green Futures: Investing in the Environment

One of the pacesetters leading the move to green electricity resources is the Bonneville Power Administration. Beginning in 1980, with passage of the Northwest Power Act, Bonneville began working to confirm the availability and reliability of renewable resources for the Northwest climate. As the region’s federal power marketer, Bonneville is pushing hard for the development of alternatives to conventional sources of electricity. It’s a natural role. Bonneville probably has more experience with renewable resources than any agency in the world, given that it has primary responsibility for managing and distributing the electric output of one of the most developed hydropower resources in the world – the dams on the Columbia River and its tributaries.

To help promote renewable resources to its wholesale utility customers, Bonneville will invest approximately $15 million annually in a three-pronged approach. The approach includes acquiring power from new renewable projects, marketing the output from these projects, and offering its wholesale utility customers discounted power rates if they invest in or purchase power from qualifying renewable resource projects. That discount could amount to as much as $6 million every year. "If the utilities don’t spend the $6 million on renewables," explains Bonneville’s George Darr, "Bonneville will make sure the money is spent. If they spend a portion, but not the rest, we’ll spend the difference. We estimate we’ll end up with between 30 and 60 megawatts of new renewable resources from these efforts."

Producing Superior Power

Among the first of Bonneville’s customer utilities to actually begin building its own renewable resource projects was the Eugene Water and Electric Board (EWEB). Jim Maloney, who runs the utility’s green power program, describes how EWEB became a leader in the region by building its own wind power project.

"We produced our energy resource plan in 1992, and it called for renewable resources," he says. "So we went together with PacifiCorp [the Northwest’s largest investor-owned utility] to build the first 69 turbines at Wyoming’s Foote Creek Rim wind farm. Now our board of directors has unanimously adopted a policy of adding enough renewables to meet 1 percent of our load, or 3 average megawatts, every year. At the end of 20 years, we should have 20 percent of our electricity coming from new renewables," he adds. "That will bring good energy value to our customers without breaking the bank."

"We've collected 17 consumer surveys from around the Northwest. Customers overwhelmingly want their utilities to invest in renewables."
- Rachel Shimshak, Director, Renewable Northwest Project

For the 11 utilities that make up the Pacific Northwest Generating Cooperative (PNGC), building their own renewable energy project meant employing a simple engine that utilizes methane gas given off at a local landfill near Corvallis, Oregon. The gas is not only a renewable resource – a byproduct of the breakdown of the organic products in the area’s dump – it would also be more of a problem if it was not used for generating electricity – it would have to be burned off in the atmosphere. The generator uses modified diesel engine technology and reliably produces enough electricity for more than 2,000 homes. Cooperative member utilities are offering their customers a choice of this locally generated renewable power or more conventional electricity. "We’re very excited about the project, and customers seem to be, too," reports Kevin Watkins, vice president for engineering at the Cooperative.

Coffin Butte Project: The two-megawatt Coffin Butte project, built and operated by Pacific Northwest Generating Cooperative near Corvallis, Oregon, uses methane from a landfill as fuel to generate electric power. This methane would otherwise be flared and its energy value lost.

A similar project is operating in Klickitat County, Washington, with some of the power being sold to the Snohomish Public Utility District farther west in Washington State. The Klickitat County Public Utility District developed its project as "an economical source of power in the long run," explains the utility’s general manager, Brian Skeahan, in a company newsletter. "It would also allow us to diversify and not have all of our eggs in the Bonneville Power Administration’s basket," he adds.

Some of the most innovative renewable projects in the Northwest make use of a resource most people think this region lacks – solar energy. In fact, there is an abundance of sunshine in the Northwest, and people in Ashland, Oregon, and the San Juan Islands of Washington, in particular, are making excellent use of it. In both instances, the impetus for developing solar power locally came from ratepayers.

In Ashland, Oregon, there are no solar collectors hooked up to the grid yet, but Dick Wanderscheid, regional affairs and conservation manager at the city’s municipal utility, expects to have some in place by this summer. "We’ve been trying to do this for more than two years," he notes, "but we needed the political support first. Now the City Council has given us the go ahead."

Ashland will be installing several solar systems on visible sites, like the Oregon Shakespeare Festival, Southern Oregon University, the city’s Civic Center and its branch U.S. Post Office, selling the power from those projects to its customers. "We already have more than 230 people signed up as ‘Solar Pioneers’ to buy the power for $4 a month. Some customers are buying more than one block and paying $8 a month. That’s more than enough to pay for the first systems," Wanderscheid adds.

Bonneville Environmental Foundation promotes renewables

Ashland’s project was the first to receive a grant from the Bonneville Environmental Foundation, a non-profit corporation that receives a portion of the revenues utilities obtain from the sale of green power and donations from other organizations, and reinvests that money to help develop and market renewable energy projects and restore watersheds. Chaired by former Oregon Senator Mark O. Hatfield, the young foundation already has a solid reputation for helping utilities find reliable renewable projects to purchase power from, as well as the most viable projects – both generating and habitat restoration – to provide support for.

"People in this region share a special concern for our environment, for our streams, our salmon runs," Hatfield says. "Even though I’m retired from the Senate, I intend to continue to work for those things Northwesterners value most, because I value them, too, of course. I’m excited about this foundation because of the people involved and the potential we have to take a lot of the guessing and finger crossing out of green power. We’ve got the expertise here to be able to guide green power and habitat investments in the right direction."

The foundation operates as a skilled broker, in a sense. It seeks out the best renewable resource projects around the Northwest, submits those resources to a review by leading environmental organizations, then markets the power from those resources to utilities and large industrial companies. In its first year of operation, the Bonneville Environmental Foundation was able to secure an inventory of more than 20 megawatts of environmentally endorsed green power and sell nearly all of that to six utilities and one aluminum company.

The portion of revenues the foundation recovers from these power sales goes toward new wind, solar or other generating projects, like the Ashland solar project, as well as toward community-based fish and wildlife habitat repair projects across the Northwest.

Selling superior power

Utilities can take one of two main routes to selling renewable power supplies. They can "rate-base" the new power by adding the cost of the renewables to that of their total resource portfolio and charging all their customers the slightly higher rate that would result. That’s how they treat other power sources, whether from new gas-fired power plants or other suppliers.

Alternatively, they can take a "green power marketing" approach, selling the renewable resources separately, and charging only those customers who request the green power option. The green power marketing approach gives the utility the opportunity to let its customers know it is making the special effort to buy renewables.

But green power marketing approaches face some barriers that rate-basing the resources avoids. "Whether you call it ‘green power’ or ‘renewable power’ or something else is an issue to a lot of people," says Eugene Rosolie, director of Renew 2000, a coalition of utilities, environmental groups, the Bonneville Power Administration, the Northwest Power Planning Council and others. The group formed to address marketing and public education strategies regarding renewable energy sources.

In the many surveys conducted to ascertain the potential market and market barriers to green power, there was a preference among customers for having their utility rate-base the cleaner power supplies. "When people were asked whether they would like their utility to invest in renewables on behalf of all customers or only for customers who choose green power," explains Rachel Shimshak, "they said they’d prefer that the utility buy the renewable resources like anything else and add it to the rate-base for everyone."

That’s what Salem Electric, the cooperative utility that supplies electricity to Oregon’s capital city and environs, decided to do.

"We asked our customers in focus groups and through a newsletter whether they’d support our goal of replacing all our non-renewable-based electricity with renewables, and the response was overwhelming, even

if it required a rate increase of 4 to 8 percent," explains Jim Dyer, past president of the board of Salem Electric.

The city utility of Idaho Falls, Idaho, is running its green power program this way, as well. "We surveyed our customers and there was an expressed interest in renewable resources. We’re convinced that if we

did market it, some of them would be willing to pay a little more for the green power, but we went ahead and rate-based it anyway," explains Mark Gendron, general manager of the Idaho Falls utility. "We want to provide the power our customers want. If they want green power, we’ll buy green power for them. If everybody felt that way, then we wouldn’t build any coal plants."

The alternate marketing approach – offering customers a choice of green or conventional resources, with a premium price on green – works in some places, particularly in Oregon, but not as well elsewhere.

Warren McConkey, general manager of the Flathead Electric Cooperative in Kalispell, Montana, has had disappointing response from his customers. "We surveyed our 50,000 customers and heard from 36 percent who said they’d buy green power. So we purchased a megawatt from Bonneville. We thought we’d need more," he reports. "But only 182 customers have signed up so far."

McConkey is particularly disappointed in federal agencies, which have a mandate – an executive order from President Clinton – ordering them to use conservation and renewable resources. None of the many federal agencies with offices in Flathead’s service territory signed up for the green power. Nor did any of the businesses that advertise themselves as "environmentally responsible."

This spring, when Flathead’s seasonal customers return for the summer, McConkey says his utility may try a new approach. "We’re considering splitting the proceeds from our green power sales with groups like the Audubon Society. That way, maybe they’ll help us market the product."

Is it really "green?"

In the past, engaging the support of environmental groups like the Audubon Society could have been a major challenge for green power advocates. Audubon was among several environmental and tribal organizations trying to block renewable resource development in some locales, largely because of potential impacts on birds, and other conflicting values. A proposed wind power site on Rattlesnake Ridge in eastern Washington, for example, was blocked because it was adjacent to a site that is sacred to the Yakama Nation and along a migratory flight route for eagles and hawks.

"The kinds of concerns raised about renewable resources, especially wind, but to some degree all of them, have to do with how you site these projects," maintains Angus Duncan, president of the Bonneville Environmental Foundation and a former Oregon member and chair of the Northwest Power Planning Council. "There were some mistakes made in early projects – some were too big, or in the wrong place or they used older technologies. At the Bonneville Environmental Foundation, we’re making sure the projects being built now are carefully sited to avoid environmental damage. That’s why we are having leading environmental groups screen the projects we invest in. Establishing criteria both for individual power facilities, and for the kinds of blended resources utilities can market as ‘green,’ is critical if customers are going to be able to trust they’re getting the environmental outcome they paid for," Duncan adds.

Renew 2000 has been working over the past year with others around the country to establish consistent criteria and a process for screening projects and products. That process and those criteria are nearly in place now.

"In the grand scheme of megawatts and power systems, what we’re trying to do is a small step," admits Rachel Shimshak. "But we hope that the combination of public policies that support conservation and renewables, the special power products that provide money to invest in renewables development, and the green marketing efforts will help build this new industry over time."