March 2001 issue

 NWCouncil.org NeWs    March 2001 index

Governors' recommended actions for addressing immediate electricity problems in the West

Meeting in Portland in February, the Western Governors Association recommended the following actions to address the West Coast power crisis:

1. Encourage California and power generators to enter into power supply contracts to reduce dependence on the spot electricity market.

2. Request utilities and state and tribal public utility commissions to adopt rate reforms that send more accurate price signals (or a proxy for such price signals) to consumers. This is the first step in empowering customers to make wise decisions about their energy use and to make investments that reduce their total use and cost.

3. Ask Vice President Cheney and the federal inter-agency task force to accept as part of its mission to work with the western governors and tribal leaders to streamline regulatory processes to enable retired generation to be reactivated, existing generation to increase production, and new generation and natural gas and electricity transmission to come on line while protecting public health, safety and the environment.

4. Ask state and tribal public utility commissions and all regulated utilities to approve demand-exchange tariffs under which customers can voluntarily agree to reduce demand in exchange for compensation.

5. Ask state and tribal public utility commissions and regulated utilities to eliminate barriers to clean distributed generation that can be in place in the next 12-24 months. Distributed generation includes small turbines (e.g., less than 5 MW), high efficiency co-generation, fuels cells, etc. that are typically installed on the consumer's property, a practice sometimes referred to as net metering.

6. Ask utility distribution companies and state and tribal energy agencies to develop energy efficiency measures that provide savings beginning within the next six months through technical assistance, financial incentives, accelerated penetration of new technologies, and appropriate regulation.

7. Where states and tribes have not already acted, direct state and tribal agencies to accelerate the implementation of efficiency practices and investments in state and tribal buildings and ask the federal government and local government to take similar action.

8. Ask Congress, state legislatures and tribal councils to expand assistance to low income families and families and individuals with fixed incomes to help pay high energy bills.

9. Enact federal legislation that would: enable the establishment of enforceable system reliability rules; provide for delegation and deference to the West; and enable the creation of regional advisory bodies of states and provinces.

10. Encourage the Western Governors Association to seek the creation of a centralized grid-wide database that 1) tracks prospective demand, and 2) tracks generation and transmission facilities under construction and those that are permitted, in the permitting process, or under consideration.

11. Support efforts to ensure the availability of information on loads, transmission and generation where necessary for ensuring the adequacy, efficiency and reliability of the grid.

12. Continue to implement the region's short-term conservation strategy adopted January 10.

13. Conduct a regional assessment of whether and how natural gas supplies and gas transmission can be increased in time to meet summer peak load demand.

Long-term recommendations:

1. At a minimum, energy generation policies should address:

Permitting Energy Facilities -- Streamline state, tribal and federal processes for siting new generation, electric transmission and natural gas pipelines while protecting public health, safety and the environment.

Coal -- Implement research and development and tax incentives to promote the development and deployment of new technologies to increase the efficiency and lower the emissions from coal-based generation.

Renewables -- Accelerate the development and deployment of promising renewable energy technologies through the extension and expansion of state and federal production tax credits and state and tribal policies such as system benefit charges, portfolio standards, renewable resource-based utility tariffs, and/or creative new incentives.

New Energy Development - Enable exploration and development of promising domestic oil, gas, coal, geothermal or wind resources where lands, air, water, fish and wildlife, and other environmental resources can be protected.

Environmental Regulation - Review environmental and natural resource policies to ensure they are as efficient as possible. These policies include the air quality regulations for health and regional haze.

Energy Infrastructure - Support economic and environmentally sound energy infrastructure investments to transport energy to markets. Specifically:

• Urge construction of a pipeline to move natural gas from Prudhoe Bay along the Alaska Highway to the lower 48 states, the expansion of natural gas pipeline systems in the lower 48 states, and the expansion of electrical transmission capacity from areas rich in energy resources to load centers.
• Encourage a stable economic environment conducive to construction of needed electrical generation.
• Convene a workgroup of major transmission system owners to identify where bottlenecks occur and to recommend needed new transmission facilities.

2. At a minimum, demand-redirection policies should:

• Encourage rate structures that give utilities an incentive to reduce consumption.
• Encourage long-term stability of government and utility conservation programs.
• Accelerate the development and deployment of new, more energy efficient products in the market place.
• Review and improve the energy efficiency of building codes in western states and tribal lands.
• Accelerate the development of federal government appliance efficiency standards that are cost-effective and recognize the unique conditions in the West (e.g., dry climates).
• Support federal research and development that maximizes the development of energy efficiency technologies applicable to the growing Western region.
• Support federal, state and tribal tax incentives to accelerate the introduction of new energy-efficient technologies.