Introduction
Major findings of the 5th Power Plan
The Council adopted its Fifth Power Plan in December of 2004. The plan broke new ground in its analysis of uncertainty and volatility, and their associated risks for future power costs. The key conclusions embodied in the Fifth Power Plan were that the region should acquire improved energy efficiency at an aggressive and sustained pace. The benefits of this strategy were both lower costs and lower risks.
A second conclusion of the Plan was that wind energy is potentially cost effective. But the Plan also recognized that wind, and other intermittent generating resources, pose challenges for integration into the Northwest Power System. The plan called for a wind confirmation plan to be informed by the development of 500 megawatts of commercial scale wind generation between 2005 and 2009. Ultimately, the plan found that up to 5000 megawatts of wind could be developed over the 20 years of the Plan, assuming that transmission and integration issues could be addressed.
The Plan found that the region had a surplus of generating capability and that the need for new generation from coal or natural gas likely would not occur until after 2012; after the 5-year action plan period. During the 5-year action plan the Council pledged to work with others in the region to accomplish three important policy changes. These included: (1) adopting resource adequacy standards; (2) changing the role of the Bonneville Power Administration; and (3) addressing problems in the operation and expansion of the regional transmission grid.
Summary of Major Developments Since Adoption of the Fifth Plan
The regional economy, and in particular energy intensive industrial sectors, has been slow to recover from the 2000-2001 energy crisis that formed the backdrop for the Fifth Power Plan. Energy markets, globally, nationally and locally, have continued to experience high and volatile prices. These prices, combined with prominent attention to climate change, have provided the impetus for aggressive conservation activity, new federal energy policies, and increasing attention to renewable resource requirements at the state and utility level.
High energy prices and concerns about potential climate-change policy have also led to aggressive development of wind power in the Pacific Northwest in the two years since the Council adopted the Fifth Power Plan. New generation capacity and slow demand growth have increased the electrical supply surplus in the region, which further delays the need for new generating capability.
The Council, Bonneville, utilities, and other interest groups have been especially active over the two years since the Plan was adopted. This has included major initiatives to redefine the roles of Bonneville and its public utility customers in meeting growth in electricity needs, to develop and adopt resource adequacy standards for the region, to improve transmission planning and expansion, to explain and reduce Bonneville’s costs, and to better understand the requirements of integrating large amounts of wind generation into the regional power system.
Purpose of the Biennial Monitoring Report
The Council included in its Action Plan commitments to monitor and assess the assumptions and forecasts underlying the Plan, and to track the region’s progress in implementing the plan. Action Item MON-7 states that the Council will provide a biennial monitoring report to document the status of the Power Plan and its implementation. This is the first biennial monitoring report for the Fifth Power Plan.
Assessment of the assumptions and forecasts included in the Plan address such issues as whether the demand forecast is representative of actual regional sales of electricity observed since the plan. Recent prices for natural gas, oil, and coal are compared to the forecast ranges and the volatility assumed in the Plan. Experience with the cost and efficiency of various generating resources is assessed for consistency with planning assumptions. Tracking new generation development and electric loads provides an indication of changing load/resource balances and possible changes in new resource needs.
The goals of the Council’s Fifth Power Plan can be accomplished in many ways. Some activities can be pursued directly by the Council, Bonneville and regional utilities. Others are more effectively accomplished through legislative action, building code changes, appliance efficiency standards, or actions to transform markets for energy equipment. Implementation progress is the second major component of this biennial monitoring report.
