Close call on power for northwest

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Close call on power for region

Barely enough through March, but other sources are available

Tuesday, February 6, 2001

By BILL VIRGIN SEATTLE POST-INTELLIGENCER REPORTER

The Pacific Northwest will have barely enough power to meet demand in February and March, a new report says, and that's if there's no cold snap and generating plant outages are no worse than usual.

Because utilities can buy power from elsewhere or send more water through hydroelectric generators, it's not likely to mean blackouts here as shortages have done in California, the report says.

But using water for more hydropower could spell trouble for fish on the Columbia River and its tributaries. That would set the stage for battles over protection of endangered species of salmon.

The Northwest Power Pool, which helps coordinate electricity transmission in seven states and two Canadian provinces, said it estimates supply will actually fall slightly short of demand in February, at 99.7 percent of demand. In March the adequacy ratio should be 100.8 percent, the power pool said.

"It just means we have to continue to watch it and continue to conserve," said Jerry Rust, president and director of the Portland-based power pool.

The forecasts presume that temperatures remain normal, and that the region loses no more than 15 percent of its generating capacity at any one time due to unplanned outages.

Either way, that doesn't leave more cushion, and the continuing expectations of low or no reserves are one reason why a Canadian energy company said yesterday it wants to build a gas-fired generator at Centralia.

TransAlta Corp., which owns and operates the coal-fired generating plant in Centralia that is one of the biggest sources of electricity in the region, said it hopes to have the 248-megawatt generating unit on line in July 2002.

While TransAlta and other utilities and energy companies have proposed a flurry of new projects, none will come on fast enough to ease in the next few months a crunch brought on by economic growth, a lack of additional generating capacity to match the growth and a low-water year on the hydroelectric system that supplies the Northwest and California.

The power pool bases its forecasts on reports from 16 control areas, including major utilities and the Bonneville Power Administration, which estimate demand from businesses and households. Rust said the forecasts take into account conservation measures and curtailments. The power pool just began compiling adequacy data, so year-ago comparisons aren't available; in January, Rust said, the region's supply was at about 102 percent of demand.

If the region falls short, the power pool said, utilities have alternatives.

They can buy electricity on the open market.

Too, the Bonneville Power Administration could elect to send more water through turbines at Columbia River system dams to produce more electricity, as it did in January when prices in the open market were so high that the power marketing agency worried about its financial health if it continued those purchases.

Generating more electricity from the hydroelectric service has an economic advantage, but it runs the risk of draining further already depleted reservoirs of water needed for salmon migrating downstream this spring, which in turn could escalate already pitched environmental battles over the operation of the river and the Endangered Species Act.

"Clearly it will be a really tough migration this spring," said Mark Glyde, communications director for NW Energy Coalition, a group with interests in both conservation and salmon restoration. While barging fish around dams may help, that's not an ideal solution, Glyde said, adding "One of the issues we're going to be looking at is whether there is anything we can do to leave more water behind the dams."

That might include working with the federal government to reschedule BPA's debt payments to the Treasury or "otherwise doing better by the fish."

Aside from the environmental issue, running water through turbines in winter is a gamble that "the water is worth more now than later," Glyde added, which might prove to be a bad bet later in the year if wholesale power prices rise.

The power pool said the latest forecast for water flows at The Dalles Dam for the first seven months of this year will be 63 percent of average. Unless there's significant rain and snow in the coming months it could also mean BPA will be back to market buying power in late summer, at a time when California too will be looking for electricity.

BPA spokesman Ed Mosey said Bonneville ran the river above normal levels for four days in January; the impact, he said, was to reduce expected May-June flows at McNary Dam (near Umatilla, Ore.) by half a percent. "The impact was very minimal," he said.

Glyde said groups such as his will also expect BPA to revitalize efficiency and conservation programs. "It's one of the few things we can do between now and next winter to be in better shape," for next winter and spring 2002, he said.

Mosey said BPA has already freed up some electricity through deals with aluminum plants that will reduce their load on the system from 2,000 megawatts (about double the residential load of the city of Seattle) to 400 megawatts in the next 30 days. Still more could be available, he said, depending on the outcome of the sale of the former Reynolds aluminum smelter at Longview, now operated by Alcoa and one of the last still operating at full capacity.

The region could also get a break if temperatures are warmer than normal, so there's less demand for electricity for home heating.

TransAlta needs the approval of federal and state environmental regulators and BPA for its gas-fired project. Rich Woolley, vice president of the company's Centralia operation, said TransAlta believes it can get the $210 million generator operating quickly because it already has the turbines.

"This is a perfect site for a facility such as this," Woolley said, since much of the infrastructure is in place and a gas pipeline extension can be built within the company's property.

He said TransAlta will likely sell some of the power under long-term contracts and the balance on the open markets; no contracts have been signed to date.

In other developments in the West Coast power mess, Bellevue-based Puget Sound Energy yesterday said it has filed suit against six industrial customers and their association in a continuing dispute over large customers who had elected to buy power at market-based rates.

When those rates soared, the companies went to the Utilities and Transportation Commission, which last month ordered a price cap on the rates charged to those customers. Puget Sound Energy's suit charges the industrial customers, which include Boeing, Georgia-Pacific, two oil refiners and two industrial gas producers, with violating the terms of their agreement with the utility.

In addition, California Gov. Gray Davis used his emergency authority yesterday to seize long-term power contracts held by one of the state's financially strapped utilities just before the assets could have been seized by creditors, The Associated Press reported.

The Pacific Gas and Electric Co. options to buy long-term power were held as collateral by the California Power Exchange, the state's electricity marketplace. PG&E defaulted on payments to the exchange, and the exchange wanted to sell the contracts.

P-I reporter Bill Virgin can be reached at 206-448-8319 or billvirgin@seattle-pi.com

http://seattlep-i.nwsource.com/business/pool06.shtml

-- Martin Thompson (mthom1927@aol.com), February 06, 2001

Answers

Tuesday, February 06, 2001, 12:00 a.m. Pacific

How dry we are: Power to stay tight

by Lynda V. Mapes Seattle Times staff reporter New estimates from regional power planners predict that supplies of water — and power — will be precariously tight throughout the winter.

This month, the region's available power can meet 99.6 percent of the demand. The region may have to shop for the rest.

In March, demand and available supply should be just barely in balance, according to predictions by the Northwest Power Pool, a nonprofit Portland group that tracks power supply and usage.

The predictions of a precariously tight supply assume normal weather conditions and a 15 percent capacity cushion to cover unscheduled generation outages.

The root of the problem is a lack of rain and snow. If the dry weather continues, this will be the fifth-driest year in the Northwest since record-keeping began, according to the power pool.

A water shortage means a power shortage because Washington gets 78 percent of its electricity from hydropower. Only Idaho is more hydropower-dependent.

Tight power supplies mean trouble in a cold snap. There is no give in the system to handle the power demand that comes with a blast of cold air.

To avoid brownouts or blackouts, utilities would have two choices: buy power on the spot market, where prices have been ruinously high, or spill more water through dams to spin hydropower generators.

The first choice is bad for ratepayers: Utilities have been raising rates in part because of the high costs they already have sustained buying power on the spot market.

The second option is bad for fish: Dam operators normally don't run the hydropower system hard in winter because they need to store water to flush baby salmon to the sea come spring.

The Bonneville Power Administration had to draw down reservoirs to generate power during four days in January.

That was in part to avoid buying power - a costly proposition.

The agency was spending $50 million a week in December to meet power demand and has spent $200 million for power purchases since October to avoid spilling water stored for fish.

Those four days in January cost fish less than 2 percent of the water supply normally used in spring, according to Mike Hansen, spokesman at the BPA.

In a low-water year like this, the agency has many competing interests to balance. People, power and fish - and different species of fish - have conflicting requirements.

Chum salmon nest below Bonneville Dam and must remain covered with water. In a dry year, that means taking water from other species of salmon that need the water stored for their use come spring.

The BPA is predicting more normal weather conditions ahead. That would eliminate the need to spill any more water than usual for power and enable the agency to have enough water in the spring for fish.

"We are not panicked," said Hansen.

Showers are forecast for the Pacific Northwest this weekend. Mountain snow and valley rain should arrive by Thursday.

But snowpack in the Baker, Skagit and Nooksack watersheds is half of normal, and at 57 percent of normal in the watershed for the Columbia River near the Methow River, according to the Natural Resources Conservation Service.

Precipitation would have to be 151 percent of normal through July just to bring reservoirs back up to average levels.

"It's going to be a bad year for fish," said Donna Darm, acting regional administrator for the National Marine Fisheries Service.

"But I keep trying to tell people the sky is not falling."

The threat to fish comes just as the Northwest has been enjoying a salmon boom due to improved ocean conditions. One of the best returns of chinook salmon in decades is predicted for the Columbia River this spring.

About the only thing people can do about the tight power supply in the short run is use less energy and use it more efficiently.

"This isn't a case where we're asking people to save energy to help California," said Jerry Rust, president of the power pool. "We need to save energy to help the Northwest."

The BPA's acting administrator, Stephen Wright, told Washington lawmakers yesterday that even if the energy crisis eases at the end of the month, there is still trouble ahead.

He said some increased power costs are being absorbed by the BPA now, but the financial squeeze "will get through to the consumer eventually."

Wright told members of the state Senate there will also be political attacks on the Northwest's usually cheap and plentiful power in the coming months.

He expects members of Congress from the "Northeast/Midwest coalition who perceive themselves at a disadvantage" to argue that the federal government is subsidizing Northwest power.

He said that when he was the top BPA official in D.C., he spent years "fighting off the hordes" who opposed the federal power program.

"Their fundamental goal is to see rates go up," Wright said.

California politicians, too, may push for changes in the BPA to make more power available in their state.

"We must be financially stable in order to fend off these attacks," he said.

Some lawmakers here have complained about the BPA selling power to California at a time when consumers here are being told there is an energy shortage.

Wright, though, told senators that only surplus power on a day-to-day basis is sold to California. He said it would be a mistake to "island the system" and require all power generated here to stay in the Northwest.

"Power systems are built without regard to political or geographic boundaries," he said.

He urged senators to renew calls for conservation.

"There is some really bad stuff in front of us," he said.

"We have some ability to control our destiny. But we have to take action now."

Seattle Times staff reporters David Postman, Susan Gilmore and Eric Sorensen contributed to this report.

http://seattletimes.nwsource.com/cgi- bin/WebObjects/SeattleTimes.woa/wa/gotoArticle? zsection_id=268466359&text_only=0&slug=power06m&document_id=134265511

-- Martin Thompson (mthom1927@aol.com), February 06, 2001.


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