SEATTLE POST-INTELLIGENCER http://seattlep-i.nwsource.com/local/power07.shtml

Locke signs deals increasing power generation; conservation still urged

Wednesday, March 7, 2001

By REBECCA COOK THE ASSOCIATED PRESS

TACOMA -- Gov. Gary Locke yesterday announced deals that will eventually increase energy generation in the state by about 1,100 megawatts, enough to power the city of Seattle, but he acknowledged it may not be enough to avoid blackouts or mandatory conservation.

"New generation is not going to get us through the next eight to 12 months," Locke said at a news conference at a Tacoma Power substation. "Conservation is critical."

Locke's main announcement was that Chehalis Power Ltd. signed an agreement with the state to build a 520-megawatt plant in Chehalis. Construction on the plant will begin in May, and the plant should start operating in November 2003, said Kevin Finan, business development manager of the parent company, Belgium-based Tractabel Power. The Chehalis project was first licensed in 1997 for 460 megawatts; it later applied to increase that to 520.

There's no guarantee the plant will sell power in Washington.

"Right now, we do not have a commitment to sell power to anyone," Finan said.

What will have an immediate effect in Washington are two other deals announced earlier, but also covered by Locke yesterday. Spokane-based Avista Corp. will be allowed to operate an older natural-gas turbine plant in Spokane County 24 hours a day for 90 days. Usually, the plant only operates 500 hours a year because of environmental concerns.

The Spokane plant will generate about 66 megawatts in the next three months. In return, Avista agreed to offset any pollution emitted by the plant by cutting back on pollution from other sources.

"I am willing to speed up the permitting process, and be somewhat flexible with environmental rules, as long as this key principle stands: There can be no net harm to the environment," Locke said.

BP-Amoco reached a similar deal with the state. The company will replace old diesel turbines with 14 cleaner gas turbines at its Cherry Point refinery in Whatcom County. The company will produce 73 megawatts of power, enough to feed the refinery's energy needs instead of buying from Puget Sound Energy.

"We want to be in control of our own destiny," said Rick Porter, BP-Amoco business unit leader for the Cherry Point refinery. In return, the refinery will offset any pollution caused by the gas turbines.

As part of the deal, Avista and BP will both contribute money to energy assistance for poor people. Avista will give at least $300,000, and BP will give $100,000.

Two other companies, Goldendale Energy and TransAlta in Centralia, have been approved to build new plants that will generate a total of about 500 megawatts of energy.

Locke said voluntary conservation efforts in Washington have cut consumption by 5 percent, and he urged residents to continue saving energy whenever possible.

Republicans in the Legislature criticized Locke for not being more aggressive about permitting and encouraging new energy generation. Locke said he would not comment on the proposed Sumas II power plant near Bellingham, which was turned down by a state regulatory committee. The Kirkland-based company that wants to build the natural-gas-fired plant, National Energy Systems Co., has revised its application to make it more environmentally friendly and is trying again.

"The governor needs to step out on the Sumas plant," said Sen. Pat Hale, R-Kennewick. "The governor needs to really show some political leadership and courage."

Hale and Sen. Bob Morton, R-Orient, the ranking Republican on the Environment, Energy and Water Committee, said the new energy supply announced by Locke yesterday isn't enough and that the governor's plan relies too heavily on conservation.

"He's really piggybacking upon the past," Morton said. "Conservation is not going to bail us out of this. We need energy generation."

-- Martin Thompson (mthom1927@aol.com), March 08, 2001