WIND WARS?

Are wind wars about to break out on the U.S. left coast?

California’s Renewable Electricity Standard (RES) requires its utilities to obtain 20% of their power from New Energy sources by 2010. That’s a lot of electricity. The state’s utilities are building their own solar power plants and wind installations but they are being stymied by a lack of adequate transmission infrastructure within the state.

Fortunately for California, there is another option. The grid system tying much of the west together makes it possible for California utilities to buy New Energy from its neighbors. To meet their state’s RES, they are willing to pay top dollar.

Oregon and Washington have RES requirements, too.

Hydroelectric doesn't count in the RESs. Solar, biomass and geothermal qualify but wind is the most affordable and available. So the competition is stiff for wind generated in the Pacific Northwest.

Lee Beyer, chairman, Oregon Public Utility Commission (OPUC): "The issue is cost…California can pay more."

Californians pay 15 cents/kilowatt-hour. Oregonians pay 9 cents.

The result: A wind war and possible inflationary pressure on the price of wind-generated electricity in Oregon and Washington.

Lance Robertson, spokesman, Eugene Water & Electric Board: "Prices are steadily going up…You're seeing premiums of $10 to $20 a megawatt-hour."

Counterstrategy: Oregon utilities are buying their own wind installations.

Scott Bolton, director of government affairs, PacifiCorp.: "We're not going to enter into a bidding war with a PG&E (in San Francisco) or a Southern California Edison…What's cost effective for them is not cost effective for us."

California’s counterstrike: They are going directly to the companies who build the wind installations.

Wind producers only ask one thing of purchasers: Top dollar.

Jan Johnson, spokeswoman, wind producer Iberdrola Renewables: "We're here to sell all over the Western markets…"[California utilities are] motivated buyers."

There has been peace in the past, when California bought hydropower from the Northweat in the summer and Oregon and Washington met their increased winter needs with California fossil fuel-generated power.

Eventually, California will have a big enough solar power supply to deliver New Energy to the Pacific Northwest in the winter. The way around a war is for operators to take the long view.

Isn’t that usually the case?

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Wind power creates storm in West
Doug Stanglin, August 25, 2008 (USA Today)
and
Power-hungry California is hot for the Northwest’s clean energy
Gail Kinsey Hill, August 23, 2008 (The Oregonian)

WHO
Lee Beyer, chairman, Oregon Public Utility Commission (OPUC); Western wind power developers (Ex: Iberdrola Renewables, Horizon Wind Energy); California utilities (Ex: Los Angeles Department of Water & Power, Pacific Gas & Electric of San Francisco); Oregon and Washington utilities (Ex: PacifiCorp, operator of Pacific Power, and Portland General Electric)

WHAT
California is cornering the market on west coast wind, buying up hundreds of megawatts being generated in Washington and Oregon.

California and Washington have lots of wind and Oregon is building it. (click to enlarge)

WHEN
- PGE’s new contracts with Iberdrola for Oregon-generated electricity from wind kick in this fall.
- Oregon’s RES: 25% of electricity from New Energy sources by 2025 (w/5% by 2011 and 15% by 2015)
- California RES goes to 27% in 2015 and 33% in 2020.
- Oregon’s Columbia Gorge wind generation is best in the morning. California’s Tehachapi mountain wind generation is best in the afternoon.

WHERE
- The power from several of Oregon and Washington Columbia River Gorge wind installations is sold to California utilities:
(1) Klondike III, Sherman County, Oregon (Iberdrola Renewables, 175 megawatts, Pacific Gas & Electric)
(2) Willow Creek, Gilliam and Morrow counties, Oregon (Invenergy, 72 megawatts, Los Angeles Department of Water & Power)
(3) Rattlesnake Road, Gilliam County, Oregon (Horizon Wind Energy, 103 megawatts, Pacific Gas & Electric)
(4) Pebble Springs, Gilliam County, Oregon (Iberdrola Renewables, 99 megawatts, Southern California Public Power Authority)
(5) Big Horn, Klickitat County, Washington (Iberdrola Renewables, 200 megawatts, Modesto Irrigation District, Silicon Valley Power and city of Redding)

WHY
- Wind experts estimate wind power prices at $70 to $90/megawatt-hour.
- California’s RES is driving its utilities aggressive purchases of New Energy-generated electricity wherever it is available.
- California uses 6 times the electricity of Oregon.
- There are sufficient grid interconnects on the west coast to make California’s purchase of power generated by New Energy in Oregon or Washington or Mexico or Nevada or
- Washington obtains much of its power from hydroelectric sources.
- PGE and Pacific Power consume ~70% of Oregon electricity.
- PGE and PacifiCorp have met the 5% requirement and are on track to meet the 15% mark.
- PG&E is on track to meet the 20% goal.

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QUOTES
- Lee Beyer, chairman, OPUC: "[California] has whipped up a wind war in the West…They're certainly trying to grab it everywhere they can…"
- Jennifer Zerwer, PG&E: "We're aggressively adding renewable…"