ORIGINAL REPORTING: CAN WARREN BUFFETT'S PACIFICORP BRING THE NORTHWEST'S RENEWABLE RICHES TO MARKET?
Can Warren Buffett's Pacificorp bring the Northwest's renewable riches to market?; The Energy Gateway will change the way America uses energy — when it gets finished.
Herman K. Trabish | September 15, 2014 (Utility Dive)
States will need the Pacific Northwest’s flexible natural gas and abundant renewables to meet energy mandates in the coming decade. And those resources may become even more necessary when the Environmental Protection Agency’s proposed 2030 emissions reductions targets are finalized.
Although it has barely begun, Rocky Mountain Power’s planned Energy Gateway Transmission Expansion Project plans to knit those riches together.
“It accesses really high-value wind and solar resources with generation profiles that vary by time of day and season,” explained Cameron Yourkowski, senior policy manager for Renewable Northwest, a non-profit advocacy group. “That will make bringing more renewables to market easier and more cost-effective.”
“Transmission allows you to take advantage of flexible resources anywhere in the system’s footprint,” agreed American Wind Energy Association (AWEA)Head of Research Michael Goggin. “One of the best ways to integrate renewables is to do it over a large area with transmission.”
Energy Gateway: 'A triangle of reliability'
“We call Energy Gateway a triangle of reliability,” said Rocky Mountain Power spokeswoman Margaret Oler. “It is being built in segments but, once completed, the somewhat triangular design will increase capacity and reliability. If something happens on one leg, we can still deliver electricity another way. And the configuration enables the company to receive a variety of existing and new resources.”
Rocky Mountain Power's parent company Pacificorp, itself a subsidiary of Warren Buffett-owned Berkshire Hathaway Energy, took the project on in 2007. The utility had seen more than a 26% demand increase in the preceding twenty years from the 1.8 million customers in Rocky Mountain Power's Wyoming-Idaho-Utah territory and Pacific Power's Washington-Oregon-California territory. Constraints were becoming apparent.
The Energy Gateway Transmission Expansion Project consists of Gateway Central, Gateway West, Gateway South, and a crucial West of Hemingway piece being built by partner Idaho Power. After seven years of work, Gateway South’s in-service target is between 2020 and 2022; Gateway West’s target is between 2020 and 2024. “The intention is to build it and put it in service in pieces,” Rocky Mountain Power's Oler explained.
Pacificorp offers no estimate of the overall cost. “We don’t quote numbers because it takes a long time and the world changes. When you are done, you know,” Oler said. “It will be billions of dollars.”
The progress so far
The Gateway Central Segment B double-circuit, 345 kilovolt, 135-mile transmission line was completed in 2010. It connects southeast Idaho to northern Utah near the Salt Lake City airport.
Segmentation allowed Pacificorp to ask each state’s regulators to rate base a portion of the $864 million cost. For all such "prudent" expenditures, the new line among them, the Utah Public Service Commission (UPSC) granted a 7% rate increase for 2011, a 6% increase for 2012, and a 3% increase for 2013.
Idaho’s regulators granted permissions for debt recovery but deferred consideration of rate increases until 2016.
The Gateway Central Segment C single-circuit 500-kilovolt and 345-kilovolt line was completed in 2013 at a cost of $402 million. It connects central Utah to the Salt Lake Valley, where voltage will be stepped down for the double circuit 345-kilovolt line running east to Salt Lake City.
The Utah PSC is considering rate increases of 2% for 2014-15 and 1% for 2015-16 for Utah customers.
As Segment C was completed, construction began on the Gateway South Segment G 170 mile, single-circuit, 345-kilovolt line from south-central Utah to southwestern Utah.
“Traditionally, transmission has been built to carry electricity from a generation source to a load but this entire Gateway system is designed in a hub and spokes pattern,” Oler said. “It can pick up generation from existing sources and will be able to pick up future generation wherever it is built.”
Of all the pieces, Segment B was built first due to constraints in the more densely populated Salt Lake region. It was also one of the shortest pieces. Perhaps more importantly, much of the 90 mile corridor was already owned by Rocky Mountain Power and therefore required little permitting through the National Environmental Policy Act (NEPA).
Notorious NEPA delays
NEPA permitting is notorious for complexities and delays. Gateway was selected as one of seven focus projects for the Obama administration’s Federal Rapid Response Team for Transmission (RRTT), created to streamline federal agency cooperation in NEPA procedures. Pacificorp was initially anxious the selection would slow progress, according to observers. In the end, Gateway has served as an example of what does and doesn’t work.
What didn’t work, Oler said, was that Gateway West had been fully permitted when the Bureau of Land Management decided to perform additional reviews on the Morley Nelson Snake River Birds of Prey National Conservation Area. Final permitting is now expected in 2016.
But an example of what can go right may be a recent resolution between Idaho Power and the Department of Defense (DOD). Idaho Power’s West of Hemingway addition to Gateway West will, pivotally, link through the Bonneville Power Administration to load centers like Seattle and Portland and to interties to California, according to Yourkowski.
The utility recently sustained progress by finding a detour that satisfied DOD’s concerns about a nearby bombing range.
Bringing everybody in and making the process better
There is no way around the NEPA process, Oler said. But “where people get involved, the process goes faster,” Oler said. “All the state and county and city officials and the public have to be in the conversation from the beginning.”
Agencies working through NEPA “don’t operate in a vacuum,” Oler said. “They need public input. Companies can only go by what is in the public record and sometimes that’s outdated. Something important may have changed and anybody may have that information.”
It takes too long to build a transmission project and federal agencies need to keep improving procedures, Yourkowski said.
For planning on the Mountain States Transmission Intertie (MSTI), Renewable Northwest created the MSTI Review Project, an interactive geographic information systems (GIS) process. By streamlining the assessment of public input, the Review Project moved MSTI through permitting after other efforts failed.
“People on the ground fill out questionnaires that detail their values,” Yourkowski explained. “The GIS evaluation picks the paths of least resistance according to the community’s own values.”
Involving local government and providing much-needed and accurate information can only make the process better and, as the review’s Lessons Learned explained, “demonstrated that complicated issues related to transmission lines can be illuminated in an objective, easily understandable way.”