August 22, 2010 in Business

Bert Caldwell: California turbulence blows ill for region

By The Spokesman-Review
 

In California’s effort to marshal a symphony of energy resources, the Northwest is the designated woodwind.

John White, director of the Center for Energy Efficiency and Renewable Technologies – CEERT for the short-winded – drew the orchestra analogy last week as he tried to explain the implications of two mostly contradictory efforts to reset standards for renewable energy use in the Golden State.

An ideal utility resource portfolio is like a symphony, he says, with geothermal, solar, wind and other technologies making energy music together. Californians, with Proposition 23 and SB722, are just working on the score.

For Northwest energy planners, both are disquieting because they might profoundly affect regional investment in wind energy.

California utilities must get one-third of their electricity from renewable resources by 2020. A presentation last week to members of the Northwest Power and Conservation Council illustrated just how important that California standard is to wind farm development in Oregon and Washington.

More and more new Northwest wind generation capacity is built for California consumption: 40 percent in 2009, 66 percent this year. Drive Interstate 90 up Vantage Hill or through the Kittitas Valley and the observable investment in new windmills is breathtaking. By rule of thumb, one megawatt of wind generation costs between $1 million and $2 million. Total capacity in Oregon and Washington is rapidly approaching 4,000 megawatts.

Eyesores to some, those windmills are also windfalls for landowners, who pocket substantial royalties, and counties that collect increased taxes.

But they have become a major challenge to the Bonneville Power Administration, which controls the major power lines that take wind-generated energy south. When the wind screams, the transmission grid overloads. On calm days, expensive infrastructure is wasted.

So how would Prop. 23 and SB722 potentially affect an already complex interplay of money, machines and good, green intentions?

The oil industry-sponsored proposition would roll back California’s clean air standards. As a side effect, it would also nullify Gov. Arnold Schwarzenegger’s executive order imposing the one-third alternative energy requirement. SB722 would codify that order, thus blocking its overturn if the proposition passes in November.

But the bill also stipulates that California private and public utilities buy more alternative energy from in-state sources or those immediately available from out of state. With the deadline for legislative action fast approaching, and the vote on Prop. 23 barely more than two months away, White says utilities are scrambling to get the best deal possible in Sacramento, while reassessing their options should either, or both, pass.

“I hope California’s actions are not disruptive,” White says.

Tom Karier, one of two Washington members on the Power and Conservation Council, suggests it could hardly be otherwise.

“Just leaving this up to an election makes it pretty hard to do power planning,” he says. “They’ve made this complicated.”

Karier says the upside for the region is the possibility that expensive investment in new transmission lines might be unnecessary and more wind power becomes available for utilities in Montana, Idaho, Washington and Oregon.

Iberdrola has been building wind farms in the region for more than a decade. Kevin Lynch, its head of policy and regulation, says Iberdrola has transmission connections to California that probably meet SB722 guidelines. Other Northwest wind generators may not have that ability, he says, and Iberdrola is watching developments closely.

Meanwhile, we in the woodwind section can only hold our collective breath as Californians come to legislative and elective blows.

Oboe is we.


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