Avista, Inland Power’s results differ with new energy standards

Wind turbines spinning on the Palouse are the final piece of Avista Utilities’ strategy to meet Washington’s new renewable energy standards.

Energy from the 58-turbine Palouse Wind farm, which started operations last year, has pushed the Spokane-based utility over the top. Even with future customer growth, Avista officials say they’ve lined up enough qualifying renewable energy to meet Initiative 937’s requirements through 2020.

Passed by voters in 2006, the initiative requires most utilities serving Washington customers to get 15 percent of their electricity from new renewable sources by 2020. The initiative’s goal is to diversify green energy production in Washington, prompting investment in wind, solar, geothermal and biomass in a state long dependent on hydropower, said Danielle Dixon, senior policy associate for the NW Energy Coalition in Seattle.

More than $8 billion has been spent on wind, solar and biomass development in Washington over the past 15 years, with the majority funneling into wind. At least part of that investment can be attributed to I-937’s passage, initiative backers say.

Some utilities “acquired early and acquired sufficiently,” which means they’ve blown past the upcoming deadlines, Dixon said.

In addition to Avista, Puget Sound Energy has enough resources in place to generate 15 percent of its electricity from new renewable resources, said Ray Lane, PSE spokesman. The utility, which serves about 1.1 million customers in the Interstate 5 corridor, built its own wind farms.

Avista provides electricity to about 237,000 Eastern Washington electric customers. The utility is ahead of the game for several reasons, said Jason Thackston, the company’s vice president for energy resources.

Avista was able to count toward I-937 requirements additional energy produced from the installation of new turbines at its Clark Fork River dams, because the turbines produce more kilowatts from the same river flow. Avista can also count energy from two long-term wind contracts, along with upcoming work at two Spokane River dams that will increase electrical output.

Through a legislative amendment, Avista will be able to count electricity produced at its existing Kettle Falls biomass plant toward the renewable tally beginning in 2016. However, the utility will have to document that the wood waste burned at the plant doesn’t come from old-growth forests, said Jessie Wuerst, an Avista spokeswoman.

Avista spent about $3.6 million last year to meet I-937’s requirements, according to information filed with the state. The cost represents less than 1 percent of a residential customer’s electric bill, officials said.

As a result of I-937, Avista invested sooner in new generating resources than it otherwise would have, Thackston said. But the utility got a good deal on its 30-year contract to purchase electricity from the Palouse Wind farm near Oakesdale, Wash., he said.

Buying energy from the Palouse was cheaper than Avista’s projected cost of putting up its own wind turbines on land it purchased near Reardan, Thackston said.

While Avista has met I-937’s requirements with relative ease, its smaller neighbor – Inland Power – is in a different situation.

Inland Power is an electric cooperative that serves 39,000 customers spread across 13 counties. Most are rural residents and 42 percent are low-income, said Chad Jensen, Inland Power’s chief executive officer.

Inland Power is already one of the nation’s greenest utilities, purchasing 81 percent of its electricity from federal hydroeletric dams, Jensen said. Because its customer base is relatively stable, complying with I-937 will force the utility to invest in renewable energy it doesn’t need, he said.

“It’s a frustrating piece of legislation,” Jensen said. “We’re having trouble getting sensible changes that we think should be easy tweaks.”

Inland Power lobbied the Legislature this year, saying that upgrades at federal hydroelectric facilities should count toward the utility’s I-937 requirements. That’s one of the inequities in the initiative, Jensen said: If utilities own the dam, they get credit for upgrades that increase electrical output. If they don’t own the dam, they can’t count the upgrades toward I-937.

Inland Power is spending nearly $3.4 million to help finance major upgrades at Grand Coulee and Chief Joseph dams, two federal dams on the Columbia River that produce power the utility purchases.

Though Inland Power couldn’t get the Legislature to adopt the change this year, Jensen said the utility will continue to push for an amendment. More than 50 bills related to I-937 were introduced during the last legislative session, which hampered the effort, he said.

“There were so many bills trying to change Initiative 937 that we couldn’t get any traction,” Jensen said.