Turns out, it is easy being green.
Nine years ago, Washington’s utilities warned that renewable energy thresholds mandated by Initiative 937 would increase power costs, and those increases would be passed along to consumers in higher rates. Voters passed the initiative anyway by a narrow 52 percent majority.
The alarms have fallen silent, at least as far as the private utilities are concerned.
I-937 set three thresholds. Alternative energy – wind, solar, biomass and upgrades of hydroelectric plants – had to constitute 3 percent of total utility resources by 2012, 9 percent by 2016, and 15 percent by 2020.
According to a new report from the Utilities and Transportation Commission, Washington’s three major investor-owned utilities met the first of three thresholds with incremental power cost increases of less than .5 percent. Spokane-based Avista reduced its costs by 1 percent. But a friendly Legislature lowered the bar by reclassifying as renewable the 50 megawatts generated at its Kettle Falls facility, which relies mainly on wood waste – biomass – for fuel. That change alone assured Avista will comply with I-937 all the way through 2020, with a little extra to spare.
Upgrades of its hydroelectric dams that began before 2006 and continue have also helped. Megawatts gained by changing out turbines, for example, are cheaper than other sources of energy. Puget Sound Energy has complied in part by doing the same to its dams.
Pacific Power was the beneficiary of another legislative change that allowed it to count renewable resources outside the region, such as windmills in Wyoming.
But I-937 has turned out less well for Washington member-owned utilities like Inland Power & Light Co.
Many buy all or almost all their electricity from the Bonneville Power Administration, which sells electricity generated by federal dams in the region, and the Columbia Generating Station at Hanford. Although the agencies that own the federal dams on the Columbia and Snake rivers are modernizing at Grand Coulee and elsewhere, I-937 does not allow electric cooperatives like Inland or public utility districts to count those upgrades against its alternative energy requirements.
Instead, they must buy renewable energy credits that represent the green attributes of new or improved generating stations somewhere else. Those credits are more expensive than power from BPA. Bringing Inland into compliance with I-937 will add 2 percent to power costs next year, and 4 percent in 2020.
Another provision of I-937 has the perverse effect of discouraging small utility investment in conservation, which is often the most cost-effective way of meeting electricity demand.
But green energy has brought plenty of green into Washington; about $8 billion in new investment, and substantial increases in property tax revenues for counties lucky enough to be windy.
It’s been easier than expected, but Washington utilities have always been innovative. However, the initiative may not be spreading benefits equally among all state residents. That’s an issue the next Legislature should examine and, if necessary, correct.