A s the Gulf Coast struggles to recover from hurricanes and the nation learns to deal with high energy prices, we are reminded to plan for the worst even if we hope for the best. Gasoline prices soared to record levels and natural gas prices are now following suit. The same price shock that we are experiencing at the gas pump is likely to play out again this winter for those of us that heat our houses with natural gas or fuel oil.
Fortunately, not all energy markets are spiraling out of control. Electricity markets in Washington state are continuing to recover from the energy crisis four years ago and with a little help we should be able to avoid the shortages and price spikes that are hitting other forms of energy. In fact, Washington state electricity prices are now the fifth lowest in the nation, a solid improvement from three years ago when we ranked only 16th.
We did some things right in order to get to this point, and if we are to stay here, we will have to do even more things right.
One of those things we did right in Washington was to resist the demands that we “deregulate” our retail electricity markets. Other states, like California, that required utilities to sell off generation and allowed prices to be driven by energy traders, took a big risk and are paying for it now. Washington’s system offers more stability by assuring that public utilities and regulated private utilities plan to meet demand and base their prices on actual costs.
The other thing we did right was to invest heavily in energy efficiency. Over the past 20 years, Washington, Oregon, Idaho and Montana suppressed electricity demand by 2,500 megawatts by investing in conservation. That is equivalent to saving the electricity of 11 cities the size of Spokane, and we did all that simply by using electricity more efficiently in homes and businesses.
Now is not the time to be complacent. In order to maintain our relatively low-cost electricity, there is more to do. The Northwest Power and Conservation Council recently released its 5th Power Plan, which provides a blueprint for the region to maintain and even improve upon our comparative advantage.
The first recommendation is that we must continue to make significant investments in conservation because it continues to be the lowest cost and least risk resource. There is, according to the plan, at least another 2,500 megawatts of conservation to be tapped over the next 20 years. We can all do our part, and save ourselves some money, by buying compact fluorescent light bulbs and energy efficient appliances that quickly pay for their higher price with energy savings.
We should also recognize solid efforts by some Washington utilities such as Avista, Puget Sound Energy, Seattle City Light and Snohomish Public Utility District that are meeting or exceeding the council’s conservation targets. Here in Spokane we see significant achievements by Sacred Heart Medical Center and School District 81 as they incorporate high levels of energy efficiency into their new construction projects.
A second recommendation of the council’s power plan is to diversify our energy supply and develop many of the promising wind sites scattered throughout the Northwest. While wind generation now provides only 1 percent of the region’s electricity, it has the potential to meet at least 10 percent in 20 years.
Wind technology has greatly improved in recent years and is attractive for both its low cost and independence from fossil fuel prices. Actual construction and planned construction for wind generation in the Northwest is strong and even running ahead of the council’s plan.
Unless these efforts greatly exceed our expectations, the Northwest will still need some additional fossil fuel generation but even here new technologies are promising. The process of converting coal into gas to generate electricity is ready for commercial development and adding a process to sequester or remove the carbon dioxide would make even these coal-fired generators reasonably clean.
In order to be successful we need to continue to augment our valuable hydropower system with conservation and renewable energy and fill the gap where these fall short. With a coordinated effort among the region’s utilities, businesses, families and political leaders we can implement a rational strategy today that will maintain one of the cheapest, cleanest and lowest-risk electricity systems in the nation for many years to come.
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