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Adding Power to the Grid by Editors The Oregonian, August 1, 2000

Avista's proposed power plant near Boardman will help close supply gap,
but conservation emphasis also needed

Avista Corp.'s announced plans to build a 280-megawatt power plant near Boardman is a timely bit of good news for the Pacific Northwest which, after a decade of surplus power supply, is entering a period of energy deficit.

The Spokane-based power development subsidiary has purchased the rights to develop a project known as Coyote Springs 2 from Enron North America and Portland General Electric for an undisclosed sum. It is a combined-cycle gas turbine power plant that, when completed in June 2002, will be able to produce enough power to supply 280,000 homes.

It's been known for some time that Northwest power-generating and transmission capacity has not kept pace with growth. The Northwest Power Planning Council has warned that the region faces a 1-in-4 chance of blackouts or brownouts during the next four years unless new generation is added.

Avista Power, a bullish independent energy producer intent on owning and developing electric generation in the western and southeastern United States, is a new breed in the rapidly deregulated electric industry. It exists solely to develop and sell power. And it is not bound by regulatory pricing or by requirements to serve a specific customer base, as are electric utilities.

In helping to fill the growing gap between demand and supply, bear in mind that Avista's purpose is to make money, not necessarily reduce the price of a wholesale killowatt hour. Avista Power has a similar 280-megawatt gas turbine project under construction in Rathdrum, Idaho, and it has two other facilities on the drawing board, one in Longview, Wash., and another in Texas.

With buyers throughout the West and Southwest, the company doesn't necessarily have to make those sales to Northwest consumers.

So while the Northwest energy users should welcome the development of the Boardman plant, the new plants are only one of the options that energy planners should pursue. Indeed, the region's energy policy goal still should be to develop a diversified energy portfolio, not just a basket full of quick-and- easy startups for natural gas-fed combustion cycle turbine generators.

One reason that wholesale electric prices on the West Coast spiked to unprecedented levels in June was that natural gas prices -- the fuel used to power the combustion turbine generators -- nearly doubled during the past year. U.S. imports of Canadian gas have increased five-fold since 1986, exhausting the supply of easy-to-extract gas in Alberta. As a result, tomorrow's Canadian gas prices could be higher.

The so-called soft-energy path still has a role to play. Accordingly, Northwest utilities should promote energy conservation and renewable energy again -- as they did in the 1970s and 1980s when supply-demand conditions in the Northwest were similar.