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Puget Sound Region on Brink of Blackouts by Ross Anderson Seattle Times, July 2, 2000

As temperatures soared last week, Puget Sound came dangerously close to running out of power.

At a time of year when the Pacific Northwest usually exports surplus power to California, a few days of hot weather and a short circuit 200 miles away left regional utilities scouring the grid for electrons to keep air conditioners humming.

The region survived with no blackouts. But the unexpected shortage sounded a wake-up call to an energy-smug Northwest that the era of boundless electricity is over - at least for the near future.

"We have a supply problem, pure and simple," said Rudi Bertschi, board chairman of Energy Northwest, the public agency that runs the nuclear Columbia Generating Station near Richland.

"Energy demand is growing, and we have not added generation to keep up."

The week's heat wave drained supplies throughout the West, leaving utilities from Bellevue to San Diego paying dearly for precious megawatts.

Wholesale prices, now floating on the free market, set records. Bellevue-based Puget Sound Energy paid more than $1,000 a megawatt-hour for surplus power from British Columbia - 50 times the usual of $20.

And Southwest utilities paid even more.

California always buys power

Down south, last week's energy alert was not unusual.

During the summer, Californians use more power than they generate, filling the gap by buying surplus power from Northwest dams.

But this time, most Northwest utilities had no surplus to sell. The immediate problem was triggered Monday morning, when an electrical arc, possibly caused by dust, shut down the 1,100-megawatt Columbia Generating Plant at Richland.

Just as the region demanded more power, the supply plummeted. The result was a crisis.

U.S. Energy Secretary Bill Richardson, testifying before Congress Wednesday, cited the Pacific Northwest as an example of a stressed-out national energy grid.

That description won't be swallowed easily in a region accustomed to cheap and seemingly boundless hydropower. But to power authorities, last week's crisis was a surprise only in that it came at the wrong time of year.

"Energy is roaring back onto the radar screen," said Bob Royer, communications director for Seattle City Light, the city-owned utility that serves much of the Seattle area.

Until recently, however, few people other than utility officials were watching that screen. The Northwest Power Planning Council got scarce attention earlier this year when it projected a 1-in-4 chance of blackouts over the next four years.

The shortage would probably come in the winter, when hydropower wanes and the Northwest is hunkered down, burning electricity for heat and light, the council said.

To prevent shortages, the council said, the region needs more power plants - at least 3,000 megawatts of new generation, or three times the consumption of the city of Seattle.

No major new power plants have been built in the Northwest in the past 10 years.

On the contrary, there is growing pressure to dismantle Snake River dams. While their production amounts to less than 5 percent of the region's grid, it is "peaking" power used in periods of high demand - such as last week.

Meanwhile, demand for power is increasing steadily. In the next few years, Seattle expects to get a new, electrified transit system, new air-conditioned office towers, shopping malls, high-rise condos and apartment buildings. There will be a new Seattle City Hall and new "Internet hotels" jammed with climate-controlled computers.

And nobody knows where the region will find the power to keep them all lighted and humming.

Deregulation causing shortages

By national standards, Northwest power is still relatively cheap - costing less than half the national average. But utility officials and political leaders are increasingly worried about power supplies.

Congress is under pressure to continue to deregulate the power industry, freeing up retail prices just as it did with wholesale prices a few years ago.

Last week, the Senate passed a bill that would give the Federal Energy Regulatory Commission authority to enforce new rules designed to prevent blackouts.

But Washington Sen. Slade Gorton, chief sponsor of the bill, stressed it is not a solution to the problem - just "a step in the right direction."

In part, the present shortage has been blamed on deregulation. Because the government opened up wholesale electricity to the free market, private firms now buy and sell power at whatever price they can get.

The idea was to use the marketplace to ease energy prices, which have been soaring in virtually every region of the country except the Northwest. But private companies have been slow to build new power plants because they can't be sure market prices will justify the costs.

There is also uncertainty about technology.

New hydroelectric projects are out of the question because of environmental impacts. Nuclear plants are too expensive and risky.

The technology of choice is the "combustion turbine," an oversized jet engine fueled by natural gas that generates electricity instead of thrust.

Gas-fired turbines are considered to be efficient, relatively quiet and relatively nonpolluting. And there is plenty of relatively cheap natural gas to fuel them. But there are only two turbine manufacturers and both are back-ordered, utility officials said last week.

Besides, environmentalists don't like combustion turbines because they burn a fossil fuel and emit carbon dioxide, a "greenhouse gas" blamed for global warming.

Local utilities worried

Puget Sound Energy, the Bellevue-based private utility, already buys power from four small turbine plants in Whatcom and Skagit counties - plants built by private companies as a result of deregulation.

"But the region as a whole has not kept up with demand," said Bill Gaines, vice president for energy supply at Puget Sound Energy.

"As we move toward deregulation, market signals are supposed to drive new generation. But so far, it isn't happening."

As many as a dozen gas-fired turbine plants are planned across the Northwest. Some, such as a 650-megawatt plant proposed in Sumas, Whatcom County, have been held up by community opposition. But others have been stalled by wildly fluctuating power prices.

Thanks to a steady flow of hydropower, Seattle City Light survived last week well and even sold some surplus to California for up to $750 a megawatt-hour, spokesman Royer said.

But the situation will change in August, when City Light's reservoirs run low and the utility finds itself buying high-priced power to meet its needs.

The utility estimates that demand for electricity will grow by at least 1.2 percent per year, said Nancy Glaser, a planner at City Light.

In the past, the city has been able to buy whatever it needed from the federal Bonneville Power Administration, which markets power from the Columbia River system. But BPA's power is stretched more thinly these days, and the city no longer can count on it, Glaser said.

So the utility is looking at its options.

Down at City Hall, the only options getting a serious look are "green."

"I am an ardent environmentalist," said council member Heidi Wills, who chairs the council committee with jurisdiction over City Light.

"That's my passion. And there is no greater arena for maintaining environmental stewardship than electricity."

On Earth Day last spring, Wills sponsored a resolution to meet future energy demands without generating additional greenhouse gases. It passed unanimously.

"That's the best thing I've done on the council," Wills said.

She believes the city can meet its demand by encouraging more conservation and by developing nonpolluting plants fueled by solar or wind power.

"With renewable energy, the source of energy is free," she said. "The costs are in the technology." Outside City Hall, there is far less optimism that Seattle can meet its needs so easily.

"Those technologies are always just over the horizon," said Gaines at Puget Sound Energy.

"They may be a little closer than they were, but they're still over the horizon."

High-tech options

Fuel cells, which take hydrogen from the air and convert it into energy, eventually may be available on a very small scale, but they are not likely to drive major power plants anytime soon.

Another high-tech option is "load management" - computers with wireless links to home or office thermostats. When temperatures rise, these gadgets would automatically adjust those thermostats to minimize power use.

But even with optimistic assumptions for conservation and green energy, Seattle City Light expects its power supply to fall short of demand.

"Remember, we have the most aggressive conservation program in the region now," Royer said.

"Even if we could double that, we still see a shortfall."

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