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Energy Crisis Not a Question of If, But When by John Tucker The Idaho Statesman, December 17, 2000

Idaho growth outpaces power supply

Nobody's asking Idaho residents to turn their Christmas lights off this holiday season to conserve energy. But such a request could come in the next four years -- or the next few days.

Known for its hydroelectric dams and the cheap power they generate, the Northwest now sees a future where there may not be enough electricity to meet the needs of growing states like Idaho and Washington.

California's energy crisis the past few weeks has shown just how vulnerable the power supply is in the West, a region that's home to computer-chip and electronic-circuit-board makers that are growing rapidly and slurping up electricity nearly as fast as it can be generated.

Those industries have attracted thousands of new residents to the West, new residents who also demand their share of electricity to power their homes.

A quick look at deregulated wholesale electricity prices shows how dire the situation has become.

Wholesale electricity has sold for as much as $5,000 a megawatt hour during peak periods recently, said Randy Lobb, the administrator of the utilities division at the Idaho Public Utilities Commission.

A year ago, a megawatt hour of electricity sold for between $22 and $45.

The problem, in a nutshell, is there aren't enough power plants to keep up with growth.

"We anticipate within three years we will be short by 3,000 megawatt hours generating capacity in the Northwest," said John Harrison, a spokesman for the Northwest Power Planning Council.

"If things were to line up right -- such as a power plant going down or unexpected cold weather setting in -- we could be short 3,000 megawatts today," he said. A megawatt is enough power to operate 1,000 homes. Hence, for every 1,000 new homes in the Northwest, an additional megawatt of generation capacity is needed.

Below-normal temperatures last week hit California and Washington, causing utilities there to be short thousands of megawatts of electricity.

Oregon Gov. John Kitzhaber on Thursday criticized California for its shortsighted handling of that state's energy crisis and called for an immediate energy summit in the West to address the shortage.

"We are really at the risk of having California and its problems drag down the rest of us," the Democratic governor said.

Kitzhaber made the request in a letter to U.S. Energy Secretary Bill Richardson after Richardson directed Northwest electricity generators to send power to California to avoid emergency shortages in that state.

Without regionwide action soon, Kitzhaber said, "the situation threatens to escalate such that the whole West may be short of power throughout a cold and dry winter.

Kitzhaber argued that California's "failed deregulation" is a key contributor to soaring wholesale electricity prices.

"Events are overtaking us," he said in a statement. "We run the risk of becoming victims of a set of circumstances which are rapidly moving beyond our control."

While other Northwest states grappled last week with the issue of short supplies of electricity, Idaho Power Co. weathered the crisis with ease.

"Idaho Power wasn't in the same pickle the other utilities were," said Don Badly, assistant operations manager for the Northwest Power Pool.

The NWPP is a group of utility company and government officials who monitor power use and generation across the Pacific Northwest. The group is charged with issuing warnings when the load -- the amount of electricity being used -- exceeds the amount that is being generated or has been contracted for.

Unless a lot of snow flies in the next few months, electricity resources will become even more scarce for some utility companies -- including Idaho Power Co. -- that depend on hydropower. Idaho Power officials said last week that the snowpack that feeds its three dams in Hells Canyon is only 64 percent of normal.

But company officials aren't panicking, saying the best snow months are yet to come.

They are, however, urging residents and businesses to conserve power in light of the current energy crunch in California, saying the company desperately wants to avoid having to buy power on the open market.

During the peak winter months, Idaho Power's generating facilities cannot produce enough electricity to keep the heaters going and lights burning throughout it's Southern Idaho service territory.

As the West continues to grow by leaps and bounds, the need to contract for electricity will be crucial for the next few years. According to an Idaho Power plan approved by the Idaho Public Utilities Commission, the company will not be able to meet the growing demands for electricity by 2004 unless more plants or transmission lines are built.

Currently, Idaho Power officials believe the company won't have to buy any additional electricity this winter. That's because it contracted some time ago to buy all the electricity it believes the customers in its service area will need.

Company officials constantly monitor weather reports, watching for unexpected events such as the recent cold snap.

As long as Mother Nature cooperates and there are no unexpected freezing conditions, there is no worry about power outages in Southwest Idaho.

"The problem we face is economic," said John Prescott, vice president of generation for Idaho Power. "We have plenty of supply. The question is what are we going to pay for the supply."

This past week, the cost of wholesale electricity in the West skyrocketed, mainly because California utility companies were caught off guard by the below-normal temperatures that hit the West.

The problem was made worse because several power plants were off line to correct maintenance problems or because they had used up all their clean-air credits, said Badly.

Members of the Western Systems Coordinating Council, which includes virtually all of the region's power companies, must keep electricity reserves on hand in case there is a breakdown at one of their generating plants.

Utilities are required to keep at least 5 percent of the electricity generated by hydropower on hand in case of a breakdown or other emergency. Thermal plants -- fueled by either coal or natural gas -- must keep 7 percent in reserve. The higher level of reserve is because those plants have more moving parts, such as conveyor belts and loading equipment, that could break down and disrupt the flow of electricity.

A Stage 1 alert simply means that a breakdown has occurred somewhere or an unusual weather condition such as the cold snap has happened, Badly said. At that point, utility companies are urged to monitor their systems closely.

A Stage 2 alert means that a utility within the system has let its reserves drop below the accepted levels. At that point, the utility in question must decrease the demand for electricity within its service territory to get back to accepted levels.

To do that, utilities will ask customers that use large amounts of electricity to cut back on their use. Another way to decrease the demand is by lowering the voltage going through the lines. Lower voltage means electrical equipment will still function, but will not operate at normal limits.

In other words, an electric drill might turn more slowly than normal under low voltage conditions.

The condition is often referred to as a "brownout."

Last week, utilities in California were below reserve and had to cut power to large water pumps in order to keep power outages from happening.

Stage 3 is the worst. That means the utility in question has completely run out of reserves. In that situation, the utility would have to voluntarily cut power off to some of its customers until reserves come back up to accepted levels.

That means "rolling" power outages.

Rolling power outages mean the company has cut power to whole transmission regions, said Idaho Power Co. spokesman Dennis Lopez.

"The outage would roll from one transmission grid to the next as power in one area comes on and power in another area shuts down for a period of time," he said.

It's a very serious situation, as electrical customers like hospitals, airports and emergency services cannot be without power, Prescott said.

"Before we would institute a rolling outage, we would be in close contact with the governor's office, the Idaho Public Utilities Commission and other officials," he said.

The question would be which areas to shut off first to restore the reserve levels, Prescott said.

Idaho Power Co. has never faced a situation where it had to institute rolling blackouts, at least in the past 20 years.

Last week, a Stage 2 alert was issued for the Pacific Northwest and then lifted when the weather warmed up.

In theory, the problems in California and other states could suck power away from Idaho.

That's because all of the power generated in the West, including Idaho Power's, is transmitted through the intermeshed Western Power Grid.

The electricity will follow the path of least resistance, meaning Idaho Power's electricity might actually be used in Oregon or California, and power users here might actually be using power generated by Nevada Power or some other utility.

If a region, such as California, runs out of electricity, it could sap supplies in other regions until the utilities cut off users.

Power companies know how much power they are generating and how much they have contracted for.

By monitoring the flow, they know when they have reached their limit and have to cut off users.

Idaho Power computers based in Boise monitor the three dams in the Hells Canyon Complex, sending signals every two seconds, to monitor the flow of electricity, Prescott said.

But should one of the company's turbines break down or a cold snap hit, Idaho would be in the same situation as California and have to buy high-priced electricity on the market.

"That's the kind of thing we definitely want to avoid," said Idaho Power spokesman Jeff Beaman.

Ultimately, it would be the users who would have to foot the cost.

Every year, the amount Idaho Power can charge for its electricity is set by the Idaho Public Utilities Commission under the power cost adjustment mechanism.

Under the PCA, Idaho Power estimates every year how much the company believes it will cost to provide power, said Lobb.

If the actual cost of providing power is higher than the estimated cost, the company would be able to recover the difference through a rate increase, Lobb said.

The PCA also works conversely. If the actual costs were lower than estimated costs, the PUC would lower the rates. Rates have been lowered and raised many times in the past, he said.

There are provisions in the PCA that cap how much Idaho Power might be able to recover through rate increases without special permission from the commission, Lobb said.

"That has never happened. Idaho Power has always been able to recover its costs within the caps," he said.

Idaho Power Co. officials said people should conserve electricity now so their rates won't go up next year.

"By saving now, people will actually be saving twice," Prescott said.

By conserving, people will save on their bill in the coming months and will most likely save again when rates are kept down during next year's PCA adjustment, he said.

If Idaho Power uses less electricity than it contracted for, the company could potentially sell the excess on the wholesale market, Lopez said. The money generated from such a sale might potentially lower rates through the PCA process.

However the supply situation could get worse, rather than better, over the coming years.

That's because growth continues to boom in the West at a time when very few power plants are being built, Lobb said.

Utilities companies have held off building plants in the past decade because of the threat of looming deregulation of the industry and the fact that power rates were low enough that it wasn't economically feasible to invest in new plants.

"With deregulation a possibility, they weren't sure if they could recover their costs," Lobb said.

Prescott describes the situation at utility companies as being much like a deer caught in the headlights of a car.

"No one knows which way to turn," he said.

The utilities have been frozen as the headlights approach.

"During the time no plants were built, the load has increased while supply hasn't," Lobb said.

There are several plants now under way in the Pacific Northwest, said Dick Watson, director of power planning for the Northwest Power Planning Council.

(bluefish interjects: "Going with the Flow finds that the total power production of the four dams is approximately 1136 average megawatts or about 10% of the Bonneville Power Administration's power and about 5% of the region's power." see patton.htm)

Under construction are:

• A 500-megawatt plant in Klamath Falls, Ore., that will come on line sometime next year.

• A 500-megawatt plant in Hermiston, Ore., that will begin operating in 2002 or early 2003.

• A 250-megawatt plant in Rathdrum that also will take until early 2003 to begin generating electricity.

How important is a 250-megawatt plant? It could generate enough electricity to power the cities of Caldwell, Nampa and Meridian for a year, Lopez said.

Idaho Power sent out a request for proposals earlier this year from companies wanting to supply the company with 250 megawatts of power. The request states that the companies must be able to supply the power by 2004 when Idaho Power's resources will be insufficient for new growth.

The demand for electricity has been growing by an average of 1.7 percent annually, Prescott said.

The proposal could mean a new power plant, or could mean building new transmission lines to carry power into the state from other sources, Lopez said.

One of Idaho Power's subsidiaries, Ida-West Energy Co., has put in a proposal to build a 250-megawatt, natural gas-fired power plant in Canyon County.

Idaho Power officials declined to say whether other companies had put in proposals or what types of proposals they were.

Idaho Power plans to release the name and give details of which proposal it selects in early January.

Since Pacific Northwest utility companies traditionally have bought surplus power from California plants to meet their needs, what happens in that state will have a big effect in Idaho, Washington and Oregon, Watson said.

"The studies have all assumed we could import power from California," said Watson. "We're hoping this year is an aberration and they get their house in order."

Power industry experts are also saying the power crunch, and the soaring cost of wholesale power, may be a serious blow to efforts to deregulate the industry.

While California, Montana and other states have deregulated portions of the industry, the Idaho Legislature has shied away from it. Idaho officials believe deregulation would seriously threaten Idaho's low-cost hydropower.

"Given what's happened in California, I think everyone is going to have to take a step back and take another look at deregulation," Lobb said.

Energy-saving tips

• Turn your home heater's thermostat down to 65 degrees.

• Reduce lighting by either keeping some lights turned off or switching to lower-wattage light bulbs.

• Reduce or eliminate Christmas lights.

• Keep blinds or drapes closed.

• Slightly raise refrigerator and freezer thermostat settings.

• Restrict the use of your washing machine, dryer and dishwasher.

• Turn off computers and televisions when not in use.

• Cook with microwave oven rather than electric resistance ovens and stoves.

• Buy only appliances listed as being energy-saving by United Laboratories.

Related Links:
Idaho Public Utilities Commission
Idaho Power Co.
Northwest Power Planning Council
Power Engineering Magazine