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Kitzhaber Blasts Federal Order to Send Power South by Mike O'Bryant Columbia Basin Bulletin - December 15, 2000

On the heels of a predicted Northwest power emergency earlier this week, U.S. Secretary of Energy Bill Richardson ordered the Bonneville Power Administration to send energy south to help California avert a Stage 3 power emergency that would cause the state to institute rolling blackouts.

BPA complied Wednesday and Thursday with the order, sending south each day more than 1,700 megawatts from Columbia River dams and other power generators.

BPA said the power sent south is an exchange and will not impact reliability of the Northwest power system, nor is it impacting the Columbia River power system's obligations to endangered salmon.

However, Oregon Gov. John Kitzhaber said the order was unilateral, had been done without consulting Northwest states and could impact river flows needed for endangered salmon in a year when rainfall and snowpack are below normal.

In a letter to Richardson, he urged the secretary to convene a forum next week, along with Chairman James Hoecker of the Federal Energy Regulatory Commission, to begin to lay the groundwork for a West Coast strategy to resolve the issue now and in the future. FERC approved California's deregulation plan in 1998.

"Events are overtaking us and we run the risk of becoming victims of a set of circumstances which are rapidly moving beyond our control," Kitzhaber wrote to Richardson.

He hinted that, perhaps, Richardson doesn't understand the situation and how the Northwest and California exchange power, depending on the season.

"Part of the justification for invoking your extraordinary emergency powers was the conclusion that the Northwest is not shipping enough power into the California market," Gov. Kitzhaber wrote. "However, the Northwest is not generally an exporter of power to California during the winter months. Rather, the Northwest generally depends on just the opposite: power imports from California. This situation raises serious questions."

Kitzhaber blamed the crisis on California's "failed deregulation experiment."

"Certainly wholesale deregulation and insufficient generating capacity are contributing factors," he wrote. "But the fact is that when California deregulated retail sales and established a market-based mechanism for wholesale transactions, it was never anticipated that wholesale prices would deviate by a hundred-fold for the actual costs of generation."

Under California's deregulation scheme, California utilities were required to divest themselves of power generation. Now in the hands of power marketers and as a result of an unregulated market in California, generation costs have soared during peak periods recently to as high as $1,500 per MW, up from a normal $30 to $40 per MW.

"In addition, it is disturbing that, in the face of this crisis, there is so much generation capacity in California that is not currently running," Kitzhaber continued. The crisis situation, he continued, is spilling over into other states, "threatening our entire system of supplying low-cost energy to customers."

Kitzhaber explained to Richardson that the Northwest also has environmental obligations that could be thwarted in a year of low rainfall and a snowpack that is not materializing by shipping power south without a clear plan to do so.

"Our situation in the Northwest is complicated by our obligations under both the Endangered Species Act -- and under federal treaties with the Northwest Indian Tribes -- to recover dwindling runs of Columbia and Snake river salmon," he wrote. "Without the ability to maintain adequate flows, this effort will be severely compromised."

"Writing as the governor of a Northwest state, the current situation puts us in great jeopardy economically, environmentally, and in terms of the future reliability of energy to our citizens," he wrote.

Predictions of plunging temperatures earlier this week caused the Northwest to prepare for power shortages of its own. Residents, businesses and industry responded by cutting load and conserving energy, even as the weather system failed to materialize as expected. Instead of temperatures in the teens across populated western Oregon and Washington, the area experienced slightly warmer temperatures around freezing.

Over the weekend, the region instituted the level 2 emergency that asked customers to conserve and called on the hydro system to prepare to use valuable water for generating energy needed to keep the lights on. Customers responded, according to Scott Bettin, of BPA. He said utilities observed a decrease of energy use in schools, businesses and for some industrial customers. The Eugene Water and Electric Board, in fact, reported a 4 percent decrease in power use over the few days of the emergency and the 5 degree to 7 degree warmer than expected temperatures took care of the rest of the power needs, he said.

Some dams did increase flows to prepare for the emergency, such as Albeni Falls Dam, Dworshak Dam and Libby Dam, but only for a short period of time. Bettin said preparing for the emergency will have little effect on salmon operations in the future.

Link information:
BPA: www.bpa.gov
Oregon Governor's Office: www.governor.state.or.us