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Legislative Action -- of Sorts -- Likely on Energy by Angela Galloway Seattle Post-Intelligencer, February 22, 2001

But new power generation expected to be off the table

OLYMPIA -- In a year when state budget problems dominate and a delicate balance of power stymies major reform, energy is one of the few areas where politicians hold out hope for substantial legislation.

Lawmakers say a compromise is near that would boost conservation, reward efficiency and require use of wind, solar and other alternative renewable power sources. It gives environmentalists a nod by moving toward renewable energy supplies while giving businesses some tax breaks to increase electricity production.

But most lawmakers have given up on more contentious measures, such as dramatic steps toward greener energy sources and incentives to make it easier to build new power generators. They are unlikely to significantly loosen restrictions on new building or provide sales tax exemptions to those who do.

"There's no question that conservation and renewables will be signed into law -- absolutely no question. And there will be great celebration and hoopla," said Rep. John Pennington, a Republican from Battle Ground who heads the energy advisory council for the National Conference of State Legislatures. "However, we are leaving off of the table -- and there is great disagreement on -- whether or not this state needs new (generator) siting and new generation. And, what we do to entice that generation?

"I'm firmly convinced that without new generation, Washington state will suffer brown-outs in the next five years -- significant brown outs."

Dick Watson, power division director for the Northwest Power Planning Council, said beefed up use of renewable energy sources will help. But it won't be enough.

"It's got a very important role," Watson said. But "we're going to need some conventional generation as well."

Republicans want to meet that demand by building more natural gas generators. The GOP has pushed for significant tax breaks to lure investors into that market. But Democrats complain that would cost too much and simply shift the state's reliance to gas, another limited resource.

In the middle, and most likely for approval, is a modest proposal for changes in how the state licenses major natural gas generators.

Rep. Larry Crouse, a Spokane Republican who is co-chairman of the House energy committee, is developing a bill with the governor that would simplify the licensing process. Crouse's measure, HB 2131, would allow more companies to build power generators without review by the state Energy Facility Site Evaluation Council. They'd still have to get local approval and state permits. But Crouse would boost the threshold requirement for EFSEC review from 250 megawatts to 350 megawatts. (It takes about 1,100 megawatts to power Seattle.)

EFSEC, which advises the governor on whether to license major generators, was created 30 years ago to streamline the process. But these days, Republicans complain that EFSEC is an inefficient bureaucracy that doesn't balance economic issues with environmental concerns. A case in point, they say, was EFSEC's recommendation last week against licensing a 600-megawatt facility near the Canadian border.

"The state has been a roadblock," Crouse said.

Seattle Rep. Erik Poulsen, Democratic co-chairman of the House energy committee, said he would support the bill, "as long as it doesn't go too far."

"We need electricity but I don't want new power plants to be built at any cost to the environment," Poulsen said.

It's sure to go too far for some environmentalists. The NW Energy Coalition thinks the existing requirements are already too loose, said Mark Glyde, spokesman for the coalition.

For now, lawmakers are pointing to the apparent agreements on conservation and diversification as a good start, especially since they tend to disagree on some fundamentals.

"Republicans are looking more on the supply side and the Democrats are looking more on the conservation side," Crouse said. "But, generally speaking, I think we're not too far apart.

"We are actually a lot closer together than a lot of people would think," he said, adding that his committee probably will pass out eight or 10 energy bills by Monday. "There's some pretty good stuff out there."

Consider the progress on a measure to require more use of alternative energy sources. "The bill that nobody thought we could pass is almost ready to go," Poulsen said.

Requested by Gov. Gary Locke and supported by members of both parties, SB 6027 would require utilities to broaden their resources to include wind, solar, geothermal and other renewable sources besides hydropower.

With some exceptions, utilities and certain industries that produce their own power would have six years to cut their dependence on standard resources such as dams and coal by 5 percent. They could meet that standard through conservation, efficiency and using greener sources. In January 2012, the threshold would be bumped to 10 percent.

The goal, Locke says, is to protect the state from the kind of skyrocketing electricity prices it now faces due to over-dependence on hydropower. About 80 percent of the state's electricity comes from dams, according to state figures. Less than 3 percent is generated through non-hydro renewable sources such as wind, solar or biomass. The rest comes from coal, nuclear and natural gas plants.

"There was very little hedge to shortages and prices," Dave Danner, Locke's energy adviser, said at a recent hearing.

But business lobbyists complain that the bill would increase power rates because alternative energy sources tend to cost more than gas or hydro plants.

On the other side, environmentalists say the bill doesn't go far enough. The energy coalition's Glyde said Locke's proposal has too many exceptions and lacks enforcement or accountability.

His group supports a more ambitious bill, SB 5867, sponsored by Sen. Darlene Fairley, D-Lake Forest Park. That bill would require the 5 percent threshold within two years, not including credit for conservation. By 2015, utilities would have to rely on renewables for 20 percent of their production.

"There's great policy in that bill but it's doubtful that I can rally enough support around it to get it passed," Poulsen said.

On the conservation front, broadly supported legislation requires public buildings to become more energy efficient. Another measure offers a sales tax exemption for energy-efficient lighting products, clothes dryers and dishwashers bearing the "Energy Star" certification. Locke also seeks tax breaks for energy generators that use alternative sources of power, co-generators that use byproducts such as steam to drive other equipment and pollution control technology that could expand the use of older, dirtier plants.

That's not to say the core package is a done deal, or that anyone is entirely pleased with it. The bills still must make it through more committees and floor votes.

Democratic lawmakers are struggling to resurrect a measure to provide $2 million in power bill assistance to low income families. SB 5717 is stalled in the House budget-writing committee. Republicans say the $4.6 million that the federal government provides is plenty, given the state's overextended budget. Democrats say the GOP is holding the bill hostage for future negotiations.

While he thinks the funding package is critical, Poulsen called the progress in other areas "incredibly positive."