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Avoiding an Energy Crunch by Editors The Oregonian, Op/Ed, December 10, 2000

Calling for voluntary conservation may avoid power crisis,
but utilities should be building a diversified energy supply

If the arctic front that has sent a big chill throughout the Northwest lingers, it may turn out to be the Grinch that stole Christmas.

Nobody as yet has called for pulling the plug on the 90-foot Christmas tree at Pioneer Square, but the governors of Oregon and Washington are asking everybody to conserve electricity over the next four or five days in actions that, at the very last, could take some of the glimmer out of holiday display lighting.

It's been more than 25 years since Oregon experienced the kind of energy crunch that inspired a governor to ask businesses and citizens to make major sacrifices in the way they use electricity. In 1973, Gov. Tom McCall initiated a ban on outdoor display lighting in Oregon on the theory that if commercial signs went dark, then, and only then, would people conserve at home.

It worked.

Govs. Gary Locke of Washington and John Kitzhaber of Oregon stopped short of calling for a lighting ban on Friday, but both asked Northwest residents to cut back on their use of electric space heaters and water heaters -- and to turn on Christmas lights after 8 p.m. and turn them off before going to bed.

Northwest energy planners, at the recommendation of the Regional Emergency Response team, have issued a warning for a so-called Alert 2 -- an emergency condition in which the Northwest's electricity supply can't meet demand under business-as-usual practices. One of the reasons for this emergency is the fact that the Northwest cannot count on California utilities to send it surplus energy as they usually have done during winter months. California has a major energy crisis of its own to combat.

Oregon's condition, for now, is not as dire, but that's not to say that the energy crunch the Northwest is experiencing is just a passing fancy. The region's energy supply picture over the next five years is bleak, given the demands of a growing economy and population.

Like California, Northwest utilities, anticipating a deregulated energy market, have not invested nearly enough in new power supply resources. Moreover, there has been little incentive in the new energy commodity market for independent energy producers to build a diversified energy portfolio, or to invest in energy conservation programs. Utilities, for the most part, have become energy buyers, not developers.

Energy prices on the open market have never been crazier. Last week, the price of natural gas, the fuel used to fire gas-fired turbine generators, was the equivalent of $280 a megawatt-hour. Last year, electricity purchased from gas-fired power plants cost utilities about $50 a megawatt hour.

Last Friday, some Northwest utilities, staring deficits in the eye, discovered they had to pay as much as $5,000 a megawatt hour for electricity from the spot market. Four days earlier the spot market price was $700. Volatility has been the norm in the West Coast energy exchange since early last summer.

Even after this cold crunch abates -- when perhaps warmer and wetter weather takes its place -- Northwest utilities and the federal Bonneville Power Administration should lay plans for promoting greater diversity in the region's energy portfolio.

That means investing more dollars in wind, solar and geothermal projects so that the Northwest doesn't become so dependent in the future on the hydroelectric system or on fossil fuels.