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Help Is On the Way for Power-Tight West by Bill Virgin Seattle Post-Intelligencer, February 16, 2001

New generating plants in Washington and Oregon set to come online by 2002

Most of the lights are still lit, despite the West Coast power crisis.

For now, emergency curtailments minimize the impact on everyday lives. In the near-term, conservation efforts will help reduce demand, buying a little more time before the next big crunch. But, ultimately, the region needs more power plants.

That help is on the way.

After a decade of dormancy, Washington, Oregon and California are seeing a flurry of proposals, permit-filings and actual ground-turning for new power plants.

In the last 10 years, Washington's Energy Facility Site Evaluation Council, which reviews thermal projects (coal and natural gas) of more than 250 megawatts, had received just five power generation applications. It has approved four, and has three more requests for site studies in advance of applications likely to be filed later this year.

All would be natural gas-fired.

Most of the new power plants should start contributing megawatts in 2002, helping ease the crunch and returning relatively low-cost power to the region. By one estimate, projects representing nearly 2,900 megawatts -- roughly enough to serve all Seattle homes -- are permitted and under construction in Washington and Oregon. An additional 9,700 megawatts could be delivered in projects that have been proposed or are still in regulatory review.

John Scadding, senior economist with the California-based consulting firm Wilk & Associates/LECG, estimates that projects in his state representing nearly 6,300 megawatts have already been approved by regulators, with about 3,000 megawatts potentially online by this summer.

Projects with an additional 6,000 megawatts of generating capacity are pending approval, and Scadding estimates that projects that would provide 4,800 more megawatts are expected to be filed.

It's difficult to say exactly when the plants might start feeding into the overtaxed power grid. Some have been on the drawing board for years and may never be built. FPL Energy Inc. bought a generating site at Weyerhaeuser Co.'s former pulp mill in Everett more than two years ago, but the Florida-based company says the project is still in development.

"Should the next couple of years see good hydropower conditions, mild winters and cool summers, market prices could fall substantially," says a report from the Northwest Power Planning Council.

"If that were to be the case, some of the currently anticipated new generation could be delayed."

Regulation and legislation also will determine what projects get built and when. While officials in several states have pledged to speed up review of projects, debate over the future of electricity market deregulation may cause delays.

"If you're investing $200 million to $300 million in a new power plant, you want to have some reasonable certainty on the outlook" for the markets, said Bill Lotto, executive director of the Lewis County Economic Development Council.

Yet the certainty that electricity is expensive has people looking at every idea for the short- and long-term. Companies are revving up co-generation facilities, which produce both electricity and steam used in manufacturing. The city of Tacoma has permission to fuel a municipal steam plant with old roofing material.

King County is testing a fuel cell that runs on a gas byproduct from its Renton wastewater treatment plant. There's even an idea of wiring together all the emergency diesel generators at hospitals, computer centers and other businesses for use when demand spikes.

Here's a look at some of the present sources of electricity in the region's portfolio, and some of the options for new plants now under study:

Combustion turbines: Using natural gas as a fuel to turn a turbine is proving to be by far the most popular option; in fact, all but one of the significant proposed generation projects in Washington and Oregon use gas-fired turbines. California is relying just as heavily on natural gas for future generating capacity.

The attractions are that gas is relatively abundant, usually inexpensive and cleaner than coal, which has been a mainstay in power plants in the past. The gas turbines can also be brought to market quickly, and new combined-cycle combustion turbines, which recover the heat from exhaust gases to drive a steam turbine, have boosted their efficiency.

But the heavy reliance on natural gas is starting to make some nervous. Demand for home heating and power generation has driven up the price of natural gas, which sold for $1.50 per million Btu in the summer of 1998 but was selling at $4.60 in September 2000, the power planning council says.

A $2 increase in natural gas prices can boost power prices by $15 to $22 per megawatt hour.

Meanwhile, others question whether the region has the pipeline and storage capacity to handle the increased gas demand.

"If all the proposed (projects) come online, we're going to have a gas shortage," state Utilities and Transportation Commission Chairwoman Marilyn Showalter warned.

Wind: Once thought of as an exotic -- and expensive -- alternative technology, wind power is suddenly competitive with most other forms of energy. The cost of wind power has dropped from 20 to 25 cents a kilowatt hour to less than 6 cents, according to Steve Hauser at the Pacific Northwest National Laboratory in Richland. New blade designs take advantage of changes in wind speed, are more reliable and don't have to be replaced as often.

Though limited to some locations and by weather conditions, wind power supplements the region's venerable hydro system.

Hydroelectric power: Don't look for any new dams to be built, but the dams that make up the backbone of the region's historically low-cost power system have more to give.

The National Hydropower Association estimates that existing dams in Washington, Oregon, California, Idaho and Montana could generate 8,800 more megawatts with equipment upgrades and other improvements. Turbines could also be installed at dams that don't already have them.

The obstacle, association spokesman David Tuft said, is a cumbersome and lengthy process for renewing dam licenses. The delays and uncertainty of the process discourages operators from making those upgrades, he contended.

Fuel cells: The Northwest has been a major center of research and development of ways to harness the reaction of hydrogen and oxygen to generate electricity. Fuel cells are seen as part of a larger strategy known as distributed power, in which fuel cells, microturbines and other small generators produce power for neighborhoods or even individual homes and businesses, and also to feed the larger grid.

While demonstration units are now being sent out for testing, fuel cells aren't yet competitive in price. Manufacturers hope further refinements and mass production will drive down the cost.

Another concern is that hydrogen for use in most fuel cells will come from fuels such as natural gas, which has also become far more expensive. Even so, Pacific Northwest National Laboratory's Carl Imhoff predicted that fuel cells will "begin to be part of capacity in the next five years."

Coal: Coal represents more than half of the nation's generating capacity, and coal-fired plants in Montana and Washington are important portions of the region's core portfolio. But environmental concerns have limited coal's appeal as a way of meeting growth in electricity demand. Indeed, when a consortium of utilities sold a coal-fired plant in Centralia to Alberta-based TransAlta, some environmentalists lobbied the new owner to convert the plant to natural gas.

Yet coal may still get a larger role, if not on the West Coast, then in the West, at locations close to mines and using low-sulfur coal and clean-burning technologies. The governor of Utah, for example, has discussed capacity increases at three coal-fired power plants in that state.

Nuclear: While the energy crunch has some thinking about reviving plans to finish nuclear plants in this state, it's a long shot. Nuclear power carries heavy political baggage because of environmental concerns.

Nuclear power in the Northwest also has the financial black eye left by the Washington Public Power Supply System's botched plan to build five nuclear plants. One went into operation, but four were terminated while still under construction and far over budget.

The debacle led to the largest municipal bond default in American history.

P-I SERIES

Wednesday: Power crisis was long in the making

Thursday: Summer blackouts possible

Friday: Energy conservation is the first step