Northwest utility news proved—yet again—to be anything but boring in 2019.
The energy transition seemed to kick into another gear in 2019, with several groundbreaking emissions laws being enacted, except in Oregon, where a dramatic Republican walkout in the Senate successfully blocked a cap-and-trade emissions bill from its likely passage.
BPA steadied its finances in July when it announced that wholesale power rates would remain flat and transmission rates would increase by 3.6 percent for the two-year rate period that started Oct. 1. And despite Bonneville triggering a 1.5 percent Financial Reserve Policy surcharge for power rates in November, the region breathed a sigh of relief, because it was less than the rate of inflation, and less than the 2.9 percent increase projected earlier.
The age of batteries came into view. Utility modeling finally showed lithium-ion batteries could be cost effective, and integrated resource plans showed batteries being deployed over the next few years.
BPA's Flexible Spill Agreement went into effect in April. The new regime faced some early challenges, like maintaining the 120 percent total dissolved gas levels in the tailraces at both John Day and The Dalles dams while maintaining a healthy flow (CU No. 1901 ), and concerns that the added spill caused some adult spring Chinook to hold back, especially at Little Goose Dam (CU No. 1904 ). And while the impacts are still being analyzed, the spring spill was successful in keeping parties out of court (CU No. 1908 ), and BPA successfully avoided spill-related surcharges for its customers (CU No. 1898 ).
NuScale Power moved closer to building a small modular nuke, solar development in the region picked up, and the proposed Boardman to Hemingway transmission line entered its 12th year of development.
Microsoft and Puget Sound Energy officially parted ways, with the technology giant signing a contract with Chelan PUD for hydroelectricity. PacifiCorp will develop its first wind farm in Montana for Facebook, while announcing plans to accelerate closure of some of its coal plants.
All of the above were good stories, but they didn't make our annual top five list.
But before we reveal the top stories of 2019, we'd like to thank you for reading and supporting Clearing Up.
We've been publishing regional energy news for more than 37 years, a remarkable achievement for a tiny, niche publication, and we couldn't have done it without an engaged readership.
So before we step deeper into 2020, let us be the last to wish you a happy, healthy and prosperous New Year!
5) Colstrip 1 and 2 close and NW Energy buys out PSE share of Unit 4.
Puget Sound Energy and Talen Energy announced in June that they will be closing Colstrip units 1 and 2 at the end of the year. For a few months, this made the future look dark for the town of Colstrip, the Rosebud Mine and the aging coal-fired power plant.
But in December, NorthWestern Energy announced it was acquiring Puget's share of Colstrip Unit 4 for $1, along with separate deal to buy a 95 MW capacity stake from PSE in the 500 kV Colstrip transmission system if the Unit 4 sale is approved. PSE's 25 percent stake in Unit 4 would be worth $130 million to $140 million if the plant operates for another 20 to 25 years, NorthWestern said.
The deal was announced just after testimony in PSE's general rate case in Washington revealed that a $20 million repair could be facing Unit 4, "which is starting to show signs of metallurgical wear and degradation," the filing stated (CU No. 1931 ).
The sale may give Colstrip units 3 and 4 a lifeline, but they are far from safe. Talen Energy, the merchant-operator of the plant, remains on shaky financial ground, while Portland General Electric and PacifiCorp are also considering an early exit from the plant.
4) PGE kicks off its Smart Grid Test Bed project.
Portland General Electric launched the nation's most ambitious smart grid pilot program in July.
The $5.9 million Smart Grid Test Bed will include more than 20,000 customers in Hillsboro, Portland and Milwaukee and marries demand response with battery storage and distributed solar resources. The program will automate customer smart devices—such as thermostats, water heaters, electric vehicle chargers and batteries—to work in concert with PGE as it operates the grid.
With the potential for future capacity-constraints, PGE's test bed will be closely watched and could provide valuable insights for future demand-side management programs, which will likely become a major feature for some utilities.
3) The region gets serious about resource adequacy in mid-2020s.
Several studies had already been pointing to a concerning lack of dispatchable resources by the mid-2020s, but fears of future capacity shortfalls crystalized when cold temperatures and a tight energy supply pushed regional power prices on March 1 to levels that haven't been seen since the California energy crisis, with Mid-C prices hitting the price cap of $1,000/MWh before leveling out at around $800.
Natural gas prices also set a single-trade record and new highs, as utilities brought natural gas-fired power plants on line.
The price spikes were driven by a variety of factors. Natural gas supplies were constrained in the wake of the October rupture of West Coast Energy pipeline, near Prince George, British Columbia; the DC intertie was down for maintenance; and production from the federal hydro system couldn't ramp any higher because freezing temperatures limited low inflows at Grand Coulee Dam and the need to store water for spring fish operations (CU No. 1892 ).
The March 1 event loomed large in the region for the remainder of the year, as utilities began to focus on forecasted capacity shortfalls over the next few years. That latest study showed the Pacific Northwest could be facing a 3,000 MW capacity deficit by 2030 (CU No. 1933 ).
In October, an overflow crowd gathered for the Northwest Power Pool's Resource Adequacy symposium, where speakers rallied utilities to begin collaborating and working toward developing a solution to region's predicted capacity shortfalls (CU No. 1922 ).
2) Talk of breaching the lower Snake River dams grows louder, but also more collaborative.
After gaining momentum in 2018, the debate over removing the four lower Snake River dams to help endangered orcas seemed to settle into a collaborative zone. Rep. Mike Simpson (R-Idaho) kicked off the latest round of debates in a speech at the Andrus Center for Public Policy in April. Simpson wondered what it would take to remove the dams and rewrite the Northwest Power Act, while ensuring BPA's viability and protecting the interests of those who depend on the dams (CU No. 1899 ).
Some events of 2019 served to widen the gap between those favoring removal and those opposed to it, including an ECONorthwest study which found an economic benefit to removing the dams (CU No. 1913 ); a letter to Northwest governors from 55 scientists pushing for dam removal due to increasing temperatures and climate change (CU No. 1926 ); and resolutions by 27 utilities supporting the dams and raising concerns about increased carbon emissions, reliability and cost if they're removed (CU No. 1931 ).
Just before Christmas, the draft of Washington state's controversial independent report on impacts of removing the dams was released. Dam supporters criticized the report as unnecessary and unscientific, but some appreciated its neutral tone and its focus on opportunities for increased understanding (CU No. 1933 ).
1) Washington Legislature passes Clean Energy Transformation Act.
Senate Bill 5116, signed into law in May as the Clean Energy Transformation Act, commits Washington to a carbon-free supply of electricity by 2045, joining California, Colorado, Hawaii, New Mexico and New York in setting carbon-free electricity goals (CU No. 1900 ).
The new law specifies three mandates—utilities must eliminate coal-fired generation from their generating portfolios by the end of 2025; all electricity sold in the state must be carbon neutral by the start of 2030; and all electricity sold in Washington must be produced from renewable resources or non-emitting generators by the start of 2045.
In addition under CETA, incremental federal hydropower marketed by BPA and the corresponding RECs will qualify as eligible renewable resources for the state's RPS, which in 2020 increases the requirement on qualifying utilities of meeting 9 percent their loads with renewables to 15 percent. Bonneville identified, and Commerce approved in 2019, eligible efficiency upgrades at Bonneville, Chief Joseph, Cougar, Grand Coulee, Lookout Point and Palisades dams (CU No. 1911 ).
Rulemaking workshops conducted by the Washington UTC are now underway to implement CETA for investor-owned utilities, and by Commerce for consumer-owned utilities.