Washington's investor-owned utilities are beginning to reshape their generating portfolios to meet the state's Clean Energy Transformation Act, and to fill capacity deficits left from the loss of the Colstrip Generating Station.
Puget Sound Energy is preparing to test the market for capacity and demand response programs with a pair of requests for proposals, and Avista on June 26 started its hunt for renewable energy by releasing an RFP for 120 aMW.
NorthWestern Energy also released an RFP on June 26 looking for energy and capacity proposals of 25-300 MW capable of delivering to a point of interconnection on NorthWestern’s system, beginning in the summer or fall of 2020.
Avista says the RFP will help satisfy the new state policy, and will likely be the first of several it will need to meet a capacity deficit in 2026 when it loses its share of Colstrip.
Washington IOUs and NorthWestern Energy will be shopping in a crowded market. Both Portland General Electric and PacifiCorp have the need for renewable energy and capacity, and will be launching their own RFPs soon.
PSE, Washington's largest utility, has enough renewable energy to meet the state's renewable portfolio standard through 2023, but it has growing capacity deficits starting next year that balloon in 2025, when the utility will drop coal-fired resources from its portfolio.
The potential sale of PSE's interests in Colstrip Unit 4, which is awaiting Washington UTC approval, and the removal of Colstrip Unit 3 from its portfolio after 2025 mean the loss of 370 MW of capacity. That same year, the utility's contract for up to 380 MW from TransAlta's coal-fired Centralia station ends, although that cap will drop to 300 MW during the last 12 months, December 2024 through December 2025 (CU No. 1554 ).
The company is forecasting a capacity deficit of 201 MW (2025), 753 MW (2026), 935 MW (2027) and 997 MW (2028) before hitting 1,048 MW in 2030. The utility forecasts a small deficit over the next three years of 46 MW (2021), 23 MW (2022) and 16 MW (2023), and plans to issue a separate RFP for short-term resources to meet those needs.
A draft of the all-source RFP was filed with WUTC on May 4 that lays out what the utility calls its "preferred glide path" for acquiring capacity.
The glide path shows PSE acquiring 200 MW in 2023 and in 2024, with another 353 MW in service at the end of 2025. "While this glide path demonstrates one way that PSE could successfully meet its capacity needs, PSE will consider any proposal consistent with requirements described in this all-source RFP for a resource or combination of resources that help meet all or part of the identified resource needs," the draft IRP says.
PSE says it will consider proposals for renewable and baseload electric generation, capacity-only resources, and storage resources from a wide variety of technologies and fuel sources. The utility says it will "primarily assess a resource's contribution to capacity by its ability to meet its winter peak," but also has seasonal and daily capacity needs.
The utility's models use an "effective load carrying capability" that compares peak capacity contributions of different resources. The comparison of "generic resources" shows wind imported from Montana and pumped storage as scoring the best.
With the possible exception of any potentially available Colstrip transmission, PSE currently has no other available transmission rights, the draft RFP says. Given the transmission constraints associated with delivering peak capacity to the utility's load center, the draft RFP says the utility "strongly prefers proposals for resources that are located on PSE's system or that can demonstrate that the project has secure long-term firm delivery to PSE's system."
The all-source RFP will also consider battery storage systems up to 100 MW, with a "strong consideration to energy storage proposals with the ability to dispatch over a longer period of time." The utility is working to identify potentially "favorable locations on its system for siting an energy storage project, which will most likely be west of the Cascade Mountains," the draft RFP says. PSE will post the findings of the study on its website when they are available.
PSE also filed a draft RFP for demand response programs that can be delivered from 2021 through 2026.
The utility wants to be able to call weekday peak hour events, typically between 7 a.m. to 10 a.m., and 5 p.m. to 9 p.m., from Nov. 1 through Feb. 28/29. Although it may call DR events outside these time windows, bidders will not necessarily be expected to provide the same level of curtailment, the draft says.
WUTC could approve PSE's RFPs in early August, and release a final RFP on Aug. 14. Bids would be due Sept. 4, with a short list released in the second quarter of 2021, according to the utility's schedule.
Avista and PSE have delayed filing 2020 integrated resource plans in Washington while the state works on CETA rules.
But Avista filed an IRP in Idaho that shows a need for winter peaking capacity starting in 2026, after the utility losses 222 MW from Colstrip and a power purchase agreement with the 257 MW Lancaster combined cycle natural gas-fired plant expires (CU No. 1943 ).
The 2020 IRP's preferred portfolio includes 500 MW of new wind capacity by 2027, including 300 MW from Montana; 175 MW of "long-duration" pumped hydro storage by 2026; and 534 MW of removed and retired fossil-fuel generation by 2035.
The pumped hydro storage and 200 MW (96 aMW) of Montana wind by 2026 would mitigate the losses of Colstrip and Lancaster.
The utility says its search for 120 aMW of renewables is "to offset market purchases and fossil-fuel thermal generation," and that it is consistent with Avista's 2020 IRP, which says "the utility will consider acquiring additional resources if such resources have lower long-term cost than electric market alternatives."
The RFP says that "energy delivery from all proposed projects must be commercially available no later than December 31, 2023."
Avista will consider proposals that include storage attached to any renewable resources, according to the RFP. Bids will be due by July 22.
The utility plans to address its capacity needs through a separate request in the future, the RFP says.
Oregon's biggest IOUs are also in need of new renewable energy resources, as well as capacity.
PGE's updated 2019 IRP shows a capacity need of about 250 MW beginning in 2021, increasing to about 270 MW in 2023 and reaching 697 MW as contracts begin expiring at the end of the action plan window in 2025.
PGE is filling its 2021 capacity needs through bilateral negotiations, and in May the utility announced a five-year contract with Douglas County PUD in Washington for between 100 MW and 160 MW from Wells Hydroelectric Project. That PPA trimmed the utility's projected 2021 capacity deficit to between 90 MW and 150 MW.
Later this year, PGE is likely to release an RFP seeking 150 aMW of renewable energy, and another for "non-emitting dispatchable capacity resources" that would also take into consideration the long lead times needed to develop a pumped hydro storage project (CU No. 1937 ).
PacifiCorp plans to release an all-source RFP in July that will seek up to 1,823 MW of new solar resources that will be co-located with 595 MW of new battery storage capacity, and 1,920 MW of new wind resources (CU No. 1952 ).
Editor’s note: A link was corrected to the draft all-source request-for-proposal filed with the Washington UTC in May 2020.
Editor's note: This story has been corrected to reflect that NorthWestern Energy's RFP does not require a project to be located within its balancing authority area.