Wild Horse

Wild Horse wind project.

The Washington UTC has given the state's investor-owned utilities until 2021 to file their next integrated resource plans, which had been due Nov. 15 of this year. The extension will allow the commission time to develop the regulatory protocols required under the state's newly enacted Clean Energy Transformation Act (CETA).

Puget Sound Energy, Avista and Pacific Power must submit draft IRPs by Jan. 4, 2021, and their final plans by April 1, 2021, according to commission orders issued Nov. 7. Rather than file IRPs, PSE will file a progress report on Nov. 15. Avista filed its progress report on Oct. 25.

CETA went into effect May 7, when the IOUs were already well into IRP modeling and planning. Delaying the IRPs will allow WUTC time to write the clean energy action plan, as required by the act, as well as work out the rules and prices for the state-mandated social-cost-of-carbon adder.

"Without this exemption, staff and other parties would find themselves spending resources reviewing IRPs that are based on current rules that don't conform to the requirements of the new legislation," WUTC staff said in its petition for the delay. "The IRPs would have limited future relevance, and engaging in their review would divert resources that could otherwise be used in developing future rules."

The delay comes as the region is facing looming capacity deficits starting next year as coal-fired power plants are retired amid concerns that utilities may not be able to rely on market purchases to meet their peak needs. A study done by Energy and Environmental Economics says that with 3 GW of planned coal retirements in the region, the Northwest will need to develop 8 GW of new capacity, or 730 MW annually, by 2030.

PSE's 2017 IRP showed the utility with a capacity shortfall of 272 MW starting in 2022, when the coal-fired Colstrip units 1 and 2 are shut down. That need climbs to 351 MW in 2023 and 486 MW in 2024 before reaching 2,011 MW in 2037. Puget currently relies on the market for about 1,500 MW of purchases to meet peak demand.

Avista is looking at a winter-peak deficit of 14 MW in 2026, climbing to 302 MW in 2027 and 325 MW in 2030, according to 2019 IRP stakeholder meeting notes.

PacifiCorp will lean on the market to meet the bulk of its summer and winter peaking capacity needs over the next decade, and doesn't see capacity shortfalls until later in the decade, according to its final 2019 IRP filed with Oregon regulators on Oct. 18 (CU No. 1925 [10]).

Randy Hardy, former BPA administrator and current principal at Hardy Energy Consulting in Seattle, said the delay was an "inevitable reality of the Washington legislation."

"I think it's unfortunate, but necessary," Hardy told Clearing Up. "I don't think any of the IOUs can do much until they know what the resource acquisition rules will be. This whole social cost of carbon is a good example. We don't know how it will be applied. Utilities think it will be in the planning stages, and the environmental community says it should apply to operations as well."

The Sierra Club worried that IOUs could now acquire natural gas-fired power plants before the commission has a chance to review their procurement strategies.

"We're concerned that fossil-fuel-friendly utilities might use this delay to sneak in risky investments in fracked gas plants without proper oversight," Doug Howell, senior campaign representative for the Sierra Club, said in a statement.

PSE has a short list of 23 energy projects that responded to the utility's 2018 all-source request for proposals, but has not announced that any contracts have been signed. Solar, wind and battery projects dominate the list, but two natural gas-fired proposals totaling 765 MW survived the cut (CU No. 1913 [15]).

Hardy didn't think that any of the IOUs would be acquiring natural gas until WUTC works through rules for the clean energy action plan and social-cost-of-carbon adder, but speculated that they could still acquire non-emitting resources during the interim. The state's IOUs will be under more pressure to acquire dispatchable capacity resources pretty quickly after 2021, he said.

"I think it's an unfortunate reality of what the Washington IOUs have to deal with," Hardy said. "They can't proceed with this kind of degree of uncertainty."