This legislative session state lawmakers approved SB 5116 sponsored by Sen. Reuven Carlyle (D-36) that puts Washington on a path to 100 percent clean energy by 2045 and imposes penalties for violations. The inclusion of rate caps and other bill provisions came after public and private utilities warned against undermining the system baseline stability provided by carbon-producing energy sources, along with carbon-free hydropower. However, some utilities say at this point that agency rulemaking will determine whether the bill accomplishes its intended goal.
Providing the backbone of Washington’s electricity is its hydroelectric system that makes it not only the top producer in the nation, but also responsible for generating one fourth of all hydroelectricity in the U.S. Hydropower accounts for more than 65 percent of all electricity produced in the state. In fact, Washington’s hydroelectric dams generate so much energy that it is exported through the Western Interconnection to other states including Oregon and California.
One of the potential problems with SB 5116 is how the transition away from fossil fuel-based electricity could affect Washington should it suffer a low snowpack level year as it did in 2015 and 2001; unusually hot weather can also drive higher energy rates.
“I think it’s been a concern for all the utilities in the region,” Puget Sound Energy Natural Gas and Electric Development Manager Benjamin Farrow said. “When you look at low hydro years, where does this capacity come from? This is kind of a long-term thing, so we still have some time to work on that.”
As the largest energy utility in the state, PSE has more than one million customers and generates almost half of the power it provides to ratepayers. PSE is also among the northwest utilities that participate in California ISO’s Western Energy Imbalance Market (EIM), a bulk power trading market. In the wholesale market, the last generating unit to be turned on to meet demand determines the price of energy. However, currently in places like the mid-Columbia Hub, carbon-based electricity sets the price most of the time.
In 2025, utilities must cease using electricity generated by coal. By 2030, they can only use or generate 100 percent carbon-neutral electricity. To do so, they must turn to clean energy sources such as solar and wind. The bill excludes the use of energy generated by new or expanded hydroelectric facilities, though efficiencies or improvements to current facilities are allowed to be used as part of that transition toward clean energy.
“As those (coal plants) retire off, that capacity replacement is an important issue for the region,” Farrow said. “With the clean energy legislation, our capacity options become more limited.”
Nevertheless, Bonneville Power Administration’s (BPA) Washington liaison Elizabeth Klumpp told Lens that the bill’s final language provides contingencies to prevent blackouts or shortages due to insufficient power supply. BPA is a federal agency created in 1937 that manages hydroelectric dams on the Columbia River.
One of the contingencies in SB 5116 comes through a report to be conducted regularly by the state Department of Commerce on the system reliability; if the report shows the system is threatened, the governor is authorized to waive penalties for violations by declaring an energy emergency.
“I could envision in a very low water year those regulators might perceive that to be case,” Klumpp said.
To track snowpack levels and forecast water trends, BPA employs short- and long-range planning teams, along with streamflow tracking by other federal agencies. During heatwaves with increased demand, BPA has a variety of options to respond, including the delay of maintenance projections done in conjunction with other the federal hydropower project owners and the Columbia Generating Station nuclear facility.
Under SB 5116, utilities can also apply for a temporary six-month exemption to the law’s standards. Finally, the state Utility and Transportation Commission (UTC) can waive penalties for purchasing carbon-producing electricity if complying with the law would jeopardize a utility’s ability to meet North American Electric Reliability Corporation (NERC) standards.
“There is recognition by policymakers that time is needed and acknowledged to make this transition,” Klumpp said. “I don’t think any of us know what it will look like in 2045, but I think there is some understanding of the steps that will happen in the next 10 years.”
Another provision imposes a cost-cap which allows utilities to halt implementation if doing so requires more than a two-percent increase in retail revenue.
“What we read is ‘You need to make efforts…but those effort should be efficient and not at cost to consumers,’” Farrow said. “I think that points to the importance of the rulemaking process around this, how that implementation would go.”