Regional utility moves quickly to implement clean energy law

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Puget Sound Energy officials say the goals outlined in the 2019 Clean Energy Transformation Act are achievable but will require long-term capacity expansion and also snapping up existing renewable energy sources on the market in order to meet demand. Photo: Freepik.com

One of the most significant public policy decisions made by state law makers in 2019 was the Clean Energy Transformation Act (CETA) – a measure intended to transition the state’s energy system away from fossil fuel-based electricity over the next 25 years and fully replace it with clean energy such as hydropower, wind and solar. One regional utility provider has wasted no time in setting a course to achieve the goals enumerated in CETA.

“We have not let the moss grow beneath our feet since the bill was passed,” Puget Sound Energy (PSE) Senior Vice President and Chief Strategy Officer David Mills said when describing the company’s efforts to meet the new requirements. “You have to have a structure and a strategy to make all this happen.”

Specifically: under CETA, Washington utility providers must offer 100 percent carbon-neutral electricity by 2030 and 100 percent clean energy by 2045. Utilities must also develop short-term and long-term implementation plans.

The Washington Utilities and Transportation Commission (UTC) is currently engaged in rulemaking to clarify the technical provisions in CETA, such as calculating incremental costs of the new law to utilities. It is soliciting comment on draft rules for its CETA rulemaking until June 2 and will hold a June 16 joint workshop with the state Department of Commerce on the incremental cost aspect.

Mills said PSE’s hope is for the rulemaking to conclude as soon as possible. “I tell my team: Every day we’re in rulemaking is a day we’re not putting a plan together or executing on deals for clean power.”

And while he is optimistic, the transition won’t come without challenges. The current plan includes a move to replace the power PSE currently receives from a Montana-based coal plant which will be unavailable to the company under a CETA provision that bans the use of coal power starting in 2025. That coal plant provides PSE 700 megawatts of electricity; the equivalent of what’s needed to power half the homes in Seattle.

Right now, Mills said PSE’s mindset is to “take advantage of the clean energy supply that’s out there (already).” The company recently made a purchase agreement for renewable natural gas with Klickitat County PUD generated by the the H.W. Hill Renewable Natural Gas facility. PSE will buy the equivalent of 161,189 megawatts for the first several years and then up to 556,835 megawatts through 2040. PSE has also signed an agreement with an Idaho tribe to get 50 megawatts from its hydropower facility and also expects to announce soon another agreement with a solar energy provider for 300-400 megawatts.

Additionally, earlier this month PSE finalized a five-year agreement with the Bonneville Power Administration which starts in 2022 and will provide access to 100 megawatts of surplus electricity.

Northwest Energy Coalition Policy Director Wendy Gerlitz said in a statement that the deal “represents an important next step in utilizing the region’s hydropower resources to integrate new, renewable resources into the Northwest electric system as it transitions away from fossil fuels.”

One primary concern is avoiding the situation California experienced in 2000 when an energy shortage led to high prices followed by temporary power outages in the northern part of the state. It is considerations such as these that in part drive PSE’s proactivity.

“I want us to get in front of it,” Mills said. “That’s why we’re acting now. There’s not enough transmission to make this (CETA) all happen. I know for a fact the region’s going to need to make investments…to reach these clean energy goals.”

One group tackling the resource adequacy aspect of the clean energy transition is the Northwest Power Pool (NPP), a voluntary organization of major utilities including PSE that has created a committee to develop a long-term plan for how utilities can meet future energy demand and avoid the same scenario as California in 2000. NPP intends to begin implementing the plan in 2021.

“It has to be a standard that’s forward-looking,” Mills said of the approach.

The state legislature this year also approved revisions to CETA requiring the UTC to meet annually with utilities to discuss short-term and long-term resource adequacy and potential CETA revisions.

On top of maintaining existing capacity, utilities will also have to find ways to incorporate clean energy into their resource portfolios without compromising the system stability that fossil fuels currently provide. For PSE, peak demand is around 5,000 megawatts, and Mills said that demand changes “not even by the day. It’s into the minutes. The dissonance between (power) generation and demand has always been there. But renewables have taken it to a whole new level.”

And while hydropower is a clean energy resource that also provides system stability, Mills is skeptical that further hydropower capacity is possible at existing facilities. “They don’t have an unending supply of water.”

Some Pacific Northwest utilities are exploring the possibility of small nuclear modules, which are mobile nuclear reactors that generate 300 megawatts (MW) or less, compared to traditional nuclear power plants that generate 1,000 MW or more. Mills said that technology is not something PSE is looking at due in part to “a long, bad history” in the region, including the 1992 closure of the Trojan Nuclear Plant in Saint Helens, Ore. due to safety concerns. Its construction was also marked by public opposition.

“The costs would have to be so compelling as to reverse existing public opinion,” Mills said.

Yet another component of the company’s strategy entails voluntary programs that allow households to switch to solar and other green energy sources. Among the company’s current solar power sources is Skagit Community Solar which was financed by PSE and allows multiple people to access the electricity that’s generated.

While some customers might pay to have solar panels added to their roofs, Mills said in some cases PSE or a third party will cover the installation costs.  “We need to find a way to make it more attractive to customers,” he said of these voluntary options. “I believe there is demand there.”

Despite the ongoing challenges, Mills is confident PSE will be able to achieve both the 2030 and 2045 benchmarks. “The West Coast move to a green power agenda really will propel transformation in the technology.”

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