A new campaign to change the state Energy Independence Act was launched Thursday in the Mid-Columbia to prevent rising electricity rates to pay for unneeded renewable energy.
Mid-Columbia state legislators, chambers of commerce, ports, business organizations, cities and public utility districts are backing the effort to prevent or delay increased electricity rates.
The group Citizens for Protecting Our Washington Energy Rates, or POWER, wants to change the Energy Independence Act, which was created by Initiative 937.
It requires utilities with at least 25,000 customers to buy at least 3 percent of their power this year from eligible renewable resources, such as wind and solar, and increase that to 9 percent in 2016 and 15 percent in 2020.
However, utilities, such as the Benton Public Utility District, already have ample power under contract and would have to buy additional power that it doesn’t need or renewable energy credits.
To meet the 2016 requirement, Benton PUD will need to spend $1.5 million to $3 million a year for credits for renewable energy produced elsewhere, said Jim Sanders, general manager of the Benton PUD. Buying credits is expected to cost less than buying the unneeded power.
“I imagine taking $1 million and putting it into the trash barrel and burning it,” because customers will see no benefit from it, he said.
It has enough power already under contract to meet customer needs for 15 to 20 years and possibly longer, Sanders said.
That’s in part because demand for power generally has decreased or been flat as a result of the difficult economy statewide.
That was not anticipated when Initiative 937 was passed by just under 52 percent of voters in 2006 and demand was expected to grow to match the required percentages of eligible renewable power.
Benton PUD buys primarily hydropower, which cannot be counted toward the renewable requirement.
POWER plans to introduce bipartisan legislation that would allow utilities to delay buying power from eligible renewable sources until their demand grows enough that they need the power.
Then the additional power would be bought from eligible renewable sources, which most likely would be wind.
“We don’t want a utility to be forced to buy power from an alternate source until it has used up what it already has,” said Steve Simmons, chairman of POWER and owner of The Country Gentleman restaurant in Kennewick.
Bonneville Power Administration rates now are $28 per megawatt-hour and future wind power rates are estimated at $75 to $125 per megawatt-hour, according to the group. Solar is projected to be more expensive at $180 to $270.
“We’re replacing $25 power with $80 power,” said Tom Mackay, general manager of AgriNorthwest, which has farms in Benton and Walla Walla counties.
The additional expense to meet quotas for eligible renewable sources initially might add $1 to $3 a month to Benton PUD residential customer bills.
But customers also could see the increased costs as businesses cope with higher electric bills and the ability to continue to attract businesses to the Mid-Columbia based on the region’s attractive power rates, said POWER supporters.
The average restaurant spends $20,000 a year on electricity, Simmons said.
“I’m concerned about that,” he said. “It’s a tough business with narrow margins.”
For AgriNorthwest, which has high power demands to pump irrigation water, rising power rates means taking a look at cutting family wage jobs and raising food costs, Mackay said.
Franklin County PUD and Richland city utilities also will soon be affected by the Energy Independence Act. Franklin County expects to have enough customers to be covered by the act in 2014 or 2015, and Richland likely will hit that many customers this year. Each will then have five years to start meeting qualified renewable resource requirements.
“Forcing ratepayers to buy wind power that they don’t need is a costly, unaffordable transfer of ratepayers dollars to wind power corporations, bad public policy and should be stopped,” wrote Ed Brost, Franklin PUD general manager on the POWER website.
POWER, which was organized by the Tri-City Regional Chamber of Commerce, also will be recruiting other chambers of commerce and utilities across the state to support changing legislation.
The group could have proposed that hydropower be included as an eligible renewable resource under the act, but believed allowing utilities to delay buying wind, solar or other eligible renewable resources until needed would be more likely to pass the Legislature.
“We don’t want to gut it,” Simmons said. “We just want to find a solution to its unintended consequence, which is higher rates.”
A similar bill was introduced late in the last legislative session. But it became a “Christmas tree” bill with other provisions added to it, making it more difficult to pass.
By attracting chambers, utilities and other interests across the state to back the bill proposed by POWER, supporters of the bill plan to build a coalition that can help persuade individual legislators to support the bill as written, Sanders said.
POWER also is looking for the support of individuals and has an online petition that supporters can sign at www.wapower.net to build legislative support.
Sens. Mike Hewitt of Walla and Jerome Delvin of Richland and Republican Reps. Brad Klippert of Kennewick and Terry Nealey of Dayton, all Republicans, attended a news conference Thursday supporting POWER.
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