In power play, customers will pay
Roger Nyquist | Albany Democrat-Herald | democratherald.com
Here’s a little history lesson that puts a spotlight on our expensive future if PGE, PacifiCorp and environmentalists have their way. Oregon ratepayers will be paying more for electricity and getting less in return if the Legislature rubber stamps the backroom deal that the big investor-owned utilities and enviros hammered together (HB 4036).
How do we know? Well, consider what happened the last time the Legislature required that PGE and PacifiCorp must meet a certain percentage of their electric generation using select renewable energy sources (wind, solar and geothermal power, but not the clean, sustainable hydro power Oregon has in abundance). The state’s 2007 “renewable portfolio standard” set a goal of 3,000 megawatts of wind, solar or geothermal.
In the years since passage, PGE undertook two projects that are worthy of examining. The Tucannon Wind Farm was designed to help meet the 2007 RPS requirements. The Carty Combined Natural Gas Plant was not. Both cost roughly the same, a little over $500 million each.
What did ratepayers get for these half-a-billion-dollar investments? Did they receive the same new energy capacity? Not at all. Wind, as you may have noticed, doesn’t blow all the time. So you have to factor in the “actual capacity” of the Carty combined cycle natural gas plan vs. that of the Tucannon Wind Farm. Carty operates at 70 percent capacity and produces 308 megawatts. Tucannon, by contrast, operates at 37 percent and produces only 98 megawatts. In other words, PGE has to build 3.14 wind farms similar to Tucannon to equal the kilowatt production of one Carty gas plan. It would cost $1.67 billion to build three-plus wind farms versus $514 million for a gas-fired plant similar to Carty. That’s a cost difference of $1.133 billion for 308 megawatts.
PGE and PacifiCorp have been spending more for less – much less – energy under the existing RPS law. But don’t worry about PGE and PacifiCorp. They can charge ratepayers for that cost difference and tack on a guaranteed profit for their shareholders in the bargain. Nice for the PGE and PacifiCorp; not so nice for you, their ratepayers.
And this will only get worse under the deal that PGE and PacifiCorp reached behind closed doors with the environmentalists. Consider what it will cost to add the additional 3,000 megawatts of RPS mandated renewable power called for in the deal. If you project the cost of the additional 3,000 megawatts required in the deal, the difference totals $11.04 billion – an additional $11.04 billion paid for, once again, by ratepayers.
Leaving future Oregon ratepayers holding the bag for an extra $11.04 billion would be nervy enough, but PGE and PacifiCorp managed to include several special goodies for themselves in the backroom deal. They would reverse earlier PUC decisions that saved Oregon electric customers tens of millions of dollars not just for one year, but for years into the future.
Again, nice for PGE and PacifiCorp; not so nice for their customers.
Roger Nyquist is chairman of the Linn County Board of Commissioners.
URL to article: https://www.wind-watch.org/news/2016/02/20/in-power-play-customers-will-pay/