Bill would ease utilities' energy targets

When it comes to Washington state's electrical grid, how green is green enough?

That's the question posed in the state Legislature, as utilities and some of their biggest customers take aim at a 2-year-old state initiative meant to spur renewable-energy development.

Supporters of the changes, sponsored chiefly by Sen. Chris Marr, D-Spokane, say they want to preserve the initiative's goal without forcing utilities to pursue costly new power projects that drive up electricity bills. While Marr predicted his bill would pass the Senate, it faces tough obstacles in the House.

The initiative's backers, including environmentalists and the wind-power industry, say the changes would gut the initiative, relieving pressure on utilities to pursue cleaner energy.

Initiative 937, was designed to force utilities to get a percentage of their power from new renewable energy, such as wind turbines or solar panels. It starts in 2012, at 3 percent of the power for medium and large Washington utilities. In 2016 it would rise to 9 percent, peaking at 15 percent in 2020.

When 52 percent of voters approved the initiative in 2006, Washington joined a growing number of states with renewable-energy quotas. There are now more than 25 states with green-power quotas, including Oregon, California and Montana.

A number of Washington utilities already have met the 2012 benchmark, but most would have to buy new power to meet the final goals, according to an analysis by the Renewable Northwest Project, a nonprofit backed by the renewable-power industry.

Marr's bill, Senate Bill 5840, would make it easier to hit the targets.

• Slow-growing utilities would have to buy enough renewable energy to meet new demand for power, rather than a higher fixed percentage set in the initiative. For example, if demand for a utility's power grew by 10 percent by 2015, it would only need to have 10 percent renewable power.

• Utilities could count power from small hydropower projects — — less than 30 megawatts — as well as power plants built before 1999 that burn plant waste, such as wood chips. One megawatt is roughly enough to light 680 Northwest homes.

• Utilities could count renewable power from throughout the Western energy grid, rather than just the Northwest.

• Power saved by extra spending on conservation, such as programs to give away fluorescent light bulbs, could be counted toward the renewable-power quota.

Marr, who voted for the initiative, said these measures would encourage more conservation and would protect slow-growing utilities from having to trade existing, cheaper power sources for more costly renewable ones just to meet the quota. To ease complaints from environmentalists, he also added a 21 percent target for 2025.

Without the change to accommodate slow-growing utilities, the result for some could be "a rate shock to ratepayers and industrial users," Marr said.

Marr's approach has won the endorsement of many utilities, including the Public Utility District Association, which represents public-power agencies around the state.

Clark Public Utilities in Clark County estimates it would have to spend $217 million between 2012 and 2028 to buy renewable energy to meet increased demand. But if demand grows slowly, it claims, it could have to pay an additional $69 million to purchase "renewable energy credits" — essentially paying for green power that it won't use.

The initiative unfairly tilts toward the Northwest wind-power industry, giving it the upper hand on utilities that need to buy wind power to comply with the law, said Clark governmental-affairs manager Dean Sutherland.

The initiative's backers say they support minor tweaks, such as allowing utilities to count renewable power they buy from around the West.

But when you add up all the changes in Marr's bill, it would effectively nullify the initiative, slashing the amount of new renewable energy needed by power utilities in 2015 to zero, according to an analysis by the Northwest Energy Coalition, a Seattle-based energy-conservation group that helped write the initiative.

"We don't think the law is broken. We think, in fact, it's working," said Nancy Hirsh, coalition policy director.

Initiative supporters say it already has a relief valve for very slow-growing utilities and in cases where power rates rise too high.

The region's renewable-energy quotas would add an average of $3 per megawatt hour to rates for Washington utility customers by 2030 — roughly 3.5 percent more than power rates without the quotas, according to estimates by the Northwest Power and Conservation Council, a federal agency.

But the impact could vary a lot by utility, depending partly on how much renewable power they already have, said Massoud Jourabchi, who oversees the council's economic studies.

A major hurdle to bill proponents is a skeptical Rep. John McCoy, D-Tulalip. He heads the House committee that would consider the bill and controls whether it will even get a hearing there. He sides with initiative backers.

"I'm not fond of Senator Marr's bill," McCoy said. "It's allowing people off the hook. They don't have to think. And I want them to think. I want them to bring in new technologies."

Warren Cornwall: 206-464-2311 or wcornwall@seattletimes.com