Washington’s Renewables: An Introduction

Washington’s Renewables: An Introduction

by: NW Energy Coalition, Marc Krasnowsky Posted on: February 11, 2013

Photo: NW Energy Coalition

Editor’s Note: The status of Washington State’s efforts to transition to renewable energy. Written by Marc Krasnowsky, Communications Director for the NW Energy Coalition.

In November 2006, Washington voters passed the Clean Energy Initiative – I-937 – to continue and build upon the state’s clean energy heritage. The law requires two things of the state’s 17 largest electric utilities:

1. That they secure all the achievable energy efficiency that will save money for their customers.

2. That they increase the amount of eligible new renewable energy in their power mix to 15% by 2020. Eligible renewables range from wind, solar, geothermal and biomass/biofuels to wave, ocean and tidal power. Upgrades that increase the output of existing hydropower dams also count. In general, these projects or upgrades must have been done after March 1999, though a legislative amendment in 2012 made some older, “legacy” biomass projects count.

Back then, new renewables other than hydropower comprised less than 1% of the region’s electricity mix, even though it was clear that developing a diversity of renewables would reduce the risks of rising costs and inadequate supply while boosting economic development, especially in economically distressed rural areas.

Energy efficiency was stuck on a rollercoaster of sporadic, up-and-down funding, even though efficiency is our cheapest, cleanest, and quickest new power source.

Special interests including some utilities and powerful business lobbies successfully blocked legislative progress on clean energy year after year, forcing clean energy supporters to go the initiative route. Volunteers and a far lesser number of paid signature gatherers collected enough signatures to get I-937 on the ballot. Then the clean energy community successfully campaigned for its passage.

Six years later, I-937 is doing exactly what Washington voters intended it to. Official utility reports filed in June and July 2012 show all 17 utilities are meeting or exceeding the initial energy efficiency and renewables targets. Consequently, Washington is benefiting from billions of investment dollars, local economic stimulus, new jobs, lower bills, healthier homes and cleaner air.

The first checkpoint

I-937 requires the state’s largest electric utilities – those with more than 25,000 retail customers (currently totaling 17) – to increase the amount of eligible renewable resources in their energy mix to 3% by 2012, 9% by 2016 and 15% by 2020 and thereafter.

It separately requires those electric utilities to pursue all “cost-effective” (which means “cheaper than getting the same amount of power from a new generating facility”) energy efficiency opportunities. The law says each utility, beginning with the 2010-11 biennium, must calculate how much power it can cost-effectively save in the coming two years and then report how it did.

Last summer the 17 utilities submitted their required reports to the state regulators detailing how they did on meeting their energy efficiency targets and how they plan to get 3% of their power from eligible renewables in 2012.

Here’s where it gets good.

For energy efficiency:

• Every utility reported that it had exceeded its own energy efficiency target, often by a significant margin.

• Every utility – including historically high performers such as Seattle City Light, Puget Sound Energy and Snohomish County PUD – blew past its average energy efficiency achievement over the previous six years. Individual utilities reported up to 8-fold efficiency increases compared to their 2004-2009 averages.

• Collectively, these utilities achieved 229 average megawatts of energy efficiency in 2010-11. One average megawatt (aMW) is enough to meet the annual electricity needs of about 700 Northwest homes, so the total savings are enough to power more than 160,000 homes or all the homes in Spokane and Tacoma combined.

The 17 utilities’ energy savings for 2010-11 are more than 2½ times the 94 aMW of savings they achieved in 2004-05, one year prior to I-937’s passage.

Those results, in the words of Northwest Energy Efficiency Council executive director Stan Price, illustrate our “deep well of savings opportunities. We’re in no danger of running dry.”

When it comes to renewables:

• Every utility reported that they will meet I-937’s 3% renewables standard for 2012.

• Many utilities reported eligible resources in excess of the 3% mark. They may choose to sell the excess power or the associated renewable energy credits until the renewable power or credits are needed to meet the 9% standard in 2016.

• To meet the standard, utilities plan to tap eligible resources such as wind, solar, biomass and landfill gas, and to make upgrades at existing hydropower facilities.

Wind led the way, comprising three-fourths of the renewables total. Upgrades to existing hydropower dams provided 22% of the increase in renewables. That is significant given clean energy opponents’ fictional sound bites about I-937’s supposed denigration of hydro.

In fact, I-937 recognizes hydropower as a valuable renewable energy resource and obviously counts upgrades at existing hydropower dams toward the renewable energy targets.

Voters supported developing a variety of eligible renewable resources beyond hydropower, which provides up to 70% of the state’s electricity in any given year. I-937’s renewable energy standard has pushed developers’ renewable energy investments in Washington State, since 2002, past the $8 billion mark. Those investments have created more than 5,000 construction and 2,200 permanent jobs, $85 million of new revenue to cover local government services and ongoing lease payments of thousands of dollars a year per turbine for property owners hosting wind farms.

Going forward

Initiative 937 will continue to create jobs, lower bills, avoid pollution and support local economies and services as long as it’s in force. A cap on utility costs for acquiring eligible renewables and other provisions of the law protect utilities and their customers from unforeseen expense and economic downturns.

At the urging of some utilities and industries in the biomass energy business, the 2012 legislature amended I-937 to count some older biomass facilities toward the renewables target and to add some additional types of biomass, such as black liquor, to the list of eligible resources. Another change, this one supported by the clean energy community, established a form of pre-certification to help utilities know in advance whether a proposed project will likely count toward the efficiency or renewable energy standard.

Clean energy advocates are open to discussing changes that will make the law work better. But let’s be clear: I-937 is working now.