OLYMPIA… A big investment in wind farms by the Cowlitz Public Utility District turned out to be a dud costing ratepayers nearly $1 million a month, and Sen. Doug Ericksen, R-Ferndale, says it makes a case for the energy plan he introduced in the Senate this year.
A story published in The Daily News of Longview reveals the PUD is losing $13 million annually on its investments in two wind farms, forcing the utility to raise prices for its customers by 9 percent. That’s roughly $9 a month for every household it serves. The Cowlitz County utility bet big on wind as new requirements for “renewable energy” in Washington and other states encouraged utilities to either purchase wind power or sell it. But the bottom fell out of the market when California changed its rules and required utilities to buy most of their green energy in-state.
“This shows what happens when we create artificial markets that depend on state rules and policies rather than on market forces,” said Ericksen, the chair of the Senate Energy, Environment and Telecommunications Committee. “It makes a strong argument for our proposal. We introduce greater innovation and flexibility into a scheme that right now serves mainly to benefit wind power developers. Instead of forcing Washington utilities to waste money on wind, we unleash their creativity, keep power costs low for consumers and manufacturers, and reduce carbon emissions.”
Ericksen’s measure, SB 5735, leaves Washington’s renewable-energy purchase rules in place, but gives utilities a new way to comply, by investing in programs that reduce carbon emissions. Washington’s Initiative 937, approved by voters in 2006, requires utilities to purchase a share of their power from specific forms of renewable energy – mainly wind, the most viable source. Because the rules passed before carbon became a political concern, the purchase goals place no value on the reduction of emissions.
Ericksen said Washington is just beginning to see the dislocations that will be created by the rules. Right now Washington utilities must purchase 3 percent of their energy from renewables, but that will increase to 15 percent in 2020.
“Cowlitz County is really the canary in the coal mine,” he said. “We’ve known for a long time that this artificial tinkering with the energy market will force utilities to make decisions that are economically unsound. Over the next few years we will see other impacts where utilities are forced to buy costly wind power they don’t need and replace the cheap hydropower they already have. The rules are so inflexible we can’t expect things to even out, yet we can’t repeal them because some utilities have already invested heavily in wind.
“The solution is to introduce greater flexibility into the system. Under our plan utilities will be able to decide where they can get the best value for their dollar, and we can count on them to make sound decisions. Any program that reduces carbon can qualify. I think we will see solutions we haven’t dreamed of yet – and the useless waste of ratepayer money we see in places like Cowlitz County will be diminished. A $9-a-month electric-bill increase ought to be enough to alarm anyone.”