Oregon and Washington also
face clean energy laws that have made wind power the most
coveted of resources. Competition from a rival of
California's size -- it uses six times as much electricity
as Oregon -- makes home-turf purchases more difficult and
more expensive.
New energy will cost
considerably more than the cheap hydroelectric power that
has kept Northwest electric rates among the lowest in the
country. The premium that local utilities might pay to beat
a competing bid from California would drive prices higher
still.
"The issue is cost," Beyer
said. "California can pay more."
Californians are used to
heftier utility bills. Residential customers pay about 15
cents a kilowatt hour for electricity; Oregonians pay 9
cents.
PacifiCorp, which operates
Oregon utility Pacific Power, owns several wind farms in the
Northwest and Wyoming and is building more. That power stays
local, meeting PacifiCorp customers' demand.
The strategy was designed,
in part, to parry California's influence in the marketplace.
Instead of going to independent developers to negotiate
long-term contracts, PacifiCorp can produce its own power.
"We're not going to enter
into a bidding war with a PG&E (in San Francisco) or a
Southern California Edison," said Scott Bolton, PacifiCorp's
director of government affairs. "What's cost effective for
them is not cost effective for us."
Portland General Electric,
Oregon's largest utility, has taken a similar tack with its
Biglow wind farm in Sherman County.
Even so, both utilities buy
from developers such as Portland-based Iberdrola Renewables.
PGE will announce several new contracts this fall.
PGE and Pacific Power
together account for almost 70 percent of the state's energy
use.
Oregon law requires a 25
percent contribution from renewables by 2025. Interim
targets call for 5 percent by 2011 -- far lower than
California's 20 percent goal -- and 15 percent by 2015.
California's requirements
increase to 27 percent in 2015 and 33 percent in 2020.
The power from the region's
large hydroelectric dams doesn't count toward the
requirements in any Western state.
Wind power isn't the only
way to meet the goals. Solar, biomass and geothermal also
qualify. But at this point, wind energy is the most
affordable and available.
PGE and PacifiCorp have met
the 5 percent requirement, utility officials said. They'll
also meet the 15 percent target.
As deals are negotiated,
California looms as an intimidating rival. It boasts a
renewables cache that delivers about 35,500 gigawatt-hours
of electricity annually, or 11.8 percent of total demand.
That's enough to serve all PGE and Pacific Power customers
combined.
San Francisco's PG&E would
need 2,400 megawatts of wind to meet the 2010 requirement,
if it were to rely on a single renewable resource, Oregon's
PGE told regulators. That's more than the total capacity of
the 20 wind farms operating in Oregon and Washington.
Of course, PG&E isn't
relying on one type of clean energy. It's also gathering
supplies of solar, geothermal and biomass. The utility,
which serves more than 5 million customers (Oregon's PGE
serves 813,000), prefers in-state purchases because
transmission and other costs tend to be lower, officials
said. But they will make deals elsewhere if the terms are
right.
"We're aggressively adding
renewables," said Jennifer Zerwer of Pacific Gas & Electric.
Renewables account for about 12 percent of PG&E's
electricity. "We're on track" to meet the 2010 goal of 20
percent, she said.
The utility has secured 175
megawatts from the 300-megawatt Klondike III wind farm in
Oregon's Sherman County and the entire output of the
103-megawatt Rattlesnake Road project in Gilliam County. (A
megawatt, adjusted to account for wind's variability, will
meet the annual electricity requirements of about 300
homes).
Officials declined to
disclose a purchase price. Industry experts peg wind power
prices at $70 to $90 a megawatt-hour.
The Eugene Water & Electric
Board bought a block of power from the Klondike III wind
farm in an early round of negotiations and paid about $55 a
megawatt-hour, spokesman Lance Robertson said. It was
interested in more, but by then prices had soared, and EWEB
walked away.
"Prices are steadily going
up," Robertson said. "You're seeing premiums of $10 to $20 a
megawatt-hour."
PG&E also has signed a
contract to buy 120 megawatts of geothermal energy from a
project near central Oregon's Newberry Crater. Developers
are in the exploratory phase and have yet to decide whether
building a power plant is worthwhile.
The Los Angeles Department
of Water & Power has found Northwest wind attractive because
a high-voltage transmission line, which it owns in part,
runs from the Columbia River to just outside the city. The
utility has purchased power from two gorge projects
scheduled for completion this year: Willow Creek in Gilliam
and Morrow counties, and Pebble Springs in Gilliam County.
Together, they carry a capacity of 170 megawatts.
Los Angeles will pay $83.75
a megawatt-hour for Willow Creek wind generation, said H.
David Nahai, the utility's chief executive and general
manager.
Columbia Gorge winds blow
hardest in the mornings, a nice complement to Los Angeles'
projects in the Tehachapi mountains, where afternoons are
windiest, he said.
Renewables account for
about 8 percent of the utility's electricity. In two years,
it expects to hit the 20 percent goal. "We have made it a
priority to develop or procure renewable energy," Nahai
said.
The utility has the support
of Mayor Antonio Villaraigosa, who has vowed to make Los
Angeles the "cleanest and greenest big city in America."
Iberdrola, Horizon Wind
Energy and other wind power developers are scrambling to
meet the surge in demand. Their sweep is regional, limited
by transmission and network constraints but not by state
borders, company officials said.
"We're here to sell all
over the Western markets," said Jan Johnson, an Iberdrola
spokeswoman. California utilities are "motivated buyers,"
she said.
Iberdrola is part of the
Spanish energy company of the same name. Horizon is owned by
EDP (Energias de Portugal).
California and the
Northwest have traded electricity for decades. California
imports hydropower in the summer; Oregon and Washington take
deliveries from California generators in cold winter months.
Wind power is more
one-sided: California buys the Northwest's wind, but not the
reverse.
Solar power and other
renewable energy could flow south to north as technologies
progress, said Rachel Shimshak, executive director of
Renewable Northwest Project, which promotes use of clean
energy.
Shimshak isn't worried
about California's clout because, she said, there will be
plenty of renewables to go around. Still, Oregon utilities
shouldn't ease off as they reach early goals. "The early
bird gets the worm."
