How to up your power bill for little in return

Smarter Government Washington’s purpose is to highlight and promote smarter public policy ideas for Washington. We’ve made it pretty clear we don’t believe I-937, the state’s renewable energy law, qualifies as smarter policy – for the economy or the environment.

I-937 drove investment primarily in wind power to meet the initiative’s mandates for renewable energy – and wind power simply has not penciled out.

Power customers paying more
This story on Cowlitz P.U.D.’s wind projects shows the real-world costs of replacing low-cost, carbon-free hydropower with expensive wind power.

  • The P.U.D.’s wind investments are losing over $1 million a month for the utility
  • Those losses are covered by ratepayers. The P.U.D. hiked rates 18% in 2011 to cover the losses
  • Today the unnecessary wind projects eat up 9% of the average ratepayer’s bill, while yielding no additional environmental benefit

I-937 was poorly constructed for the reality of Washington’s power supply. Of course, it being an initiative written by special interests, its drafters likely don’t see it that way. They wanted to require utilities to invest in renewables whether they needed additional power generation or not. From their perspective, I-937 is working exactly as intended.

Ratepayers may not see it that way.

Wind power hasn’t fared well in the actual market
A few factors in the West Coast power market have made it difficult for wind power to come close to penciling out.

  • The power market has not grown as much as projected. Successful conservation programs are a big factor in this
  • California, previously a good market to unload excess power from renewable sources, changed its renewables law to require that its mandates be met by California sources
  • Wind power is not a consistent base load power source. Unreliable sources such as wind are, from a practical perspective, far less valuable than base load or dispatchable sources

Wind power only becomes competitive by making other power sources more expensive. A carbon tax or cap-and-trade system would make wind power look comparatively more competitive by making other sources more expensive, but in hydro and nuclear-dominated Washington, the difference would be negligible.

Other options
Legislators are aware that I-937 needs tweaks to make it effective and fair to ratepayers.

  • At the least, the initiative needs to be amended so that it does not require utilities and ratepayers to pay for more expensive renewables before they need additional power supply
  • Doug Ericksen has proposed a smart bill that would allow utilities to meet alternate goals under the law. His bill, which already passed the Senate, would give utilities other options to make an actual difference for the environment, such as smart grid updates that conserve power and developing new storage technologies

I-937 as it currently exists is clearly an imperfect law. We can make it better – but that will take overcoming the inertia in Olympia to try something new that actually works for our state and for the environment.

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