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NW Energy Coalition Report -Jan/Feb 2002

AROUND THE REGION

MONTANA

In late March the Montana Public Service Commission will hold hearings on Montana Power Company’s (MPC ) proposed default supply portfolio. MPC announced in December that it signed a $120 million contract for 150 megawatts (MW) of wind power for its resource portfolio. Montana Wind Harness plans to build 115 turbines on three sites around the state by the end of 2003 to provide MPC with power for its 288,000 customers. MPC’s resource portfolio also includes power from coal and natural gas fired-power plants, large and small hydro, and co-generation projects.

MPC’s default supply portfolio does not include energy conservation. NWEC’s Montana Caucus members and the People’s Power League will call on the Company and the PSC to include a minimum of 100 aMW of conservation. MPC’s own analysis shows that 100 aMW is available on its system at a cost of 3.5 cents or less. The PSC is expected to make a decision on the portfolio in May.

IDAHO

Avista Energy applied to the Idaho Department of Water Resources for a permit to consume 2.8 million gallons of water per day for upgrades at its 160 MW peaking generation facility in Rathdrum . Idaho activists say the company’s upgrade plan would increase efficiency at the existing plant and considerably reduce NOx emissions. But with two new power plants vying for another 17 million gallons of water use per day, Avista may have to wait in line. A state hearing officer will begin taking testimony on the first of the proposed new plants — the 800 MW Cogentrix facility — on February 11. The officer ruled late last month that it would consider concerns expressed by Washingto n citizens and state officials. The Spokane Valley-Rathdrum Aquifer , the water source for the proposed plants, is the sole source of drinking water for 400,000 people in North Idaho and Eastern Washington.

OREGON

Parties representing utilities, large and small customers, and the Oregon Public Utility Commission staff recently committed to making a deal in the next couple of months on “stranded costs” associated with the state’s restructuring law. Lawmakers anticipated large customers who left utility service (to go to market) would either pay a charge for the stranded costs of expensive generation left behind or get a credit if that generation was cheaper than market alternatives. This one-time accounting would then leave smaller customers owning all the generation. With market prices so volatile, however, setting a value for these assets has been difficult. Some stakeholders argue that with the uncertainty of the power market, perhaps the large customers should simply be allowed to walk away free, leaving remaining customers to deal with costs or assets left behind.

WASHINGTON

PacifiCorp filed a request in January with the Washington Utilities and Transportation Commission (UTC ) to increase its system benefits charge (SBC) from $2.8 million to $6.5 million. The SBC recovers the costs of the company's energy efficiency investments. In October 2000, the UTC had approved the provision at a level below expected future expenditures needed to fully establish, market and implement the new programs. The UTC since then has approved three enhancements to augment the energy efficiency programs offered; those modifications resulted in significant increases in customer participation. According to an independent analysis, the programs are cost-effective at avoided costs greater than $22/MWh. If approved, the utility will collect $6 million in 2002 to recover increased expenditures in 2001 and provide for ongoing expenditures this year. The UTC will consider PacifiCorp’s request on February 15.

Quote of the Month

“ I know it would be devastating to all of us, but I wish we would get caught. We're such a crooked company. ”

– From an unnamed manager level employee quoted by Enron vice president Sherron Watkins in a letter to former CEO Ken Lay . The letter was released in January.