FAQ: Comparison of 4 Lower Snakes Dam Power Replacement Costs

3-14-06 - The Save Our Wild Salmon Coalition (SOS) study, Revenue Stream, included and estimate of the cost to replace the 4LSR dams’ power output. Other reviews challenged Revenue Stream’s results. This table compares the three studies’ assumptions and results.

Comparison of 4 Lower Snakes Dam Power Replacement Costs

Comparison of 4 Lower Snakes Dam Power Replacement Costs

Steven Weiss – NW Energy Coalition – March 14, 2006

The Save Our Wild Salmon Coalition (SOS) study, Revenue Stream, included and estimate of the cost to replace the 4LSR dams' power output. That section of the report was done by the NW Energy Coalition. It concluded that the four dams' electricity could be replaced with non-polluting conservation and renewables for a cost in the range of $79-179 million per year. This study was reviewed by the NW Power and Conservation Council's Independent Economic Advisory Board (IEAB), and also by the Bonneville Power Administration (BPA). Both these reviews challenged Revenue Stream's results. This table compares the three studies' assumptions and results.

IEAB Relied on 2002 Federal EIS study	*REVENUE STREAM*	BPA
Replacement Resources
1,550 MWs gas-fired combustion turbines (CTs) + some transmission and other upgrades. Dams produce about 1075 MWs on average, but more for winter and summer peaks. Analysis shows this amount of over-building & transmission needed to match reliability of status quo.	895 MWs of conservation and 107 aMWs of wind. Conservation has no transmission line losses, needs no reserves and reduces peaks (895 MWs of conservation reduces peaks about 1250MWs, and 107 aMWs of wind serves about 50 MWs on peak), so little extra peaking capacity is required.	3,400 MWs of CTs. Dams can produce 3,400 MWs of power in an emergency, so BPA argues that a fair comparison must over-build to that maximum amount. However, 2002 EIS study (used by IEAB) noted that the system only needs about 300 MWs of emergency capacity from these four dams.
Annual Cost of Replacement
$271 million Based on 2000-1 natural gas cost + purchases of ancillary services that the dams produce and trans-mission upgrades. Due to higher gas costs, this number would be closer to $400M today. But, the study notes that the cost would be about $300M if conservation were used instead of CTs.	$79-179 million Cost only includes utility's costs of conservation. End users who install efficiency measures absorb similar cost, but are compensated with bill savings. Benefits of freed-up transmission were not included.	$400-$550 million Cost assumes tremendous over-build, but CTs operated only to match dams' current output. In actuality, the CTs would be operated much more and power sold into the market. Study only counts costs, but not revenues from such sales.
Is Enough Conservation Available?
Study analyzed, but ultimately rejected conservation approach because it was believed that not enough conservation was available. Conclusion relied on NW Council's 4^th Plan estimate of only 1,000 MWs of cost-effective conservation available, and that was assumed to be used to help meet load growth. The Council's 5^th Plan raised that number to 2,500 MWs, due to new technology, which calls original conclusion into question.	Study relied upon 2002 peer-reviewed Tellus Institute study that identified 4,538 MWs of efficiency at a cost well-below that of power generated from fossil fuels. The total included 3,542 of electric efficiency and 1746 MWs of net savings from gas efficiency and co-generation projects in the commercial and industrial sector. This number is significantly above the Council's forecasted need for load growth, 2,500 MWs, leaving enough to replace LSR dams.	Study assumed only the 2500 MWs of conservation identified in Council's 5^th Power Plan. Therefore, BPA assumed there was not enough additional low cost conservation available to replace the dams, so CTs seen as best strategy.