by Jim Luce, Oregon Capital Chronicle
August 1, 2024
While “energy crisis” is an overused term, recent estimates show the Northwest could face a 30% increase in electricity demand over the next decade.
Data center expansions, high-tech manufacturing growth and a shift from natural gas toward electricity are some factors driving the trend.
Historically, the region has looked to the Bonneville Power Administration to meet rising energy demand. The BPA sells power at the wholesale level to utilities. This energy is produced at 31 federally operated dams, one nuclear plant, and other smaller power plants around the Northwest.
The problem is that a 1980 law has long-handicapped the BPA. And the degree the BPA will be able to help meet the region’s electricity needs in the years ahead will depend on the Northwest’s members of Congress getting re-engaged around the agency.
The delegation has largely ignored BPA for decades, rendering it little more than a minion of the Department of Energy. If this continues, a bad situation will only get worse.
How did we get here?
The Northwest Power Act, approved in 1980, currently governs BPA. It was enacted because BPA in 1974 issued a “notice of insufficiency,” meaning it could not meet customer’s needs.
Panic ensued. Editorials were written, meetings held and people got busy making a mess of things.
The act was doomed from the start because it limits BPA’s flexibility to address our situation.
It imposes onerous process requirements that restrict how the agency goes about anything other than conservation – and only then with the blessing of the Northwest Power and Conservation Council, whose member states include Idaho, Montana, Oregon, and Washington.
The law’s practical effect was to relieve Congress of its traditional BPA oversight role.
This wasn’t necessary. The statute creating the BPA allowed discretion to “provide a reliable power supply.” And this authority could have been used to deal with the predicted power crunch in the 1970s.
BPA’s policy leadership rejected this authority, wary of litigation risks. The Northwest Power Act, with its provisions geared toward helping fish and wildlife affected by hydroelectric dams, was sold as a way to end lawsuits against BPA by environmentalists. But it brought even more litigation.
Amazingly, before the Power Act’s approval, BPA and its customers began a “power system makeover” – including a “hydrothermal” power system.
The hydrothermal plan was for five nuclear power plants to be overseen by the Washington Public Power Supply System. The WPPSS Board – composed of well-meaning public utility members, who knew nothing about nuclear power – was given the task.
Until then, WPPSS’ biggest “project” was the small 37.5-megawatt Packwood hydroelectric facility.
Congress failed to ask hard questions: Why would BPA simultaneously propose a new law limiting its authority and support the construction of five nuclear projects – at once?
Because, in part, the power supplies of aluminum companies and public utilities were threatened, along with local economies that depended on them. And because states, tribes, fish and wildlife advocates, renewable energy proponents, and others saw an opening.
All but one of the five nuclear projects failed. But the Northwest Power Act remains law anyway.
Less than two years after the law was approved, the aluminum companies had new contracts with the BPA and Bonneville declared it had surplus power. Earlier power demand estimates that led to the notice of insufficiency were off. It turned out there was no crisis.
Coincidence?
Meanwhile, Bonneville hasn’t used its authority to carry out anything other than conservation measures.
It allocated “slices” of its existing power and has told its customers that they are on their own if they need more. And, perhaps not surprisingly, last year, Energy Northwest – which is what WPPSS was renamed in the 1990s – announced its intent to build 12 smaller nuclear plants.
Who won and who lost?
The states’ planning council lost. Since BPA wasn’t acquiring power, it is largely irrelevant. Northwest states, tribes, and fish and wildlife interests cut billions in side deals with BPA and ignored the council’s fish and wildlife Plan. Endangered Species Act listings, which BPA had hoped to avoid, happened anyway.
Public utilities saw rates increase as they were required to help pay for private utility residential consumers’ lower power rates through an accounting gimmick known as the “residential exchange.”
As for the aluminum companies? They left town.
What should we do now?
The first lesson to be gleaned from BPA’s history is you can’t predict the future. In time, just as the aluminum companies moved on, so too could the server and crypto facilities.
I propose Congress reconsider the Columbia Valley Authority, a legislative proposal made by President Harry Truman, and then Congressman Henry “Scoop” Jackson in April 1949 but killed by Congress because of the fear of too much federal control.
And there isn’t too much federal control today?
The CVA would have a presidentially appointed board and a chief executive. It would integrate and boost power, environmental, and economic development interests. A similar model has worked well in other regions. We should take a closer look at it.
Other options are available but to do nothing, and allow the status quo to persist with the BPA, is unacceptable. It’s up to our congressional delegation to step up to reality. Will they? If our goal is to strengthen the availability and reliability of affordable power in the Northwest, one can only hope.
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Washington State Standard, like Oregon Capital Chronicle, is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Washington State Standard maintains editorial independence. Contact Editor Bill Lucia for questions: [email protected]. Follow Washington State Standard on Facebook and X.
Oregon Capital Chronicle is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Oregon Capital Chronicle maintains editorial independence. Contact Editor Lynne Terry for questions: [email protected]. Follow Oregon Capital Chronicle on Facebook and X.