by Paul W. Taylor, Washington State Standard
April 24, 2026
The Pacific Northwest faces a near-term electricity shortfall as demand rises faster than new resources can be built, according to a new regional analysis from San Francisco-based Energy and Environmental Economics.
Arne Olson, a senior partner at the firm, said the findings point to an immediate challenge for utilities and policymakers trying to balance reliability, affordability and decarbonization.
“We see a looming shortfall of electric power with the need to construct a significant amount of new resources to fill that gap,” Olson said. “The need is now. It’s not 10 years from now.”
The study identifies mounting pressures on both sides of the equation. On the supply side, coal plant retirements, slow permitting, transmission bottlenecks, and supply chain disruptions have limited the pace of new generation. At the same time, demand is accelerating, driven by artificial intelligence, data centers, and long-term electrification policies such as electric vehicles and electric heating.
In an interview with Austin Jenkins on TVW’s Inside Olympia, Olson said the region is seeing “an unprecedented amount of new electric demand, largely from tech industry data centers driven by artificial intelligence.”
The region’s heavy reliance on hydroelectricity — which Olson said provides roughly 60% to 65% of energy — adds another layer of risk because output varies with water conditions. A prolonged winter cold snap combined with low hydro availability presents the highest risk of shortages, he said.
To close the gap, Olson said the region must move quickly on multiple fronts, including wind, solar, batteries, and demand-side tools such as flexible load and energy efficiency. But he emphasized those resources alone cannot ensure reliability under all conditions.
“You’ll be very happy that you have a natural gas plant during that circumstance that you can turn on rather than having to endure a rotating blackout type of an event,” he said.
Olson framed natural gas not as a contradiction to climate policy, but as a necessary complement to it. Under the state’s Climate Commitment Act, natural gas is not prohibited but regulated within a declining emissions cap. It is treated as a fuel whose greenhouse gas emissions must be covered by allowances in a carbon market, increasing its cost over time while remaining part of the energy system as the state moves toward net-zero emissions.
Environmental groups including the Sierra Club, the Natural Resources Defense Council and Climate Solutions argue natural gas should play only a limited, transitional role. The Sierra Club has moved away from earlier views of natural gas as a “flawed but necessary transition fuel” and now opposes new gas infrastructure, urging utilities to meet demand with clean energy and phase out fossil fuels. NRDC has also described gas as a “transitional” fuel while warning of its climate impacts. For its part, Climate Solutions warns that natural gas is a “major” and growing source of climate pollution and calls for a managed shift away from fossil gas toward electrification and clean energy.
Wind and solar are mature and increasingly deployable, Olson said, but their intermittent nature and limited storage duration leave gaps that current technologies cannot fully address. Nuclear and emerging options such as long-duration storage, geothermal, and carbon capture show promise, but are unlikely to scale quickly enough to meet near-term needs.
As a result, Olson said maintaining — and in some cases expanding — natural gas capacity is a practical step to preserve reliability while the region builds out cleaner resources. Over time, those plants would be used less frequently as more carbon-free energy comes online.
The transition, he added, will come with higher costs, as utilities invest in new infrastructure to meet both demand growth and policy goals.
This article was first published by TVW, a media nonprofit that provides comprehensive coverage of state government. TVW broadcasts unedited gavel-to-gavel coverage on statewide cable and at tvw.org, and produces original current affairs and education shows, including “Inside Olympia” and “The Impact”. TVW’s mission is to give Washingtonians access to their state government, increase civic access and engagement, and foster an informed citizenry.
Washington State Standard 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].