Maintaining low cost electricity vital for Washington’s clean tech industries

Since the construction of Grand Coulee and Bonneville dams, Washington has enjoyed an abundance of low cost, reliable hydropower. It has been one-key competitive advantage for energy intensive industries and now it is vital to our state burgeoning “clean tech industries.”

Hydropower, along with nuclear, solar and wind, produce no greenhouse gases; however, solar and wind only generate electricity intermittently. Their production must be augmented by reliable sources, which include those using natural gas.

Washington’s Dept. of Commerce estimates that 90,000 workers in our state are tied to companies which make high tech components for computers, solar panels and carbon fibers. Many of these clean tech plants require large loads of a consistent current of electricity. Even the slightest fluctuation or interruption in power is harmful to production. It is that sensitive.

Over the years, electric utilities realized as our state and region grew, there would be an increased need for new power plants which provided a steady transmission of electricity.

Forty years ago, many of our state’s public utilities banded together and formed the Washington Public Power Supply System (WPPSS) to build five nuclear power plants. Meanwhile, many investor owned utilities invested in coal-fired plants at Centralia and in Colstrip, Montana.

Of the five WPPSS projects, four were abandoned and only the Columbia Generating Station near Richland was completed. Today, Columbia produces 1,190 megawatts of electricity, which is about 10 percent of the state’s electricity generation.

Other PUDs without a hydropower base started looking for other generating sources.

For example, Clark Public Utilities, which serves about residential, commercial and industrial customers in Vancouver, installed a new efficient natural gas-fired plant that went into operation in 1997. It generates 40 percent of the utility’s energy needs.

The River Road Generating Plant is important to help to shape and stabilize the new supply of renewable power because under Initiative 937 — the statewide renewable energy law passed by voters in 2006 — Clark PUD has incorporated wind energy into its power mix.

Unfortunately, while Clark PUD is attempting to provide affordable, reliable electricity to its customers and comply with I-937 requirements, Gov. lnslee’s new clean air rules under consideration by the Dept. of Ecology, impede the utility’s ability to provide a reliable and affordable power supply to its customers.

The rule, as first proposed, would have applied to 23 entities producing 100,000 metric tons or more of greenhouse gases per year, including power plants, natural-gas distributors and oil refineries. That draft rule was withdrawn, rewritten and released for comment in May.

Inslee made some accommodations to industries struggling to compete internationally, such as pulp and paper, but held firm on power plants including the River Road Generating Plant.

The added costs associated with including natural-gas fired generators in the new rule, impact households as well as industrial ratepayers in southwest Washington, an area hit hard by the last recession. It is home to the state’s largest concentration of semiconductor employers employing over 4,000 people.

Washington state has recognized the semiconductor industry as one of the state’s existing key industry clusters, but semiconductor manufacturers are facing increasing pressure to expand or relocate elsewhere.

The Southwest Washington High Tech Council wrote the Inslee Administration requesting an exemption from the new rule or some accommodation. They fear if its members lose this competitive edge in electricity rates, expansion of the local semiconductor industry and recruiting of other semiconductor companies here will be difficult at best, impossible most likely.

That is important for the governor and DOE to remember as they push their new rules.

Don C. Brunell is a business analyst, writer and columnist. He retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at theBrunells@msn.com.