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Home / Articles / News / News Articles /  News | Whose Bright Idea?: Two rival bills target renewable energy for Utah
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News | Whose Bright Idea?: Two rival bills target renewable energy for Utah

By Katharine Biele
Posted // January 30,2008 - In an otherwise quiet legislative session so far, renewable energy is making big waves in back rooms at the Capitol. Sens. Scott McCoy, D-Salt Lake, and Curtis Bramble, R-Provo, are duking it out over establishing a renewable portfolio standard (RPS) in Utah. A RPS sets a target percentage for a utility to obtain electricity from renewable sources of solar, wind, geothermal and hydrothermal.

Gov. Jon Huntsman Jr. liked the idea so much that he formed a Renewable Energy Initiative to report and move legislation forward. There was definitely a parting of minds from there. “As we worked with the governor’s task force, we determined that the direction that some of the participants were going favored hard mandates,” says Rocky Mountain Power (RMP) spokesman Dave Eskelsen. “Our experience in Washington and Oregon informed us that that was not something we could agree with.”

McCoy is all about hard targets. His bill, modeled after Oregon’s, would require 25 percent of Utah’s electricity be generated from renewable sources by 2025. There are interim targets and some exclusions. For instance, if consumers would be paying too high a rate, the provision could be suspended.

The McCoy bill also sets up a task force to develop renewable energy zones throughout the state, to identify where the resources are and to create economic incentives to set up generation plants. It also establishes an authority to coordinate transmission lines for the state.

“Rocky Mountain Power’s bill doesn’t have any kind of mandatory targets, no interim targets and outlying years,” says McCoy. “And it has a couple of giveaways which will almost allow [RMP] to monopolize the renewable energy sector.”

This actually will be Bramble’s bill, who’s busy on the Hill and refers interested parties to PacifiCorp for details. As you might guess, the company has problems with McCoy’s version. The issue, Eskelsen says, is cost-effectiveness. “Most state laws and regulatory rules require utilities to pursue low-cost, low-risk resources and our concerns are that a lot of renewable portfolio standards did not.”

Utah uses more energy than its own plants can produce, getting additional energy from Wyoming and the Northwest. Rocky Mountain Power has some renewables in its mix—wind power, for instance. But bottom line is that 65 percent of Utah’s electricity is generated by coal-fired plants.

That spells pollution: sulfur dioxide, particulates and nitrogen oxide as well as carbon-dioxide emissions. While there are plenty of people working on the problem, “it’s not our job as utility companies to do research and development,” says Eskelsen. “Our job is to use existing technologies for low-cost and dependable sources of energy.”

That’s why RMP is so heavily invested in coal generation. Plus, the utility giant has plans and prefers that no one mess with them.

Utah is expected to need somewhere between 1,200 and 3,000 megawatts of new generation between 2012 and 2016, Eskelsen says. RMP is looking at some new thermal generation with a mix of coal and natural gas and wants to invest significantly in wind power on the supposition that it could provide up to 2,000 megawatts of that needed electricity.

“But because of the discussion and possible regulations on carbon-dioxide emissions, it doesn’t really matter what kind we have; we know we’re going to face opposition from some corner,” Eskelsen says.

One of the main arguments against standards, whether local or national, has been that the consumer will suffer from higher costs. Well, that’s a given no matter what happens, says Oregon Rep. Jackie Dingfelder, one of the sponsors of Oregon’s recent RPS. “Twenty-two states have had Renewable Portfolio Standards, and none has seen more than a 1 percent rise in cost,” she says.

Washington state passed an RPS in late 2006 after a contentious voter initiative hammered home the reality to their 63 utilities including PacifiCorp, parent to our own Rocky Mountain Power.

Washington Rep. Jeff Morris, a bill sponsor, bristles at some of the initiative’s prohibitions. For instance, Washington may not purchase renewable energy from British Columbia. However, since the law passed, California has been buying from the Washington market and is driving up costs. Market pressure, Morris says, has taken costs from $60-65 per mw hour to $80-90 now.

McCoy believes Bramble’s bill effectively cuts out competition for anything generating electricity below 300 mw. “I call it the ‘ostrich bill’—it sticks its head in the sand and lays a big egg. It’s lip service and window dressing.”

The challenge is to cut the rhetoric—and the pollution.

 

 
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Posted // January 31,2008 at 02:48 Actually, about 90 percent of Utah’s electricity is generated by coal, and aside from being clean, the economic benefit of renewable energy, such as wind power, is that it is price stable. Once the turbines are up, the wind is free, so costs center on equipment and excepted maintenance. Coal and natural gas (as will fossil fuels), by contrast, are subject to price volatility due to weather, political issues, and supplies. nnRather than bolstering Rocky Mountain Power’s monopoly power over electricity in Utah, the legislature should encourage more free market reforms, allowing more energy entrepreneurs to develop Utah’s geothermal, solar, and wind resources -- rather than relying on Rocky Mountain Power. For that matter, Rocky Mountain Power should pass the price stability of renewable energy to end consumers rather than simply charging a premium to its Blue Sky subscribers. In Texas, Austin Energy has offered wind power to its subscribers at a slight price premium, but that price is locked in for 10 years! Demand for the program has been so high, the utility has had to add new customers by lottery because the waiting list was so long. Even non-green consumers see the value in price stable power. Indeed, early subscribers to wind are actually paying less today than other customers who stayed with the standard, fossil fuel rate (which has been subject to volatile natural gas prices).nnFor too long, Rocky Mountain Power has made electricity decisions for Utah because the state has not had an energy policy or plan. We’re now stuck with an out of balance portfolio of energy coming overwhelmingly from coal that is dirty and that will face carbon taxes or restrictions in the coming years -- added costs that Rocky Mountain Power will simply pass onto its ratepayers. Had the legislature been on the ball, it would not have allowed Utah to face such risks! Forcing Rocky Mountain Power to add more renewables will help diversify our energy portfolio and help stablize prices! That is how the renewable portfolio standard should be framed in this debate!

 

 
 
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