PORT ANGELES — The challenges of fulfilling the twin mandates of voter-approved Initiative 937 — increasing use of renewable energy such as wind and solar and upping the level of energy conservation — will only grow in coming years, a top Clallam County Public Utility District official said Tuesday.
Pressure will be placed on rates, said Fred Mitchell, the utility’s power supply and utility services manager, though he did not say rates would go up.
“Washington state is one of the few states to use the initiative process to put in place rules for a renewable portfolio,” Mitchell told about 20 people at a Port Angeles Business Association breakfast meeting.
Initiatives, he added, “are not always well-thought-out by those that have to implement them in terms of how doable that is.”
As more money is spent, though, it could be a boon to the local economy, Mitchell said.
I-937 was approved in 2006 by 52 percent of voters statewide, including 52 percent in Clallam County and 63 percent in Jefferson County.
It mandates that utilities with 25,000 customers or more acquire and supply to their customers 3 percent of the utility’s power from renewable energy by 2012, increasing that to 9 percent by 2015 and to 15 percent by 2020.
Clallam PUD has 30,000 rural, mostly residential customers in an area that does not include Port Angeles, which is provided electrical power by the city of Port Angeles.
The utility gets mostly hydroelectric power produced by the Bonneville Power Administration from the Columbia River.
The electricity costs 3 cents a kilowatt hour compared with four to five times that for energy from renewable sources such as wind, solar and biomass — and hydroelectric power is not considered a renewable resource.
Biomass costs about 9 cents a kilowatt hour, wind 12 cents and solar 14 cents.
By 2020, increasing use of renewable energy will create “significant rate pressures” on PUD rates, Mitchell said, predicting “it will have an impact on rates.”
“For a utility experiencing load growth, buying renewables is not such a bad picture because you are buying more energy to meet demand,” Mitchell said.
“The challenge comes when growth and the load is low.”
But that’s only half of I-937’s equation.
Requirements for energy conservation “may end up costing us more than the renewable part of the picture,” Mitchell said.
Conservation needs
Under I-937, conservation requirements double in 2012 and 2013, requiring conservation of 11 million kilowatts in 2012 and nearly 14 million kilowatts in 2013.
In 2009, the requirement was barely 2 million kilowatts and is less than 6 million kilowatts for 2011.
“The targets we face particularly in 2012 and beyond are just mind-boggling for us to figure out how we are going to accomplish that,” Mitchell said.
Utilities that don’t fulfill the requirements on time will face penalties and still must meet the requirements, he added.
In 2010, Clallam PUD received $330,000 in rate credits from BPA for energy conservation programs and an extra $1.2 million in unspent conservation funds from other utilities, Mitchell said.
“In the future, conservation costs will increase in terms of how much we have to incentive the customer to participate in programs,” Mitchell said.
PUD spends $30,000 to $40,000 a week for customer incentives and conservation measures, added PUD board President Ted Simpson.
“We’ve been doing this 30 years,” he said.
“We really have insulated an awful lot of houses.”
Mitchell envisions the PUD spending $100,000 a week to get “to the level of activity we need to meet the requirements,” he added.
Fulfilling the conservation mandates will require the utility to contract with thousands of PUD customers but also will pour money back into businesses in the community, he said.
“That’s one of the bright sides,” Mitchell noted after the meeting.
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Senior Staff Writer Paul Gottlieb can be reached at 360-417-3536 or at paul.gottlieb@peninsuladailynews.com.
