Photo by Scott Eastman, contributed by PacifiCorp
Three years after launching a fully automated, real-time energy exchange market with California utilities, PacifiCorp announced earlier this month the project has surpassed $100 million in total savings for customers.
Bob Gravely, PacifiCorp spokesman, added the market is also making it easier for the company to integrate renewable resources such as wind and solar power onto the electricity grid without suffering hiccups in reliability. Pacific Power serves approximately 17,847 customers in Umatilla County.
The Western Energy Imbalance Market was born Nov. 1, 2014, through an agreement between PacifiCorp and the California Independent System Operator, allowing them to share power across jurisdictions to match supply with demand. That means if there is an overabundance of solar energy in California or a surplus of wind blowing in the Columbia River Gorge, that electricity can be sent automatically where it is needed most at the lowest possible cost.
Since its launch, six utilities covering parts of eight western states have joined the market, including Portland General Electric and Puget Sound Energy. Another two utilities, Idaho Power and Powerex Corporation in Canada, are scheduled to join next year, followed by Seattle City Light, the Sacramento Municipal Utility District and Los Angeles Department of Water and Power in 2019.
The bigger the market grows, the more options and flexibility will become available, Gravely said.
“It’s really kind of changing the way energy is distributed around the region,” he said.
Energy imbalance markets are not a new concept, with the exception of the California ISO, Gravely said they have been slow to catch on in the western U.S. Under the energy imbalance market, a central operator manages and distributes electricity generated at multiple utilities and power plants, which can be mixed and matched over a wide map.
In the past, Gravely said utilities filled gaps in their electrical grid by picking up the phone and making power purchases from the trading room floor, but with the development of more intermittent sources of energy — namely wind and solar — that system was becoming increasingly impractical.
“As we got more wind and solar where things fluctuate more frequently, it was becoming harder and harder for grid operators to use this old system,” Gravely said.
Now, the California ISO uses a system of computers to track the same information, but can make transactions automatically every five minutes.
PacifiCorp still owns its own transmission lines and makes its own decisions on where and when to generate power, but the energy imbalance market allows them to pick and choose from a greater field of low-cost sources. For example, if California solar farms are generating more electricity than local utilities can use, PacifiCorp can take that power on the cheap and scale back generation at its own power plants, which provides savings for customers.
By running coal and natural gas plants more efficiently, Gravely said PacifiCorp was also able to lower carbon emissions by 12 percent in 2016.
“It’s enabling more renewable energy to take the place of other resources that have fuel costs, like coal and gas, and that also create emissions,” Gravely said.
The renewable energy industry is also touting the economic and environmental benefits of the energy market. According to a report released Monday by the Wind Energy Foundation, along with the Portland-based Renewable Northwest, the total benefits to all participating markets is nearly $250 million over three years.
“The rapid expansion of the EIM across the West shows that increased regional coordination really can capture the inherent value of the diverse resources and weather patterns across our interconnected grid,” said Rachel Shimshak, executive director of Renewable Northwest, in a statement.
That could play a big role for PacifiCorp and PGE moving forward, as the Oregon Legislature passed a bill in 2016 doubling the companies’ renewable energy mandate to 50 percent by 2040.
Environmental groups are calling for a carbon cap in Oregon as early as the 2018 legislative session. The proposal would place a limit on greenhouse gas emissions, charge companies and utilities for exceeding the limit and reinvest the money in clean energy projects.
A potential wind farm upgrade in rural Gilliam County may be in danger after the House tax bill called for lowering federal tax credits for wind projects.
As part of its Energy Vision 2020 plan, PacifiCorp would invest $3.5 billion in the company’s existing wind fleet across Oregon, Washington and Wyoming, fitting turbines with longer blades and new technology to increase output and extend the life of facilities.
One of those projects would include the 67-turbine, 100-megawatt Leaning Juniper wind farm near Arlington. But Gravely said the project could be in jeopardy after a provision in the latest tax bill lowers the Production Tax Credit from 2.4 cents per kilowatt-hour to 1.5 cents per kilowatt-hour for projects not yet under construction.
If the credit is reduced, Gravely said it would be unlikely that Energy Vision 2020 would move forward. For Gilliam County, that would mean losing 59 construction jobs and up to $1.2 million in added annual property taxes.
The Senate’s version of the tax bill, however, would keep the Production Tax Credit intact before being phased out in 2020. Republican Sen. Chuck Grassley, of Iowa, has said the Senate plans to tackle energy tax credits in a separate bill before the end of the year.
Oregon Sen. Jeff Merkley, a Democrat and staunch supporter of renewable energy, said the wind industry has proven to be an economic boon for many Eastern Oregon communities, and the House proposal to lower the Production Tax Credit is both frustrating and outrageous.
“If we want to spur job creation, we should invest in the industries of the future, like wind energy, not in further lining the pockets of the powerful and privileged,” Merkley said in a statement. “The D.C. leadership is trying to ram this bill through in the next two weeks, so now is the time for Oregonians to make their voices heard if they disagree with this egregious tax scheme.”
Rep. Greg Walden, Oregon’s lone Republican congressman, voted yes on the bill. A spokesman did not return messages for comment.
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