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PUD Commissioner: Trying to Find a Cost Effective Approach to Meeting the Mandates

by Commissioner Hugh Haffner
from the Clallam County PUD Newsletter


Posted 8/19/2012


The state of Washington  has a renewable portfolio standard (RPS) which all qualifying utilities must meet.   The RPS came to be as a result of Washington voters passing I-937 in 2006.  Now known as the Washington Energy Independence Act (EIA, RCW 19.285), all qualifying utilities are mandated to purchase a certain amount of renewable energy as defined by the EIA.


Clallam County PUD is a qualifying utility under this Act because we have more than 25,000 customers.  As such, we have had to develop a strategy on how to most cost effectively meet the mandates of the EIA.  Keep in mind, as your locally controlled utility, our objective is to provide reliable, efficient, safe and low cost utility services in a financially and environmentally responsible manner.   The challenge with the EIA mandates is meeting the “low cost” objective of our mission.

Qualifying renewable energy options are significantly more expensive than the low cost clean hydro power we have become accustomed to.  What’s even more disappointing is that the clean hydro power that powers our homes and businesses does not count as “renewable” under the EIA.  So, the PUD is required to look at sources like wind (3 times more costly than hydro), solar (3-4 times more costly than hydro), or other sources that are also more costly than hydro. The PUD has looked at many renewable energy projects, and thus far the strategy we have found that best fits our mission is to buy Renewable Energy Credits (REC’s).  What is a REC?  A REC represents the environmental benefits of one megawatt hour of clean energy.  In essence, the PUD is not purchasing the higher cost renewable energy; it is just purchasing the “environmental attributes” of a given project and continuing to purchase the low cost clean hydro power it always has.


With low cost clean hydro power from the Bonneville Power Administration (BPA) costing 3-4 cents per kilowatt hour (kWh), compared to wind (9 cents per kWh) or solar (12 cents per kWh), the strategy of purchasing REC’s makes the most sense right now.  In the future though, we may need to purchase something other than REC’s, and perhaps even be forced to replace the low cost hydro power with more expensive energy.

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