1. 1 Jesse Jenkins (RNP) November 7th, 2006 Northwest Energy: A Look at the Past, Present and Future of Electricity Generation in the Pacific Northwest

2. 2 Overview I. Introduction II. Past: where we’re coming from II. Present: where we’re at III. Future: where do we want to go? IV. Conclusions

3. 3 I. Introduction Me –recent UO graduate (class of ‘06) – now work for the Renewable Northwest Project in Portland (policy research associate) Renewable Northwest Project (RNP) – founded in 1994 – unique coalition of, consultants, developers, consumer & environmental groups, etc. – seek responsible development of renewable energy in the Pacific Northwest.

4. 4 II. The Past: a Brief History of Northwest Electricity Generation Growth met with new Coal - 1970s-90s Growth met with new NG - 1990s-2000s Growth met with new Hydro - 1890s-1970s False start with Nukes - 1970s-80s Energy Conservation! (NW Power Act - 1980) Date source: NW Power and Conservation Council (http://www.nwcouncil.org/energy/powersupply/existingprojects.xls)

5. 5 II. The Present: Average water & maximum thermal plant availability. September 2006

6. 6

7. 7 - Abundant resources - >1,386 MW currently serving NW Load Source: RNP (http://www.rnp.org/Projects/projectlist.php)

8. 8 III. The Future: Demand Continues to Grow Source: NWPCC 5th Power Plan (vol. 2), p. 2-4 ?

9. 9 III. The Future: Coal? Coal: –Cheap –Relatively abundant –Dirty! Utilities love their coal: –cheap baseload (reliable) power –(For the most part) don’t have to pay for public health costs –150+ coal plants proposed in the West…

10. 10 Over 150 Coal-fired Power Plants Proposed in the West Pacific Mountain Lower Columbia

11. 11 Coal is a risk for everyone: –cheap now, but fuel costs already rising: up 20% from ‘03-’05. –Investments in coal now will cost customers later. –Increasing environmental regulations –Carbon restrictions coming soon… Regional regulations: CA and Northeast Industry asking Congress to limit carbon emissions - want certainty Only a matter of time now –Invest in coal = export NW jobs and $$$ to MT, WY for fuel –Moral issue: people in MT, WY bare environmental costs of mining and power plant pollution for our power consumption III. The Future: Coal = Risky Business

12. 12 III. The Future: Natural Gas? Natural Gas: –Low capital (upfront) costs –High fuel costs –Cleaner than coal –Natural gas prices very volatile

13. 13 U.S. Historic Natural Gas Prices (Volatile and Unpredictable) III. The Future: Natural Gas?

14. 14 Liquefied Natural Gas (LNG): –Imported from Indonesia, Qatar, Iran, Russia, etc. –More dependence on foreign fossil fuels –Exporting $$$ overseas –Potential security risk (terminals and tankers) –Several LNG terminals proposed for Northwest… III. The Future: Liquefied Natural Gas

15. 15 NW has abundant renewable energy potential: –Western Governor’s Association - developable potential by 2015: Wind: 2,310-7,735 MW (693-2,321 aMW) Solar: 325-500 MW (71.5-111 aMW) Geothermal: 1,290 MW (1,187 aMW) Total: 3,925-9,525 MW (1,951-3,617 aMW) 72% of 5,000 aMW forecasted growth by 2025 III. The Future: Renewables?

16. 16 Expected demand growth by 2025: 5,000 aMW Conservation and Efficiency: 2,800 aMW (NWPCC) Renewables: ~2,000-3,600 aMW (WGA) Total: 4,800-6,400 aMW So who needs coal or natural gas? III. The Future: Conservation + Renewables = More than Enough

17. 17  Provides power at stable, predictable price for many years - (Fossil fuel prices volatile & unpredictable.)  Helps fight global warming: no/low emissions, offsets fossil fuels  Economic Development: it creates jobs & tax revenue  Domestic resources: Keep jobs and $ local instead of sending elsewhere to buy their fuels (e.g.. coal from WY, gas from Canada). III. The Future: Benefits of Renewables  Minimal water use  Public Health Benefits Doesn’t have air & water pollution impacts of fossil fuels  Customers want it: PGE poll: 75% customers want RE and efficiency, <10% want coal.

18. 18 Coal? Natural Gas? Conservation + Renewables? It’s our energy future: what do we want it to look like? III. The Future: So Where Do We Want to Go?

19. 19 A Clean Energy Future is Possible: It’s up to us to make it happen!

20. 20

21. 21 Policy Solutions Renewable Energy Standard / Renewable Portfolio Standard (RPS) Purpose –have electric utilities gradually increase amount of new RE in electricity supply to certain % by certain year. –Gov. Kulongoski: 25% by 2025 proposed for Oregon –Washington ballot initiative (I-937): 15% by 2020 –Create a stable market for renewables, encourage siting of domestic manufacturing, create jobs, economic development, health benefits

22. 22 20 States Have RPS Policies WI: 10% by 2015 TX: 5880 MW by 2015 *NJ: 24% by 2021 CT: 10% by 2010 ME: 30% by 2000 *NM: 10% by 2011 CA:20% by 2017 (2) *AZ: 15% by 2025 *NV: 20% by 2015 MT: 15% by 2015MN: 1,125 MW wind by 2010; 10% goal by 2015 RI: 15% by 2020 *PA: 18%¹ by 2020 *DE: 10% by 2019 *MD: 7.5% by 2019 *DC: 11% by 2022 State RPS Goal MA: 4% by 2009 + 1% annual increase NY: 24% by 2013 HI: 20% by 2020 *CO: 10% by 2015 *Minimum requirement and/or increased credit for solar ¹ PA: 8% Tier I, 10% Tier II (includes non-renewable sources) 2 CA: 33% by 2020 under review IA: 105 MW Source: Interstate Renewable Energy Council. www.dsireusa.org, July 2006 IL: 8% by 2013

23. 23 Policy Solutions Incentives –Public health, energy security and economic development benefits of renewables all warrant incentives –Federal Production Tax Credit is biggest factor –State incentives too (OR and WA offer strong package of incentives) Environmental Regulations / Carbon Cap –Stricter environmental regulations force polluters to pay –Renewables have no emissions so more competitive –Cost of carbon needs to be included (carbon cap or tax)