Analysis confirms nuclear’s value

Facts still matter. And the fact of the matter is residential utility rates in Washington state are the lowest in the nation. But some people want to change that and force Washington residents to pay more for their power.

“…the widely-publicized decline in solar and wind prices now makes it probable that (Columbia Generating Station) could be replaced entirely with renewable resources and still deliver a cost reduction to Pacific Northwest customers. Once thought to be too expensive, renewables are becoming a viable option for utilities…”

Portland economist Robert McCullough wrote those words as part of a February report pushed by Physicians for Social Responsibility, an anti-nuclear energy group dedicated to closing Columbia Generating Station nuclear energy facility and eliminating nuclear energy entirely from the U.S. electricity mix.

McCullough based his conclusions mostly on levelized cost of electricity reports by Lazard, a financial advisory and asset management firm. However, in doing so he misrepresents the Lazard LCOE 10.0 report, which clearly states that renewables alone can’t replace baseload generation. By ignoring the cost of firm capacity resources needed to back up intermittent generation from renewables, McCullough significantly under-represents the costs that would be incurred if Columbia were retired prematurely (it’s currently licensed through 2043).

McCullough’s conclusion: replacing Columbia with renewables yields a net present value savings of $261.2 million to $530.7 million through June 2026.

A recently released analysis (PPC Analysis – McCullough CGS Report) by the Public Power Council, an entity that has represented the Pacific Northwest’s consumer-owned utilities for 50 years, uses actual data for the Northwest to show McCullough is simply wrong in his conclusions.

The PPC report concludes McCullough’s recommendation would cost Pacific Northwest power customers $271 million a year, as well as impact the region’s power supply resource adequacy.

Playing with numbers

As the PPC report explains, McCullough uses the “median” Lazard LCOE to make his cost comparison, which gets him a cost per megawatt-hour for solar of $42.50 and $31 for wind. The PPC writes, “(a)lthough these values might be realistic in some circumstances, they are wildly inconsistent with the values produced specifically for this region by the [Northwest Power and Conservation Council].”

But the numbers in the Pacific Northwest aren’t as friendly to McCullough and PSR, so they avoid them altogether. The PPC looked at the NWPCC’s Seventh Northwest Power Plan to find levelized costs more in tune with the region where necessary replacement power for Columbia would be generated. “The least expensive new renewable resources in terms of levelized cost in the 7th Power Plan is $61.43 per MWh for utility scale solar and $102.45 per MWh for wind. Many options are significantly higher,” the PPC writes.

They go on to offer a slight rebuke of McCullough’s research tactics.

“Although the (McCullough) report cites the NWPCC and the 7th Power Plan in other instances, the choice to rely on a minimally documented, national level report for levelized resource costs rather than the extensively vetted regional analysis used by the NWPCC is not explained.”

Perhaps we can help. Anti-nuclear energy ideology drives many folks to discount scientific facts about nuclear (such as calling carbon-free nuclear “dirty”) and economic facts that don’t serve their point of view (such as existing resources being cheaper than new resources, even renewables). A lot of people across the country just participated in the March for Science which was, in part, a protest against this type of tactic. In fact, PSR members just marched against this type of tactic.

Doing the math

The PPC takes the NWPCC solar cost of $61.43/MWh and adds Bonneville Power Administration’s Resource Support Services number, basically capturing the cost of an intermittent resource versus a baseload, or full-time, resource. The PPC report uses BPA’s 2018 rate case number of $16.30/MWh for solar.

“Using regionally vetted analysis from the NWPCC and BPA’s latest proposed rates, the least expensive replacement for the power of (Columbia) with intermittent renewables would be utility scale solar facilities in Idaho at a total cost of $78.84 per MWh,” according to the PPC report.

The average cost of power for Columbia Generating Station is $48.50/MWh through 2026 (including transmission), according to the PPC.

McCullough Chart new

Given the difference between the two costs, based on Columbia’s 1,019 aMW annual output (1,019 MW of generation an hour multiplied by 365 days), the McCullough/PSR recommendation would cost power customers $271 million a year over what they currently pay.

“This result is consistent with a scenario analysis conducted in the 7th Power Plan that examined the change in regional portfolio cost for the planned retirement of a 1,000 MW carbon free resource. That analysis found an increase in regional power costs of
$3 to $6 billion on a net present value basis over 20 years,” the PPC concludes.

Other report issues

Cost is certainly an important factor when considering electricity resources. But so is capacity and reliability, or what McCullough strangely sees as “inflexibility.”

In his report, McCullough writes, “Indeed, as renewable energy standards in the Pacific Northwest, California, and other Western states require additional variable resources, inflexible baseload plants, including nuclear and coal plants, will become increasingly problematic.” This ignores two key points: that intermittent generation from renewables is not a reliable replacement for baseload generation; and, existing Northwest coal plants are and will be retiring, reducing the available amount of baseload generation in the region. By arguing that Columbia should be retired, McCullough is doubling down on these challenges.

The Public Power Council report catches this mistake.

“The NWPCC conducts a rigorous, annual Pacific Northwest Power Supply Adequacy Assessment which looks forward five years. The most recent assessment conducted in 2016 for adequacy in 2021 already shows significant potential for resource deficiencies based on the planned retirements of the Boardman, Centralia and Colstrip Units 1 & 2 coal facilities. Retirement of (Columbia) would significantly exacerbate these issues,” the PPC writes.

A final point from PPC: BPA uses the hydro system to help balance the wind generation in the region. The baseload electricity from Columbia Generating Station provides significant additional margin to accomplish that while still maintaining an environmentally-friendly carbon-free mix. Following the McCullough/PSR formula would put added pressure on BPA and the hydro system.

Here’s why:

“(T)he 7th Power Plan specifically does not rely on the large scale development of intermittent resources to meet capacity needs, instead calling for demand response measures as available or natural gas generation,” according to the PPC analysis.

Reports, reports

So to summarize, McCullough took 48 pages to reach a result that was off by literally more than half a billion dollars at best ($750 million at worst) versus a three-page analysis that provided facts relevant to the Northwest and its power customers, and showed the true value of Columbia Generating Station to the region.

As another regional energy expert said about this McCullough report:

Overall, it looks like Robert McCullough hasn’t changed his basic approach. Instead, he’s just adding more superstructure on top of a weak foundation. For example, he willfully continues to ignore and misrepresent the fact that the Mid-Columbia spot market only reflects the variable operating costs of resources, and at best only allows a small portion of the fixed costs of owning resources to be recovered.

As headline grabbers, McCullough’s reports do the job admirably (see here and here, for example), but as the basis for serious energy policy discussions, they seem to miss the mark, and in this case, wildly.

(Posted by John Dobken)

 

EVITA could be a game changer

“We have to crawl before we can walk before we can run. But we have to start somewhere and we believe these fast charging stations are a good place to start.” – Robin Rego, Energy Northwest

Call it the “charging gap.” Electric vehicle owners know what it is – the distance between charging stations on the highway. On the West side of Washington state, mainly along the Interstate 5 corridor, the gap is relatively small, with Direct Current fast charging stations located every 40 to 60 miles, according to the West Coast Green Highway website.

Electric vehicle charging station sign isolated with sunset sky.But if travelling eastward, say to the Tri-Cities area, the gap gets wider and wider, limiting routes and, likely, opportunity for Westsiders to make a carbon-free trip to a favorite Mid-Columbia winery.

Enter EVITA, the acronym for a new project involving Energy Northwest, local utilities and the Tri-Cities Development Council. It is sponsored by the Mid-Columbia Energy Initiative, an industry collaboration effort.

EVITA stands for Electric Vehicle Infrastructure Transportation Alliance. The objective is to advocate for sustainable electric transportation infrastructure by promoting public/private partnerships in developing DC fast charging stations throughout the service areas of local utilities in Benton and Franklin counties, as well as along the major highways leading into the Tri-Cities area.

“We are focused on growing the (Energy Northwest) vision to support our member utilities with what their interests are, charging station infrastructure as an example, but also to stay on top of new technologies,” said Robin Rego, Generation Project Development manager. “Electric vehicles are a real part of storage. Storage is becoming much more important as people are focusing on renewables.”

Discussing EVITA

Alaxandria Von Hell (left) and Robin Rego, both of Energy Northwest, discuss an upcoming presentation to stakeholders on EVITA.

Rego says wind and solar, because they are intermittent, require storage to be most effective and it is becoming increasingly expensive and often not possible to use other fast responding resources like hydro and natural gas turbines to firm up renewables. Battery storage is in its infancy with electric vehicles essentially at the forefront of battery development. Energy Northwest brings its knowledge of battery storage technologies to the table, according to Rego.

Transportation versus utilities

As reported by Brad Plumer in Vox, the transportation sector in the U.S. recently passed the utility sector in carbon emissions. Plumer notes:

Over the long term, the real hope is that electric cars will catch on and help drive down overall emissions by relying more heavily on the quickly-greening power sector. Right now, electric vehicles are only 0.7 percent of the US car fleet, and turnover is fairly slow, but many analysts expect that falling battery prices should help speed up the shift by making EVs more cost-competitive with traditional vehicles.

Washington state has an enviable mix of carbon-free electricity generating resources, including all the assets operated by EN. Where the state struggles to reduce its carbon-footprint is the transportation sector, which makes up 50 percent of the state’s emissions.

The Energy Information Administration has figures from 2014 that show Washington state as an electric vehicle leader in the U.S. (see below). But in raw numbers, that’s not saying much. Washington has seven million registered cars and trucks on the road. The state’s goal is to have 50,000 electric vehicles or hybrids on the road by 2020.

EV Nationwide

That’s where EVITA can help.

Benefits and challenges

The program involves deploying DC fast charging stations at participating businesses or organizations throughout the Mid-Columbia region. The stations will re-charge an electric vehicle in about 30 minutes. Compare that to a normal home re-charge which can take 8 to 20 hours to fully re-charge. The speed is a key attribute because EV owners will want to charge up and get back home. But with speed comes cost.

Installation of one station can run between $50,000 and $150,000. On the other side of the ledger is the potential for more customers for businesses, a tourism boost and increased electricity sales for utilities. But there are risks involved.

Fast Charger

A DC fast charging station.

Demand for public charging is relatively low and how quickly that will change is uncertain. Another risk is that little is known about the financial performance of EV charging station infrastructure.

Alaxandria Von Hell, with EN’s Generation Project Development and assisting on the project, believes it is worth finding out if there can be a path to success.

“Support of this project aligns with Energy Northwest’s core values. The expansion of EV charging station access is of valuable interest to EN’s member utilities and participants and is aligned with EN’s vision statement, to be a leader in energy solutions,” Von Hell said.

Ultimately, success rests with collaboration between a wide-ranging group of interested parties, including public and private utilities, charging station owners and operators, EV owners and government agencies. Participating utilities will be identifying potential charging station locations this summer and waiting to hear about any grant money available to offset costs.

If EVITA fulfills its promise, the program will open up a new gateway of carbon-free travel across the state.

Local utilities involved with the project include Benton PUD, Franklin PUD, City of Richland and Benton REA.

View a recent news story on EVITA by KEPR-TV in the Tri-Cities by clicking here.

(Posted by John Dobken)

Public Power Week: Why we have reason to celebrate

(Guest post by George Caan, executive director of the Washington Public Utility Districts Association)

George Caan - Portrait

George Caan, WPUDA Exec. Dir.

Sometime today you will use electricity.  It may be in your office, when you make your morning coffee, or when you login to your computer. Electricity is a staple of our lives and of our economy.  October 4-10 is National Public Power Week; a national, annual event sponsored in conjunction with the American Public Power Association recognizing the 2,000 public utilities across the nation that collectively provide electricity on a not-for-profit basis to 46 million Americans. While Public Power Week isn’t a holiday marked on your calendar and won’t likely be celebrated with family gatherings, special decorations, or a large sphere dropping in Times Square, that doesn’t mean it should go by without at least a little recognition – because here in Washington state, not-for-profit, consumer-owned utilities play an important role in meeting the daily electricity needs of communities.

Public Power’s contribution

Washington’s consumer-owned utilities serve more than half of all electric customers while delivering almost two-thirds of the electricity in the state. Public Utility Districts, part of the public power family, serve almost a third of the state’s electricity needs and about half the state geographically. As not-for-profit utilities owned by the communities they serve and governed by locally-elected boards of commissioners, PUDs not only strive to help residential customers maintain comfort in their homes but also work to support local, mainly rural economies. This Public Power Week is a good time focus on the contribution of public power as an economic driver in our state.

Rates and reliability are key factors in attracting new industry to Washington and helping existing businesses thrive. Washington’s PUDs offer the lowest electricity rates in the nation. Not-for-profit services along with local control and local accountability contributes to affordability and reliability in areas served by PUDs, providing a competitive advantage for existing businesses as well as those seeking to expand or to locate in Washington.

A source of clean energy

But affordability and reliability are just part of the picture. Washington’s consumer-owned utilities offer something else in demand by many businesses and industries: clean energy. Washington consumer-owned utilities are far out ahead of the curve nationally, serving customers with some of the cleanest energy in the nation, thanks to our vast hydropower resources complimented by other renewable energy resources and nuclear power. In fact, 95 percent of the resources that serve PUD customers produce zero greenhouse gases, an attractive feature not only for residents but for businesses and industries seeking to power their operations with clean energy.

Energy Northwest has 27 public power member utilities located throughout the state of Washington.

Energy Northwest has 27 public power member utilities located throughout the state of Washington.

Promoting conservation and efficiency

To maximize our existing clean energy resources and keep rates affordable, PUDs have a long history of promoting conservation and energy as a least-cost, environmentally friendly resource. In 2014 alone, PUDs helped customers save more than 350,000 megawatt-hours of electricity. That is enough to power more than 30,000 homes. Industrial and business customers have seen the financial advantage of working with their local PUDs on energy efficiency improvements with bottom line energy savings.

As Public Power Week gets underway, you don’t have to celebrate by carving a large orange gourd or sending out “Public Power Week” greeting cards; just take a moment when you flip on the light switch to remember there are consumer-owned utilities in Washington working hard for you, for our economy, and for our environment.

Bringing together military veterans and the energy industry

(Post by Kelley Ferrantelli, EN Human Resources)

Visit any nuclear energy facility control room across the country and it’s highly likely you will meet a veteran. The commercial nuclear energy industry grew alongside the U.S. Naval Nuclear Propulsion Program – and the relationship between the two programs has grown stronger over the years. Not only in transitioning veterans to civilian jobs in nuclear plant operations, but in the Maintenance, Engineering, Health Physics and Security departments as well. The energy industry, and nuclear energy in particular, provides an outstanding career opportunity for veterans.

Reaching out to veterans

SignageThe Center for Energy Workforce Development, in partnership with the Edison Electric Institute and six pilot electric companies, developed the Troops to Energy Jobs Initiative. This initiative is designed to establish and maintain outreach to groups and companies across the country to assist in recruiting qualified veterans.

As part of the Troops to Energy Jobs initiative, Energy Northwest is expanding our partnership with regional military bases and veterans. As more members of our workforce prepare for retirement, the need for individuals with training and skills for our careers grows. In many cases, military veterans have the training and skills that directly correlate to the skills required for our positions and are a natural fit for the energy industry. Veterans have a strong sense of pride and fit well with our culture of excellence.

This effort is an ongoing partnership which can last for several months or even a couple years for the transitioning service member.

EN staff communicate with local and regional veterans representatives, bases, transition offices and service members directly for transition opportunities. Communication topics include translating military skills to the utility industry, resume preparation, job search skills, interview preparation, job applications, mentorships and networking.

We also participate in local and regional career fairs, including the Washington state Service Member for Life Transition Summit and Hiring our Heroes career fair held last week at Joint Base Lewis-McChord near Tacoma, Wash.

Kelley Ferrantelli and Matt Evans talk with a job seeker at the career fair.

Kelley Ferrantelli and Matt Evans talk with a job seeker at the career fair.

I was joined there by Matt Evans, EN component group manager, and Spain Abney, Operations crew manager. Evans served in the Navy as a nuclear electrician. Abney served as an electrician’s mate on aircraft carriers.

Abney told me he enjoys talking to military personnel making the transition because he can help them translate their military experience into civilian applications. He says this is particularly important when it comes to creating a resume.

Spain Abney, right, provides information to an attendee at the career fair.

Spain Abney, right, provides information to an attendee at the career fair.

Abney can also deliver the message as to why the nuclear energy industry seeks out veterans. “They have the standards. The integrity they teach in the military where they own their performance. And their background and time they spent serving our country is the attitude and aptitude we seek as an employer.”

Nearly 6,000 transitioning service members and spouses were invited to attend the hiring event at JBLM last week. We talked to a number of strong candidates for opportunities in information services, maintenance, operations, radiation protection and supply chain. In addition, we made several connections for additional outreach and partnership opportunities.

Tips for other companies

Hiring veterans into the organization is clearly a win-win. Prior to implementing your strategy, complete benchmarking for best practices for your industry and obtain recommendations on a couple of key outreach partners to start building relationships. Identify a few internal veteran employees to help champion your efforts and help you with your outreach.

To learn more about the Troops to Energy Jobs Initiative, visit: www.troopstoenergyjobs.com

To learn more about career opportunities at Energy Northwest, visit our website.