I-937 requires Avista to have 3 percent eligible renewable resources, renewable energy credits (RECs) or a combination of both in 2012
Avista’s been generating renewable energy for a long time – after all we were founded on hydropower more than a century ago. But starting in 2012 renewable energy has officially become a required part of our energy portfolio.
In addition to meeting our customers’ energy needs, Avista has to meet renewable portfolio standards detailed in Washington’s Energy Independence Act. Washington state voters approved the act with the passage of Initiative-937 in 2006. It requires us to use eligible renewable resources, renewable energy credits (RECs) or a combination of both to meet the following annual targets: 3 percent of energy used to meet customer demand by Jan. 1, 2012, 9 percent by Jan. 1, 2016 and 15 percent by Jan. 1, 2020.
We will meet the majority of our 2012 requirements simply by doing what we had already planned to do – upgrading our hydroelectric dams, primarily those on the Clark Fork River
. We upgraded the generating units at Cabinet Gorge Dam from 2001 to 2007, replacing the original turbines, which were installed in the 1950s. And at Noxon Rapids Dam, we just finished upgrading all four original generating units with new turbines. We did this work to extend the life and capacity of our dams. And with the modern turbines, we can generate more energy using the same amount of water. Better yet, since the upgrades were done after 1999, the additional energy qualified as an eligible renewable resource to meet our state mandates.
The next big deadline will be 2016, and while it’s still a few years away, we’ve been planning for it for some time. Over the past several years, we followed the market and looked for opportunities to incorporate additional cost-effective sources of renewable power. Lower costs of developing wind power facilities and ongoing tax incentives set to expire at the end of 2012 led us to a request for proposals in early 2011, and later that year we signed a power purchase agreement with the Palouse Wind Project, which has the added benefit of being located in our service territory. Palouse Wind
has added value in the form of the renewable energy credits it provides. From time to time, we sell surplus RECs that result from the generation of power from renewable resources that exceed our need to meet state requirements. Sales of excess credits help offset and lower power costs for customers.
A more recent accomplishment gives us even more flexibility in meeting our renewable energy mandates. As one of the first biomass plants of its kind in the country, Kettle Falls has been generating renewable, dependable energy for more than 25 years. We’ve been working since 2008 to get the energy generated at Kettle Falls recognized in Washington state as renewable, and in March of 2012, Washington Governor Christine Gregoire signed SB 5575 into law. The bill qualifies biomass energy projects built before 1999 as eligible renewable resources. As a result of the bill’s passage, the energy generated at Avista’s Kettle Falls biomass plant will qualify to meet our renewable requirements beginning in 2016. This will save our customers millions of dollars that we might otherwise have to spend to acquire or build more renewable energy to meet our state mandates.