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Summer Gas, Hydro Generation Sources Plentiful in West

Despite dire drought forecasts as recently as January, the summer energy outlook in the West looks bright for both hydroelectric and natural gas-fired generation, according to a variety of sources.

The most recent water and energy assessment by the Northwest Power and Conservation Council (NPCC) shows water levels at the Dalles Dam in the Mid-Columbia River area at 101% of normal for the March through September forecast, compared with assessments just two months ago that would have been in the 80% area.

"We were in a world of hurt until about Feb. 1," said John Harrison, NPCC's Portland, OR-based spokesperson. "We had an extremely low water year from Thanksgiving on, and there were big concerns that we weren't going to make it much above 80% of average, but since the first of February we have been dumped on with heavy rains pretty much. Everything looks better."

The anticipated heavier load for natural gas to make up in the face of lower-than-normal hydro supplies is not going to develop the way things look now, Harrison said.

On the demand side, in Idaho Wednesday state regulators accepted a revised growth plan from Spokane, WA-based Avista Utilities, meaning the combination utility will delay for one year the need for an additional gas-fired power plant. In Avista's assessment, approved by the Idaho Public Utilities Commission (PUC), previously forecasted 1.6% electric load growth has been cut to 1.1% annual growth.

"Avista's plan says its own generation and its long-term contracts will provide enough energy to meet customer needs until 2020," a PUC spokesperson said. Beyond 2020, Avista has three gas-fired power plants slated: an 83 MW simple-cycle peaking plant in 2023; a 270 MW combined-cycle baseload plant in 2026; and a 50 MW simple-cycle plant in 2032.

A western-wide assessment -- the first of a two-phase report for the Western Interstate Energy Board (WIEB) -- earlier this month concluded that there is adequate natural gas infrastructure (interstate and intrastate), including storage, to meet the needs of the Western Interconnection grid for at least 10 years.

A second phase report due out in June will look at the question of whether western gas delivery systems have the flexibility to meet increased volatility in hourly electric industry natural gas demand due to high penetration of variable renewable resources providing power to the Western Interconnection.

WIEB's aim, through two working committees that commissioned the study, is to focus on more regional dialogue leading to greater gas-electric grid coordination, along with identifying potential troubling issues and providing guidance to various stakeholders.

"In the past two decades, the North American power sector's reliance on natural gas for electric generation has grown significantly," said the report by San Francisco-based Energy and Environmental Economics Inc. (E3). "Low gas prices, environmental regulations, and improving technologies have all contributed to rapid and sustained investment in new gas-fired power plants across the continent."

This growing gas reliance has caused some concerns among regulators and energy planners regarding how well the gas and electric grids coordinate. It has caused federal and state regulators to push for closer coordination, and WIEB is attempting to be responsive to that concern.

As the most recent example of the need for closer gas-electric grid coordination, the report cited the move by Sempra Energy's Southern California Gas Co. in February to curtail a number of large, noncore customers, including electric generators, in response to severe winter weather-induced shortages of supply at the California border.

"While California's electric reliability was preserved throughout the curtailments, this event provides a recent reminder of the vulnerability of the electric sector resulting from its reliance on natural gas," the E3 report said.

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