| Questions & Answers About Energy |
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January 11, 2001
Thanks to the Oregon Office of Energy for the responses to these questions about the energy situation and the state´s efforts to conserve energy this winter.
Q: Is there really a shortage? Why are we sending power to California if we have a power shortage in the region?
A: Regional electricity experts say we have enough electricity to meet our day-to-day needs -- but there isn´t much extra to go around. We don´t have a comfortable cushion of extra electricity available for cold weather, crippled power plants or other potential problems. Part of the shortage reflects a decade of economic growth in the Northwest. At the same time, the development of new resources to supply more electricity for new businesses, homes and residents has not kept pace.
Another reason our electricity supplies are tight is that our region relies heavily on hydropower for most of our electricity. While hydropower is a clean and renewable energy resource, its availability depends on adequate rain and snow. This fall has been dry, leaving reservoirs lower than normal.
Traditionally, we try to meet some of our winter power needs by buying electricity from California. This winter, however, we can´t count on power sales from California to make up the difference because that state´s own electricity system is near collapse. The problems there are extensive enough that Energy Secretary Richardson in December ordered Northwest and other utilities to make power available to California after local needs had been met. Under the federal order, California must return any power the Bonneville Power Administration sends on a two-for-one basis.
Californians have been asked for months to conserve electricity. In January, California´s governor formally asked its citizens to save 7 percent of the electricity they use. He also ordered state agencies to reduce electricity use by 20 percent during energy alerts.
Q: What does the State hope to achieve with energy conservation now?
A: In short, electricity conservation will help us avoid a power shortage over the next few years. The more electricity we save now, the more water we leave behind the dams. That means we have more power reserves in case cold weather hits and electricity demand spikes or in case a power plant breaks down and we need to push more water thorough the dams to make up the difference.
In addition, allowing more water to stay behind the dams helps save water for spring fish flows needed to help our native fish. And, saving electricity will help us all save money. Some utilities have been buying electricity at a cost that is more than 30 times what they paid last year. Helping utilities avoid buying this high-cost electricity means fewer costs have to be passed on to consumers in the long-run.
New power plants under construction or planned in Oregon and elsewhere in the West should help alleviate our tight power situation within a few years. Our best hope for avoiding a serious power problem right now is conservation.
Q: How much electricity (kWh) does the state government use? How much does it expect to save as a result of its conservation program?
A: State government uses about 200 million kilowatt-hours (kWh) of electricity during October through March. Governor Kitzhaber has asked state agencies to try to reduce their electricity consumption by 10 percent. Some facilities will be able to do more and others less, depending on their systems and their facility uses. Utility experts say that voluntary conservation programs are highly effective in reducing energy demand, particularly during periods of peak demand. We will know the state´s actual savings in the spring when we have enough utility bills to analyze thoroughly.
Q: Which state agencies use the most electricity?
A: Last winter, the Oregon University System accounted for about half of state governmentís total power use, or about 109 million kilowatt-hours for October through March. The Department of Corrections was next at about 30 million kilowatt-hours. The Department of Administrative Services was third at about 25 million kilowatt-hours. Together these three accounted for more than 80 percent of state governmentís winter power use.
Q: How serious is the electric shortage in Oregon? Are certain parts of the state more vulnerable to outages than others?
A: It is difficult to separate Oregon from Washington, California, and even some other Western states when you talk about electricity shortages. The systems for generating and distributing power are extensively interconnected throughout the western region. Power flows back and forth in the region -- including Canada -- all the time. This interconnected system has been beneficial because it usually helps keep costs lower and allows power to flow where it is most needed. When the power supply is tight, then, everyone in the region tends to be tight.
Oregon and Washington stand out a bit from the rest of the region because of their heavy reliance on hydropower. When conditions are dry and less hydropower is generated, Oregon and Washington may be more affected. California is affected, as well, but it also has a whole set of other electricity problems stemming from a deregulation process that hasn´t worked and high natural gas prices. (Oregon´s deregulation process is different from California´s.)
Again because of the interconnected nature of the system, all parts of Oregon share the risk when the power supply is tight. In general, though, Oregon´s electricity is mostly generated east of the Cascades and is used mostly west of the Cascades. That means a transmission outage could cause more problems for the west side.
Q: Will this shortage result in higher electric rates for Oregonians? If yes, by how much and how soon?
A: Some Oregon utilities have been paying more than 30 times what they paid last year for electricity. To counteract these skyrocketing costs, utilities have been initiating innovative programs to keep costs down. For example, some utilities now have "demand-exchange programs" that allow the utilities to "buy back" power from large electricity users when costs skyrocket. The utilities save money by paying less to the companies for their "avoided" electricity use than they would have paid to buy the electricity for the company to use.
Oregonians pay different rates for their power depending on who supplies their power. And how those rates will change again depends on who supplies their power. It also depends on the duration of the tight power supply market and other factors. What we can say is that as long as electricity prices remain higher than usual, those costs will be passed to the consumer in the long-run.
Q: Why have we all of a sudden realized there is a problem? Were the forecasts wrong, or was someone not minding the store? Why should the ratepayer have to pay for this oversight?
A: There isn´t a convenient person to blame for an "oversight" when it comes to the tight power market. Some of our tight power supply problem can be tied to unusually dry weather over which utilities and governments have no control. Another cause is the fact that California can´t supply the region this winter as it usually does because of its own problems. Again, Oregon has no control over that situation, but it´s true that we did not anticipate this problem. We knew the Northwest was going into a tight supply situation several years ago, but we projected that we could meet loads with our typical level of imports from California.
Another cause has been the region´s traditionally low power prices. Power plant developers had little incentive to build new plants with such low prices as long as the region had a sufficient supply of power. The tight power supply has spurred the development of a handful of new power plants in Oregon. These are under construction or in the planning stages. But it will take several years for all of these plants to begin operation.
The reality is that electricity systems strive for a load-resource balance. The ideal is to have just enough electricity on hand to meet all needs and still tuck away a bit in case of plant outages, extraordinary load growth, low water in the reservoirs, and emergencies. Too much electricity on-hand can mean that customers are paying for unused power plants. The load-resource balance for electricity shifts all of the time. When several problems converge -- as is happening now with the weather and with California -- what were manageable shortages become magnified.
Q: How long will it take to develop new power supplies? That is, how long are we going to be in this situation?
A: New power plants are being built in Oregon and across the western states, but it will take several years before enough new resources have been developed to dent the tight power supply situation. Conservation efforts at the residential, business, and state levels are our best hope for alleviating the problem in the short-term.
Q: Households are a very small percent of the stateís electric need? Why does it seem that households are being asked to do most of the conserving? How can one household affect the stateís energy supply?
A: Businesses and governments are being asked to conserve, as well. It may seem as if residents are being singled out because most of their information comes through the media. And residents are the primary audiences of television news programs and newspapers so their stories often focus on residential conservation.
Every little bit helps. One household by itself can´t do much. Together, though, they can make a big difference in helping the region avoid a power emergency. And it´s not that difficult to do. For example, if a household exchanged half of its standard light bulbs for compact fluorescent bulbs, it could save 3-to-5 percent on its electricity use.*
*Percent savings depends on how a household heats its home.
Q: What else can I do to conserve energy?
A: For more information try these web sites:
Ore. Office of Energy
Energy Outlet Links
Pacificorp
PGE
NW Natural Residential
NW Natural Business
US Department of Energy
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