United States

United States

Factoring in cost of environmental risk

Consumers could save as much as $5 billion a year if utilities in the western United States follow a course that includes more renewable energy and conservation instead of more natural gas and coal power plants. So concludes a study by Western Resource Advocates (WRA), previously known as the Land and Water Fund of the Rockies.

WRA drew its conclusion after developing a green energy supply plan for seven states based on the same risk management technique used by Northwest utility PacifiCorp in preparing its latest Integrated Resource Plan. That plan, which calls for 1400 MW of new renewable energy (Windpower Monthly, June 2004), factors in the costs associated with nitrous oxide (NOx) and sulphur oxide (SOx) emissions, as well as potential carbon dioxide (CO2) penalties. WRA's study, "A Balanced Energy Plan for the Interior West," applies these costs to the states of Colorado, Utah, Arizona, New Mexico, Nevada, Wyoming, and Montana.

"If history is any guide, those high costs will be passed on to customers, which is something any large consumer of electricity, such as a business or a city administration, should be concerned about," says John Nielsen of WRA, which is based in Boulder, Colorado. Nielsen intends to use the study to show state legislators there can be significant increases in renewables without sacrificing electric reliability. "We're now reaching out to the region's larger electricity consumers to get their support for the plan," he says.

WRA hopes its findings will encourage Arizona to raise the state's renewables requirement beyond the current 1.1% by 2007 (60% of that from solar) and will significantly influence Colorado's attempts to also set a minimum standard for the renewables content of its electricity supply. The state's legislature has failed three times to establish a Renewables Portfolio Standard.

The WRA report follows a plea by western state governors in April calling on the interior states, along with California and the northwest states, to develop 30,000 MW of clean power by 2015. The governors also released a study showing what transmission improvements would be needed to achieve that target (Windpower Monthly, May 2004). WRA looks at the power needs and how that will impact business risk and electricity prices, says Nielsen. Assuming that 20% of electricity demand is met by renewables by 2020, the cost to provide electricity would drop by $2 billion a year. If climate change regulations are adopted the region would save $4.9 billion a year, the WRA says.

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