PUD backs power production

By Sharon Salyer

Herald Writer

After hearing predictions that the Snohomish County PUD may not have enough power to meet demand in five years, commissioners Tuesday took what could be the first step toward approving a gas-powered electrical generating facility.

Specifically, the public utility’s three-member governing board approved a deal with Tulsa-based Williams Pipeline Co. to lease pipeline capacity. The agreement calls for the PUD will lease more transmission capacity than it needs — 45,000 million BTUs of gas a day — for $6.5 million a year beginning in 2003, said John White, assistant general manager.

PUD officials insisted the acquisition would barely affect consumer power rates, perhaps raising them less than 1 percent. Already, rates are set to go up 18 percent on Oct. 1, the second increase this year.

White said the utility would be able to sell the capacity it doesn’t need to other industrial natural gas users. If so, it would lower the PUD’s net annual bill to about $3 million.

Although some commissioners questioned whether excess capacity in fact could be sold, PUD staff members said they thought it could, explaining that pipeline capacity, particularly in the Northwest, is at a premium.

The move was approved on a 2-1 vote, with commissioners Don Berkey and Cynthia First voting in favor and Kathy Vaughn voting against it.

Resulting gas shipments from the deal could begin flowing in mid-2003. If all the gas were used in one facility, it would fuel a plant that could produce 240 to 248 megawatts of power, enough to meet the needs of roughly 148,800 homes.

"This looks to me like step one in an effort by this utility" to build a combustion turbine generating facility, Berkey said. "Frankly, I haven’t heard a lot of discussion from staff on how or why they think we should be doing this."

First argued in favor of the proposal. "This is the first step toward a turbine (generating plant), but there’s no harm, no foul if we don’t," she said.

"I’m not necessarily sold on being the owner in a turbine. I want to keep our options open," she added.

White said the agreement doesn’t necessarily mean the PUD will own or operate the plant. "There are many alternatives as to how we would take (natural gas) capacity and get electricity," he said.

The utility could contract to bring gas to a site and have a developer build a power plant anywhere in Western Washington, from Sumas to Chehalis, he said. "That gives us quite a bit of geographic opportunity for participation."

The move could give the PUD more options in providing future power needs, said Paul Elias, general manager.

Earlier, the three-member board was told that the utility could be 50 megawatts short of meeting projected power demands by 2006. By 2009, the power deficit could grow to 100 megawatts, White said.

Berkey and Vaughn said they were worried about the cost of the pipeline project for utility customers.

"We don’t know where the future goes," Vaughn said. "I feel like this is a risk and extra cost to the community we shouldn’t be incurring in these uncertain times."

Earlier this month, the commissioners approved an 18 percent rate hike effective Oct. 1., the second increase this year. Berkey noted that the PUD now has some of the highest utility rates in the state. White said that the pipeline project would amount to less than a 1 percent rate increase.

"Can you do this with minimal or no rate pressure?" Berkey asked.

"Yes," Elias said, adding that there would be no rate increase from the project starting in 2003.

Noting that the PUD would need only 50 to 100 megawatts from a plant that could generate 240 megawatts of power, Vaughn asked what would be done with the remaining electricity.

"It would not work unless we have a partner," Elias said of plans for a turbine-powered generating plant.

You can call Herald Writer Sharon Salyer at 425-339-3486

or send e-mail to salyer@heraldnet.com.

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