By Mitch Cutter and Donald Miller / For The Herald
The Bonneville Power Administration — the Northwest’s wholesale public power supplier and the owner of 75 percent of the Northwest’s electrical transmission grid — should be leading the way toward a successful, smooth transition to abundant, clean energy resources that can fulfill growing demand for power.
Instead, the BPA is about to make an unforced error that will harm ratepayers, decarbonization efforts and the entire region.
Energy markets are critical for the unfolding clean energy transition. These markets can be used to share resources to increase reliability, keep prices low and maximize the efficiency of wind and solar electricity. Larger markets, with more participants and diverse geography, allow more efficient sharing of resources. In the West, two of these markets are emerging: the larger Extended Day Ahead Market (EDAM), which covers California, Nevada, and parts of Oregon and Idaho; and the smaller Markets+ construct, based in Arkansas.
For many of us, debating the pros and cons of energy markets seems wonky. But the ramifications of BPA’s decision to join one market or the other are huge, running from Everett to Boise, Idaho and beyond. That choice will affect the future of the Northwest for generations to come. Leveraged properly, a large Western energy market could help replace fossil fuels and drought-susceptible Northwest hydropower with a diverse portfolio of renewable energy. Choosing the wrong market translates to escalating energy bills, unreliable energy supply, and large-scale power failures that will upend communities and destabilize the regional economy.
This is why energy experts agree: EDAM — as opposed to Markets+ — is the clear choice to deliver a reliable, economic and environmentally friendly energy mix for the American West. EDAM is the best choice for the Northwest region as we seek to meet the growing energy demand resulting from data centers and population growth. EDAM’s larger market will allow broader usage and development of lower cost, carbon-free power sources that will aid in decarbonizing the energy system and lowering electricity costs for consumers.
But instead of joining much of the West in EDAM, BPA has proposed joining the distant and far-flung Markets+. The agency made this choice knowing it will lead to higher costs for its customers and could increase the risk of blackouts.
That may seem like a surprising choice, but let’s not forget: BPA has a long history of getting the big things wrong. For instance, BPA pressured the Washington Public Power Supply System to build five nuclear plants, a fiasco of cost overruns and chronic delays that ended with just one operating plant and the largest municipal bond default in U.S. history in the 1980s (remembered as the “Whoops” debacle). Ratepayers today are still paying for the multi-billion dollar debt incurred by Bonneville’s misstep.
In addition, ratepayers continue to pay for the largest, most expensive species recovery program of all time. BPA spent more than $25 billion since 1980, but not one wild fish run listed under the Endangered Species Act has recovered. Bonneville doesn’t seem to mind profligate spending of ratepayer dollars.
Now BPA wants to stick it to its customers once again. This became abundantly clear last year, when it contracted with consulting firm E3 to evaluate its market options. E3’s study concluded that EDAM offered $69 million to $221 million more in annual system operations cost benefits than Markets+. Those benefits would flow to customers: BPA charges electricity rates based on its own costs. Seattle City Light, one of its largest customer utilities, estimates that BPA’s decision to join Markets+ and forgo the benefits of EDAM will cost Seattle ratepayers $6 million to $21 million per year. Snohomish County PUD is similar in size to Seattle City Light and gets about 80 percent of its electricity from BPA, so ratepayers here would be affected similarly.
Bonneville’s missteps have raised alarms. U.S. Senators in Oregon and Washington have voiced concerns, warning BPA to make a carefully considered choice, noting that with growing climate uncertainty, “BPA’s decision to join a day-ahead market is monumental; BPA must be able to demonstrate that it is in the best interests of communities across the Northwest that are reliant on BPA for both power and transmission services.”
Seattle City Light is also troubled by the potential for more blackouts. In a Nov. 24, 2024 letter to BPA, the Seattle utility cited concerns that Markets+ holds “a higher likelihood of reliability challenges for BPA, its customers, and the western U.S. The forecasted increases in load, the changing needs and challenges of the region, and the likely increased reliance on imports underscore the need for greater visibility, coordination and optimization, not less.”
BPA’s actions may not be surprising, but it’s not too late for the agency to correct its course. Its path to join Markets+ will cost more to customers and consumers, decrease grid reliability, and threaten environmental and clean energy goals.
Northwest utilities, including Snohomish PUD, should encourage BPA to join EDAM’s larger market, reap the benefits for customers to keep rates low, and welcome more renewable energy into the Northwest. As in the WPPSS debacle, the consequences of a bad markets decision will last a long time. In a time of rising prices for just about everything, we can’t afford another misstep.
Donald Miller is a member of Snohomish County Indivisible, advocating for progressive policies. Mitch Cutter is a salmon and energy strategist with the Idaho Conservation League.
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