RE Proves the Right Balance for Utility

Puget Sound Energy has released for public comment a draft least-cost plan that details the utility’s strategy for meeting its customers’ growing energy needs with a balanced portfolio featuring energy efficiency, renewable resources and efficient thermal-power generation.

Bellevue, Washington – April 2, 2003 [] The utility already has begun to implement its renewable component. PSE recently signed a near-term agreement with PPM Energy to receive power from Stateline Wind Farm in Walla Walla, Washington. The agreement will provide PSE’s portfolio with 68,000 MW hours of Renewable Energy for a year. “We are committed to making Renewable Energy an important part of our balanced power-supply portfolio and Stateline gives us a great opportunity to gain experience with this type of generation,” said Eric Markell, senior vice president of energy resources at PSE. “Renewable resources are becoming more economically viable sources of energy as the technology continues to improve.” PSE has set a goal to meet a minimum five percent of customers’ energy-supply needs with renewable resources by 2013. The commitment to Renewable Energy is a key part of PSE’s plan, especially with some of the company’s existing purchased-power contracts already expiring. PSE soon will face a power-supply deficit of 300 average MW (aMW), enough to serve 300,000 homes. If this deficit is not addressed, PSE would be forced to rely more heavily on unpredictable wholesale markets for power to serve its customers. “A utility and its customers can win or lose with too much or too little generating capacity, depending on what happens in the highly volatile wholesale energy market,” said Steve Reynolds, president and chief executive officer of PSE. “Our draft least-cost strategy is designed to provide customers low cost and low risk by meeting their needs through a balanced portfolio of energy efficiency and supply resources.” PSE’s plan, which will be submitted for review by the Washington Utilities and Transportation Commission (WUTC) at the end of April, also focuses on energy-efficiency savings and a diversified mix of additional new power resources to serve its customers’ future needs. The utility is targeting a minimum of 150 aMW in energy-efficiency savings over 10 years, enough energy to power 150,000 homes. PSE also plans to achieve 21 million therms in natural-gas savings over the same period of time, enough to serve 22,000 homes. Furthermore, PSE is exploring additional energy-efficiency targets beyond the aforementioned goals. PSE plans to meet its remaining resource requirements through a diversified mix of additional new energy supplies. The supply mix might include energy from purchased-power agreements, the purchase or development of new generating facilities and/or joint development of new generation facilities with others. “To meet our public-service obligations, we must look to ourselves for solutions,” Reynolds said. “With the distressed merchant-energy sector, we must take steps to diversify and secure a resource portfolio that helps satisfy our customers’ growing power demands. Our balanced portfolio strategy is a long-term solution that will provide more local control over the power supply and minimize risk to customers.” PSE’s draft least-cost plan is in step with Washington state’s official energy policy, which advises utilities in the state to meet their customers’ energy needs without excessive reliance on the wholesale power market. The plan will be open for 30 days of public comment before it is reviewed by the WUTC. After incorporating the comments from the WUTC staff, key stakeholder groups and the public, PSE’s plan will be filed with the WUTC on April 30 and revised in August to incorporate forthcoming energy-efficiency data.
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