Page 16 RAIN February/March 1981 NORTH EST ER PLAY.2 Within the next few years, a number of decisions about our energy future will be made-decisions that will affect our lives for at least the next generation. One of the places where those decisions will probably be made first is in the Pacific Northwest, where .electrical utilities are predicting widespread power shortages by as early as 1983. The Northwest is one of the most electricity dependent regions in the world, with a strong tradition of loc~lly controlled public power that has been steadily compromised over the years. The reasons go · back to the early days of the great power trusts, one of the great robber baron sagas of this century. By breaking an early precedent of industrially and municipally generated power, a few consortiums of private utilities were able to gain a stra'-ngleho{d o~ the nation's power supply that extended into the early 1930s. The collapse of some of the·power trusts during the Depression, combined with public outrage over utility practices, led to a strong public power-,,,movement, actively supported by the federal government. The movement was particularly effective in the Northwest, where a· long history of progressive reform efforts was combined with federal development of some of the region's abundant hydroflectric resources and the creation of the Bonneville Power Administration, an agency charged with a firm commitment to publicly controlled power. As World Warll approached, however, Roosevelt was forced to compromise with the nation's private utilities,.and BPA's support of public power faded as heavy industry, particularly the aluminum and aerospace industri.es, moved into the area. By the '50s, BPA's interests and outlqok had come to be closely identified with the region's large industries and private utilities. The 'S0s also saw the formation of the Washington Public Power Supply System (WPPSS), a small group of private utilities that developed an early taste for nuclear p_ower and has since committed itself to one of the most ambit(ous nuclear construction projects in the world. The postwar industrial boom, combined with huge surpluses of cheap hydroelectricity, resulted in the explosive growth of electrical energy consumption in the Northwest. Utilities expected this growth to continue indefinitely anq planned accordingly, unveiling the Hydro Thermal Power Program (HTPP) in 1970. The term "Hydro Thermal" was somewhat misleading. The only role of hydrolectricity in HTPP was its expected displacement by the 26 nµclear and'coal power plants that utilities wanted to build before the turn of the century. HTPP fell apart almost immediately, a victim of rapidly rising construction costs and a decision by the Treasury Department restricting BPA's ability to involve-the federal government in subsidies of thermal generating plants. The stage was set for an historical debate over whether the region should turn to thermal power, or continue and expand its historic reliance on renewable energy. By Kevin Bell----------------------------------- Projecting a Fantasy The reasoning behind the almost fanatic dedication of utilities to centralized power, against seemingly insurmountable odds, provides some fas~inating insights into the nature of modem utilities. The greed of the early robber barons that gave rise to.the great power trusts of the twenties has led to a growth ethic among utility managers that is backed by a sixty-year winning streak and reinforced by an almost religious determination to produce unlimited amounts of electricity. It has taken utilities several years to realize that the situation has changed drastically. It ·is quite possible that by the time they are prepared to respond effectively, the decision about the Northwest's energy fuure will have already been made. It turns out that many of the assumptions that u~ilities used to justify their massive commitment to coal and nuclear generation have little bearing on reality. FOF example, ten years ago utilities were predicting that regional electrical demand would nearly triple .by the turn of the century.-Since then, projected growth rates have been cut in half. Even so, utility forecasts are higher than any ~f the half dozen or so forecasts that have emerged in various government and independent studies over the last five years. The region's average electrical demand last year was the equivalent of eight lO00MW nuclear or coal plants below what it was expected to be ten years ago, and more than two large plants below what it was expected to be only two years ago. In fact, power demand has leveled off nationally, and last year actually-declined slightl'y in the Northwest. For the last decade, utility forecasts have been-consistently out of touch in a region that has fe~ new uses for electricity. If the Hydro Thermal Power Program (HTPP) had stayed on schedule, the Northwest would have been forced to pay for several billion dollars •worth of unne~ded thermal plants. Regional r.atepayers are lucky · that HTrP fell apart as rapidly as it did. Utilities have also had a hard time getting a handle on how much thermal plants actually cost. Three years ago, the standard wisdom was that nuclear plants would deliver power for about 2½ cents/ kwh (i980 $). Now, the Bonneville Power Administration (BPA) is talking about 6 cents/kwh (1980 $), and many sources within the BPA expect these costs t~ be revised sharply upward. Private·econo.:. mists are predicting that costs could go as high,as 10-15 cents/kwh. These figures do not include decommissioning or waste disposal costs; nor do they take into account the effects of mistakes, construction delays, design changes, or galloping inflation. These factors are impossible to predict. Usually nobody tries. U~ility tunnel vision can lead to some grimly ludicrous situations. A good example is the decision in: 1974 by the Washington Public Power Supply System (WPPSS, pronounced "whoops") to rise above its humble roots by building five nuclear plants in Washington state. It was quite a ju p from the $130 million that was needed to retrofit a military reactor at Hanford to the $4.1 billion initial price tag for WPPSS Projects 1-5. WPPSS hasn't managed the transition very weil. At the moment, the plants are five to seven years behind schedule, and WPPSS predictions of a 7-9% annual inflation rate in plant costs have been shattered by current cost estimates of over $19 billion. Assuming that there are no further cost increases (an unlikely assumption) the cost of the five plants will equal about half an MX missile project, or about $4700 fQ~ every person in Washington State. WPPSS is borrowing more money than every state, county, and local governrpent in the Northwest combined, and with inter- 'est, the total cost of the project _could easily go over $50 billion.
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