The Goldendale Sentinel - Headlines & History since 1879

By Andrew Christiansen
Reporter 

PUD pumped storage on hold for time being

 

File photo

TOUGH DECISIONS: The Klickitat PUD commissioners held a public meeting in February to discuss the proposed pumped storage project. Left to right, Dan Gunkel, Ray Mosbrucker, and Randy Knowles.

Mark Twain once said "Rumors of my death have been greatly exaggerated," in response to a reporter inquiring about his health. That could have been the response of Klickitat PUD Commissioner Randy Knowles upon learning that some in the county have declared the PUD's interest in a water storage project to be dead.

Not so, says Knowles.

"We have suspended our licensing efforts and with a fairly short time line we may be looking for an extension from FERC," says Knowles.

The PUD is in the process of applying for a license that would allow construction of a pumped storage hydroelectricity project from the bluffs above the old aluminum plant near John Day dam to property they control near that site. Knowles says it will take about $3 million to complete the studies required by FERC to grant the license.

Knowles says that Klickitat County Board of Commissioners expressed interest in seeing the project built and the PUD approached them for support in obtaining the license. At first Knowles said it was proposed for the county to put up $500,000. Then Sherman County Commissioners expressed an interest and Knowles said the proposal was changed, asking each county to put up $1.1 million and become full partners with the PUD, thus sharing any income the project might generate.

After some consideration, Sherman County chose not to make the commitment and Klickitat County followed suit. That led to the suspension of activity, which some have apparently assumed meant death of the project. Instead, Knowles says the PUD is working with a quasi-government group created by west coast states and British Columbia to facilitate infrastructure development with public-private projects. The intent is to bring the PUD and the two county boards together to learn more about the potential of the proposed project. Knowles said that he believes that meeting will happen in July. In the meantime, PUD has until October to make their license application. If they don't accomplish it by then, they would lose protection from some other entity opting to do the project. Knowles says it wouldn't stop the PUD from making another application for a license. Rather than go that route, he thinks the PUD is likely to ask FERC for an extension from the October dead line.

Knowles says the county wants the project built, regardless of who builds it because it could mean $13 million to $14 million of annual property tax revenue to the county. It is not clear who might jump the claim, so to speak, if the PUD permit to obtain a license expires, but Knowles doesn't want to take that chance. He sees the project as a money maker for the PUD as well as the county. Knowles believes that a Market for the power is being developed. He sees Bonneville Power Authority as just one of several customers for the capacity they can be sold by this project.

Knowles admits that energy is a depressed Market right now as legislative mandates have been met and things like fracking have put low cost natural gas in the Market. But he says there are renewed efforts to sell energy to California. He also points out the project is years away and there is no guarantee it will ever be built. If it is built, Knowles says it will take six to 10 years to complete. It is the capacity that will be marketed and that isn't specific to wind energy. If solar is the future, it also has a need for storage capacity, says Knowles. The value of the project is being able to Market energy delivery at times of the day and year when demand is high. Whether it is wind or solar, production is often at times of low demand and thus low value. It leads Knowles to say "capacity will be more valuable than the energy." He says Bonneville or any other delivery of energy won't take on wind or solar projects that don't provide storage.

Knowles admits he's the driving force behind the project. When asked if they need the $2.2 million they asked from the counties in order to proceed, Knowles said the PUD board differs on that. "I'd spend the $3 million or whatever it is," says Knowles. He sees it in risk and reward terms. "If I am wrong, we would have spent $3 million. If others on the board are wrong, we lose $750 million to $1 billion from potential taxes and earnings." Knowles says that even if it generates no earnings for the county, the tax income is huge. "It doubles our county assessed value," says Knowles.

Of course, doubling assess value doesn't necessarily translate into more tax income. It could also spread tax assessment out so everyone would pay less.

The bottom line is that the PUD is trying to facilitate the construction of pumped storage hydroelectricity by clearing the FERC licensing hoops. Knowles thinks that it is worth $3 million to do so. "The PUD is not going to build it. We would never spend $2.5 billion to build it. We are getting the license that will allow someone else to build it."

"We aren't going to get another opportunity like this in my lifetime, so I push to keep it alive," says Knowles.

 

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