By Sandra DeMent
For The Sentinel 

County energy industry: Size, production, and benefits

 

March 25, 2020



Last week’s article in this series incorrectly identified the number of wind turbines and megawatts in Klickitat County. The correct numbers are more than 700 turbines and 1,248 megawatts.

Last week we took a look at the diverse energy industry in Klickitat County. To recap:

Legacy projects

1997: The McNary Dam Fishway Hydro Project, a partnership between KPUD and Wasco County PUD, generates 10 megawatts of power. KPUD’s 50 percent share is the only project whose energy remains in Klickitat County, serving local residents.

2004/2007: Pudget Sound’s Goldendale plant generates up to 250 megawatts of electric power from natural gas, destined for Seattle area customers. The plant created about 18 jobs and the county benefits by taxing the facility.


New renewable energy projects

1999: Methane gas from the Roosevelt Regional Landfill was first used to generate electric power. Now mothballed, a new plant began in 2019 to use the methane gas to generate 700 million BTUs of renewable natural gas, the energy equivalent of 14 million gallons of diesel gas per year. BP Energy has bought the gas for fleet fuel, such as city bus lines, mostly in California. For the next five years, KPUD gets about $1 million annually over the cost of operations and debt repayments; after that the Market price of renewable gas will determine how profitable the BP contract is.

2007: White Creek Wind Project, jointly owned by four utilities including KPUD, operates 89 wind turbines that generate 204.7 megawatts of power. KPUD’s 13 percent share is sold to others under long term contracts. KPUD’s debt for White Creek was recently paid off, so contracts are more valuable. And, 89 landowners are receiving about $10,000 a year per turbine for the land leases. Cows get free shade.

2006-2011: A handful of wind turbine operators manage over 700 turbines in the county, generating up to 1248 megawatts of electric power, as long as the wind continues to blow. Most of the power is exported to California. This generates $7 to $10 million in annual lease payments to Klickitat County property owners. Yes, they have to pay taxes on that additional income.


2019: Lund Hill Solar Project, on 1,800 acres south of Bickleton, will begin producing 150 megawatts of solar power in 2020. It is the largest solar project in Washington, its power already sold to cities and towns and state agencies throughout Washington. The project pays approximately $300 per acre, for a total of half a million dollars annually to a mix of private owners and the state.

You might ask, how much money is being made off all these megawatts? Turns out it is complicated, very, very complicated. There is no single reliable source of data, the price varies by type of power, and companies are not necessarily interested in breaking out the Klickitat County share of their revenue, expenses and profits.

Let’s start with KPUD. To serve Klickitat County’s 22,000 residents living in an estimated 11,000 households plus commercial establishments, KPUD uses about 48 megawatts of power a year. That amounts to just 3 percent of the total power generated in the county today. Roughly 75 percent comes from BPA, under a preferential rate available to public utilities. As needed, KPUD may buy another 15 percent from BPA at slightly higher rates.

Another 10 percent of our power comes from the McNary Dam, which can provide power at almost half the BPA rate, since KPUD has just paid off its construction debt. That low cost power represents a real benefit to Klickitat County residents. In addition, KPUD receives revenue from selling its share of power from the White Creek Wind project. County landowners receive nearly a million dollars in turbine lease payments.

What is the price of a megawatt of power? It’s complicated. The U.S. Energy Information Administration (EIA) publishes an Annual Energy Outlook which projects the cost of future energy from diverse sources. A key concept is the “levelized cost of energy”(LCOE) which factors in the cost of building an energy plant (and eventually removing it)spread over the expected lifetime of the plant, waste disposal costs (think nuclear waste, for example), the operating and maintenance costs, the cost of fuel, transmission and so on.

The other key factor built into LCOE is “capacity” which means how steadily or efficiently the plant can generate power. Hydroelectric dams are 75-85 percent efficient, since the rivers don’t stop running. But the plants still need to stop for maintenance and repairs so even a hydroelectric dam will never achieve 100% capacity.

Even though the wind is “free” for wind projects, their capacity is low, about 33 percent, since the wind doesn’t blow all the time and the turbines still need to be shut down for maintenance. Similarly, the sun doesn’t shine 24/7. So, capacity for solar projects is lower still, usually around 25 percent. This results in solar power having a relatively high LCOE, about $74 according the Energy Information Administration.

Think of LCOE as a way of calculating the “gross” value of energy created. Plant operators still have to pay the costs of construction, operations and transmission. And, Market fluctuations affect what price energy firms can ask for their power.

A final point: while the LCOE attempts to fairly compare all kinds of power sources, the actual Market costs are often lower. The Advanced Energy Economy Institute points out that while the LCOE for wind power is $55.80/Mwh, recent Market prices for long term wind power contracts are only $24/Mwh. The attached chart describes Klickitat County’s “energy export” Market.

The subject is complicated, the experts don’t agree, and the local data isn’t available. The only solution is to offer the best estimates possible, with advance apologies to all parties who later come forward with the “real” numbers. Combined, the new hydroelectric, wind, solar and renewable natural gas plants generate nearly $1 billion. If the pump storage project is built, the energy produced in Klickitat County will easily exceed $1 billion.

 

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