Many years ago, I had the challenge and pleasure of working with Chuck Collins, who, along with former governor Dan Evans, was one of Washington’s state representatives on the Northwest Power and Conservation Council. It was a challenge because Chuck was (and is) an extremely bright and hard-charging individual who, at that time, was intent on seeing the council’s plan and, in particular, its conservation elements implemented.

A strategy session with Chuck always left me with a slight headache as I strained to keep up with his thinking. It was a pleasure for the same reasons. I learned a lot watching and listening to Chuck in action.

One of the things I learned from Chuck Collins was the power of an apt metaphor. Chuck understood very clearly that the great value of the Northwest power system is the Columbia River and the system of federal and non-federal dams that harnessed its power. With the river, our power was less expensive and, in some ways, less environmentally damaging (salmon are another story) than that of other power systems.

Take away the dams and our power system was pretty much like everyone else’s: dependent on fossil fuels and nuclear fission with all the economic and environmental implications they entail.

Selling conservation to utility commissioners and managers in those days was a tough sell. They understood, with some skepticism, that conservation was less expensive than building new sources of electricity generation. But the whole idea of paying their customers to use less of their product was, at the very least, counterintuitive. But Chuck came up with a metaphor for conservation that made sense.

Conservation was a way of “stretching the river,” making it possible for more customers and more end users to be served by the mighty Columbia. It would be a gross exaggeration to suggest that once conservation was explained this way, everyone fell in line to support it. But I think explaining conservation in such as way may have helped result in some important converts. The region’s record on conservation would attest to that.

Recent events illustrate that the vision of stretching the river has continued relevance today. In July, the Bonneville Power Administration (BPA) released its long-awaited Regional Dialogue Policy [see “Power policy unveiled,” nwcurrent, August 2007]. The Regional Dialogue was the process through which BPA, the Northwest Power and Conservation Council, regional utilities and others determined how Bonneville would meet its obligations to supply power and implement conservation and renewable resources during the next 20-year contract period, which begins October, 2011.

The process took more than five years. While I would have liked to see things move along more rapidly, the stakes are high, and it’s not surprising the process had to grind on for a long time.

The biggest change incorporated into the Regional Dialogue decision is the commitment to sell BPA’s power under a system of “tiered” rates. Under tiered rates, Bonneville would sell power from the existing federal base system — the dams, Columbia Generating Station and some smaller additional resources — at the average (relatively low) cost of the resources.

Power sold from the existing power system would be known as Tier 1 power. Any additional power customers might require would be sold at the (higher) cost of acquiring the necessary new resources. Power sold at this rate would be known as Tier 2 power.  

I believe tiered rates are a plus for conservation [see “Current Thinking: BPA’s Regional Dialogue,” nwcurrent, September 2006]. From the utility perspective, no longer will conservation be competing with a rate that melds costs of the existing system with the cost of new resources. Conservation will compete directly with the cost of new generating resources. Yes, the Dialogue Policy included some compromises, such as augmenting the existing system to the tune of 300 to 400 megawatts. But ultimately getting the fundamental economic signals right in the new policy is a big plus.

In fact, many interests argued getting the economic signals right was sufficient. Once tiered rates were in place, there was no need for BPA to get involved in acquiring conservation. In addition, many utilities are subject to the requirements of Washington State Initiative I-937, which requires utilities serving more than 25,000 customers to develop all conservation that is cost-effective, reliable and feasible using methodologies consistent with those used by the Northwest Power and Conservation Council. Utilities would have all the incentive needed to carry out all the conservation that was cost-effective.

BPA, however, had proposed continuing to pursue all cost-effective conservation on the load it serves and recovering its costs in the rates it charges for Tier 1 power. Many customers objected, arguing doing so would be unfair. Those undertaking conservation on their own would also be required to pay for the conservation of others in their Tier 1 rate.

I am happy to report BPA made a “stretch the river” decision. It will count the conservation acquired by its customer utilities toward its goal of achieving all cost-effective conservation. The costs of additional conservation that may be required to meet its goal will be recovered in Tier 1 rates. Does the decision carry the potential for some inequities?

Yes, but the inequities are small compared to the benefits of stretching the capability of the Columbia River as far as possible through cost-effective conservation.

Contact Dick Watson at dick@celilo.net.