New capacity attracts outsiders

Wind farms - Multistate agreements may follow the state's expansion into renewable energy

As the Oregon Renewable Energy Act made its way through the Legislature last month, lawmakers emphasized its potential to create homegrown, clean sources of electricity.

Yet, even as Gov. Ted Kulongoski signed the bill into law Wednesday, the emerging reality defied the vision of a lone state moving toward energy self-sufficiency.

Oregon wind farms, expected to dominate the state's renewable power expansion, are in the sights of utilities throughout the West. Electricity buyers in California are showing interest in power generated by a wind farm under construction in Sherman County, and already California utilities have snagged power from a Washington project. And the electricity from a project under development in Oregon's Union County is headed for Idaho.

More interstate deals are expected as Oregon, California and Washington, each with renewable energy mandates, vie for green power, which can move easily throughout the Western power grid.

"We trade power between California and Oregon all the time," said Troy Gagliano, a senior policy associate with Renewable Northwest Project, which promotes clean energy and supported the bill.

Nevertheless, Kulongoski and leading lawmakers clearly intend the new law to help keep the wind energy for in-state use, powering local homes and businesses. During debate on the bill, they warned that failure to set Oregon mandates in place would deflate demand and make it easier for Washington and California to step in to seal long-term wind-power contracts, which typically extend for 20 years.

"We definitely were concerned about being a net exporter," said Peter Cogswell, Kulongoski's energy policy adviser. "We wanted to keep power in the state."

With the mandate, Oregon utilities will have to compete as aggressively as others for the power generated by wind farms expected to rise along the Columbia River Gorge, Cogswell said.

The ideal situation, said Kulongoski spokeswoman Anna Richter Taylor, would be to develop enough in-state wind farms to meet the Oregon mandates, then sell any surplus elsewhere.

"The governor wants as much here as possible," she said, "but he wants Oregon to be a hub too."

So far, support for the wind farms runs deep throughout Oregon's Columbia Gorge counties. But, there are flutterings of unrest. In the scenic and more populous area west of The Dalles, a group of residents has gathered forces to oppose a wind farm proposed by Massachusetts-based UPC Wind.

"We keep hearing we need local power," said Jill Barker, one of the opponents. "But if it's going to be shipped to California, what kind of an argument is that? What do we get out of it?

California could prove an eager buyer. Its energy standard calls for 20 percent renewables by the end of 2010. Not surprisingly, electricity use in the state easily outpaces the entire Northwest's: California's population of 36.6 million is 10 times that of Oregon's.

The Oregon law requires the state's largest utilities -- Pacific Power, Portland General Electric and Eugene Water & Electric Board -- to get 25 percent of their electricity from renewable energy sources by 2025. Interim requirements set the amount at 5 percent by 2011 and 15 percent by 2015.

Pacific Power, PGE and Eugene electric board say they will meet the 2011 target with years to spare -- likely by the end of this year. The jump to 15 percent will be more challenging, they said. Pacific Power and PGE together account for almost 80 percent of the state's retail electricity sales.

The bill doesn't require utilities to build projects in Oregon. Neither does it require the purchase of only in-state power. Instead, the territory described by the renewable standard encompasses the 14-state Western grid, known as the Western Electricity Coordinating Council.

Advocates said the larger area gives utilities room to shop around for the best-priced power. Otherwise, demand could outstrip supplies and drive up prices and, in turn, customer rates, they said.

Utilities can buy the power for delivery to their service area or they can buy energy credits, known as green tags.

Pacific Power and PGE, which initially bought the electricity from developers, are now taking on their own projects. PacifiCorp, the six-state utility that operates Pacific Power, owns wind farms in Oregon, Washington and Wyoming. PGE is developing a huge multiphased project in Oregon's Sherman County called Biglow Canyon.

Both say the power will go exclusively to their customers.

Still, utilities are not the biggest players on the nation's wind-swept hills. PPM Energy, based in Portland and one of the largest wind developers in the country, is erecting hundreds of turbines at various locations in the West, Midwest and East. It has become expert at transporting wind power throughout regional grids, sometimes designing complex deals to account for tricky transmission routes and fluky wind patterns.

Its newest project, the huge 200-megawatt-capacity Big Horn wind farm, is spread across wheat fields and range land near Bickleton, Wash. The entire output -- enough to power 60,000 homes annually -- has been purchased by a group of public utilities in California.

"Electricity is a commodity, just like the wheat underneath the turbines," said Kevin Lynch, the company's director of policy and regulation.

PPM Energy, owned by a Spanish energy company, currently is sifting through bids for the power from another big project, Klondike III in Oregon's Sherman County. Eugene Water & Electric will buy roughly 10 percent of the power. Of the rest, PPM would say only that entities in all three Western states are interested.

Further east in Oregon's Union County, Texas-based Horizon Wind Energy -- with corporate ownership based in Portugal -- is building the 100-megawatt Elkhorn wind farm. When it's completed at year's end, the power will head east to Idaho.

High-voltage transmission lines stretching into Idaho Power's service area "made us a natural target," said John Lamoreau, a former Union County commissioner and wind farm supporter.

Lamoreau said he's looking forward to more wind-farm development, "almost like a gold rush," now that Oregon's renewable requirements are in place. Property taxes shore up ailing budgets and turbine royalties feed farmers' pockets, he said.

"I have no problem with the power going to Idaho," he said. "We still get the economic benefit and we're still creating green energy."

Gail Kinsey Hill: 503-221-8590, gailhill@news.oregonian.com