Guest Column: What Does OPALCO Board Plan for the Future?

— by Tom Owens —

OPALCO : Where is the OPALCO Board Taking Us? Part 1

Does the Draft OPALCO Integrated Plan Roadmap result in low cost electricity for San Juan County? I can not tell.

We have a real opportunity to see where the OPALCO Board is taking us on the electric side of the business. Let’s first take a look at the Integrated Resource Plan (IRP) done for OPALCO by EES Consulting (a private consulting firm, EES), then compare the EES work to the subsequent Draft OPALCO Integrated Plan, especially the Road Map on page 81, done by OPALCO. I will review the Road Map in a second article. Both the EES IRP and the Draft OPLCO IRP can be found on the OPALCO website (www.opalco.com Integrated-Resource-Plan-IRP.pdf) and they total a bit over 200 pages in length.

Good news! EES reports that BPA predicts there will be no load growth for the next 20 years and that OPALCO’s own load forecast shows very low load growth. Forecasts tend to be off the mark, so using them with caution could be a good idea. OPALCO’s energy conservation efforts are paying off! We are in a great position with either set of forecasts as we do not need to go out and get involved in expensive new generation projects to meet new loads (there should not be any new loads to meet). We can live under our BPA contract at Tier 1 (cheap) rates if OPALCO can manage its loads! EES concludes that Tier 1 rates are far less expensive than new resources (except conservation). The BPA contract ends in 2028 and renegotiations will take place. This throws some uncertainty into the pot but this risk was not further addressed by EES.

The most important part of the EES IRP is their analysis of 4 scenarios that predict future power costs that OPALCO would be paying. This analysis addresses only power costs and loads over the next 20 years, given different sets of actions OPALCO could take. They do not address other costs such as distribution system up grades or grid communication (fiber) investments. We will get to those costs in the second part article.

Let’s have a look at the four EES scenarios.

Scenario #1, perhaps this is the past direction, includes conservation and energy efficiency efforts. No load growth is assumed. Over the next 20 years, this will cost OPALCO 192 million dollars (in today’s dollars) in power costs.

Scenario #2 includes low loads and high conservation and more solar. No load growth seems to be present. This one will cost OPALCO 186 million dollars (in today’s dollars) in power costs.

Scenario #3 includes higher loads and low conservation. Fuel switching is used to increase loads as does an increase in demand for electric vehicles. This one comes in at 213 million dollars (in today’s dollars) in power costs.

Scenario #4 builds on scenario #2 to include sustainablity which seems to mean adding local generation to our resources (reaching 20 percent of our needs in 20 years). Demand response units are used to limit BPA demand charges. This scenario comes in at 223 million dollars (in today’s dollars) in power costs.

Let’s compare the costs of these scenarios.

• Scenario #2 is the lowest cost.
• Scenario #1 is 6 million dollars more expensive than #2.
• Scenario #3 is 27 million dollars more expensive than #2.
• Scenario #4 is 37 million dollars more expensive than #2.

I could not tell where the OPALCO Board is going in relation to EES’s four Scenarios. Looking at the Draft OPALCO IRP, page 81, is informative. This is the OPALCO’s Road Map. There will be more on the Road Map in the second article.

The Road Map direction seems to be :

• Encourage load growth through fuel switching, like scenario #3.
• Encourage sustainability through more local distributed generation (solar and wind), like scenario #4.
• Encourage more conservation, like scenario #2
• Try to keep load growth near zero, like scenarios #1, 2, 4

Does the OPALCO Road Map put us near EES’s Scenario #2 (lowest cost) or near Scenario #4 (highest cost)? This is something the Board will have to fully address in making their decisions for our future as defined in the Road Map. What is OPALCO’s prediction of future power costs in today’s dollars over the next 20 years under the Road Map direction? I could not find this piece of information to compare it to the EES estimates?

Please read the second article that explores the Road Map, it will be out soon.

I have no affiliation with OPALCO other than being a customer/owner of the Co-op.