‘About seven Rocky Reach dams’: PUD details looming power generation gap

WENATCHEE — Chelan County PUD commissioners got a sobering picture Monday of how quickly the Northwest’s electricity demands are outpacing supply, and why local utilities are pushing back against state lawmakers who want a stronger hand in how new large power users are managed.

During a legislative update at the Feb. 2 commission meeting, government affairs program manager Kelli Scott told commissioners that a recent regional study projects a potential power supply shortfall of nearly nine gigawatts by 2030 during extreme weather conditions.

To put that in perspective, Commissioner Randy Smith asked how that compared to a familiar benchmark.

General Manager Kirk Hudson answered plainly.

“That’s about seven Rocky Reach dams,” Hudson said. Chelan County’s flagship dam produces approximately 1.3 gigawatts at full capacity.

Scott said the projected gap is driven largely by rapid growth in electricity demand, including from the expanding data center industry, at a time when adding new generation and transmission resources has become increasingly complex and time-consuming.

That tension is now showing up in Olympia, where lawmakers are advancing bills aimed at addressing reliability concerns and protecting existing customers from potential cost shifts tied to large new power users.

One set of identical House and Senate bills would require utilities that serve “emerging large load energy use facilities,” such as data centers, to create special tariffs applying only to those intensive-use customers under a list of state-defined requirements.

Scott told commissioners the intent of the legislation is understandable — to ensure reliability and fairness — but said Chelan PUD and other mid-Columbia utilities are already doing that work at the local level.

“In this part of the state, PUD commissions like [Chelan County’s] have gone through this process and in a thoughtful way approached the creation of a framework to protect customers and address the growth of data centers,” Scott said.

The evidence of this is apparent in the multiple contracts the PUD has entered into with Microsoft and other smaller data center entities, such as Salcido Enterprises. Companies running those types of businesses understand in advance that they will pay a premium for their special use, and that this differentiation will be directly so that regular consumers don’t end up paying for a product they’re not using as heavily as high-demand applications are.

Because Chelan PUD is already taking care of business in that regard, she said, the PUD has testified in opposition to the prescriptive portions of the bills, arguing that tariff design and contract terms should remain under the control of locally elected boards rather than be dictated by the state.

“What we’ve said consistently is that the state’s role here needs to be to support coordination, data sharing and transparency, not to prescribe contract and tariff terms,” Scott said.

At the same time, Scott noted that bill sponsors have repeatedly pointed to mid-Columbia utilities as examples of how to handle large loads correctly and have incorporated language suggested by Chelan PUD into draft legislation dealing with interconnection transparency.

The resource adequacy issue is also shaping other energy bills this session, including proposals aimed at accelerating transmission development and simplifying procurement processes for utilities. Scott said Chelan PUD is supporting legislation that would make it easier for PUDs to contract for energy projects and use in-house crews more efficiently.

Wildfire policy has also been a focus. A bill that would have created a utility-funded, state-managed wildfire damage fund has been pulled back for the year after opposition from Chelan PUD and others who raised concerns about undefined costs and lack of liability protection.

Instead, Scott said the PUD is advocating for the restoration of $60 million in state wildfire mitigation funding that was cut last year, arguing that utilities’ investments in system hardening must be matched by state efforts to improve forest health.

Affordability is another area where state proposals and local action are intersecting. Scott briefed commissioners on competing energy assistance bills in Olympia that range from creating a statewide program to requiring utilities to fund their own low-income discount programs.

Those discussions come as Chelan PUD itself moves to expand its customer bill assistance program locally.

Scott framed all of the PUD’s legislative engagement around four priorities: addressing wildfire risk, preserving affordability, balancing growth with resource adequacy, and accelerating new transmission and generation, with the overarching mantra of maintaining local control.

“Every position we take, every concern we raise, every amendment we pursue is evaluated through that lens,” she said.

With the 60-day legislative session now more than one-third complete and state lawmakers grappling with a projected $4.3 billion budget shortfall, Scott said many proposals creating new state offices or programs may struggle to advance.

But the underlying challenge remains.

“The Northwest faces an elevated risk of power supply shortfalls in the coming years as demand for electricity is outpacing supply,” Scott said.

For Chelan PUD, that means walking a careful line. They must continue planning for a future that may require the equivalent of several new dams’ worth of power, while ensuring that decisions about how to manage that growth remain close to home.

Andrew Simpson: 509-433-7626 or andrew@ward.media