Energy is essential to Washington's economy, costing residents, businesses, and industries $8.5 billion per year. The 1997 Biennial Energy Report provides information and background on what the Washington Department of Community, Trade and Economic Development (CTED) Energy Service Area sees as the most pressing energy issues affecting Washington. The focus is on those areas most likely to be the subject of legislative action in the 1997 session. Foremost among these are the immense and rapid changes that are occurring in the electric power industry, both in Washington and throughout the nation. A number of areas such as natural gas, renewables, alternative fuels, global climate change, and specific energy programs being implemented in Washington are touched on in this report, but not dealt with extensively. The Energy Service Area continues to monitor these areas and assess how activities or changes in these fields affects the state.
With the legislated closure of the Washington State Energy Office on June 30, 1996, a number of important energy programs were transferred to other agencies. CTED now houses energy policy and energy facility siting functions; the Commute Trip Reduction Program was transferred to the Department of Transportation; General Administration received public sector energy efficiency programs; and Washington State University Cooperative Extension now operates programs related to commercial and industrial energy efficiency, energy-related software, Energy Ideas Clearinghouse and the energy library, telecommuting, energy education and training, manufactured housing, energy code support, and alternative fuels.
The energy sector experiencing the most dramatic change in the 90's is the electric industry. Most of the energy issues legislators will face in the upcoming sessions are influenced by the introduction of competition in this industry, both on a wholesale and a retail level. Wholesale competition issues are characterized by jurisdictional issues and differences among private and publicly owned utilities. At the retail level, access to a choice of providers will present both opportunities for customers to customize services and may lower energy costs. Competition will also present challenges for some utilities and customers who may be unable to take full advantage of the market due to the need to pay for expensive existing resources and nuclear debt.
Issues that legislators may be facing in the upcoming two years include: ensuring fair treatment of stranded costs; providing for the continued support for public purposes; considering economic impacts of energy choices; balancing energy needs with environmental interests; considering tax impacts of a restructured industry; responding to recommendations coming forth from the Comprehensive Review of the Northwest Energy System; understanding and considering jurisdictional differences and limitations among public and private, and federal and state-jurisdictional matters; and fostering transmission and distribution reliability and efficiency.
Record demand for gasoline and declining domestic crude oil production leaves us more
dependent than ever on imported oil, and more vulnerable than ever to oil price shocks.
That vulnerability was demonstrated during the spring and summer of 1996, when tight
supplies drove up the price of gasoline by 15-20 cents per gallon. Prices climbed higher
and stayed high longer on the West Coast, due to problems in the California refining
industry. Other recent developments of note include successful Congressional legislation
to allow the export of Alaska North Slope crude oil, and the Olympic Pipeline Company's
proposal to build a petroleum product pipeline across Snoqualmie Pass.
Supply shortages or disruptions can ultimately affect every person and every economic sector in the state. The ability to anticipate supply shortages, and respond appropriately to supply disruptions can help mitigate the severity of emergencies. By statute, CTED is responsible for coordinating a response to petroleum and electricity shortages and for administering the Governor's energy emergency powers. CTED has been actively involved in a number of energy emergencies in the past year and will continue to update energy contingency plans during this biennium.
Washington's Energy Strategy provides an organized framework to guide the state's energy decisions. Its recommendations rely on known cost-effective technologies, beginning with improved efficiency, renewable resources, and wise use of natural gas. The Energy Strategy provides the guidance for energy policy and programs in Washington, and, by executive order, is the policy framework for energy decisions made by state agencies. Through legislative action, CTED has the lead for implementing the Energy Strategy. With the extensive changes underway in the electric industry, the Energy Strategy will be reviewed and revised as necessary during this biennium.
The Energy Facility Site Evaluation Council (EFSEC or Council) provides a "one-stop" siting process for major energy facilities in Washington. The Council also issues major environmental permits required by such facilities and serves as the regulator of the construction and on-going operations of the facilities. The siting process includes opportunities for public participation, a coordinated environmental review with federal agencies and formal administrative hearings on contested issues.
During the 1990s the Council has sited four power plants representing 2121 megawatts of capacity. It is currently reviewing the application of the Olympic Pipeline Company to construct a 227-mile petroleum product pipeline from Woodinville to Pasco, Washington.
This report also includes several appendices with additional information and resources. These include: a summary of Washington utilities with market-based prices; the preamble and summary of the Comprehensive Review of the Northwest Energy System; biographies of Comprehensive Review Steering Committee members; the status of Energy Strategy recommendations; a list of energy-related acronyms; a glossary of often-used terms in the energy field; and a directory of contacts in CTED's Energy Service Area for additional information on specific energy topics.
Contents | Glossary
| List of Acronyms
The print version of the 1997 Biennial Energy Report is available free of charge. To order, contact Julie Palakovich at (360) 956-2098, or send e-mail to wepg@ep.cted.wa.gov.