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Green, On-Demand Hydropower Starting to Pay Off for Chelan PUD Christine Pratt Wenatchee World, August 8, 2013

WENATCHEE -- Being the supplier of a clean, renewable form of on-demand energy is starting to pay off for the Chelan County PUD, officials say.

The utility collected more than $518,000 through June for the hydropower it sells to offset the variability of windpower and meet the demand for qualifying renewable electricity.

During this same time, the PUD also collected nearly $48,000 from its share of Energy Northwest's Nine Canyon Wind Farm in Tri Cities. The region's other PUDs also own shares in the farm.

"It's starting to add up to be a significant part of our portfolio," Gregg Carrington, the PUD's managing director of energy resources.

Revenues from this sought-after power are still tiny when compared with the more than $49 million the utility collected through June on its hydropower sales overall.

But as states, especially energy-hungry California, require more and more of the electricity consumed to come from qualifying renewable resources -- wind, solar and some hydro -- demand and value for this power will increase.

During the first four years of the Obama administration, the amount of electricity generated from wind and solar power nationwide more than doubled, according to a news release Tuesday from the U.S. Department of Energy.

Washington state installed 235 megawatts of new wind power last year, alone, bringing its total to about 2,800 megawatts, the news release said. Growth is driven by government subsidies to build wind farms and generate power.

But the wind doesn't blow all the time, making this intermittent form of energy uncertain for the customers who depend on it.

Hydropower can fill in the void by powering up on demand to keep the electricity flowing.

By integrating its hydropower with wind generation, the PUD collected $86,000 through June, Carrington said.

Another $432,426 came from renegotiating a better price from one of its slice power contract holders, Morgan Stanley.

Carrington said the original slice contract -- a percentage of power from PUD dams sold into the future to lock in an above-market price -- specifically excluded power sold for its "environmental attributes."

But when Morgan Stanley said it could sell the power at a higher price for these attributes, PUD officials agreed to renegotiate a higher contract price, Carrington said.

Higher prices obtainable by selling hydropower to balance wind generation could also be adding value to a PUD contract with Canadian power broker Powerex, Carrington said.

Powerex takes electricity the PUD is generating but doesn't immediately need to cover local demand and contract obligations and sells it all over the region for as much as it can get, Carrington said.

The Powerex contract has created $4.2 million in revenue for the PUD through June and will easily top the estimated $5 million in additional annual revenue expected from this contract, Carrington said.