New power market has a sluggish start
Home energy users like 'green' options; industry unimpressed by open market
When Californians restructured their electricity markets, they got economic mayhem and blackouts. When Oregonians did it, thousands of them opted to tax themselves voluntarily to save salmon and subsidize windmills.
That's because competition, the basic concept that drove the restructuring effort, was nowhere to be found when Oregon's not so brave new energy world debuted last Friday.
The option to seek cheaper power on the open market is open only to large industrial customers. And given the wild fluctuations of the past year, Enron Corp.'s ignominious collapse and other causes for hesitation, Portland's biggest energy consumers aren't budging.
'There has been very little movement, though there is a lot of potential interest,' Bob Valdez, a spokesman for the Oregon Public Utility Commission, reported Friday.
Not one Oregon company is choosing to purchase power on the open market.
That's bad news for the four companies certified to sell electricity to businesses in Oregon in a free market. (There would have been five, but Enron is out for obvious reasons.)
These four businesses Ñ AES NewEnergy, Idacorp. Energy LP, Powerex Corp. and Strategic Energy LLC Ñ all blame their inability to draw new customers on high 'exit fees' charged by the utilities.
Portland General Electric and PacifiCorp, the region's two major investor-owned utilities, charge such fees to make sure they won't be left holding the bag for power already purchased when a large customer leaves to buy on the open market.
Utility officials say the fees are necessary to protect other customers. Opponents say they are prohibitive and discourage competition.
'The exit fees make it next to impossible for Oregon companies to shop in the marketplace,' said Aaron Thomas, a vice president for AES NewEnergy, a multinational power company with headquarters in England.
Of course, a lot also depends on power prices, which still are relatively high.
'Once prices come down, then you'll start seeing some changes,' Valdez predicted.
Ron Eachus, the former chairman of Oregon's utility commission and the chief architect of the restructuring plan, also predicted changes.
'All of this will take some time to develop,' Eachus said. 'But as customers get more choices and more information, that will create a more dynamic marketplace. Eventually, we'll see a more active market, and we'll see an improvement in the options that are being offered.'
Focus shifts to green, clean
So what do you do if you hold a deregulation party and nobody signs up?
Apparently, you push green power Ñ with a little help from the governor.
Gov. John Kitzhaber declared March 1 'Renewable Energy Day' and proclaimed in a news release, 'I encourage Oregonians to continue to show their dedication to renewable power by signing up for one of the renewable options today.'
For more than a month now, PGE and Pacific Power have been collaborating with Austin, Texas-based Green Mountain Energy Co. to market a new array of green power options.
A news release issued by Green Mountain on Friday stated that more than 7,000 homes and small businesses have signed up so far for one of three environmentally friendly choices, all of which result in higher electricity bills:
• One hundred percent renewable. All of this power would be purchased by your utility from Green Mountain. Eighty-five percent of it would be geothermal Ñ harnessing heat energy trapped beneath the Earth's crust in volcanic areas Ñ and 15 percent from windmills in the Columbia River Gorge. The extra cost would be about $7 or $8 per month for the average household.
• Habitat. This would buy the same Green Mountain power as the previous option, plus direct additional funds to the nonprofit group For the Sake of the Salmon. The extra cost to the average home would be about $10 per month.
• All wind power. Consumers can purchase as many units of wind power as they want, in 100 kilowatt-hour blocks. The extra cost for buying one block per month runs $3.50 for PGE customers and $2.95 for Pacific Power customers.
An option that could lower your bill is also still open. The 'time of use' choice allows a customer to save money by using power at non-peak times, similar to the way long-distance phone billing works.
How green is Green Mountain?
Although Oregon's restructuring plan was passed with strong support from the business community, the only company poised to benefit from it at this point appears to be Green Mountain Energy, partially owned by BP Amoco and Sam Wyly.
Wyly is the Texas billionaire who financed a blitz of TV ads in New York, California and Ohio last year attacking Sen. John McCain's environmental record just before the Super Tuesday primaries that put George W. Bush over the top in winning the GOP nomination for president.
In February 1999, environmental groups in Pennsylvania staged a boycott of Green Mountain Energy after they learned that the company was burning landfill gases and selling the power as renewable energy.
Green Mountain's Oregon marketing director, Karen Norris, would not pinpoint the source of the Oregon-bound electricity, but she said it would come mostly from geothermal projects in Northern California. These projects would be certified by the Environmental Protection Agency to be emissions-free, she said.
'Geothermal is a very attractive option,' Norris said. 'There's plenty of geothermal out there. And it's totally pollution-free.'
For more information about new power options for businesses and homes, call your power company or check www.portlandgeneral.com or www.pacificpower.net.
For more information about the campaign against Green Mountain Energy, see www.boycottgreenmountain.com.