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Wind project is first for trust

PacifiCorp gets OK for alternative energy plant in Umatilla County

PacifiCorp will be the first utility in the state to benefit from a fund created to promote the generation of power from environmentally friendly sources under Oregon's controversial 1999 electricity restructuring law.

The nonprofit Energy Trust of Oregon will have as its maiden project the development of a $41 million wind-power project in Umatilla County.

Eurus Energy Holdings Corp. of Tokyo will build a plant that initially will produce 41 megawatts of power. The power from this project, expected to be completed in December 2003, will go to PacifiCorp's customers, said Peter West, the energy trust's director of renewable energy.

Because PacifiCorp's service territory is close to Umatilla, the cost of moving electricity from that site is low, West said.

Portland General Electric would like to have been first in line to receive the power. But the distance from its service area, together with the congested electricity transmission system, would have made the costs of the Umatilla wind power too high, said Mark Fryburg, a PGE spokesman.

'We could have done this deal if the (transmission) bottleneck didn't exist,' Fryburg said.

Bottlenecks are points in the region's transmission system Ñ made up of poles and wires Ñ that already carry too much electricity 'traffic.'

Some of the developers who responded to the energy trust's request for wind-energy proposals suggested looping from one utility system to the next to avoid a bottleneck, West said. But looping, he said, creates multiple transmission charges and increases the cost of wind power.

PGE may not have to wait long for its share of subsidized green power. West said the utility and the trust are engaged in talks now about a renewable energy project whose electricity can be transmitted at reasonable cost to PGE.

An agreement, in fact, on a biomass project Ñ one that utilizes animal waste as fuel Ñ may be close, a trust representative indicated.

The 1999 restructuring law requires utilities to earmark 3 percent of their revenues for renewable energy and conservation. The trust will oversee the spending of an estimated $45 million that it ultimately is expected to collect each year from the state's utilities.

The money Ñ $8.5 million so far this year Ñ is to be used to wean Oregon away from fossil fuels, which pollute the environment.

The trust, launched in March, has a strategic plan to invest in enough renewable energy projects to provide 10 percent of Oregon's electricity by 2012.

Over the long run, transmission problems are the major obstacle preventing developers and utilities from building and operating more wind-power plants in Oregon and the Northwest, said Don Bain, president of Aeropower Services Inc., a Portland wind-energy consulting firm, and a former wind-energy specialist at the Oregon Office of Energy for 21 years.

'The transmission constraints are one of the major drivers for the wind industry in terms of where it goes and what it does, whether there is a business possibility, how much wind power can be developed and where it can be sent,' he said. 'Transmission is the entire access to the market.'

Bain contends that Northwest utilities and policy-makers aren't working hard enough to solve the bottleneck problem. They're taking a Band-Aid approach, trying to fix transmission bottlenecks on a case-by-case basis, he said.

'We need to say, 'Where do we want to be developing the next generation of power resources and what new transmission do we need to serve those locations?' ' Bain said. 'I don't see that effort being made across the Northwest; we are too busy alleviating transmission constraints.'

While the region relies on temporary fixes for transmission obstacles, funds available to subsidize clean power will continue to grow, as required by Oregon's restructuring law. Meanwhile, the number of people interested in green energy continues to increase.

In October, the number of PGE customers willing to pay extra for 'clean energy' swelled to 15,000 people, Fryburg said. That was three times the number of people who purchased clean energy before PGE began offering new 'green' options in March.

Now, about 18,000 PGE customers pay extra each month for the green power, he said.

The energy trust's subsidies ultimately will make green energy available to all PGE customers Ñ not just those customers willing and able to pay extra for the power.