Working with farmers, ranchers and rural communities to produce clean energy

February 2003 – Issue#2 | Archive



Unprecedented level of rural clean energy interest evidenced in joint 2003 Harvesting Clean Energy Conference/Idaho Ag Summit

For Northwest farmers, practical prospects to generate new revenues producing clean energy are emerging now, and agricultural operators and organizations are moving to understand and realize their new opportunities. This is evidenced by the joining of the Northwest's premier rural clean energy conference with Idaho's most important annual agricultural event.

The 3rd Annual Harvesting Clean Energy Conference this year will take place in conjunction with the Idaho Ag Summit, February 10-11 at the Centre on the Grove in Boise. The meeting will strongly emphasize the practical, "nitty-gritty" details of putting clean energy projects on the ground -- planning, financing, marketing and implementation.

The unprecedented level of interest in clean energy is also evidenced by the broad array of high-level public officials that will speak at the conference. They include U.S. Department of Agriculture Undersecretary for Rural Development Tom Dorr, both of Idaho's U.S. Senators - Larry Craig and Mike Crapo, Idaho Gov. Dirk Kempthorne, U.S. Rep. George Nethercutt (R-Wash.) and Montana Secretary of State Bob Brown.

The conference will also hear top national experts detailing rural clean energy success stories. Technical experts and successful project developers will tell how farmers are producing windpower, biodiesel and ethanol for the marketplace, generating valuable products from livestock manure with anaerobic digesters, and driving farm operations with solar power, wind and geoheat. They include two representatives from Minnesota, widely regarded as one of the nation's rural clean energy leaders. Dave Kolsrud of Corner Stone Farmers Co-op will speak on "Farmer's Co-ops for Wind and Ethanol." Legislator Dan Dorman will talk about the legislative package that made Minnesota farmers into major producers of vehicle fuel.

Financing is one of the biggest hurdles in setting up any new farm operation. A panel will feature professionals with direct experience in financing clean energy projects. Working group sessions will provide "nut-and-bolts" details on feasibility assessments, economics, technical and financial resources, and marketing clean energy and co-products. Four tracks - windpower, biofuels, anaerobic digesters and on-farm energy -- will be offered the first day and repeated on the second

"The conference provides the Northwest agricultural community, not just in Idaho but also across the Northwest, with the opportunity to see and discover firsthand how they can enhance their economic vitality through clean energy production technologies and techniques," notes Idaho Ag Summit organizer Brad Hoaglun.

"This joint conference is designed to meet the changing economic needs of farmers, ranchers, agriculture and rural leaders, tribes and elected officials from across the Northwest," adds Rhys Roth, co-director of Climate Solutions, one of the organizers of the Harvesting Clean Energy conferences.

Special events will mark the conference, including the Governor's Awards Luncheon and the Idaho Ag Summit's Strolling Supper With Idaho Legislators. At the same time as the supper, another option will be a dinner talk by Montana's Bob Brown on how wind and biofuels could propel rural development in his state.

The Harvesting Clean Energy Action Plan, developed in consultation with dozens of farm, energy and rural development organizations following initial discussions at the 2002 Harvesting Clean Energy Conference, will be the subject of a special session moderated by Idaho State Sen. Joe Stegner, assistant majority leader.

In conjunction with the conference will be a special workshop the evening of Jan. 11 on funding opportunities in the new federal farm bill, which includes $405 million in funding in the farm bill's first-ever energy title.

Washington legislative package proposed biofuels tax incentives

A package of bills before the Washington Legislature is designed to promote biodiesel and ethanol fuel markets by increasing supply and availability, lowering costs and increasing demands.

The package, supported by Clean Cities Coalitions in the Puget Sound and Columbia Plateau regions, are drawing strong legislative support. At this writing, four bills have been introduced on the House side by Rep. Brian Sullivan, vice chair of the House Technology, Telecommunications and Energy Committee along with eight other legislators. Two bills introduced on the Senate side by Sen. Bill Finkbeiner have seven other sponsors.

While the state budget shortfall weighs heavily on this session, the fiscal impact of the bills ranges from zero to minimal for this biennium, notes Jim Armstrong with the Columbia Plateau Coalition. "I feel confident there is enough support for all of these bills to get passage." Also heartening Armstrong is good support from both sides of the aisle and the state.

Besides the package of bills, biofuels also might benefit if the Legislature raises fuel taxes. A 3-5-cent increase is being discussed. Armstrong said there is bipartisan support for exempting biofuels from any increases.

The House package includes:

HB 1240 - Providing tax incentives for biodiesel and alcohol fuel production.
• Sales and use tax deferrals on machines, equipment, labor, etc. to construct biodiesel and ethanol production facilities in rural areas and empowerment zones, which covers all but four counties. The deferred taxes need not be repaid if facilities meet requirements of legislation for 7 years.
• Property tax exemption for biodiesel and ethanol production facilities for 6 years after facility becomes operational. Amount of exemption calculated based on gallons of biodiesel and ethanol produced.
• Reduced Business & Occupation (B&O) tax rate for biodiesel and ethanol production facilities (.138% compared to typical rate of .4%)

HB 1241 - Providing tax incentives for the distribution and retail sale of biodiesel and alcohol fuels.
• Allows deduction of B&O taxes owed from retail sale or distribution of biodiesel or ethanol fuels.
• Exempts, in the form of a remittance, retail sales and use taxes on purchase of equipment, labor and services related to creating biodiesel and ethanol fueling and distribution services.
•Allows local governments the option to provide for similar retail sales and use tax exemptions.
•Property tax exemption for biodiesel and ethanol retail sale and distribution services, if at least 75% of activity is biodiesel or ethanol fuel related.

HB 1242 - Establishing requirements for the use of biodiesel by state agencies.
• Encourages all state agencies to use a blend of 20% biodiesel (B20) with petroleum diesel and mandates use of a minimum of 2% biodiesel blend as a lubricity additive beginning in 2006 when EPA regulations requiring ultra-low sulfur diesel fuel take effect.
• There is no funding provided for these provisions.

HB 1243 - Establishing a biodiesel pilot project for school transportation.
• Requires superintendent of public instruction to conduct a pilot program using two school districts on the use of biodiesel with ultra low sulfur diesel beginning in 2004.
•There is no funding provided for the pilot program.

The Senate side bills provide tax incentives for alternative fuel stations, including pumps and storage tanks for fuel containing at least 85 percent ethanol or 20 percent biodiesel

SB 5467 - Sales and use tax exemptions
• For purchase of alternative fueling equipment, and for services and labor connected to installation of equipment.

SB 5469 - B&O tax credits
• For purchase of alternative fueling equipment, and for services and labor connected to installation of equipment.
• For public stations 50% of the cost up to $ 200,000
•For private stations 25% of the cost up to $100,000.

For more information contact Linda J. Graham, Puget Sound Clean Cities Coalition (206) 684-0935 or linda.graham@seattle.gov, or Jim Armstrong, Spokane County Conservation District (509) 535-7274 jim-armstrong@sccd.org

Action Plan for Northwest Rural Clean Energy
Development Proposed

The chair of the Oregon House Agriculture and Natural Resources Committee is leading the charge to build an Oregon biofuels industry with several pieces of legislation this session.

Rep. Jeff Kropf, himself a Willamette Valley farmer, is introducing bills to extend tax exemptions and credits to ethanol, biodiesel and biolubricants. The legislation comes as a result of a Biofuels Task Force with broad representation from Oregon agricultural interests and chaired by Kropf.

One piece of legislation would expand Oregon's current five-year, 50% property tax exemption on ethanol plants to 10 years and 100%, and to include biodiesel and biolubricant plants. The legislation would cover oilseed crushing plants. A second bill would extend a pollution control income tax credit to cover the costs of equipment for production of biofuels and biolubricants. It would also cover 50% of the costs, in contrast to 35% with the current tax credit.

Measures will be of limited duration. The point, Kropf says, is to provide the foundation for an Oregon biofuels industry

Kropf is also seeking to have a small amount of lottery funds directed to biofuel industry development. Included would be capital costs and producer payments for growers of fuel crops and refiners. He will seek a constitutional amendment if necessary, but he is also working with Executive Branch officials to see if this can be done administratively.

A New Apollo Project for Energy Independence:
Landing in Rural America?

The idea is to accelerate a shift already at its early stages. Today energy production is a mining operation, digging and drilling fossil fuels from the ground. Tomorrow's energy industry will be more like a computer company married to a farm. Sophisticated energy technologies will enable concentration of diffuse natural forces - solar rays, photosynthesis, wind, geoheat, waves, and tides - into useful energy products. In essence, energy production now focused on a relatively few oil-, gas-, and coal-rich regions will spread out across the entire landscape. So Rural America has much to gain from an initiative that accelerates development of the technologies that make landscape-derived energy feasible.

'LET'S ROLL' ON ENERGY

Such an initiative is drawing support from many quarters. Invoking the "Let's roll" spirit of the passengers who brought down the Pennsylvania suicide plane, New York Times columnist Thomas Friedman has called for a "version of the race to the moon…a program for energy independence, based on developing renewable resources, domestic production and energy efficiency."

Admiral Thomas Moorer (ret.), the former chair of the Joint Chiefs of Staff, one-time CIA Director James Woolsey and Reagan National Security Adviser Robert McFarlane issued a call for a "Liberty Ship" initiative for biofuels a week after 9-11. Sen. John Kerry (D-Mass.) has proposed a "Strategic Energy Initiative…to initiate a transition from our heavy dependence on polluting and sometimes insecure fossil fuels to more efficient, clean, and reliable energy." Noting that "national security demands an orderly but accelerated shift toward domestically-based renewable energy," Republicans for Environmental Protection advocates a New Manhattan Project.

One of the most recent calls came in January when 15 Democratic Congressmen endorsed a New Apollo Project for Energy Independence: "This New Apollo Project provides a specific policy solution to a problem that nearly all Americans instinctively know -- Our policies in the Mideast are shackled by our addiction to Mideast oil that entangles us in a dangerous quagmire that now threatens our own security. The New Apollo Project will aggressively take us down the inevitable and only path of energy independence for our country -- a robust renewable energy and conservation technology resource base." The group is now working with experts to develop goals for New Apollo.

Initiative for the effort comes from Rep. Jay Inslee, who recently wrote in the Seattle Post-Intelligencer, "We should call for a total national commitment to harness the genius of America's can-do attitude that would design, invent and deploy the new clean energy technologies that befit this new century….What the nation achieved in building the technologies that took us to the moon now can be matched by technologies that keep our launching pad, Earth, in healthy condition."

Rural America has a huge stake in the effort, Inslee told Harvesting Clean Energy Bulletin, "In an era of increasing international competition and a host of economic challenges, America's agriculture sector is sitting on potential sources of sorely needed new revenues -- lease payments for the location of wind turbine towers, payments for a host of sources of biofuels, and perhaps revenues for solar farms. We just need a bit of boost from Uncle Sam to help these efforts out of the chute."

Inslee's own Washington State district offers some of the world's best examples in how federal pump priming generates profitable new industries: "As one representing a district that includes Boeing and Microsoft, the benefits are obvious of leading the world in computer sciences and aerospace technologies, both of which occurred in no small part due to federal government investment in the project."

The first Apollo Project itself laid the groundwork for two of the major energy technologies now emerging. The first fuel cell was invented in 1837. Bell Labs developed the solar cell in the 1950s. But not until the space program were these developed as serious energy sources. Initial public investment paved the way for substantial industries.

But unlike the first Apollo, which was a singular effort organized by the federal government, a New Apollo Project would be far broader. The challenge of transforming the energy system is in reality more imposing than landing on the moon, requiring the involvement of the entire nation. Researching, developing and deploying the needed new technologies will take federal leadership but it will also take all levels of government, and rely heavily on initiatives by businesses, citizens and the nonprofit sector. A mix of public dollars, private investment and venture philanthropy must drive the project.

THE POTENTIAL FOR RURAL AMERICA

So if a New Apollo Project is launched, where and how might it land in Rural America? Here are a few possibilities:

Biomass

Today's starch-based ethanol is limited by cost and availability of feedstocks. But if sugars can be economically unlocked from cellulose, from which most of the plant world is made, cheap and plentiful feedstocks for ethanol and related co-products become available. Ethanol might beat gasoline prices in the marketplace without subsidies. But it will take both technological development and capital for developing first-of-a-kind plants to make this a reality. The Liberty Ship Initiative recommended by Moorer, Woolsey and McFarlane should be part of New Apollo. The Biomass Research and Development Act spearheaded by Sen. Richard Lugar (R-Ind.) and reaffirmed in the new federal farm bill is a start in this direction.

Plant matter could also be gasified to run power turbines. U.S. Department of Agriculture programs are studying gasification of grass and tree energy crops. At the same time, advanced turbines are being developed that are capable of utilizing biogas. Putting more resources into these efforts is another prospective piece of New Apollo.

Biodiesel is another biomass source with great potential. Nearly 20% of U.S. diesel could be feasibly produced from mustard seed, the National Renewable Energy Lab calculates. With relatively modest efforts to develop, finance and market the biodiesel industry, the nation would have cleaner air and a domestic energy source that brings farmers new revenue streams.

Hydrogen Fuel Cells

The most common element of the universe could be our primary energy source in the future. Reactions of hydrogen and oxygen in fuel cells produce electricity, with heat and pure water as the only byproducts. But pure hydrogen is not available on this planet. It can be produced by cracking it out of fossil fuels, electrolyzing it out of water or using biological processes that make hydrogen. (One promising process uses algae.) Such biohydrogen farming that will likely require extensive land areas. Electrolysis will take massive amounts of electrical power which might well come from large wind and solar fields.

Hydrogen production will take much research and development to make it economically feasible. Storage and transmission also represent major technological challenges. President Bush's initiative to develop hydrogen-powered cars over the coming decades will have to address these issues. A more ambitious proposal recently announced by Sen. Brian Dorgan (D-ND) calls for a 10-year, public-private initiative to develop hydrogen fuel cells. "We need a new, bold initiative -- in the spirit of the Apollo moon-landing project," Dorgan said.

Fuel cells are rapidly developing, and with a push could be brought to market competitiveness in not too many years. Fuel cells can now provide energy to buildings at rates around double that of grid-supplied electricity. For vehicles, the comparable figure is 10 times the price of energy supplied by internal combustion engines. So much work is to be done improving fuel cell technologies.

Ultimately, fuel cells could become economical enough to become a standard feature of farm life. Farmers could run their operations with fuel cells, and use not only hydrogen but also farm-produced biogas and alcohols. Fuel cells generate 2-3 times more energy per unit of fuel than the electrical engines now tied to biogas digesters.

Windpower

Rapid technological advances in wind turbines, from better materials to incorporation of information technologies that allow use of a wider range of wind speeds, have much to do with the rapid decline in windpower costs. Accelerating these developments with improved designs and lighter materials could in short order move wind from the cheapest renewable power source to the cheapest power source bar none. And technologies that improve economics for big wind turbines will also bring costs down for small- to medium-scale wind machines that can power farms and remote, off-grid applications.

But perhaps the greater challenge for wind is transmission of energy from remote locations with huge untapped wind generation potential such as Montana, North Dakota and South Dakota. Developing means to deliver this energy to the marketplace should be a New Apollo priority. This could involve advanced technologies such as superconductors, or simply subsidizing construction of transmission lines. Working through the many issues surrounding hydrogen storage and delivery could also unlock these resources.

Solar Power

The more solar panel prices come down, the wider the variety of conditions under which their use becomes economical. Today solar is already the best choice for off-grid applications in sunny areas. Tomorrow, solar could compete with grid-supplied power even in cloudy places. The challenge is to create the computer chip effect - Bring prices down by building markets that create economies of scale. Once costly, computer chips are now found everywhere.

A New Apollo Project could help achieve the computer chip effect by making the federal government a much larger market for solar panels, and by putting in place tax incentives to encourage people to buy solar. Research and development of advanced solar cell materials is another priority. Today's silicon-based cells are costly to make. One prospect is super-cheap solar cells made of plastic.

Cheap solar panels will be a boon to everyone, not the least of who are rural residents. Farmers would find it economical to power farm operations with solar. Ultimately, large-scale solar fields could provide landowner revenues, tax revenues and jobs to rural areas much as wind farms are today.

TIME TO GO

The demands and challenges of the time indicate that tinkering around the margins of our energy system will not do. More than half the world's remaining oil is in the Persian Gulf region, and many respected petroleum geologists predict the peak of world oil production is coming in the next 5-15 years. Natural gas is expected to follow just a few years after that, with remaining gas exporters centered in the same unstable regions. From ballooning trade deficits that undermine our prosperity to the increasing potential for outright shut-offs, the problems of dependency on foreign energy sources will only grow.

Meanwhile, European and Japanese corporations are taking the lead in advanced energy technologies. Japan is coming to dominate solar, and leads in hybrid gas-electric vehicles. Germany and Denmark command the wind turbine industry. The U.S. is falling behind, opening yet another trade gap.

Put the economic and security concerns on top of the disruption of the climate from fossil fuel emissions, and the crucial need for a major new initiative for energy becomes transparent. Fortunately, New Apollo can blast off from every point on the map. States and regions can begin spurring development and deployment of new energy technologies. And they are from Massachusetts to Michigan to Ohio to Texas to Washington. But ultimately, federal efforts will be vital, and this will require political leadership to step up to the plate with bold and visionary actions. All Americans would benefit. Since the outcome of New Apollo would be a transition from overseas fossil fuel sources to domestic energy production based on the land, it could well be that the greatest benefits of all would flow to the new energy belts of rural America.

Energy Portfolio Standard would create new economic opportunities for Washington State rural communities

A proposal before the Washington State Legislature to increase the mix of clean energy sources in the state's power portfolio would provide tremendous benefits to rural communities and landowners.

The proposal is for an Energy Portfolio Standard (EPS) under which 5% of electricity used in Washington would come from new renewable sources by 2010, 10% by 2015 and 15% by 2023. Most of the new generation would come from the most competitive forms of new renewables -- windpower and biomass. Among the rural clean energy producers for which the EPS would create new markets are:

• Utility-scale wind farms - Leases from wind developers to rural landowners amount to $2,000-$4,000 per turbine.
• Small-to-medium-scale wind turbines - Owned by landowners and primarily used to power farm and other operations, these turbines would gain markets for their surplus generation.
• Anaerobic digesters - Utilities would have an incentive to buy power produced by biogas-fired generators.
• Biomass-fired generators - Field and forest waste as well as crops grown specifically for the purpose would fuel these installations.

EPS in particular represents major opportunities for large-scale wind development, with substantial benefits to rural communities. For example, meeting 10% of electrical needs with new wind turbines would require approximately 3,000 megawatts in nameplate capacity, equal to around 2,000 modern wind turbines. That would provide a minimum of $4 million in annual landowner payments, plus significant revenues to local governments. The 300-megawatt Stateline Wind Farm in the Walla Walla area will pay an estimated $1.5 million in property taxes this year. Kittitas County can look forward to $2.8 million more in annual property tax revenues if two proposed wind farms are built. Job creation is another benefit. Stateline required a construction crew of up to 350, over 70% from the local area, and maintains a full-time operations staff of 20.

Another element of EPS calling for steady improvements in energy efficiency also holds major upsides for rural communities. The proposal is for 0.75% reduction in electrical loads through efficiency improvements each year through 2005, and 0.85% by 2010. Irrigators in particular stand to benefit. Since irrigation is one of the largest draws on electrical capacity, utilities will have an incentive to direct their investments to more efficient pumps. Overall, more effective use of hydroelectric resources could mean more water in rivers for irrigators.

Perhaps the greatest benefit of the EPS for rural communities, as well as all Washington electrical ratepayers, is protection from price volatility. The 2001 western power crisis graphically illustrated the Northwest's vulnerability to steep rises in energy prices. Increasing reliance on natural gas-fired turbines places the region at the mercy of the gas market, which is expected to remain volatile. Diversifying the Washington power to include a mix of renewables takes pressure off natural gas prices and provides a hedge against volatility. With a 10% share of renewables, the resulting lower gas prices almost completely offset higher costs of renewables, the U.S. Energy Information Administration calculates.

Lead groups pushing for the EPS are Renewable Northwest Project. NWSEED, NW Energy Coalition and WashPIRG. For more information call 509-520-4970 or visit www.renewwashington.org.

Northwest Wind Roundup:
Still growing despite market and policy turbulence

By Patrick Mazza,HCE Bulletin Editor

Windpower continues to move forward in the Northwest despite low wholesale power prices and uncertainties about federal policies.

Northwest wind capacity has grown to 582 megawatts (MW), all since 1998. With addition of 36 MW in the past year, FPL-owned Stateline wind project has secured its status as the world's largest independently owned wind farm at 300 MW. (Some California wind fields are larger, but they represent multiple wind farms under different owners.) FPL has permits to grow Stateline another 20 MW, and has applied for permission to add yet 184 more MW on the Oregon side. The wind farm runs from Walla Walla, Wash. to Pendleton, Ore.

Besides Stateline, the other big 2002 Northwest windpower addition was Energy Northwest's 48-MW Nine Canyon Plant to the west of Stateline. Other Northwest wind farms now operating include, in Oregon, Condon at 50 MW, Klondike at 24 MW and Vansycle at 24 MW, and in Wyoming, Foote Creek at 85 MW and Rock River at 50 MW. (Though Wyoming is generally not considered a Northwest state, the projects have Northwest owners and serve Northwest markets.)

Windpower could be coming to one of the Northwest's windiest areas, Kittitas County in Central Washington. January saw applications for approval of two 180 MW wind farms north of Ellensburg. Zilkha Renewable Energy applied to the Washington Energy Facilities Site Evaluation Council for approval of its Kittitas Valley Wind Power Project. The Kittitas County Commissioners received an application from enXco for its Desert Claim Wind Project.

The differing approval pathways represent different strategies to deal with NIMBY-style opposition in the area. Nearby landowners of recreational properties dislike the potential visual impacts. Zilkha has generated photo simulations of its project to document what appear to be fairly minor impacts on vistas already broken by transmission lines. Local support is also substantial, notes Heather Rhoads-Weaver of NW SEED. "Long-term residents really want wind. It will bring needed revenue and jobs into the community."

Local resistance has also developed to a 120-MW wind farm still at the early proposal stage. Renewable Generation Inc. proposes the plant for the Tillamook area on the wind-swept Oregon Coast. Some residents are concerned about visual impacts and effects on the tourist trade (though wind farms have proven to be more of a tourist draw than turn-off in other places.)

Wind projects are at various stages in the two other Northwest states. A 50 MW project is proposed for Whitehall, Mont. And Windland is looking at a site on Cotterell Mountain in south central Idaho for a 200 MW wind plant. In January the company held scoping meetings in preparation for drafting an environmental impact statement. Developers are studying several other Idaho sites for wind potential as well.

A new Oregon wind farm in the state's Northeast corner, the 100 MW Combine Hills project, will come on line this year with financial support from the Energy Trust of Oregon. The state's largest wind farm to date will be the first large-scale renewable energy project by ETO, launched in 2002 to administer public purpose funds set up by Oregon utility restructuring. ETO plans to buy down the cost of approximately half the output of the plant to cover the difference between wind prices and wholesale power rates. Power will be sold to Pacificorp customers. A goal of the ETO support is to add wind capacity in Oregon before the federal Production Tax Credit (PTC) runs out at the end of the year.

The on-again/off-again PTC has been a bane of the wind industry. Congress let the 1.7-cent/kilowatt hour credit expire at the end of 2001. It was not renewed until the March 2002 economic stimulus bill, and then only until this Dec. 31. A longer extension went down with the failed energy bill. All the uncertainty caused a slow 2002 for U.S. wind, only 410 MW added compared to 1,700 in the record year of 2001. It also caused postponement of plans by Denmark-based Vestas, the world's largest turbine maker, to site a U.S. manufacturing plant employing 1,000 in the Portland area.

"Congress has allowed the PTC to expire twice before renewing it -- in 1999 and 2001 -- and each time the impact on our industry has been devastating," notes American Wind Energy Association Executive Director Randall Swisher.

To provide wind developers with the stability they need, Sen. Gordon Smith (R-Ore.) in January introduced a stand-alone bill that would extend the PTC for 10 years. Wind projects will be eligible for the credit for 10 years following the date they go on line. The new member of the Senate Finance Committee will use his position to push it forward there.

Besides the PTC, another great uncertainty surrounding Northwest windpower has been the wholesale power market. Between new gas-fired turbines coming on line, and sharp drops in demand from recession-plagued industrial customers, power has been in surplus so wholesale rates have hovered under four cents/kilowatt hour. Meanwhile, cash-strapped utilities are still struggling with debts they absorbed during the 2001 power crisis.

All this has caused severe cutbacks in Bonneville Power Administration's once ambitious wind development plan. BPA had issued a solicitation for up to 1,000 MW in power and in 2001 picked 830 MW in projects for further study. But that was when wholesale prices were expected to be in the six cents/kilowatt hour range, notes Tom Osborn, BPA wind project manager. And, he adds, "Our financial situation is the worst we've been in." So none of the projects is going forward, though the environmental impact statement has been completed for one of them, the Maiden Wind Farm in south central Washington. However, BPA has acquired 90 MW of Stateline as well as the full outputs of Condon and Klondike.

Osborn cautions not to expect BPA to become "an anchor tenant in a wind project" at this time. Instead the agency will aggregate demand from its utility customers.

A PacifiCorp projection of its resource needs over the next 20 years indicates such demand will be forthcoming. The utility estimates it will need 4,000 average megawatts of new generation over that period. The plan said the most economical way to meet that need includes acquiring 750 average megawatts of renewables. In practical effect, this means the cheapest renewable source, windpower. Since it is an intermittent resource that runs around a third of the time, 2,500 MW in wind generating capacity would be required. Over the next 10 years, the scenario with the most favorable economics calls for acquisition of 1,400 MW of renewable capacity. PacifiCorp made its projections based on volatility in the power market and in natural gas prices. The corporation forecasts gas prices to raise 25-50% above today's typical range.

Puget Sound Energy is now crafting its 20-year resource plan. The draft notes, "Wind resources offer an attractive resource alternative because of their mitigation of fuel price risk, their declining costs of production, and the absence of emission effects." PSE is working with the Washington Public Utility Commission and ratepayer advocates as it firms up its generation plan due in April.

However, gas price assumptions are "extraordinarily low," notes Danielle Dixon, a policy analyst with NW Energy Coalition. Portland General Electric's resource plan used similar assumptions and projected a future heavily reliant on gas turbines. However, the Oregon Public Utility Commission ordered PGE to rework its study more in line with PacifiCorp's higher projected gas costs.

A Tellus Institute study done for NW Energy Coalition points to a Northwest energy future increasingly oriented to windpower. Cost-competitive windpower on environmentally sound sites could alone supply 15% of Northwest electricity by 2020 or 6,433 average megawatts.

While the power market and federal policy uncertainties have put the wind industry through some turbulence in both the nation and Northwest, windpower continues its ascent. Windpower economics are only improving, while gas costs are volatile and hydropower suffers under yet another drought, a foretaste of what climate change could bring to the region with increasing frequency over coming decades. Wind projects are moving forward, and new wind developers are coming on the scene. The overall picture is clear -- Northwest windpower will continue to expand and will represent an increasingly important element of the regional power mix.