EWEB pursues affordability, partnership and flexibility with choice on future power supply
The Eugene Water & Electric Board (EWEB) has made a major decision about how to meet rising electricity demand in the years ahead.
The choice came down to how much EWEB wants to continue relying on the Bonneville Power Administration (BPA) for energy, and how much EWEB wants to procure energy itself. BPA, which supplies about 80% of the energy that EWEB delivers to customers, is a federal agency that sells energy from large dams on the Columbia and Snake River systems.
Last year, EWEB signed a contract with BPA, securing $2.5 billion of affordable, clean energy for the next two decades. BPA’s hydropower forms the foundation of EWEB’s cost-effective power supply. That contract provides energy that goes towards meeting customers’ existing levels of energy demand. But it does not provide energy to meet growth in demand.
EWEB forecasts that electricity demand will rise between 2% and 10% over the next 10 years as customers switch from gasoline-powered vehicles to electric vehicles. This would add between 5 and 25 average megawatts to EWEB’s load, which is currently 270 megawatts on average.
With higher levels of electrification, including if more customers switch to electric heating and cooling, EWEB could see 70 average megawatts of load growth by 2044.
Separate processes apply to new large energy users — defined as a customer that consumes more than 10 average megawatts during a 12-month period. EWEB would need to source power to serve such a customer from a non-federal source, since BPA does not supply federal power to cover the needs of “new large single loads.”
As EWEB weighed how to meet the forecasted rise in energy demand from electrification, the utility considered several choices. EWEB could rely on BPA. Or EWEB could meet that demand by procuring energy resources itself.
EWEB chose a middle ground, opting to meet the first portion of demand growth — the first 50 megawatts — with its own energy resources, while signing an agreement with BPA to cover unexpectedly high growth beyond that threshold. The 50-average-megawatt threshold reflects a balance between EWEB’s projected load forecast and future potential local resource options, while giving sufficient scale for EWEB to build an effective portfolio.
“This decision reflects EWEB’s unique role in the community,” said EWEB Chief Electric Operations Officer Lisa Krentz. “We believe that partnerships with local power producers and local customers are important. Those partnerships make the most sense financially, allowing us to save customer dollars, while also benefitting the local economy.”
EWEB’s local governance also makes it nimbler than BPA, so EWEB can seize energy resource opportunities that BPA may struggle to capitalize on. EWEB’s existing opportunities including local prospects fit within the 50-average-megawatt threshold. But the 50-average-megawatt threshold gives EWEB, essentially, an insurance policy if electricity demand unexpectedly spikes in the years ahead, allowing EWEB to tap into BPA for “Tier 2” resources above that level if needed.
It also gives time for BPA to refine its own energy resource acquisition program.
“This decision allows us to leverage our operational flexibility and pursue near-term local resource options, while using BPA’s resources as a backstop for longer-term load growth,” said Krentz. “We can focus on our core competencies and local relationships while mitigating long-term risk.”
