Puget Sound Energy [the utility subsidiary of Puget Energy (NYSE:PSD)] today issued two requests for proposals (RFPs) for expansion of the company’s already ambitious energy-efficiency programs and new power-supply acquisitions.
The requests for outside proposals are a central part of the company’s ongoing effort to acquire the clean energy supply and the natural gas and electric transmission systems necessary to ensure reliable, stably priced energy supplies and utility service for its steadily growing customer base in Western Washington – a region whose population is expected to grow by 28 percent, or about 1 million people, over the next 20 years.
“Puget Sound Energy is fortunate to serve a vibrant, growing region,” said Kimberly Harris, PSE executive vice president and chief resource officer. “But all that growth brings with it a tremendous need for new energy resources. Our strategy is to cost-effectively meet growing energy needs through a balance of enhancing our energy-efficiency efforts and acquiring new energy supplies.”
Customer growth and the expiration of large purchased-power contracts in coming years are driving PSE’s need to acquire a large amount of new power supplies. The utility estimates it will need more than 1,600 average-megawatts (aMW) of new electricity supply in the next decade, and more than 2,600 aMW by 2025 – roughly equivalent to the power demand of two cities the size of Seattle.
Peak wintertime (January) electricity usage by PSE’s 1.04 million electric customers currently is about 3,200 aMW.
The first of the two RFPs seeks to broaden and expand PSE’s aggressive program for helping customers conserve energy. Under the utility’s 2007 Integrated Resource Plan (IRP), PSE estimates that its energy-efficiency programs have the ability, by 2015, to help customers cut their electricity need by 314 aMW and their natural gas usage by approximately 21 million therms. The power savings would be sufficient to serve the electricity needs of about 237,000 households. The natural gas savings would meet the needs of more than 25,000 households.
PSE sees an opportunity over the next two decades to achieve more than 500 aMW of energy savings. A power-demand reduction of that size would avert the need to build two medium-sized natural gas-fired power plants.
Over the next two years, PSE plans to expand existing energy-efficiency programs for residential, commercial and industrial customers, and offer several new programs set to launch in 2008 and 2009. New offerings for residential customers include increased incentives for installing energy-efficient lighting fixtures and major appliances, in-home energy audits and electricity monitors. Small-business lighting rebates and financial incentives for all commercial and industrial customers also will be increased.
The second RFP asks outside power producers, marketers, and power-plant developers to help PSE procure up to 1,340 aMW of new electricity resources by 2015. Any type of power-generating fuel or technology is open for consideration. PSE will consider various contract arrangements, such as investment in existing power plants, ownership of new plants, or long-term power purchases.
“Our overriding goal is to keep costs for our customers as low as possible, while ensuring a reliable source of future energy that is compatible with environmental concerns,” Harris said. “Energy efficiency, wind and natural gas are all high on our list to meet that goal.”
The company in 2003 set a goal of securing 10 percent of its customers’ power supply from renewable sources by 2013. Since then, PSE has acquired its Wild Horse wind and solar facilities in Central Washington and Hopkins Ridge wind facility in Eastern Washington, which produce a combined 379 megawatts (MW) of power-generation capacity – enough to serve 100,000 homes.
The company’s latest resource plan suggests that 550 MW of additional wind power be added to PSE’s supply portfolio by 2015. To meet the 2006 voter mandates of Washington state Initiative 937 (the Energy Independence Act), PSE will need to acquire about 1,000 MW of renewable power by 2020.
A Jan. 23 conference for prospective RFP bidders will be held at PSE’s Bellevue campus to review the RFP requirements. Questions about bid submittals can be sent to Sheri Maynard at sheri.maynard@pse.com
About Puget Sound Energy
Washington state’s oldest and largest energy utility, with a 6,000-square-mile service territory stretching across 11 counties, Puget Sound Energy (PSE) serves more than 1 million electric customers and 721,000 natural gas customers primarily in the growing Puget Sound region of Western Washington. PSE, a subsidiary of Puget Energy (NYSE: PSD), meets the energy needs of its growing customer base through incremental, cost-effective energy conservation, low-cost procurement of sustainable energy resources, and far-sighted investment in the energy-delivery infrastructure. PSE employees are dedicated to providing great customer service to deliver energy that is safe, reliable, reasonably priced, and environmentally responsible. For more information, visit PSE.com.