West Coast utilities and independent-power producers are locked in a land rush to secure the best wind sites and the power they produce. That's great news for some farmers.
WASCO, Ore. — Long lines of wind turbines tower over stubbled wheat fields and backcountry roads in Sherman County. Hundreds pinwheel lazily in the breeze, their white propellers like massive Mercedes medallions, spinning out electrons that pulse down a high-voltage line to nearby John Day Dam.
Looking east into Gilliam County and north into Washington, turbines are strung over ridgelines as far as the eye can see.
And there are nowhere near enough of them.
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Last year, Oregon lawmakers passed landmark legislation mandating major increases in the use of renewable energy. But Oregon’s needs are puny compared with those of California, where renewables targets are higher and kick in sooner. Under another set of mandates, Washington state has needs as pressing as Oregon’s.
The combination is producing an unintended result: West Coast utilities and independent-power producers are locked in a land rush to secure the best wind sites and the power they produce. Coupled with a worldwide shortage of turbines and a falling dollar, the resulting scarcity is driving up the cost of wind power — a burden that electricity ratepayers ultimately will shoulder.
Oregon’s largest utility, Portland General Electric (PGE), recently persuaded regulators to let it charge ratepayers for deposits it needs to place on scarce turbines and wind sites, arguing in part that in a few years, there might not be any good sites left “at any price.”
The center of Oregon’s wind rush is Sherman County.
“This is the biggest thing that’s happened in Sherman County since they switched from horses to tractors,” said Kevin McCullough, a fourth-generation wheat farmer whose 4,000 acres are crawling with contractors, crew-cab pickups and semi rigs hauling in turbine parts from the Port of Vancouver.
It’s not hard to figure out why power companies love Sherman County.
Bounded by the Deschutes River on the west, the John Day River to the east, and the Columbia to the north, much of the county’s 823 square miles is windblown glacial silt — the kind that swirls into three-story dust devils as gusts leave the gorge, then blow over the Columbia plateau.
“If the wind’s not blowing, it’s thinking about it,” said Lee Kaseberg, a local wheat farmer.
Officially, the northern reaches of Sherman County have only Class 4, or “good,” wind. It blows harder and steadier in parts of eastern Oregon and Wyoming, experts say.
But Sherman County has the ingredient that’s often missing elsewhere: transmission.
Thanks to the federally owned hydroelectric dams that dot the Columbia, the entire basin is festooned with high-voltage lines that can carry electricity to Western Oregon and Washington.
Transmission has become a key factor driving wind development. East of the John Day Dam up to McNary Dam, the system is heavily congested and badly in need of an upgrade.
Wind farms in Sherman County, meanwhile, effectively can run an extension cord right to the substation at John Day. And that’s what they’ve done, laying a shiny feeder line past Bob’s Texas T-Bone restaurant in Rufus into the hills beyond.
Sherman and neighboring Wasco County are also home to two other important pieces of Oregon’s renewable-energy equation: the terminus substations in the high-voltage system connecting Oregon with power-hungry California.
Just as Californians have thronged Oregon’s residential real-estate market, the Golden State could bigfoot Oregon’s renewables market.
Some experts think it’s inevitable.
Demand could be huge. Pacific Gas & Electric, the massive utility serving Northern California, sells electricity to six times more customers than PGE. The California utility’s rates also are two-thirds higher, giving it flexibility to pay higher prices for renewables.
Moreover, while Oregon’s renewable standard kicks in gradually — utilities need 5 percent renewables by 2011, rising to 25 percent in 2025 — California utilities need to hit the 20 percent mark in the next three years.
PG&E is meeting 12 percent of its customer demand with renewables today and has contracts that could get it to 18 percent. But regulators in California worry that the company’s renewables contracts could fall through as they have in the past.
That’s one reason the company is studying a big expansion of its transmission capacity into the Northwest.
Meanwhile, California is seriously considering increasing its renewable-energy mandate to 33 percent by 2020.
Utilities and independent-power producers get cagey when asked how much renewable power is selling for these days. But Jeff King, an analyst at the Northwest Power and Conservation Council, said he’s hearing prices in the range of $85 to $100 per megawatt hour delivered. That’s 40 percent to 70 percent more than King figures utilities would pay for natural-gas-fired power, even with a carbon tax.
Compliance mandates drive some of that premium. But it also comes from a worldwide shortage of turbines, rising prices for everything from steel rebar to transportation and the tumbling value of the dollar.
Local giants PGE and PacifiCorp say they’re confident they can hit Oregon’s first renewable target: 5 percent in 2011. But things get dicier in 2015, when the target rises to 15 percent.
That’s great news for landowners such as McCullough, who can expect to harvest between $4,000 and $14,000 a year for every turbine planted on their land.
“Retirement’s pretty much set,” he said, unable to suppress a grin.