Recently, a handful of alarmist narratives have suggested that skyrocketing demand and risk of rolling blackouts require us to gut the Clean Energy Transformation Act and build new natural gas plants. Before Washington dismantles its commitment to a clean electric grid, let’s talk about all of the variables in the equation.
We all agreed — via democratic legislative process — on a shared framework for our energy future under CETA, so why would we rewrite the rules before we’ve explored the full tool kit of modern energy resources? We can protect energy customers and strengthen our grid without renouncing our clean energy future, provided we demonstrate a willingness to evaluate all the options. Washington’s history of a stakeholder-intensive energy process demonstrates that we can.
It is undeniable that we are in a period of unprecedented load growth, and grid reliability is a valid concern. We agree — the region has been irresponsibly slow to respond to new energy demand. But what’s flawed is the assumption that CETA itself is the barrier. For starters, CETA is not an unyielding policy. Designed with grid realities in mind, the law explicitly includes safety valves and regulatory offramps for cases where the grid is legitimately threatened. While lawmakers in 2019 may not have fully foreseen the takeoff of the artificial intelligence and data center boom, they did foresee future scenarios where affordability and reliability take precedence over decarbonization goals. If there is a concern that clean energy is the direct cause of rising costs or reliability concerns, the law provides mechanisms to address those crises. To date, no utility has taken these formal steps.
Another key part of the equation: how utilities account for the grid resources we already have. An analysis by Sylvan Energy Analytics reported that a study cited by two recent opinion pieces in The Seattle Times failed to consider large-load, demand-side flexibility. (Find these at: st.news/flex and st.news/problem.) Considering that large loads like data centers are the primary driver of new demand, exploring their ability to manage demand is critical. Recent data found significant potential for flexible demand-side management strategies, which utilities in Washington have not yet fully examined.
To be clear, not all energy load can be flexible; uninterruptible infrastructure like hospitals and emergency response must stay online. But if a load can be flexible, let’s incentivize it. For example, in Oregon, data centers are required to explore load flexibility in exchange for faster grid interconnection. Implementing voluntary flexible tariffs to encourage ramping down operations during peak events can have tremendous benefits to the grid and shield customers from price spikes. We should strive to get more out of the existing system before altering well-functioning state policy.
Why are utilities proposing new, centralized power plants instead of leading with these efficiency measures? Because of a fundamental misalignment of incentives. Under our current regulatory system, investor-owned utilities earn profit by building massive capital projects like gas plants, even when cleaner, more modern alternatives exist. This allows them to charge ratepayers for a new power plant for decades while locking in guaranteed returns for shareholders. Fortunately, Washington’s Utilities and Transportation Commission is already working to change this paradigm, seeking new regulatory mechanisms that incentivize energy-saving behaviors and reward utilities for efficiency.
Building new wind and solar power remains cost-effective, even without tax incentives, and large-scale battery storage to firm up these variable resources is rapidly being deployed. Renewable energy is insulated from global commodity shocks and fuel price volatility, and in a volatile world, clean energy represents the most stable long-term pricing option available to ratepayers. Add in the fact that renewables have no ongoing fuel costs, and the risk profile to utility customers greatly diminishes as well.
In 2019, the Legislature, utilities and climate advocates sat at the table and agreed that CETA was the smartest path forward for our state. Setting goals was the straightforward part; navigating the friction of implementation is where the real work begins. It could be that we’re in the exact scenario that CETA’s framework was engineered to guide us through. Washington’s leaders should support our regulatory bodies, realign utility incentives to protect ratepayers, and look at all the variables. Let’s let the law work before we declare it broken.
