Small, Rural Utilities Give Their Energy Perspective

Here's a preview of an interview with Bill Drummond of Western Montana Electric Generating and Transmission Cooperative, which will be in the upcoming Council Quarterly.

Q: As a four-state entity, the Council approaches energy planning from a regional rather than an individual perspective. What value does this regional perspective provide for small, rural utilities?

Drummond: The true value of the Council's power plan is that it sets a regional benchmark against which all individual utility plans can be compared, and it quantifies the cost of not working together. As I mentioned earlier, it can't replace utility planning, and individual utility resource choices will inevitably differ from those contained in the Council's plan, but it stands as a benchmark against which all others are examined.

The power industry has a tendency to adopt a "flavor of the month" approach to new resources. In my career, I've seen utilties veer from temporary addictions to nuclear, coal, market purchases, combustion turbines, and now wind; each being the next great resource. The Council's plans have forced us to momentarily consider our addiction to whichever "resource of the month" is in favor in the light of all potential resources, including efficiency. While I've disagreed with some of the resource portfolios adopted over the years, I do believe that all Northwest residents have benefited from the Council's planning process.

Additionally, the structure of the Council itself means that states serving large populations of rural and smaller-utility residents have an equal voice with more populated, urban states. This has proven especially useful in guaranteeing that the concerns of the rural areas of the region are considered and addressed.

Q: Where would you like to see the region and your members over the next 10-15 years?

Drummond: Regionally, I'd like to see resolution of the Gordian Knot that currently bedevils the construction of new transmission. There is no doubt that additional transmission investment is necessary; the challenge is figuring out how to pay for it. Until we can negotiate long-term contracts that will guarantee the repayment of transmission investments, few projects will get built and we will potentially build more generation than would otherwise be necessary.

I would also like to see more joint investment by public power and the investor-owned utilities in transmission, generation, and energy efficiency. I think the largely failed experiment in retail deregulation caused our interests to diverge more than necessary.

For my members, we will continue to work closely with other Bonneville customers to ensure that the Federal Columbia River Power System continues to be a reliable and cost-effective base load resource. A positive resolution of the ongoing Bi Op litigation is a very important step. We need to get out of the courtroom and focus on the prudent management of the substantial investment that Bonneville customers are making to fulfill their stewardship obligations. I'm confident that my members will husband the low-cost Tier 1 resources they will be purchasing from Bonneville by continuing to invest in energy efficiency; the Tier 2 alternatives will certainly provide a direct price signal for that. Second, I would like to see a substantial portion of their Tier 2 requirements that are not served by increased efficiency come from resources they are purchasing and building equity in. I want to make certain that new technologies are embraced and deployed in their territories just as they will be in urban areas. Finally, I would like to see my members maintain the close relationship they have enjoyed with their consumer/owners since they were formed. This has been, and will continue to be, among their greatest strengths.