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A Balanced Energy Plan for the Interior West
Western Resource Advocates
Boulder: Western Resource Advocates, 2004
90 pp., Free, paperback

Energy production is a major economic activity and the source of many environmental problems in the seven western states of Arizona, Colorado, Montana, Nevada, New Mexico, Utah, and Wyoming. In 2002, about 30 percent of the electricity generated in those states was exported to other states, primarily California. By 2020, electricity exports are expected to increase, but a projected 50 percent increase in electricity consumption in those fast-growing states is the primary reason that many new power plants are on the drawing boards.

According to A Balanced Energy Plan for the Interior West, the "Business as Usual" approach would meet that increased demand almost entirely from new coal and natural gas plants. That's consistent with the current reality in which 68 percent of electricity is generated by coal-fired power plants, and 14 percent is from natural gas plants (up from just four percent 10 years ago). The Palo Verde nuclear power complex in Arizona produces about 10 percent and hydroelectric plants provide about seven percent of the current electricity generated in the region.

Since the region's power plants now emit approximately 255 million tons of carbon dioxide (about 10 percent of the nation's emissions) while providing about eight percent of national electricity generation, building many new fossil fuel plants would only exacerbate air pollution - if federal laws do not require more stringent emission control technology. While natural gas plants can be built much quicker than coal or nuclear units, natural gas prices are rising and can be extremely volatile. Coal plants also use a significant amount of the region's scarce water supplies. The environmental damage from producing coal, natural gas, and uranium also is significant. People concerned about climate change also point to fossil fuel use as a major cause.

The "Balanced Energy Plan" states: "The best way to protect the region from both volatile fossil fuel prices and future environmental liabilities is to diversify our energy portfolio with a reasonable proportion of resources that do not have fuel costs associated with them and that also have low environmental impacts."

The plan relies on energy efficiency, renewable energy, and combined heat and power (cogeneration) and could even retire some of the existing coal and natural gas plants early. Thus, by 2020, about 63 percent of the region's electricity generation would be from coal, natural gas, and nuclear plants, while non-hydro renewable sources would provide about 20 percent of the electricity. Because of energy efficiency measures, the Balanced Energy Plan requires 30 percent less electricity generation by 2020, compared with Business as Usual.

Beyond describing the current situation and the two approaches to the future, much of the report addresses whether the Balanced Energy Plan is feasible and how would it be accomplished. The PROSYM electricity market simulation model provides the analytical basis for both "Business as Usual" and "Balanced Energy" approaches. The model "allowed us to compare the costs, environmental impacts, transmission requirements, and reliability and risk-mitigation properties" of both scenarios. The model uses the entire western U.S. electricity grid (the seven states, plus Idaho, Washington, Oregon, California, and parts of western Canada and Baja California), since the generation and transmission are linked. Important model assumptions, including fuel, transmission, and distribution costs are included in two appendixes. The model assumes that coal prices will decline slightly in constant dollars while natural gas prices will rise. Those cost assumptions could be too low, in which case the $2 billion a year in cost advantages estimated for the Balanced Energy Plan would be billions more. Additional projected advantages of the Balanced Energy Plan are equivalent system reliability, less water consumption, a more than 40 percent reduction in carbon dioxide emissions, and more than 30 percent less sulfur dioxide and nitrogen oxides emissions that cause smog and haze.

Increased electricity generation and consumption require more transmission lines, and the Balanced Energy Plan requires about one-third additional transmission capabilities because of the substantial increased use of wind generation from rural areas without sufficient transmission capacity. The Balanced Energy Plan estimated exports are also less because of the assumed energy efficiency measures that California and the Pacific Northwest would take (and are being planned).

The report also provides examples of private and public action consistent with the Balanced Energy approach. For example, IBM has a corporate goal of annually saving four percent in its fuel and electricity use. Arizona, Nevada, and New Mexico have enacted renewable portfolio standards that require utilities to substantially increase their electricity generation from renewable sources. Utah, Wyoming, Colorado, Idaho, and Montana are coordinating planning for new transmission with particular attention to tapping wind resources. The City of Phoenix funds energy efficiency projects that have saved $42 million over 20 years.

While this report is written primarily for government and utility officials and advocates, it provides useful information for concerned citizens who want to be involved in promoting a cleaner, cheaper, and more environmentally friendly energy future.

— Don Hancock

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The report can be downloaded at: www.westernresourceadvocates.org/energy/bep.html.

Please contact WRA at (303) 444-1188 x221 with any questions about the report.