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Executive Interview: Viewpoints from the Board Room: Snohomish County PUD

Snohomish County Public Utility District is a forward-thinking organization that is focused on developing all of the renewable resources in its own back yard. Although conventional hydro leads the charge, the PUD also is looking at tidal resources, solar and geothermal.

By Elizabeth A. Ingram

Steve Klein, general manager, Snohomish County Public Utility District

Snohomish County Public Utility District in Everett, Wash., is a fairly young utility, having begun operations in 1949. Today, it provides electric service to more than 320,000 customers over a service area of 2,200 square miles and is the largest PUD and second largest municipally owned utility in the Pacific Northwest.

The PUD owns and operates three hydro projects: 112-MW Henry M. Jackson on the Sultan River, 650-kW Woods Creek on Woods Creek and 7.5-MW Youngs Creek on Youngs Creek. Between the PUD's various generating projects and energy purchased from the Bonneville Power Administration through a long-term power supply contract, about three-quarters of Snohomish County PUD's energy comes from hydropower. The remainder comes from wind (8%), biomass/landfill gas (3%) and other BPA energy sources.

The PUD is governed by a three-member Board of Commissioners, elected for staggered six-year terms. It has been managed by Steve Klein since 2006. Snohomish County Business Journal named General Manager Klein its 2011 Executive of the Year. Under his leadership, the PUD has obtained more than $31 million in grants for research and development of tidal and geothermal energy, modernization of its electrical system with smart grid technology and community conservation programs.

Hydro Review recently sat down with Klein to discuss the PUD's perspective on hydro, its significant new development work and its plans for the future.

Q: Snohomish County PUD appears to have a strong focus on developing new generating facilities. What is the reasoning behind this?

Klein: Because we are a relatively young utility, we were not yet formed at the time the first hydroelectric facilities in the area were being developed. Other large utilities in Washington existed in the early 1900s and developed a legacy portfolio of hydro facilities. We see that this legacy of renewables has served the older utilities well in terms of financial stability and self-determination, as well as the value having a renewable asset adds to their portfolio. Snohomish County PUD wanted to follow that legacy and develop renewables, with a focus on our own back yard.

We are in one of the fastest-growing areas of the state. As we continue to grow, we are looking to bolster our generating portfolio by adding the renewable resources available today.

Unfortunately, essentially all the sites for large hydro facilities in our area have already been developed, and many of the medium to small sites have significant environmental issues. So it's not just hydro facilities we are looking to develop. Other renewable opportunities fit our model, such as geothermal and solar. Once we develop these facilities, they provide stability to a utility over time and do not have the volatility of fossil-fueled facilities, particularly with regard to fuel costs. And they have the benefit of being benign and having low impact on the environment.

Q: In October 2011, Snohomish County PUD opened the 7.5-MW Youngs Creek hydro plant. How did you accomplish completing this first dam built in Washington State in nearly 20 years?

Klein: The first and foremost requirement for developing new renewable facilities is having a great staff that provides the internal expertise and desire to fulfill your objective. The district also had some partnerships that helped facilitate that project, including with the Tulalip Tribes.

The approach we take in developing our generating facilities is to invite all stakeholders in as early as possible to talk about the project and develop an approach to address the relevant issues and concerns up-front. You need an understanding of the interests of the parties so you can factor that into the project design and concept. The people who experience problems during development are those who develop it in their own minds and proceed, then later get input that involves modifying the project or creates problems that delay its completion.

Kim Moore, assistant general manager, water, generation and corporate services, developed that project. With regard to the hydro projects Snohomish County PUD develops, our goal is to focus on those that are: outside of old-growth forest land, above natural barriers to fish migration, and not creating new transmission or transportation corridors.

We originally identified Youngs Creek when we issued a request for proposals in 2008 to look at renewable resources. In that RFP, we received information from wind developers that led to several contracts. The Youngs Creek project was in the mix as well. A developer owned the land and wanted to build the generating plant and sell Snohomish County PUD the power. This eventually led to the PUD purchasing the assets in 2008: land for the intake, powerhouse and pipeline corridor.

Prior to our involvement, the Federal Energy Regulatory Commission had issued a notice of implied surrender for the license. We met with FERC and provided justification for them not to pull the license. Then we expedited the permits with federal, state and county agencies. Snohomish County PUD advertised the turbine-generator package in 2009 and started work on the project in 2010. Construction took 19 months because we had one of the wettest summers ever in 2011. And Youngs Creek was commissioned in October 2011.

The site for the 7.5-MW Youngs Creek powerhouse, along with land for the intake and pipeline corridor, was purchased by Snohomish County PUD. The project began operating in October 2011.

Q: Why develop hydro in this day and age, rather than a more easily licensed generating source, such as natural gas or coal?

Klein: We have a policy that says conservation and energy efficiency is the No. 1 tool in our tool chest. Yet, being one of the fastest-growing utilities in the state, conservation alone is not enough.

Our next focus is on renewables and, to the extent possible, we want to develop those resources in own back yard. The district is specifically not pursuing fossil fuel resources, including gas. Our focus on renewables promotes economic development in the area we serve, which potentially creates jobs, and puts us in a better position of self determination. Renewables such as hydro are attractive because they are closer to the load, which means fewer electrical line losses and less transmission to build.

Q: You are pursuing FERC licenses for the 6-MW Calligan Creek and 6-MW Hancock Creek hydro projects. What is the status of this work?

Klein: Both projects were licensed in the early 1990s. These licenses were pulled due to lack of activity in 2004. We applied for preliminary permits, and the permits were granted in early 2011. We filed the pre-application documents in September 2011 and conducted public meetings in November. We also have had numerous discussions with tribes and agencies. We did not receive strong opposition. In fact, some of the agencies expressed some surprise that these projects had not been built previously.

Snohomish County PUD hopes to file the draft license applications by the end of 2012 and receive the licenses by 2014. We are developing these projects in tandem because they are only about 3 miles apart and share common transmission lines and communication infrastructure.

As with Youngs Creek, we have purchased the land for the intake, powerhouse site and pipeline. The design of both projects is essentially complete. And we are working to file permits in February 2012 to help finalize design issues related to the penstock.

We expect the entire process to take another year to a year and a half. We anticipate getting the license in 2014. For both projects, we have already obtained approval from FERC to use the traditional licensing process. Snohomish County PUD could be building these projects as early as 2015.

We plan to follow an incremental approach to developing new facilities over the next five to 10 years. So we'll complete Hancock one year and Calligan the next, then reassess our next steps under our long-term integrated resource plan.

Q: Further down the development pipeline is the 30-MW Sunset Falls hydro project. Where does the PUD stand in its pursuit of a FERC preliminary permit for this project?

Klein: We have applied for a preliminary permit and conducted two public meetings. We are working with agencies on study plans and hope FERC will grant the preliminary permit in February or shortly thereafter. The public comment period ended before Christmas 2011.

We have since met with agencies again to discuss the trap-and-haul facility at this location. Sunset Falls provides a natural waterfall barrier to fish migration. In the 1950s, Washington State Fish & Wildlife created a trap-and-haul facility. Fish are captured and transported by truck above three natural falls in the south fork of the Skykomish River and then returned to the river. About 20% of the fish habitat in the basin is located above Sunset Falls. As part of the development of the hydro project, the district would upgrade this facility to meet current Endangered Species Act standards.

We may hear something from FERC regarding the preliminary permit in February or March 2012. Meanwhile, the PUD is in the process of putting together the pre-application document, working to get road agreements and planning for geotechnical and in-stream flow studies. We also are working on incremental flow modeling plans to determine minimum flows, which then must be run by state and federal agencies for approval.

Q: Snohomish County PUD is developing a tidal demonstration project in northern Admiralty Inlet of Puget Sound. How do you justify what can be a significant expenditure on commercially unproven technology?

Klein: We need energy, but we have more wind in our portfolio as a percentage than any other utility in the state (8% from three projects). We need to add renewable facilities that are more baseload-oriented or at least have a more accurately forecastable production. Our county has a water body with very strong tides, and we didn't want to go to someone else's backyard to find these renewable resources when we haven't fully explored our own first.

This project is still in the research and development phase. We are pursuing a pilot project, not a commercial installation. We have received substantial support from various entities to further this effort, so we are not carrying the full financial burden on our shoulders.

Craig Collar leads our total renewables effort and is spearheading this work. There is a lack of data regarding the technical, economic and environmental viability of tidal energy. One perk of this project is the opportunity to gather this needed data. Thus, this project will be configured to provide data over power production. There are no commercial tidal energy projects installed in the world. The only way to determine if this is viable is to deploy an appropriately-sized pilot unit and learn from it.

The turbine for the 7.5-MW Youngs Creek project was acquired after Snohomish County PUD advertised the turbine-generator water-to-wire package in 2009.

Q: What made you choose OpenHydro Group as your technology partner for this project, supplying two Open-Centre Turbines?

Klein: About three years ago. Snohomish County PUD went through a rigorous project to look at all developers worldwide, including visits to the United Kingdom, where the majority of work in ocean energy is taking place. OpenHydro was one of the few developers who had deployed a large-scale unit in a marine environment and gathered data relevant to that project.

In addition, we were drawn to the simplicity of the device. It contains a direct-drive permanent magnet rotor. Not too much can go wrong with this type of system. The final consideration was the benign environmental nature of the technology. It operates slowly and has vanes like a fan (instead of blades) that are constrained in an outer housing. This means no blade tips to potentially negatively affect fish and other marine mammals.

Q: When is this project to begin operating? How will the electricity be used?

Klein: The best case, depending on permitting, is 2013 to 2014. We are blazing the trail on this project in terms of permitting. Everything about tidal energy is new to the agencies and tribes. Again, we have been proactive in engaging with stakeholders. The PUD expects to submit a final license application to FERC around the end of February 2012.

This device will be grid-connected and will bristle with instrumentation intended to provide needed data. Depending on the design and tidal regime, it will have a generating capacity of 150 to 200 kW and a capacity factor of 10% to 20%.

Q: In 2009, the PUD received up to $600,000 from the U.S. Department of Energy to study environmental conditions in Admiralty Inlet. What results have you seen?

Klein: A lot of that research is being wrapped up and will be contained in the final license application for the project. The University of Washington is one of our key partners in this project. We found that the tidal currents are a little stronger than predicted. The sea bed where we would install the unit is as expected: scoured, cobbled beckrock with no eel grass or kelp. There is not a lot of sea life down there, mainly rat fish and jellyfish were seen. But we know salmon and orca transit through Admiralty Inlet, so we also characterized how this species uses this resource.

Another takeaway, which was somewhat of a surprise, is how noisy Admiralty Inlet is, with all the traffic going in and out. (This inlet is the entrance to Puget Sound.) One point of interest was whether a tidal turbine would contribute meaningfully to the existing noise. In actuality, the noise from the turbine would be minimal compared to the background noise already there.

This research will be publicly available in the final license application, which will be posted on the PUD website. We also shared the results of the studies with resources agencies and regulatory stakeholders because they are applicable to the overall resource of Puget Sound. And the University of Washington has a website where all of this data will be publicly provided: http://depts.washington.edu/nnmrec/project_meas.html

Q: Your Jackson project recently received an eight-year certification from the Low Impact Hydropower Institute. Why does the PUD seek this certification for its hydro projects?

Klein: We recently received a new 45-year operating license for Jackson after two years of collaborative efforts and meetings, resulting in a settlement agreement in 2009 that balanced power production and environmental needs. During this process, Snohomish County PUD noticed this project was fairly environmentally benign. We had already talked to LIHI about certifying the Woods Creek project, which we purchased in 2008. For Jackson, we had done all the studies, had all documentation available to make the application, and had support from the Tulalip Tribes and American Whitewater. So we applied.

We hope to potentially sell renewable energy credits from this project and use the money for further research related to developing other renewable projects. We are going through a registration process for a West Coast renewable energy network in order to sell the RECS from the Jackson project and other renewable energy sites in the future.

In some sense we sought this certification because we are proud of the project and what came about working with stakeholders. Secondarily, if we can sell the RECs to generate income to reinvest in more research, that's great.

Q: Snohomish County PUD is developing other renewable projects, such as geothermal, wind and solar. Why focus on these technologies? And what is their synergy with hydro?

Klein: We just put up two micro wind turbines at the PUD's Operations Center. We break our efforts into utility scale vs distributed generation. Our strategy is to look at partnerships with customers or entities within communities. For example, we have a program called Solar Express that promotes development of solar projects on rooftops and businesses using a turnkey approach. We have bonded, certified installers; and we provide an incentive to help offset costs.

We are looking at anaerobic digestion of yard waste and restaurant and home food waste. And we are participating with dairy farmers who are looking to expand a small facility where manure is turned into soil additive and the methane gas produced is used to generate electricity.

Geothermal is of interest because of its baseload nature. We are on the Ring of Fire that goes along the west coast of North America and around to Asia. Glacier Peak, in our service territory, is one of the most historically active volcanoes in the state.

There is no single resource we can secure to solve all our energy needs. It has to be a combination, and there is virtually nothing reasonable we won't at least take a look at.

The synergy with hydro is the opportunity to take advantage of the varying nature of all these renewable resources. During the rest of the year, other resources pick up that gap that aren't able to ramp up in winter. Hydro is more of a baseload resource, and we use it to meet our winter peak. But typically wind picks up at night and backs off in the morning, while solar picks up in the morning and backs off at night.

We're proud of the hydro projects we have and hope to add to that portfolio, but they're going to be small compared to the large projects built decades ago. Our approach isn't just hydro, but it's built upon the legacy of the value the historical hydro resource has demonstrated. We think these other renewables provide some of that same advantage. We stand on the shoulders of the greatness of what hydro has proven to be, and we hope to add more to our portfolio to the extent that we can.


Elizabeth Ingram is senior editor of Hydro Review.

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