3.1 Power Supply and Transmission Introduction and Policy Language from SD15
EWEB Climate Change Policy SD15 – Power Supply & Transmission Sectiom
The Board is committed to supporting a low-carbon electric power portfolio that maintains, on a planning basis, over 90% of annual energy from carbon-free resources and targets over 95% of annual energy from carbon-free resources by 2030 to the extent possible and practical without distinct adverse impacts to customer-owners.
Using the Integrated Resource Plan (IRP) process including final adoption by resolution (GP7), the Board will work with the General Manager to establish the long-term (20-year) principles, priorities, approaches, definitions (including carbon-free, carbon intensity), measurements, and goals for the electric generation portfolio, demand response, conservation and energy efficiency, and customer impact limitations (including but not limited to reliability, cost, and equity) supporting this directive.
EWEB is unique in Oregon as a public utility that both owns generation resources and relies on the Bonneville Power Administration (BPA) for a share of the federal power system. EWEB is also an active participant in the regional energy market. EWEB is the third largest electric utility (behind Portland General Electric and PacifiCorp) and the largest consumer-owned municipal utility in the state in terms of customers served. EWEB is the fourth largest electric utility (behind Portland General Electric, PacifiCorp, and Umatilla Electric Cooperative) in terms of total electricity sales.
EWEB’s long-term power supply decisions must be made within the context of state and regional climate policy and changing regulations, rising energy demands via customer decarbonization / electrification efforts, and the physical realities of a changing climate on temperatures and hydro conditions.
Content currently included in v2.0:
- EWEB’s 2020 and 2021 Electrification Studies showing expected load growth through 2040
- EWEB’s 2023 Integrated Resource Plan (IRP)
Content planned for future Guidebook Versions:
- Conservation Potential Assessment and Demand Response Analysis
- 2025 Integrated Resource Plan
Explore this webpage: 3.2 Electrification Study | 3.3 Integrated Resource Planning (IRP) Process
3.2 Electrification Study (Phase 1 – 2020, Phase 2 – 2021)
In early 2020, EWEB’s management and Commissioners agreed to develop a better understanding of the impacts of electrification on EWEB’s future planning efforts. EWEB’s first Electrification Study (released in November 2020), focused on the potential impacts of electrification without analyzing the costs to customers choosing to electrify. The Phase 2 report from 2021 built on that initial analysis by considering the economics of electrification from multiple perspectives.
In both studies, the sources of electrification analyzed within the transportation sector focused on light-duty vehicle electrification, while the building sector analysis focused on the electrification of space and water heating technologies for existing residential and small commercial buildings. Heavy-duty transportation electrification and industrial electrification were outside the scope of the analysis.
These reports reflect EWEB’s ongoing assessment of evolving electricity consumption patterns that will help guide decisions and investments associated with electricity generation, delivery infrastructure, utility rate design, and customer program development. These studies do not advocate a position, or necessarily fully align with other agency targets or assumptions but are an attempt to inform and prepare EWEB for a range of different future conditions.
Prior to 2028 when a new contract with the Bonneville Power Administration (BPA) will be put into place, EWEB will need to reassemble an electric supply portfolio for the long-term economic, environmental, and social benefit of our community. These electricity supply decisions can be improved by effectively aligning time-of-use consumption, distributed generation, demand response, and efficiency programs with the increasingly dynamic future of clean energy resources and evolving storage technologies.
Consistent with EWEB’s stated values, EWEB will need to align our electricity supply portfolio with the evolving energy needs of our community, considering the potential effects of climate change, economics, technology, customer behavior, industry variations, and policy changes. All these factors, including the likelihood, degree, and pace of electrification, will be used as planning criteria in EWEB’s Integrated Resource Planning process (IRP).
Links and Relevant Resources:
- EWEB Website: EWEB is Exploring the Impacts of Widespread Electrification in our Community
- EWEB Electrification Study – Phase 1 Report (Oct 2020)
- EWEB Electrification Study – Phase 2 Report (Nov 2021)
3.3 Integrated Resource Planning (IRP) Process
What is an IRP?
An Integrated Resource Plan is a long-term planning process to identify EWEB’s energy needs and the best resource options to meet those needs. There are two main components to a standard IRP: an Energy Resource Study that relies on modeling and analysis and public input to provide a 20-year look at future portfolio options and a nearer-term (2-5 year) Action Plan. Best resource options will be identified in accordance with EWEB’s organizational values.
An IRP is a long-term modeling exercise to assess a utility’s energy needs over the next 20 years and identify the best mix of resource options to meet those needs. Unlike Investor-Owned Utilities (IOUs), EWEB as a public utility is not required to complete an IRP on a specific timeframe. EWEB had completed an IRP in 2011, but with demand staying steady, had not undergone a full-scale IRP again until 2022-2023. EWEB is now planning to conduct regular IRPs on a 2-year cycle with the previous IRP finished in summer 2023 and the following IRP expected to be completed in summer 2025.
These long-term power supply decisions are made within the context of state and regional climate policy and changing regulations, rising energy demands via customer decarbonization / electrification efforts, and the physical realities of a changing climate on temperatures and hydro conditions. Additionally, EWEB must live our values, one of which is to maintain a focus on affordability. The climate benefits of electrification depend on both the cost and the carbon content of electricity. If the shift to low-carbon power supplies causes a material increase in electric rates, the incentive to electrify will be reduced, and the overall cost burden on average customers will increase. Keeping EWEB rates low is climate action.
Power purchases represent the largest share of each customer dollar EWEB receives, so we must be especially cognizant of how we source our wholesale power. Additionally, the carbon intensity of EWEB’s power relates directly to the carbon reduction benefit of electrification.
Through EWEB’s IRP process, EWEB will develop resource plans to meet the SD15 goal for getting to 95% carbon-free resources by 2030 on a planning basis. Actual annual emissions will be influenced by real customer demand (driven by local weather patterns and customer behavior) and EWEB’s changing need to rely on market purchases to balance customer demand and resources continuously. For example, EWEB’s current portfolio is predominantly hydro power, so poor water years with low hydro supply will likely cause EWEB to make additional market purchases to balance supply and demand.
3.3.1 2023 IRP
The 2023 IRP used modeling software to determine a reference case, built on a set of assumptions, along with a set of sensitivity analyses. The full set of modeling results and the near-term Action Plan were published in July 2023.
Key insights from the 2023 modeling and analysis included:
- Energy demand will rise: While our overall demand has fallen or remained flat in recent years despite population growth due to conservation investments, we expect this trend to change starting around 2030 due to electrification.
- Peak needs will continue to occur during the winter: For the next 20 years, EWEB is expected to continue to remain a winter-peaking utility despite the impacts of climate change that are expected to increase summer demand. The primary driver for increased peak energy use is unmanaged electric vehicle charging behavior.
- Hydropower is a good fit: Currently more than 80% of EWEB’s energy comes from hydropower, both from the Bonneville Power Administration (BPA) and EWEB-owned projects on the McKenzie and Clackamas Rivers. IRP analysis points towards BPA hydropower remaining a cost-effective, low-carbon way to meet most of EWEB’s needs.
- Wind and batteries are promising options: The IRP modeling analysis indicated that a combination of wind and batteries is a competitive option to meet growing demand in the future.
- Customer Partnerships will be vital: Customers are likely to play an integral role in helping reduce peak energy usage. Programs such as conservation, demand response, and new rates designs, such as time-of-use rates, were all indicated as competitive options across various portfolios.
- Zero-carbon, dispatchable resources will likely be necessary in the future: As EWEB and the Pacific Northwest region pursue full decarbonization, there will likely be a need for dispatchable resources that do not create emissions and can be relied upon for extended periods of time.
The 2023 IRP Action Plan included several action items outlined below with status updates:
- BPA Contract: EWEB committed to participating in BPA’s “Provider of Choice” regional negotiations and to incorporate BPA product details into future IRP modeling as information becomes available. Update: staff continue to actively engage in regional discussions to define a post-2028 BPA contract. This process involves over a hundred utilities who all have a right to cost-based preference power from BPA.
- Conservation/Demand Response: EWEB committed to commissioning a study to quantify the amount and cost of available energy efficiency/conservation and availability and value of demand response within EWEB’s territory through 2045. Update: EWEB has initiated this Demand-Side Potential Assessment, and the work is expected to be completed in 12-15 months.
- Existing Energy Resources Contracts: EWEB committed to engaging with existing local resource contracts to improve terms and identify future generation opportunities. Update: EWEB’s Board has extended the joint operation contract for the 25 MW steam turbine generator located on International Paper’s property through September 2028 to align with the current BPA contract. This extension fills resource gaps in the portfolio and benefits EWEB customers, including International Paper.
- Western Markets Analysis: Update: EWEB is conducting a Power Markets Gap Analysis to identify the gaps and investments required in systems, processes, and resources that EWEB will need to participate in new market constructs.
- Ongoing IRP Modeling Refinements: EWEB seeks to update modeling inputs and assumptions, continue to monitor trends, update load forecasts assumptions, and improve workforce analytical capabilities. Update: EWEB analysts continue to identify modeling improvements such as incorporating monthly capacity targets (instead of annual) into our least-cost portfolio selection process. These monthly targets are anticipated to impact EWEB’s least-cost portfolio solutions by identifying a resource mix which helps meet EWEB’s growing summer peak needs in addition to our higher winter peak capacity requirements. This enhancement is also expected to better align with the reliability standards utilized in the Western Resource Adequacy Program.
- Prepare for the 2025 IRP: Prepare to publish the next IRP in summer 2025. Update: See next section.
3.3.2 2025 IRP
The 2025 IRP will focus on the new power products that the Bonneville Power Administration is planning to offer when the existing regional contract expires in 2028. The 2025 IRP will build off the initial analysis and assumptions used in the 2023 IRP.
Why is the BPA 2028 contract renegotiation important?
BPA sells power from 31 federal dams and a nuclear plant (called the Federal Columbia River Power System or “FCRPS”), which provide EWEB with cost-based, low-carbon, dispatchable power. Historically, BPA’s costs have been relatively low due to the size and scale of these legacy assets. EWEB’s current 17-year take-or-pay[1] BPA power contract is called the Regional Dialogue Contract and is set to expire in September 2028. This BPA contract costs EWEB approximately $80 million annually and provides roughly 80% of EWEB’s energy. Negotiations for BPA’s next contract offering, referred to as the Provider of Choice (PoC) contracts, are underway. The regional negotiations involve in-depth discussion and analysis of various power products that BPA intends to make available to their customers[2], as well as other contract and rate principles. For example, this includes contract details such as billing determinants and organized market compatibility. Customers expect to be asked to sign BPA PoC contracts in December of 2025.
For the 2025 IRP, staff will prepare an Energy Resource Study (ERS) which will compile useful information for making the BPA product decision in 2025. The completion of this ERS in mid-2025 would allow for EWEB management to review the study results before preparing a BPA product recommendation and a first draft of an IRP action plan. In Q4 2025, the Board will review management’s recommendation and endorse an Action Plan, including a BPA product selection.
Key questions that the 2025 Energy Resource Study intends to address:
- How would different BPA product decisions impact EWEB's resource portfolio?
- Which resources could be used to serve EWEB’s future load growth?
- How much energy efficiency and demand response should EWEB pursue in the future?
Links and Relevant Resources:
- EWEB Website: 2023 Integrated Resource Plan
- 2023 IRP Fact Sheets:
- Is Solar a Good Fit for Our Community’s Energy Needs?
- How can EWEB’s IRP Incorporate Diversity, Equity, and Inclusion?
- What are Considerations Around Utility-Scale Storage in EWEB’s Future Portfolio?
- IRP Next Steps: How and When Will EWEB Acquire New Resources?
- Planning for Long-term Carbon Reduction Goals in the IRP
- Board of Commissioners Regular Meeting – March 5, 2024: 2025 IRP & Energy Resource Study Kickoff, Scope & Analytical Plan
[1] In a take-or-pay contract, the buyer takes the product from the supplier or pays the supplier a penalty. Effectively, EWEB is committing to purchase power from BPA whether or not EWEB actually takes delivery of such power.
[2] BPA customers include over 130 NW entities including NW public utilities, like EWEB, and a few direct use industrial customers
