Not Easy Being Green

Unless you're Kermit the Frog

This is a story about the rocky road that results when our government provides power to the people. It is now playing out in the Pacific Northwest and I’m unsure what lessons are to be learned beyond confirming the law of unintended consequences.

It was provoked by a Propublica (they’re good folks worthy of our ongoing support) story explaining why Washington and Oregon have been unable to meet their green goals and are actually less renewable reliant than Texas, largely because the Bonneville Power Administration won’t hook new projects into their grid.

Bonneville was created in 1937 to distribute the hydropower created by the Bonneville Dam and other government-built dams. It operates the grid that moves electricity from where it is created to local utilities who then distribute it.

Like the Tennessee Valley Authority, also created during the New Deal, it was a part of a Federal effort to expand low-cost electricity. But unlike the TVA, it doesn’t produce power. Initially it merely distributed hydropower from government dams, like Grand Coulee, operated by either the Corps of Engineers or the Bureau of Reclamation.

Producing aluminum from ore requires massive amounts of energy, so firms doing this favored locations where they could use relatively inexpensive TVA or Bonneville electricity. When rates went up domestic firms declined. In 1939 the US produced more than half the world’s aluminum, but we’re now a marginal player with less than 10%. US production peaked in 1980 and declined steadily and significantly since. That trend is part of the Trump trade concern

By the last quarter of the 20th century, energy use in the Pacific Northwest had increased to a point where it appeared Bonneville would be increasingly unable to supply anticipated demand with hydropower alone, so it and its wholesale customers began thinking of alternative supplies.

That resulted in an ambitious plan to build five new nuclear reactors, largely financed by bonds issued by Bonneville, a government-affiliated nonprofit entity. That plan did not go well. Only one of the five reactors was placed in service and those abandoned precipitated the largest municipal bond default in American history, now ruefully remembered by the acronym of the ill-fated plan – or WHOOPS.

In retrospect, there were two serious problems. Construction costs were seriously underestimated and the projected surge in energy demand failed to arrive on schedule.

That’s basically the background for today’s situation where only one of 469 applications for new connections to the Bonneville grid submitted since 2015 have won approval. Inasmuch as Bonneville is part of the Department of Energy where enthusiasm for renewables waned with the arrival of the new administration, that’s unlikely to improve soon.

DOGE-mandated Bonneville reductions in force (some of which have,of course,already been reversed) isn’t likely to make the agency hungrier for new projects.

The coda to this story comes from a friend who chairs a rural Washington school board and has patiently educated me about how income from public lands is used to fund public education. A state scheme to lease hundreds of acres to solar providers for up to $1000/acre/year has been stymied. In the meantime the land will continue to be used for grazing at a rental rate of less than $5 annually.

Good for farmers, less so for public schools and advocates of green energy.