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An energy boom hits Northwest towns


Note: This article is a sidebar to this issue's feature story.

SUMAS, Wash. - Driving past the empty storefronts and abundant "For Sale" signs downtown, it's easy to understand why Sumas City Council members initially rolled out the welcome mat for a power company that wants to build a new gas-fired power plant. Sumas, a border town of about 1,000 people in northwestern Washington that depends largely on Canadian business, has seen its tax revenues drop by over 60 percent since 1993.

The proposed plant would generate a staggering 50 percent of the town's entire tax base, along with 400 construction jobs and 25 permanent positions.

It looked as though the National Energy Services company would have no problem setting up shop here. But that was before Irwin Noteboom, a dairy farmer who has lived in this valley his entire life, caught wind of the plan to build the 660-megawatt plant.

Confronting a consultant he found surveying his property without permission, Noteboom was shocked to learn about National Energy Services Company's proposed Sumas Energy 2 plant. He began to ask questions about the plant's size, new transmission lines, air pollution, and effects on the area's aquifer.

Responding to the Sumas City Council's claim that the community supported the proposal, Noteboom and Bo Bumford, a local woodworker, conducted an exhaustive door-to-door campaign, polling residents about the new plant.

"We found many residents either uninformed or outright opposed to the project," says Bumford. "We proved that the Sumas City Council was really out of step with the community."

Their campaign worked: In February, Washington state's Energy Facility Site Evaluation Council, a group of agency representatives, recommended that Gov. Gary Locke deny the plant a permit, citing public opposition and a lack of local benefits. That means the company must revise and resubmit its application, with consideration for environmental concerns - or walk away from the project.

While plant opponents hailed the council's recommendation as a major victory, it may be short-lived. Due to the current energy crunch in the West, companies are considering building up to a dozen new power plants in Washington. In May, Gov. Locke signed a bill that eases restrictions for building new plants, and in the same month Vice President Dick Cheney estimated that the country needs up to 1,900 new power plants. With that momentum, the power company has notified the council of its intent to amend and re-file the application by the end of June. This next round, Washington may have a harder time denying a permit because of "local concerns."

Not a very green plant

Gas-fired power plants are often billed as a clean-power alternative to traditional coal plants, but they are hardly environmentally benign. According to environmental studies for the project, the Sumas plant would increase air pollution, greenhouse gas emissions, truck traffic and flood hazards, and would adversely affect water quantity and quality. These concerns were a large part of the reason the state denied National Energy Services a permit, says Allen Fiksdal, manager of Washington's Energy Facility Site Evaluation Council.

Fiksdal says the state was also concerned that the plant's power would not help the state's consumers, because the company would sell the power on the open market.

Chuck Martin, president of National Energy Services, complains that the council's recommendation of denial has prevented the company from signing any long-term contracts in the state.

The council is "letting emotion from the public overwhelm the science and analysis," says Martin.

But even with the setback, Martin remains hopeful that the amended proposal will be approved. "We're meeting or surpassing most environmental standards in our revised application," notes Martin. "There's not going to be enough of the energy pie to go around, and with today's prices, we've got a competitive proposal."

Martin's company isn't the only one trying to get in the game this year. Fiksdal says there are over a dozen projects pending across the state that collectively would add over 7,400 megawatts to Washington's total generation. The council is currently reviewing five proposals for gas-fired plants, which typically take two years to build.

"It's really a gold-rush mentality out there," Fiksdal says.

With the promise of tax revenue and local jobs, plants offer an economic boost to rural areas throughout the state. According to Nancy Hirsh, policy director for the nonprofit Northwest Energy Coalition, recent studies show that favorable tax policies and weaker environmental requirements for power plants have helped draw companies to Washington. "Until the Sumas 2 decision, many people have seen the council as a rubber stamp," notes Hirsh.

While the council's February decision may be a sign of Gov. Locke's attempt to strike a balance between power supply and the environment, she adds that power demands have since increased, and Locke is paying attention. In May, the governor signed a bill that allows all plants producing less than 350 megawatts to skip council review.

With this year's low hydropower production and record high prices on the open market, many power companies are hoping to cash in, says Jeff King, senior resource analyst for the Northwest Power Planning Council, a congressionally created regional advisory group.

"While hydroelectric power is still the major energy source in the region, I expect a long-term shift toward gas-fired generation," says King.

Many pundits predict that a wash of new power plants could glut the market, but power company president Martin says that won't happen. While he indicates that his plant has backers, he adds, "Many of the plants on the drawing board today will likely never be built because of the inability to get financing. Lenders won't be willing to back an unprofitable plant."


Dave Wortman writes from Seattle, Washington.


Copyright © 2001 HCN and Dave Wortman