Green Business Interviews: Puget Sound Energy

Puget Sound Energy & the Environment - An Interview with Phil Bussey

Phil Bussey is Vice President of Regional and Public Affairs at Puget Sound Energy, a Bellevue-based energy utility. Earth Share of Washington (ESW) recently interviewed Mr. Bussey about the present status of renewable energy, its future direction, and Puget Sound Energy's role in expanding this fast-growing industry.

Puget Sound Energy is Washington state's largest and oldest energy utility, serving nearly 1 million electric customers and more than 650,000 natural gas customers, primarily in the vibrant Puget Sound region. Phil is responsible for the company's corporate communications, community relations, state government relations, information technology, facilities and real estate. Prior to becoming vice president regional and public affairs at Puget Sound Energy, Phil served as the President of the Washington Roundtable, a public policy research and advocacy group composed of 38 chief executive officers of major Washington State companies.

For more information, please visit the Puget Sound Energy website: www.pse.com

ESW: Let's talk first about renewable energy. Excluding hydropower, how heavily does Puget Sound Energy (PSE) rely on renewable energy like wind, solar and biomass as a resource?

PB: Beyond hydropower, renewable resources currently compose about 1 percent of our power-supply portfolio. I believe you'd find a fairly similar percentage at most other Northwest utilities. Puget Sound Energy's use of renewables, however, is increasing - in a very big way. In addition, we have one of the most vigorous and comprehensive energy-efficiency programs in the region.

ESW: PSE reported to its customers last year that it used the following mix of resources to serve their electricity needs: 42% hydropower, 36% coal, 20% natural gas, 1% nuclear, 1% non-hydro renewables. What does PSE envision its resource mix will look like in the year 2015?

PB: We expect the mix to remain diversified and fairly balanced among the individual resource components. Because the best way to hold down customers' energy costs, ensure reliable power supplies, and limit their exposure to the turbulence of wholesale energy markets, we believe, is to not put all your power-portfolio eggs in one basket. So for the benefit of our customers, we intend to continue maintaining a diversified and balanced mix of supply resources. But we're going to make renewables a much greater share of that mix. Once our Hopkins Ridge and Wild Horse wind farms come on line, nearly 5 percent of our customers' power will be from renewable sources. And if possible, we want to double that share to 10 percent within the next decade.

ESW: Can you elaborate on that?

PB: Beyond Hopkins Ridge and Wild Horse, we're preparing to solicit proposals this fall for up to 1,500 average-megawatts of new power supply to help us meet our customers' long-term electricity needs. We hope and expect proposals for renewable resources to be prominent in this bid process. Cost, of course, will be a key consideration in judging the proposals we receive. But another key consideration for us will be the public benefits a project can provide. And by that, we mean how well a particular proposal lowers our portfolio's overall emission levels, how it supports our portfolio target for renewable resources, and how it promotes our energy-efficiency goals. A project's ability to limit PSE's exposure to future environmental regulations will be another important factor in the selection process.

As we weigh the pros and cons of other potential additions to our power portfolio, each project's effects on the environment will be a major consideration for us. If, for example, we find that we can site and build another wind farm at a cost roughly equal to that of a new gas-fired plant, the choice is fairly obvious: we build the wind farm. If, on the other hand, a new thermal resource appears to be more cost-effective for our customers, we'll first investigate the project's environmental impacts and to what extent they can be reduced or mitigated. That's no small matter because, aside from the direct benefits to the environment, reducing power-plant emissions potentially saves significant mitigation costs for utilities - and their customers.

ESW: Turning now to energy efficiency, how is PSE investing in energy efficiency and what future plans does PSE have for investment in efficiency?

PB: I'm proud to say that our energy-efficiency program is one of the most ambitious in the region. We estimate that our varied conservation initiatives should be able to help our customers save 86 million therms of natural gas and 313 average-megawatts of electricity over the next two decades. That's enough saved energy to meet the average gas needs of 90,000 households and the electricity needs of more than a quarter-million households. We crafted our program in collaboration with state regulators, customer groups, consumer advocates, environmental organizations, and various others. We work with these same groups on an ongoing basis to analyze and evaluate our program's effectiveness, and to make periodic changes or enhancements, where needed, in specific services. This fall, for instance, we're planning to seek proposals for new energy-saving strategies in areas such as boosting efficiencies in apartment buildings and commercial laundry facilities.

ESW: What is the consumer's role in increasing energy efficiency?

PB: It's the consumer who turns the lights on or off, who decides whether to install double-pane windows or to buy a high-efficiency clothes washer when the old one wears out. And of course, it's the consumer who, through his rates, pays most of the costs of his utility's energy-efficiency program. So consumers' role in energy efficiency is huge. I should add that the consumer - as a citizen and a voter - also has a major say in shaping the policies on what we, as a society, do or don't do in the way of energy conservation.

ESW: What is PSE doing to advance the smart digital power grid and what are the implications for making the grid cleaner and more efficient?

PB: I fully expect digital technology to bring significant change to the power sector in coming years, perhaps in ways we have yet to imagine. Puget Sound Energy intends to help promote such change and then, to capitalize on it. As you may know, we've already built one of the country's largest networks of digital, automated metering, and we're involved in a variety of other smart-grid efforts as well. For example, we're about to launch a year-long test of voltage-reduction technology to see how well it can reduce random power loss on utility lines and, at the same time, lower consumers' energy usage. We're exploring other technology initiatives, too, through our membership in the Northwest Energy Technology Collaborative, a joint endeavor by PSE, the BOA, the Washington Technology Center, and the Pacific Northwest National Laboratory.

We're very hopeful about digital technology's potential to reshape the electricity grid in beneficial ways, at both the utility and the consumer ends of the spectrum. We may, for instance, come to have an automated power-distribution system that can instantly anticipate equipment faults and avert outages, or that more quickly restores service when outages happen. We may be able to more efficiently deliver varying levels of reliable, digital-grade power to customers according to their fluctuating demands. And through smart-metering systems like the one PSE already has in place, consumers may be empowered with a two-way energy-information portal that not only provides them with real-time power-price signals, but lets them remotely control energy-smart appliances in the home, manage distributed-generation equipment such as at-home fuel cells or solar panels, and monitor security systems.

ESW: What is the role of non-profit organizations to create sound energy policies and provide consumer information?

PB: In Puget Sound Energy's view, the best energy policies arise when all sectors of society - consumers, business, environmental interests, government, and the energy industry itself - come together with the goal of finding common ground on mutually beneficial solutions. Nonprofit organizations are critical participants in this process, especially when it comes to representing environmental and consumer issues.