Avista Chief Says Natural Gas is Best Choice

By Greg Stiles, Mail Tribune, Medford, Ore.

Jun. 12–MEDFORD, Ore. — As politicians ratchet up renewable energy benchmarks for utility companies, the president of Avista Utilities made a pitch in Medford Monday for natural gas as the best short-term choice.

Scott Morris, a former Medford resident who now runs the $1.5 billion Spokane-based electric and natural gas distributor, told a monthly Chamber Forum gathering that solar, tidal and wind technologies won’t begin to meet state mandates during the next few years. Oregon will require utility companies to include 25 percent renewable energy sources in their portfolios by 2025. Washington mandates 15 percent by 2020.

Avista bills rose about 24 percent from 2004 to 2006.

The following shows the average monthly bill in the year following rates set on:

–Oct. 1, 2004 — $64.78

–Nov. 9, 2005 — $76.40

–Nov. 1, 2006 — $80.37

“In many cases, the technology isn’t advanced far enough to be used in a cost-effective way — even with oil, using biofuels and ethanol,” Morris said. “Wind, geothermal, solar and biomass aren’t great choices, but it’s an admirable goal.”

Technology will advance over time, but in the interim, natural gas is not only the cleanest fossil fuel but the only one to meet California and Washington greenhouse emissions standards.

When used to heat homes and water, it’s 90 percent efficient, he said. When used to generate electricity, such as the Coyote Springs plant near Boardman, it is only 40 to 45 percent efficient.

“It loses 50 percent of its value,” Morris said.

In the early and mid-1990s, natural gas consumed by Rogue Valley residents was relatively cheap. A British thermal unit (the typical household uses 600 Btu annually) cost about half of the present $1.44 rate.

Canadian producers discovered they could build pipelines to the American heartland, where going rates were vastly higher than Northwest users were paying.

“There was a huge supply and low demand,” Morris said. “Producers were smart and built lines to the east.”

Fueled by pipeline malfunctions, natural disasters, geopolitical factors and higher demand, natural gas prices have risen like a weather balloon.

“Prices are fluid, liquid and volatile,” he said.

Avista’s rates this winter could be similar to the year before, however. Morris said Avista has locked in about a third of its gas for the coming year, but won’t know its overall costs until it gets ready to go before the Public Utility Commission next fall.

“Our hope is that there will be a small increase or decrease, but it’s too early to tell if the price is going up or down,” Morris said. “If we have a tough hurricane season, though, you will see natural prices go crazy.”

Avista serves 346,000 electric and 306,000 natural gas customers, including 56,117 in Jackson County. Eighty employees work out of its Medford office. Morris said the utility company contracts out construction jobs to Brotherton Pipeline and a couple of smaller firms.

Earlier in the day, Morris said the impact of the proposed liquefied natural gas pipeline from Coos Bay to Merrill would increase access and supply.

“The rules and regulations involved are all Department of Transportation guidelines where welds are X-rayed,” Morris said. “It would benefit all natural gas customers because more supply would moderate the overall price.”

He said new pipelines in Alaska and Canada are targeted for use sometime after 2010, adding to the supply side.

The company already stores natural gas underground for its Idaho and Washington customers, buying supplies during the summer and then using them during peak demand time in the winter. He said Oregon customers will have similar benefits beginning around 2010 to 2011.

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