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Press release |
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Related links: Issue paper on direct use of natural gas policy September 26, 2001 Efficiency and personal finances, not subsidies, should guide decision to switch from electricity to natural gas, Council recommendsSpokane, Washington -- For some consumers, natural gas may be a more efficient and lower-cost fuel than electricity for home water heaters and furnaces, and the decision to switch from electricity to gas should be based on individual financial considerations, the Northwest Power Planning Council said today. The Council decided not to support the concept of subsidizing consumers to switch from electricity to natural gas. “We believe consumers should decide for themselves whether to switch fuels,” Council Chairman Larry Cassidy of Vancouver said. “What makes economic sense for some consumers may not make sense for others.” Fuel switching is an issue for the Council as it prepares to review and possibly amend its Northwest Power Plan, which dates to 1998. The Power Plan describes the changing electric industry, analyzes some of the consequences of the increasingly competitive electricity market and suggests alternative strategies that policy-makers in the Northwest may adopt in response to industry changes. Meeting in Spokane today, the Council reiterated its existing fuel-switching policy in response to public comments on a July 2001 issue paper. The current policy recognizes the benefits of competition between providers of electricity and natural gas and supports individual choices on fuel-switching. The policy does not consider fuel-switching a form of electricity conservation, although it may be for some consumers. In fact, the “market-oriented” approach to fuel switching endorsed by the Council might translate to some electric utilities providing subsidies to their customers to switch to gas as a means of reducing electricity demand because it would be less expensive than building new power plants or buying new electricity supplies on the wholesale market. “Although we have decided not to change our policy, this doesn’t mean we will be silent on the issue,” Cassidy said. “There is a role for the Council in providing information to help consumers make informed fuel-choice decisions, analyzing electricity pricing practices for ways to encourage efficient fuel choices and working to improve coordination between the electricity and gas industries. These are issues for our next power plan.” The Council prepared the issue paper in response to a proposal from Cascade Natural Gas and Northwest Natural Gas to alleviate the regional electricity shortage by encouraging electric utilities to pay their customers to switch to natural gas. The comments, however, generally opposed the strategy on the grounds that consumers should decide whether fuel-switching makes sense for them without financial incentives that favor one fuel over another. Some comments, particularly from public utilities, encouraged the Council to promote renewable energy resources to help meet future power needs rather than the direct use of natural gas because gas is not a renewable resource. The Council’s power plan encourages the development of renewable resources. The Council is an agency of the states of Idaho, Montana, Oregon and Washington and is directed by the Northwest Power Act of 1980 with preparing a program to protect, mitigate and enhance fish and wildlife of the Columbia River Basin that have been affected by hydropower while also assuring the region an adequate, efficient, economical and reliable power supply. |
