Across the Pacific Northwest and California, coal- and gas-fired thermal combustion power plants are being retired and replaced by renewable wind and solar power facilities. This environmentally friendly policy, however, is causing a logistical problem. The intermittent nature of wind and solar generation threatens to result in a 7,500–10,000 megawatt (MW) shortfall in power generation capacity. There is only one technology that can reliably address a problem of this scale: pumped storage. Columbia Basin Hydropower is planning a major pumped storage project at Banks Lake in Central Washington with a capacity of 500 MW.
In this interview, Columbia Basin Hydropower’s manager of project development, Tim Culbertson, tells Municipal Water Leader about the genesis of the Banks Lake project, the arduous permitting process his agency is now going through, and how the Northwest can address its energy dilemma.
Municipal Water Leader: Please tell us about your background and how you came to be in your current position.
Tim Culbertson: I have 49 years of utility experience, primarily in the Northwest. I worked for three large investor-owned utilities for 30 years and then worked for 12 years on the public utility side before moving to the irrigation district, where I’ve been for 7 years. I primarily focused on existing hydro projects but also worked to increase the portfolio of hydro projects of the three irrigation districts that make up the Columbia Basin Project. Today, I am manager of project development for Columbia Basin Hydropower.
Municipal Water Leader: Please tell us about Columbia Basin Hydropower and its history.
Tim Culbertson: Columbia Basin Hydropower is a subdivision of the three irrigation districts that make up the Columbia Basin Project: East Columbia Basin Irrigation District, South Columbia Basin Irrigation District, and Quincy–Columbia Basin Irrigation District. We are considered a municipality under the statutes of the State of Washington. Our job is to operate and maintain five of the seven hydroelectric projects that the three irrigation districts own. The other two projects that the three districts own are operated and maintained by Grant County Public Utility District. I came on board because the irrigation districts had filed to develop a number of small conduit projects ranging in size from 1 to 3 MW. We are currently proposing the development of five of those conduit projects in the near future, when and if we find the right technology to make them economical. Along with that, we have been working on the development of a large pumped storage project known as the Banks Lake Pumped Storage Project.
Municipal Water Leader: What is the motivation for the Banks Lake Pumped Storage Project?
Tim Culbertson: The motivation is twofold. To provide some context, in November 2013, there was a circuit-breaker explosion in the Keys Pumping Plant, which is responsible for moving water from Lake Roosevelt into Banks Lake, the priming reservoir for all the water that supplies the approximately 700,000 acres of the Columbia Basin Project. It took the Bureau of Reclamation 4–5 months to repair the circuit breaker in the Keys powerhouse. Fortunately, at the time that the explosion occurred, the irrigation season was over, but we had to ask what would have happened had it occurred in May or June, when the irrigation season was in full swing. It could have resulted in all 700,000 acres of the Columbia Basin Project running out of water, with losses potentially reaching $6 billion. So one of the motivations to build another pumped storage plant is to serve as a primary or backup facility to move water from Lake Roosevelt into Banks Lake.
Right now, however, the real driving force for looking at pumped storage is the needed for flexible capacity, especially in the Northwest, but along the entire West Coast. What’s driving that is the ongoing construction of renewable power facilities, primarily wind and solar. In addition to that, a lot of the states have taken an aggressive approach to doing away with thermal-based combustion turbines, primarily fired by coal, gas, and oil. In the Northwest, thermal-based coal plants will disappear entirely sometime between 2025 and 2030. The forecast right now is that the Northwest alone will be short around 7,500–10,000 MW of flexible capacity. A lot of people are discussing solving this issue with batteries. However, battery technology hasn’t advanced to the state where you could count on them to provide 7,500–10,000 MW of capacity. The only other resource that can provide that kind of flexible capacity is pumped storage. There are probably three or four pumped storage projects on the drawing board across the Northwest, including ours. Ours is distinctive because we already have two large reservoirs. Most pumped storage projects would have to construct one or two new reservoirs.
Municipal Water Leader: What kind of new infrastructure would the Banks Lake Pumped Storage Project require?
Tim Culbertson: It would require an intake, an outlet, and a penstock that would connect Banks Lake, which has a storage capacity of 700,000 acre-feet, to the lower reservoir, Lake Roosevelt, which has a capacity of 5.2 million acre-feet. In fact, there would be two penstocks, 35 feet in diameter and approximately 7,000 feet long. On the lower side of the penstocks, in between Banks Lake and Lake Roosevelt, there would be an underground powerhouse capable of generating more than 500 MW of energy. Directly above the powerhouse, on the surface, there would be a substation connected to the Grand Coulee substation, which is one of the major substations in the Northwest. It’s important to note that pumping the water between these two lakes would be a nonconsumptive use. We envision generating power primarily in the daytime and then pumping water back into Banks Lake at night. One of the other real advantages of this project is that whereas most pumped storage projects are built to provide capacity for 7–10 hours a day, this facility could, under the right operating conditions, generate 500 MW for up to 70 continuous hours.
Municipal Water Leader: How would this project be funded?
Tim Culbertson: We estimate that the project will cost $1.2–1.5 billion. There is a lot of equity capital out there looking for looking for a home. We are in discussions with a number of large financial investors, and we hope to have some in place shortly—one, two, or three of them, but the fewer, the better—to provide the development capital. We will need around $30 million and about 2 years to get through the licensing/permitting phase and be ready for construction.
One of the complicating factors is that this project, unlike others, requires more than just a Federal Energy Regulatory Commission (FERC) permit. We are under a FERC licensing process framework and we have a FERC preliminary permit, but we will also require a lease of power privilege with the Bureau of Reclamation. That is because Reclamation has jurisdiction over Lake Roosevelt and FERC has jurisdiction over Banks Lake. Those two processes are lengthy and do not align well, meaning that they will require additional time and money. We initially thought that FERC would relinquish jurisdiction, allowing us to escape its licensing process, but that turned out not to be true. The only way to avoid this duplicative process would be through legislation. We had legislation that passed the House of Representatives in 2017 but never passed the Senate. Now we’re starting over. Senator Maria Cantwell has proposed S. 1751, and it has gone through the Energy and Commerce Committee in the Senate. She’s pushing for that bill to be acted upon. On the House side, H.R. 537 has been proposed by Congressman Doug Lamborn. Senator Cantwell is working with the office of Congressman Frank Pallone, who is the chair of the House Energy and Commerce Committee, to move it as well. Those bills state, in pretty simple language, that if the project uses two Reclamation reservoirs, which Banks Lake and Lake Roosevelt are, then the project falls under the jurisdiction of Reclamation. The bills also include a draft memorandum of agreement negotiated with the Colville and Spokane Tribes to support the Banks Lake Pumped Storage Project. If those bills pass, we would be exempted from the FERC licensing process. We’ve been working on licensing nonstop for over 3 years.
Municipal Water Leader: How would the Banks Lake Pumped Storage Project help address fluctuations in the energy provided by various renewable sources? Would Columbia Basin Hydropower be selling power to the grid?
Tim Culbertson: We’re in discussions right now with three utilities in the Northwest, two public and one investor owned. They would sign up for a 40-year power purchase agreement. We would be a part owner of the project along with the other equity investors, and all the output of the plant would go to these three utilities. They would have the ability to generate power based on their individual needs.
Municipal Water Leader: How does project compare to other pumped storage facilities in the region or across the country?
Tim Culbertson: The only other pumped storage project in the Northwest is the Keys plant, which is quite old. There were six original units that were built strictly for pumping. Later, they built six additional units for generation. As you may know, it takes more energy to pump the water up the hill than the amount of energy you generate by letting the water down again, but it’s the value of capacity that makes pumped storage projects worthwhile. The Keys pumping plant is 60 percent efficient. It loses 40 percent of its efficiency pumping the water up the hill. Our new facility will use a variable-speed pump generator that has been used in Europe for probably 20 years but has not been previously deployed in the United States. Depending on the elevation of the reservoirs and the differential between the two reservoirs, which we call head, our units would be 75– 82 percent efficient—significantly more efficient than the Keys pumping plant. The U.S. Department of Energy has a loan program with $4 billion available for large projects that use new technology. You’re effectively allowed to borrow money from Energy at a 2 percent discount rate to our borrowing rate. The equipment we propose to use would likely qualify for its low-interest loan program. That could could be significant for the overall long-term financing of the project.
Municipal Water Leader: What is your vision for the future of the project?
Tim Culbertson: Well, my vision is that this is not just a good thing for the irrigators. I’ve been in the industry for almost 50 years. I don’t see a lot of good answers right now to the question of how we’re going to meet the capacity needs of this region alone. The situation in California— with which we’re inextricably linked when it comes to energy supply and demand—is even worse. Those of us who have worked in this industry for a long time have seen this train wreck coming. Unfortunately, policymakers have been telling us to get from point A to point B without any clear idea of how to get there. We’re doing away with all the coal plants and replacing them with wind and solar facilities whose generation is intermittent. Simultaneously, the commissions that regulate investor-owned utilities have banned new combustion turbines, and some utilities believe they will soon be required to get rid of existing combustion turbines. If that happens, the 7,500– 10,000 MW capacity shortfall we are already dealing with is going to increase significantly. People are wondering where that capacity is going to come from.
Today, everybody’s talking about pumped storage. They’d better get serious about it, because pumped storage projects take a long time to permit and construct. If you get the right kind of development company, you can construct one in 4–5 years, but you also have to add 2 years of permitting. It’s 2020, and we’re facing a huge capacity shortfall that will get even larger in 2025. We need to be taking action. Three or four other pumped storage projects have been proposed in the Northwest. I don’t necessarily view them as competitors to our project, because most of them have a capacity of 300–500 MW. Even if we had five pumped storage projects, each with a capacity of 500 MW, we’d still be facing a capacity shortfall of at least 5,000 MW. Where’s the rest of it coming from? We have to do better at planning for our future. This can’t remain just a discussion. We need to start taking action, or we’re going to have a real problem.