Sep 14 - McClatchy-Tribune Business News Formerly Knight Ridder/Tribune Business News - Chris Mulick Tri-City Herald, Kennewick, Wash.

A provision in this year's clean energy initiative, designed to guarantee new environmentally friendly power sources won't cost ratepayers, lies at the crux of the debate over Initiative 937.

That provision would cap utilities' costs to meet the demands of the measure at 4 percent of their total budget.

But critics have doubts the language in that provision is strong enough to hold off the kind of runaway costs they fear.

"We're concerned, as enacted, I-937 will be very expensive," Benton PUD Manager Jim Sanders said as part of a panel debating the measure before the Herald editorial board this week.

"I think it's pretty clearly written," said Nancy Hirsh, policy director for the Northwest Energy Coalition, an environmental group and the measure's main backer.

The initiative, which will be on the general election ballot in November, would require large utilities to meet certain conservation targets and get at least 15 percent of their power from environmentally friendly power plants -- most likely wind farms -- by 2020 or face penalties.

The Northwest Energy Coalition, an environmental advocacy group and the measure's main backer, has lobbied the Legislature for similar mandates for six years.

The bills they pushed in Olympia were much tougher. The inclusion of the 4 percent cost cap, which the Washington PUD Association helped negotiate, led the organization to narrowly endorse the measure even though it vigorously opposed the mandates before the Legislature. The Benton and Franklin PUDs are opposing the initiative.

Supporters, including environmental groups, wind energy companies and scads of environmentally conscious individuals, had raised $930,000 as offor the campaign. Opponents had raised almost $120,000. Major donors include the Washington Rural Electric Cooperative Association, Weyerhaeuser and Boise Cascade.

Supporters believe the measure would prevent utilities from investing in carbon-producing generators such as coal plants, stations they believe might offer short-term savings but with long-term costs associated with making them cleaner.

"We think the long-term costs are untenable," Hirsh said.

And while it's expected that wind power would be the primary clean energy source to meet the new mandates, Hirsh argues other sources, such as generators that run off gas produced at landfills and sewage plants, will be cost effective by time the mandates are fully implemented.

"We want a variety of a lot of resources," Hirsh said. "We think the age of the large central station power plant is over."

Opponents argued other forms of renewable energy won't be cost effective and that hillsides in Eastern Washington and Eastern Oregon would have to become littered with wind turbines to generate enough power to meet the mandates.

"I'm not convinced there are wind sites available for all that," Sanders said.

They criticize the measure for not classifying hydroelectric power as being renewable, say costly transmission upgrades would be needed and argue there aren't enough other power sources that could backfill wind power generation gaps when the wind doesn't blow.

Furthermore, critics argue governments would have no incentives to renew tax credits and other subsidies that help make wind projects cost competitive if utilities are required to purchase wind power anyway.

"If you have enough mandates, what's the reason for the incentives?" asked Benton REA spokesman Troy Berglund.

Opponents and critics agree the public supports clean energy. But Benton PUD spokeswoman Karen Miller said that stops when it costs more. She said enrollment in the utility's green power program, where customers agree to pay more to support clean energy projects, is stagnant at 500.

Hirsh said the energy coalition's surveys suggest more people would like to participate in such programs but don't "when other people are free riders and don't want to pay anything."