The nation is currently at the beginning of a serious energy crisis. For the electrical utility industry, it is the most serious crisis since the 1970s, with a shortfall in generating capacity and skyrocketing fuel prices. At the same time, legislation to deregulate the industry is stuck in Congress; rolling blackouts are plaguing California and threatening the Northwest; elected officials are frozen by ideology over good governance - and there is no end in sight. How did we get in this condition?

In the Pacific Northwest, the answer to this and many related questions can be found in Energy Northwest: A History of the Washington Public Power Supply System. This work documents the joint operating agency made up of publicly owned utilities that became Energy Northwest. But for most of its existence the agency was known as the Washington Public Power Supply System - WPPSS, or, simply the Supply System. Its founders were veterans of years of conflict between their public utilities and the powerful private utilities of the region. Public power leaders hoped to provide their ratepayers reliable and affordable electricity, at the cost of production, for the future. Founded in 1957, the agency got into business by building and operating a small hydroelectric plant called the Packwood Lake Project located in the majestic Gifford Pinchot National Forest. Then in 1966, WPPSS built the Hanford Generating Project, a power facility that used the steam created by the N-reactor, a plutonium producing defense plant on the Hanford Reservation 25 miles north of Richland, Washington. The Supply System ran the plant for 20 years before the N-reactor shut down for good, taking away the source of steam from Hanford Generating Project.

As Hanford Generating Project began to churn out power, in the late 1960s, the region initiated a planning process to build more thermal plants, since no more hydroelectric dams would be built. This ambitious effort - the Hydro-Thermal Power Plan - enthusiastically sponsored by the federal power marketing agency Bonneville Power Administration, envisioned up to 20 nuclear and coal powered plants in the Northwest. This frenzied effort was in response to the Energy Crisis of 1974 and the reliance on an outmoded energy forecasting system that projected power blackouts and economic chaos. Two nuclear power plants were eventually built and operated - Portland General Electric´s Trojan plant, near Ranier, Oregon, and WPPSS´s WNP-2, at Hanford. Others were planned, at Pebble Springs near Arlington, Oregon, and in the Skagit Valley in Northwest Washington, which were abandoned early on.

But the major effort went into five nuclear power plants to be built and operated by the Washington Public Power Supply System. The Joint Power Planning Council, representing all the region´s utilities and hosted by Bonneville, and the Public Power Council asked WPPSS to build these plants and build them quickly. Two were to be located on a forested hilltop near Satsop, in western Washington, and three at the remote Hanford Reservation. Of these only WNP-2 (now renamed Columbia Generating Station) was completed. Since it began commercial operation in 1985, the plant produces 1,150 net megawatts of electricity at full power, enough to serve the greater Seattle area. The other four were mothballed and later terminated in various stages of completion after years of construction woes and stunning cost overruns. The ratepayers of the Northwest continue to pay off the revenue bonds for three of those - WNP-1, WNP-3, and Columbia Generating Station - through a financial arrangement with Bonneville. The Supply System defaulted on the bonds for the other two - WNP-4 and WNP-5 - to the tune of $2.25 billion, the largest municipal bond default in U.S. history to that time.

The aftermath of this disaster was extremely damaging, not only for those bondholders who received only pennies on the dollar after years of expensive litigation, but also for power planning in the region. Bonneville Power Administration, an agency that had played a strong leadership role in the economic development of the Northwest, stepped back from its preeminent position to allow the new Northwest Power Planning Council its congressionally mandated role of power planning, conservation and fisheries mitigation. However, after the collapse of construction of the WPPSS plants, there was no incentive for any utility or group of utilities to build for the future. The Supply System was willing, but was stymied for years by both the morass of litigation and by a reputation for incompetence. This reputation was not helped by early operational problems at WNP-2 and by the long memories of utility officials and editorial writers. ´Whoops´ - the derisive nickname of the agency - was a resource of last resort.

Ironically, the region was awash in excess power in the early 1980s, rather than the power shortages that had been predicted so stridently. Eventually, as everyone realized, that surplus of power would evaporate. The Northwest Power Planning Council paid little attention to the need for future power generation as it focused on intractable issues of fish mitigation. By the mid-1990s, a few smaller natural gas combustion turbine generators were built, but in 2000 the wholesale price of natural gas skyrocketed, making the electricity generated much more expensive than originally anticipated. Even at that, expensive electricity is better than no electricity at all. The Supply System tried to find utilities willing to cooperate on one or two gas generators at its small remaining Satsop site, but could find no entity willing to make the financial commitment in such a situation.

By 2000, the renamed Energy Northwest had made a dramatic turnaround. Improved management resulted in vastly improved operational efficiency at the huge nuclear plant, which now produces power much cheaper than that available on the open energy market. Long continuous runs, an exemplary safety record and reduced operating expenses have made Columbia Generating Station an extremely valuable regional asset, which is very fortunate for the ratepayers, since Bonneville is obliged by contract to buy all of the power produced at the plant. No longer the subject of derision, Energy Northwest is a vital component of the regional power system, and its power is a bargain by any measure.

Energy Northwest looks to build on this more recent record of success by investigating new power generating opportunities for its member utilities. Duke Energy of North America will be developing a combustion turbine generator at the Satsop site, which may be operated by Energy Northwest, giving the agency experience in that growing field. Also, development is underway on the Nine Canyon Wind Energy Project located 10 miles south of Kennewick, Washington, to join the Packwood Lake Project in producing environmentally benign ´green´ power. Energy Northwest is also investigating distributed energy technology in the form of fuel cells.Reports of an energy crisis will continue into the future. It is a complex issue, but given the vital nature of that ubiquitous element of modern society - electricity - it is an issue that must be understood by the public if good public policy is desired. Energy Northwest: A History of the Washington Public Power Supply System offers a fascinating look at the agency that was at the center of controversy two decades ago - a look that will offer some valuable ´lessons learned´ for the region in the next few years.

The nation is currently at the beginning of a serious energy crisis. For the electrical utility industry, it is the most serious crisis since the 1970s, with a shortfall in generating capacity and skyrocketing fuel prices. At the same time, legislation to deregulate the industry is stuck in Congress; rolling blackouts are plaguing California and threatening the Northwest; elected officials are frozen by ideology over good governance - and there is no end in sight. How did we get in this condition?

In the Pacific Northwest, the answer to this and many related questions can be found in Energy Northwest: A History of the Washington Public Power Supply System. This work documents the joint operating agency made up of publicly owned utilities that became Energy Northwest. But for most of its existence the agency was known as the Washington Public Power Supply System - WPPSS, or, simply the Supply System. Its founders were veterans of years of conflict between their public utilities and the powerful private utilities of the region. Public power leaders hoped to provide their ratepayers reliable and affordable electricity, at the cost of production, for the future. Founded in 1957, the agency got into business by building and operating a small hydroelectric plant called the Packwood Lake Project located in the majestic Gifford Pinchot National Forest. Then in 1966, WPPSS built the Hanford Generating Project, a power facility that used the steam created by the N-reactor, a plutonium producing defense plant on the Hanford Reservation 25 miles north of Richland, Washington. The Supply System ran the plant for 20 years before the N-reactor shut down for good, taking away the source of steam from Hanford Generating Project.

As Hanford Generating Project began to churn out power, in the late 1960s, the region initiated a planning process to build more thermal plants, since no more hydroelectric dams would be built. This ambitious effort - the Hydro-Thermal Power Plan - enthusiastically sponsored by the federal power marketing agency Bonneville Power Administration, envisioned up to 20 nuclear and coal powered plants in the Northwest. This frenzied effort was in response to the Energy Crisis of 1974 and the reliance on an outmoded energy forecasting system that projected power blackouts and economic chaos. Two nuclear power plants were eventually built and operated - Portland General Electric´s Trojan plant, near Ranier, Oregon, and WPPSS´s WNP-2, at Hanford. Others were planned, at Pebble Springs near Arlington, Oregon, and in the Skagit Valley in Northwest Washington, which were abandoned early on.

But the major effort went into five nuclear power plants to be built and operated by the Washington Public Power Supply System. The Joint Power Planning Council, representing all the region´s utilities and hosted by Bonneville, and the Public Power Council asked WPPSS to build these plants and build them quickly. Two were to be located on a forested hilltop near Satsop, in western Washington, and three at the remote Hanford Reservation. Of these only WNP-2 (now renamed Columbia Generating Station) was completed. Since it began commercial operation in 1985, the plant produces 1,150 net megawatts of electricity at full power, enough to serve the greater Seattle area. The other four were mothballed and later terminated in various stages of completion after years of construction woes and stunning cost overruns. The ratepayers of the Northwest continue to pay off the revenue bonds for three of those - WNP-1, WNP-3, and Columbia Generating Station - through a financial arrangement with Bonneville. The Supply System defaulted on the bonds for the other two - WNP-4 and WNP-5 - to the tune of $2.25 billion, the largest municipal bond default in U.S. history to that time.

The aftermath of this disaster was extremely damaging, not only for those bondholders who received only pennies on the dollar after years of expensive litigation, but also for power planning in the region. Bonneville Power Administration, an agency that had played a strong leadership role in the economic development of the Northwest, stepped back from its preeminent position to allow the new Northwest Power Planning Council its congressionally mandated role of power planning, conservation and fisheries mitigation. However, after the collapse of construction of the WPPSS plants, there was no incentive for any utility or group of utilities to build for the future. The Supply System was willing, but was stymied for years by both the morass of litigation and by a reputation for incompetence. This reputation was not helped by early operational problems at WNP-2 and by the long memories of utility officials and editorial writers. ´Whoops´ - the derisive nickname of the agency - was a resource of last resort.

Ironically, the region was awash in excess power in the early 1980s, rather than the power shortages that had been predicted so stridently. Eventually, as everyone realized, that surplus of power would evaporate. The Northwest Power Planning Council paid little attention to the need for future power generation as it focused on intractable issues of fish mitigation. By the mid-1990s, a few smaller natural gas combustion turbine generators were built, but in 2000 the wholesale price of natural gas skyrocketed, making the electricity generated much more expensive than originally anticipated. Even at that, expensive electricity is better than no electricity at all. The Supply System tried to find utilities willing to cooperate on one or two gas generators at its small remaining Satsop site, but could find no entity willing to make the financial commitment in such a situation.

By 2000, the renamed Energy Northwest had made a dramatic turnaround. Improved management resulted in vastly improved operational efficiency at the huge nuclear plant, which now produces power much cheaper than that available on the open energy market. Long continuous runs, an exemplary safety record and reduced operating expenses have made Columbia Generating Station an extremely valuable regional asset, which is very fortunate for the ratepayers, since Bonneville is obliged by contract to buy all of the power produced at the plant. No longer the subject of derision, Energy Northwest is a vital component of the regional power system, and its power is a bargain by any measure.

Energy Northwest looks to build on this more recent record of success by investigating new power generating opportunities for its member utilities. Duke Energy of North America will be developing a combustion turbine generator at the Satsop site, which may be operated by Energy Northwest, giving the agency experience in that growing field. Also, development is underway on the Nine Canyon Wind Energy Project located 10 miles south of Kennewick, Washington, to join the Packwood Lake Project in producing environmentally benign ´green´ power. Energy Northwest is also investigating distributed energy technology in the form of fuel cells.Reports of an energy crisis will continue into the future. It is a complex issue, but given the vital nature of that ubiquitous element of modern society - electricity - it is an issue that must be understood by the public if good public policy is desired. Energy Northwest: A History of the Washington Public Power Supply System offers a fascinating look at the agency that was at the center of controversy two decades ago - a look that will offer some valuable ´lessons learned´ for the region in the next few years.