INTERVIEW: PSE executive discusses latest All-Source RFP and 2030 capacity needs

Puget Sound Energy (PSE) is pushing to secure capacity during summer and winter peaks through its latest RFP and has already contracted for two wind projects outside of the solicitation effort.

Craig Pospisil, vice president of business development and M&A, told NPM that it has so far contracted with the 248 MW Beaver Creek project in Montana, which is currently under construction. PSE also announced this week a PPA with Clearway Energy Group for the 315 MW Haymaker Wind Project, also in Montana.

Pospisil said that PSE is “going through some of the most significant changes” in its history, driven by Washington state’s CETA rules which he described as “one of the most ambitious clean energy policy goals in the nation.”

Currently, PSE owns or contracts roughly 6,600 MW of generating capacity. To achieve CETA 2030 goals, which calls for at least 80% of generation to be from renewable or non-emitting resources, PSE must acquire about 6,700 MW of nameplate capacity. This would double PSE in size.

“This will be the largest change in our 150-year history,” Pospisil said.

Prior to issuing the latest Voluntary All-Source RFP, seeking CETA-compliant energy and capacity resources with bids due by September 16, PSE established its target capacity goals in its Integrated Resource Plan (IRP). PSE’s last IRP was in 2021, then updated in 2023 via its Electric Progress Report. This identified the need for 6,700 MW.

“In this RFP, we identified 2.3m MWh of CETA-compliant energy that we are looking to procure,” Pospisil said. “Part of CETA is also transitioning away from certain resources.”

In Washington State, PSE must divest of all coal assets by 2025 whether that is from ownership or if PSE pulls power through PPAs.

“Right now, we either own or purchase around 750 MW of coal-fired generation but that stops at the end of 2025 and that is base load generating capacity,” Pospisil said. “To fill that, we need to look for capacity resources.”

PSE has narrowed this down to winter and summer need capacities. The new RFP is looking for 1,755 MW of summer capacity and 1,573 MW of winter capacity resources.

Pospisil said that the RFP is expected to receive plenty of wind, solar, and BESS bids, though PSE is interested in evaluating other technologies to be online by 2030.

“We are bullish on prospects for hydrogen, but not sure we will look at that or see projects come online in that timeframe,” he said.

When asked if PSE will prioritize project bids in-state, Pospisil said that PSE will use metrics to evaluate which include equity components.

“We don’t have a preference for location, but preference to deliver power to our system or to a point where we can pick up the power, so that may advantage Washington assets,” he said.

As for interconnection, Pospisil said that the Inflation Reduction Act (IRA) “has been great,” by providing development capital for additional resources “and that’s why we anticipate a fairly robust turn-out in this RFP,” but that with the increase of projects the queues have ballooned.

“Long term transmission solutions are required,” he said. “In the interim, we will look and evaluate which projects can deliver.”

Bonneville Power Administration’s (BPA) territory extends around PSE, with most of PSE’s territory on the west side of the Cascade Mountains. Large-scale renewables of wind and solar are mostly in the eastern side of the state outside of PSE’s grid, meaning many resources being developed in Washington have a first POI in BPA’s system and are then transmitted to PSE’s territory.

Additionally, Pospisil said that PSE’s load growth is being driven by EV adoption rates and that not a lot of data centers are in its territory.

“There is interest in data centers in eastern Washington and Oregon as well, and I think that is competition for us in procuring power,” he said. “If those are procured in an effort to serve those data center needs, it might make it more expensive to acquire those resources.”

*This story was originally published exclusively for NPM subscribers in July.

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