Commentary: Washington’s current energy strategy needs to be rethought
By Don Brunell
For years, Washington state has masked its high commercial and regulatory costs with largely reliable, low-cost electricity. However, Tennessee offers reliable, low-cost electricity and a very favorable business climate to attract $ 1 billion in new investment in the auto industry.
Today, electricity costs are higher than ever and investors want CO2-free electricity in their facilities. Hydroelectricity meets this requirement.
For example, Ford and SKI Innovative just announced an $ 11.4 billion partnership to build the next generation of F-150 Lightning (all-electric pickup trucks) and set up three new battery factories in Kentucky and Tennessee for the ‘feed.
âEnergy costs were a big consideration for battery factories because of the immense amount of electricity they use – five times more than Ford’s typical assembly plan,â said Lisa Drake, chief operating officer. of Ford for North America, to the Wall Street Journal (WSJ).
Despite huge electrical loads for semiconductor manufacturing, carbon fiber production, and computer server farms, data from the US Energy Information Office for July shows Washington still has the lowest electricity rates in the world. country (10.4 cents per kilowatt hour); however, Tennessee is just behind at 11.26 cents.
Tennessee has long had a head start in the area of ââavailable and affordable electricity, a benefit known as the Tennessee Valley Authority (TVA), established in the 1930s as a federal utility. Today, it is a wholesale public electricity supplier serving more than 150 local power companies, and customers in its region have tariffs below 70 percent of the country.
Interestingly, TVA’s facilities are very diverse, and customers, like Ford, view its 19 hydroelectric dams and one pumped storage hydroelectric plant as renewable, CO2-free power generation.
TVA supplements its hydroelectric dams with seven natural gas power stations, four coal power stations and two nuclear power stations.
In Washington, on the other hand, steps are being taken to reduce the hydroelectric base by crossing the four lower dams of the Snake River. These dams can provide enough electricity for 1.87 million homes when producing at full capacity.
The state’s last coal-fired power plant at Centralia will close in 2025. TransAlta Corp. has already stopped producing electricity from the first of the two coal burners. The closure of the two factories creates a 10% hole in our state’s electricity production.
On the other hand, Tennessee rulers continue to leverage electricity and the availability of cheaper electricity to their advantage. The certainty of energy supply is a big selling point and has worked for automakers and battery makers considering building huge electric car and lithium battery facilities.
Tennessee auto production began in 1983 when Nissan built its first US assembly line in Smyrna, located a half-hour drive southeast of Nashville.
Nissan employs 11,000 people. Statewide, nearly 66,000 jobs in Tennessee are related to the manufacturing of motor vehicles.
âTennessee is emerging as a leader in a national struggle to expand production of electric vehicles and batteries, as states compete to attract multibillion dollar investment from automakers moving away from the engine. combustion, âaccording to the Wall Street Journal.
In the 2021 ranking of states with the best business climate, Tennessee moved up to second place, ranking at or near the top of various rankings in the business friendliness and positive climate categories, according to AreaDevelopment.com. Georgia is still number one.
Finally, in the last of the most important regional development states for doing business, the only states outside of the southeast were Indiana, Ohio, and Arizona. Washington was not in the top 20, and that should be a wake-up call to heads of state that we should step up our game and no longer rely on cheap electricity to bail us out.
It should also tell us that our current energy strategy needs to be seriously rethought.
Don C. Brunell is a business analyst, writer and columnist. He retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at [email protected]