New demand response rate promoting carbon-neutral fuels goes into effect April 1
Tacoma Power created the nation’s first pilot rate to support the production of electrofuels, a carbon-neutral replacement for traditional fossil fuels. The new, lower cost tariff is designed for industrial producers of electrofuels, such as hydrolyzers that produce green energy, to take Tacoma Power’s carbon-free electricity and produce hydrogen or hydrogen-rich compounds that can be used to store electricity for later use. With the approval of this rate in December 2020, Tacoma Power became the first consumer-owned utility in the nation to offer a rate specifically designed to capture the operational and social benefit of this technology.
Under the rate schedule terms, Tacoma Power has the option to curtail electricity consumption during times of high market prices or other electrical system need, making it much more affordable to provide power to all customers. In return, the customers on this new rate schedule pay a rate lower than the standard industrial rate. The new tariff will also serve as Tacoma Power’s first Demand Response rate.
“Tacoma Power is committed to engaging with partners and exploring opportunities presented by hydrogen and other electrofuels that encourage a carbon-free economy and a clean energy future,” said Clay Norris, Power Manager for Tacoma Power. “Investing in alternative fuels brings opportunity for economic development, reduced rate pressure, and system resiliency to Tacoma.”
“Tacoma Power’s proactive and first-of-its-kind initiative will test the ability of flexible loads like green hydrogen to help integrate high levels of renewables on the electric grid by reducing renewable curtailment and improving grid reliability,” said Rachel Fakhry, Policy Analyst for Climate and Clean Energy Programs at the Natural Resources Defense Council. “Green hydrogen produced from renewable energy is a critical solution needed to supplement energy efficiency and renewables and help us achieve a net-zero emissions global economy by midcentury.”
The new rate offering will facilitate the location of electrofuel facilities in Tacoma. Such facilities would transform Tacoma Power’s clean, renewable hydropower into portable, stable fuel able to replace fossil fuels across the region and possibly even the world.
Tacoma Power owns renewable, carbon-free hydropower, and its long-term contracts for power are from carbon-free sources. Only a small percentage comes from fossil fuel sources purchased on the short-term energy market.
The electrofuel tariff was approved by Tacoma’s Public Utility Board and City Council in December 2020, and will go into effect April 1, 2021.