Northwest Power Pool

  • By Jim Kershner
  • Posted 3/29/2016
  • HistoryLink.org Essay 11199

The Northwest Power Pool is an organization of the region's major electrical utilities, tying together Northwest electrical systems for increased efficiency and reliability. In 1942, the federal government encouraged the Bonneville Power Administration (BPA) to interconnect with 10 public and private electrical systems for maximum wartime production. The Northwest Power Pool soon became famous for delivering huge amounts of reliable electricity to the region's aluminum, aircraft, and shipbuilding industries. After World War II, the members chose to continue the Power Pool because they had come to recognize the many advantages of interconnecting with others, including shared backup capacity. In its early decades, the Power Pool was a voluntary organization operating on a handshake basis with a tiny staff loaned from the member utilities. As membership grew and the electrical industry became more complex, relationships between the members were formalized. Between 1961 and 1964, the Power Pool played an important role in negotiations for the Columbia River Treaty with Canada. In 1999, the Northwest Power Pool Service Corporation was registered as a nonprofit mutual-benefit corporation. By 2016 the Northwest Power Pool membership had grown to 31 entities.

Building a Web

A power pool is "the integration of many separately-owned generating and transmission systems" tied together "into a kind of web. ... Over this web, electricity flows back and forth as the needs of customers on each system require[] ... in this way, more load is carried than each system could if it operated in isolation" (Netboy, 3). As early as 1917, Pacific Power & Light Co. (PP&L, later to be called Pacific Power and then PacifiCorp) had interconnected with the Washington Water Power Co. (later called Avista). Other interconnections followed in the 1920s and 1930s. By 1941, six of the Northwest's privately owned utilities -- Washington Water Power, PP&L, Northwestern Electric, Montana Power, Idaho Power, and Utah Power & Light -- were linked in a partnership called Northwest Interconnected Systems. It was the seed of the Northwest Power Pool, but not yet complete. It still lacked two especially vital components -- the publicly owned municipal utilities and the federal government, in the form of the Bonneville Power Administration. The BPA was charged with marketing the power generated by the federal dams on the Columbia and Snake rivers built and operated by the U.S. Army Corps of Engineers and the U.S. Bureau of Reclamation for flood control. Massive amounts of electricity were being generated by the Bonneville Dam (Corps of Engineers) and the mammoth Grand Coulee Dam (Bureau of Reclamation).

Dr. Paul J. Raver, then head of BPA, had already signaled that he favored "interconnecting practically every major public and private power system in the Northwest" (Raver). When the U.S. entered World War II in late 1941, the impetus to create a complete regional power pool became even stronger. As wartime industry ramped up the Northwest was becoming a vital production region, with its giant Seattle Boeing airplane plant, its numerous Portland, Vancouver, and Puget Sound shipyards, and its new electricity-hungry aluminum mills. With the concurrence of the federal Office of Production Management (OPM), BPA began interconnecting with several major Northwest utilities, including Washington Water Power, PP&L, Portland General Electric, and the major municipal systems -- Seattle City Light and Tacoma City Light (later called Tacoma Power).

However, the OPM (soon to be renamed the War Production Board) wanted a more comprehensive power pool and laid down the new wartime reality in January 1942: "All power systems must be coordinated and operated at maximum overall efficiency for the duration of the war" (Minutes, Northwest Systems ...). The OPM representatives indicated that they preferred that a complete power pool be established in the Northwest "on a joint voluntary basis" because otherwise it would be imposed on an "involuntary basis ... from Washington" (Minutes, Northwest Systems ...). This directive was given more force on May 1, 1942, when the War Production Board issued Limitation Order L-94, which made interconnection programs mandatory throughout the U.S.

The Northwest Power Pool

The Northwest's utilities and the BPA immediately began planning a voluntary, comprehensive power pool. It consisted of 10 of the region's major electrical utilities: Portland General Electric, Washington Water Power, PP&L, Northwestern Electric Co. (later merged with Pacific Power & Light), Tacoma City Light, Seattle City Light, Puget Sound Power & Light (later called Puget Sound Energy), Montana Power (later called NorthWestern Energy), Idaho Power, and Utah Power and Light (later part of PacifiCorp and called Rocky Mountain Power), and BPA. Representatives from all 11 of these entities met in Spokane under the name "Northwest Power Coordination" on May 21 and 22, 1942, to hash out the details of this new partnership. On August 1, 1942, "actual operations of the Northwest power pool began" (BPA Annual Report, 1943, p. 14). The Northwest Power Pool was formally born.

Michael Blumm, an environmental law scholar, later wrote that this event "signaled the beginning of an era in which public and private utilities would operate their projects as essentially one utility, which remains the chief characteristic of the systems operations today" (Hirt, 313). The pool created a unified Northwest power system that extended nearly to North Dakota and and deep into Utah. It was still a voluntary organization, with decision-making power vested in the Operating Committee, which met every month and consisted of one representative from each member. The actual staff consisted of three or four engineers, working out of a Portland office. They were called the Coordinating Group, on loan from the investor-owned member utilities. Their major task was to coordinate the complex mix of dams and steam plants in the region and manage them as if they were just one big system. For instance, one utility could hold water in its reservoir and, during times of high demand, release it to another utility's downstream reservoir. By sharing resources in this way, each utility had more electricity available on average and could operate with a lower backup reserve. 

An industry executive said in the Wall Street Journal on December 11, 1942, that the Northwest Power Pool had already created about 100,000 additional kilowatts for war industry and general use. A 1944 story in Electrical World magazine reported that one of the Northwest Power Pool's secrets of success was that it was "entirely voluntary" and that each member "can operate his own system to suit himself ... however, it must be said that no one has exercised his prerogatives in these respects to the detriment of pool operation" (Heston). By 1945, BPA was referring to it as "the now famous 'Northwest Power Pool'" (BPA Annual Report, 1945, p. 15). That year, BPA estimated that Columbia River electricity powered plants that produced enough aluminum to build the equivalent of "10,000 B-29s or 150,000 fighter planes" (BPA Annual Report, 1945, p. 19). The Power Pool also supplied huge amounts of electricity to the Hanford Engineer Works, although that atomic-bomb project remained a secret until the war's finale.

Expanding the Pool

When World War II ended, the Northwest Power Pool might have ended with it. However, the member utilities had come to recognize -- and rely on -- the many advantages of the Power Pool, including greater backup flexibility in case of low stream flows and increased efficiency for an already-stretched-to-the-limit system. The demand for electricity in the Northwest remained stronger than ever because of a growing population. The aluminum plants and Hanford project were still humming because of the Cold War. The Northwest Power Pool played a key role in minimizing blackouts and brownouts, yet it was obvious that the Northwest needed more power. The federal government and some of the individual utilities were planning ambitious programs of new dams on the Columbia River, but most of them would take years or decades to complete. Meanwhile, the Northwest Power Pool expanded into Canada in 1948 when British Columbia Electric (later to evolve into BC Hydro) was granted membership in the Northwest Power Pool. This cross-border partnership would grow in importance over the decades, especially after more Columbia River dams were built on both sides of the border.

In the early 1950s, 18 new dams were in various stages of construction, including the Chief Joseph Dam, Rocky Reach Dam, The Dalles Dam, and the McNary Dam on the Columbia, all scheduled to begin producing electricity within a decade. Other major projects included the Hungry Horse Dam on the South Fork of the Flathead River in Montana, the Albeni Falls Dam on the Pend Oreille River in Idaho, and the Cabinet Gorge Dam on the Clark Fork River in Idaho. At least nine other major hydroelectric projects were in the proposal stage on the Snake, Kootenai, Pend Oreille, and other rivers. The Hungry Horse Dam started generating power in 1953 and came completely online in 1954. In the 1953-1954 operating year, the Northwest Power Pool had a combined peaking capability of 7,200,000 kilowatts, more than double its original capacity. Only about 10 percent was steam-generated -- the rest was hydroelectric. BPA accounted for 43 percent of the total. The Spokane Daily Chronicle reported that the Northwest Power Pool was one of the world's largest electrical pools and "the envy of power distributors throughout the world" (Reilly).

In 1954, the Northwest Power Pool's geographic footprint expanded to include most of Wyoming after Pacific Power & Light merged with Mountain States Power Company. By this time, the Northwest Power Pool had been divided into two sectors. The eastern sector consisted of the Montana, Idaho, and Utah power utilities, and the western sector consisted of the Tacoma and Seattle city utilities, Puget Sound Power and Light, Washington Water Power, Pacific Power & Light, Portland General Electric and BPA. BPA fed power into both sections and British Columbia Electric marketed power into the western section. The pool now consisted of 116 hydro projects -- some massive and some quite small. There were also 15 steam generation plants, using "coal, furnace gas, coke and pitch as fuel" (Netboy, 10). This electricity was shared through a complex system of transmission lines embracing 700,000 square miles from the Pacific Ocean to the eastern side of the Continental Divide. The great diversity of watersheds encompassed made for a great diversity of stream flows, allowing one part of the pool to support the other at times of drought. Engineers likened managing the system to working "a sort of jigsaw puzzle" with flexible and constantly changing pieces (Netboy, 17).

The Northwest Power Pool's four major benefits were well established by 1954, according to a report by BPA's Anthony Netboy. First, the Power Pool allowed all the members to harmonize their operations, using more-expensive steam power only when less-expensive hydropower was insufficient. Second, every utility was obtaining energy at lower cost because of efficient transmission and fewer service interruptions. Third, each utility could make do with a smaller amount of standby capacity for emergencies, since it could call on the resources of the entire pool. Fourth, and still most importantly, the Northwest had far more "firm power" available than it would have had if each utility operated in isolation. Netboy called this "perhaps the major benefit of the Northwest Power Pool" since its inception, because "the region has suffered from a chronic shortage of electricity" (Netboy, 33-36).

Northwest Power Pool membership expanded in the 1960s to include the Eugene Water and Electric Board; West Kootenay Power and Light (later called FortisBC) at Trail, British Columbia; and several of the public utility districts (PUDs) with new dams on the Columbia: the Chelan County PUD, the Grant County PUD, and the Douglas County PUD. The Power Pool expanded again geographically as well, because in 1961 Pacific Power & Light merged with California Oregon Power Company, which served southern Oregon and northern California. For the first time, the Power Pool had spread to California.

International Coordination

By this time, the Northwest Power Pool had become deeply involved in a crucial international issue: negotiations for the Columbia River Treaty between the U.S. and Canada. One of the treaty's major goals was to establish a joint plan for managing the Columbia's waters on both sides of the border. The Northwest Power Pool's engineers had decades of analytical expertise and data, which proved vital in the negotiations. A treaty was signed in 1961, but it was not ratified by Canada's Parliament, so negotiations continued for the next three years. In order to make an agreement work, one unified stateside power entity would be required, so that Canada would not have to deal with dozens of separate U.S. utilities. The Northwest Power Pool members formed the nucleus of that entity and they huddled together and crafted the 1961 Pacific Northwest Coordination Agreement, replacing the existing voluntary agreements between the Power Pool members. In 1964, as treaty negotiations neared fruition, the members concurrently negotiated an even more comprehensive agreement, the 1964 Pacific Northwest Coordination Agreement, scheduled to last 39 years, and considered part and parcel of the treaty negotiations.

The signatories of the 1964 Pacific Northwest Coordination Agreement included BPA; the U.S. Army Corps of Engineers; the cities of Eugene, Seattle, and Tacoma; Grant County PUD; Chelan County PUD; the Pend Oreille County PUD; the Douglas County PUD; Cowlitz County PUD; Puget Sound Power and Light; Portland General Electric; Pacific Power & Light; Washington Water Power; Montana Power; and the Colockum Transmission Co. (a wholly owned subsidiary of Alcoa near Quincy in Grant County).

On September 16, 1964, one day after the 1964 Pacific Northwest Coordination Agreement was signed, U.S. President Lyndon B. Johnson (1908-1973) and Canadian Prime Minister Lester Pearson (1897-1972) joined in a formal ratification ceremony of the Columbia River Treaty at the Blaine Peace Arch. This historic treaty specified that Canada would cooperate with the U.S. on water storage north of the border, in exchange for half of the additional electricity generated south of the border, as well as compensation for building three new dams on the Canadian side. A fourth dam, Libby Dam on the Kootenai River (a tributary of the Columbia) in Montana, was also planned. From that day forward, the treaty would have a far-reaching impact on the Northwest Power Pool. One of the treaty's key objectives was to regulate the storage and release of waters behind the three Canadian dams, for optimal power generation by the downstream (American) dams. These three new upstream reservoirs, when completed, would contain almost half the water storage for the entire Columbia system. They would also provide vastly improved flood control.

The 1964 Pacific Northwest Coordination Agreement "frankly put the Northwest Power Pool on the map, because we were doing things here in the Northwest that nobody else in the world was doing," a Seattle City Light executive said in 2015 (Garman interview). Merrill Schultz, who joined the Coordinating Group in 1967 and later became the Power Pool's longtime director, said that the Power Pool fostered an atmosphere of mutual cooperation rare in the competitive power industry: "If you went to a Power Pool meeting and you listened to people speak, you could not pick out who was from BPA and who was from PacifiCorp and who was from Seattle City Light" (Schultz interview). He said the driving force behind the Power Pool was not profits, but physics -- or to put it in more practical terms, reliability -- and that "the Golden Rule was more regularly applied when people felt there was a mutuality" (Schultz interview). 

Conservation and Deregulation

The new Canadian dams on the Columbia River were finished by 1973. However, these and more newly built dams did not eliminate the possibility of Northwest power shortages in low-water years. In late 1976 and early 1977, the region experienced the lowest runoff in its history to that date. The Power Pool took the lead in urging power conservation. Schultz went on television to urge power conservation and cutting back on holiday lighting. A new issue also arose that year, one with enormous implications for the future: Fisheries officials asked for larger stream flows to support salmon and steelhead runs.

This would become the overriding issue for the Power Pool and the dam operators in subsequent decades. In 1980, Congress passed the Pacific Northwest Power Planning and Conservation Act, known as the Northwest Power Act, which was partially aimed at protecting the fish runs. Salmon and steelhead runs on the Columbia and Snake river systems had fallen precipitously. Several species were placed on the federal endangered species list, which prompted a string of federal Biological Opinions that fundamentally changed the way the Northwest Power Pool managed river flows. From that point on, the Northwest Power Pool was not able to manage river flows for optimal power generation, as it had always done. It had to take into account the needs of migrating fish, as they made their perilous journeys downstream, as juveniles, and upstream, as spawning adults. Jerry Rust, who became the director and president of the Northwest Power Pool corporation in 2001, said that before the Biological Opinions, the priorities for managing the Columbia watershed river flows were, roughly, as follows: flood control first, power generation second, navigation third, recreation fourth and "fish way down on the bottom" (Rust interview). Then, it "flip-flopped" and fish became first after flood control, with generation near the bottom (Rust interview). It "took a lot of flexibility and a lot of surplus out of the generation system," which impacted the Northwest Power Pool "tremendously" (Rust interview). The Northwest Power Pool would continue to run detailed analyses of projected flows, but now had to keep those flows relatively constant because of the fish.

The 1990s brought another transformative issue: power deregulation. The federal government began deregulating the nation's entire power industry beginning in 1992 with National Energy Policy Act, with the stated goal of transitioning the industry to more competitive electricity markets. A series of orders required utilities to separate their transmission from generating functions and to separate their transmission and power-marketing operations. This affected many of the Northwest Power Pool's ways of operating as well as its longstanding principles of cooperation. For instance the weekly conference calls, in which all the members shared their generation forecasts, were abandoned because of a new fear of giving away private marketing information. Also, the members no longer shared their maintenance schedules. It had long been important to coordinate how many generating facilities might be off-line at any one time, but now utilities were worried that other utilities might use that information for marketing advantage. In the name of open competition, said Schultz, "one of the things lost was the sense of mutual dependence" (Schultz interview).

The Service Corporation

Deregulation also spurred a change in the way the Northwest Power Pool was governed. In 1995 the members adopted the Membership Agreement, which formalized many of the voluntary arrangements of the various committee activities. The agreement would later be amended in 1996 and 2011. And the 1964 Pacific Northwest Coordination Agreement was revised in 1997, with one of its major revisions being improved accommodation for fisheries.

April 22, 1999, was one of the most significant dates in the entire history of the Northwest Power Pool. On that day the Northwest Power Pool Service Corporation was incorporated. It was registered as a legally constituted nonprofit mutual-benefit corporation in the state of Oregon, a trade association with federal tax-exempt status. From that point on, the term "Northwest Power Pool" could actually refer to two separate entities. One was the Northwest Power Pool membership group, the traditional group dating back to 1942 of electrical utilities working together for efficiency and reliability. The membership had grown (to 31 by 2016) and included members in California, Nevada, and Alberta.

The second entity was the newly formed Northwest Power Pool service corporation, which had its own board of directors and provided services to the member utilities. In 2015, corporation president Jerry Rust explained that the corporation had "individual general services agreements with all 31 Northwest Power Pool members" and provided services and professional training to these members (Rust interview). As soon as incorporation took effect, the Northwest Power Pool employees were no longer lent from the individual companies. They became employees of the corporation itself.

The Power Pool in the Twenty-first Century

By 2016 the Northwest Power Pool had evolved in significant ways. Yet it was still focused on its original goal: maximizing the efficiency and reliability of the Northwest's power network. One of its most significant programs was its fully automated contingency reserve sharing program, called "an industry standard" by Walt Pollock, former BPA executive (Rust interview): If any utility has a power-plant outage, the other members of the Reserve Sharing Group restore the lost megawatts within 15 minutes. The Northwest Power Pool has also developed a comprehensive Energy Emergency Plan to deal with any regional power crises. Meanwhile, according to Rust, the Northwest Power Pool's original spirit of cooperation is "more and more" coming back, in part because of less rigid federal rules (Rust interview).

The Northwest Power Pool as of 2016 had four major committees: the Operating Committee, the Transmission Planning Committee, the Pacific Northwest Coordination Agreement Coordinating Group, and the Reserve Sharing Group Committee. Not all members had to participate in every program. Meanwhile, professional training had become one of the most important services provided by the Northwest Power Pool service corporation. The service corporation became a National Electric Reliability Council approved continuing education provider in 2005, offering training in subjects including reserve sharing, emergency planning, underfrequency load shedding, frequency management, and many others. In 2014, it expanded its training to an online service.

In early 2016 the membership of the Northwest Power Pool included Alberta Electric System Operator, Avista Corporation, Balancing Authority of Northern California, Bonneville Power Administration, British Columbia Hydro & Power Authority, Calpine Energy Services LP, Chelan County PUD No. 1, ColumbiaGrid, Cowlitz County PUD No. 1, Douglas County PUD No. 1, Eugene Water & Electric Board, FortisBC, Grant County PUD No. 2, GridForce, Iberdrola Renewable, Idaho Power Company, NaturEner, NorthWestern Energy, NV Energy, PacifiCorp, Pend Oreille County PUD No. 1, Powerex, Portland General Electric, Puget Sound Energy, Seattle City Light, Snohomish County PUD No. 1, Tacoma Power, Turlock Irrigation District, U.S. Bureau of Reclamation, Western Area Power Administration-Upper Great Plains, and Energy Keepers, Inc. The U.S. Army Corps of Engineers was also involved in the Northwest Power Pool as a signatory to the Pacific Northwest Coordination Agreement, but was not a signatory to the Power Pool Membership Agreement. The Northwest Power Pool covered an area encompassing eight states and two provinces, with the Northwest Power Pool corporation office located in Portland, Oregon. The electrical capacity of the Northwest Power Pool had mushroomed from a 1941 installed capacity of 1,000 megawatts to a load of 66,000 megawatts in 2016.

Sources: Anthony Netboy, "The Bonneville Power Administration and the Northwest Power Pool: A Research Report," U.S. Department of the Interior, Bonneville Power Administration, January 1954, Bonneville Power Administration (BPA) archives, Portland, Oregon; Paul J. Raver, "Columbia River Power for Industry," text of speech delivered to the Oregon Section of the American Association of Mining and Metallurgical Engineers, Portland, Oregon, October 16, 1939, copy in BPA archives; Minutes, Northwest Systems Interconnected Operation, February 16, 1942, BPA archives; Minutes, Washington Conference with OPM on Northwest Power Pool, January 16, 1942, BPA archives; Bonneville Power Administration Annual Reports, copies available at Bonneville Power Administration website accessed March 27, 2016 (https://www.bpa.gov/Finance/FinancialInformation/AnnualReports/Pages/default.aspx); Paul W. Hirt, The Wired Northwest: The History of Electric Power, 1870s-1970s (Lawrence: University Press of Kansas, 2012); Walter C. Heston, "Northwest Power Resources Pooled for War," Electrical World, March 4, 1944, pp. 56-66; W. Newland Reilly, "Nonexistent Dam Helps Region's Power Users," Spokane Daily Chronicle, November 22, 1951, p. 1; Jim Kershner interview with Gerry Garman, Seattle, Washington, October 26, 2015, transcript in possession of Jim Kershner, Spokane, Washington; Jim Kershner telephone interview with Merrill Schultz, November 16, 2015, transcript in possession of Jim Kershner; Jim Kershner interview with Jerry Rust, Portland, Oregon, December 3, 2015, transcript in possession of Jim Kershner.

Licensing: This essay is licensed under a Creative Commons license that encourages reproduction with attribution. Credit should be given to both HistoryLink.org and to the author, and sources must be included with any reproduction. Click the icon for more info. Please note that this Creative Commons license applies to text only, and not to images. For more information regarding individual photos or images, please contact the source noted in the image credit.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License
Major Support for HistoryLink.org Provided By: The State of Washington | Patsy Bullitt Collins | Paul G. Allen Family Foundation | Museum Of History & Industry | 4Culture (King County Lodging Tax Revenue) | City of Seattle | City of Bellevue | City of Tacoma | King County | The Peach Foundation | Microsoft Corporation, Other Public and Private Sponsors and Visitors Like You