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Funding Support from the Northwest Energy Efficiency Alliance

CWEB.100/April.29.2004


Con.WEB Turns 100!

Well, not exactly ... But this does mark the 100th issue of our newsletter, which started monthly Web-based publication in January 1996, back when the Internet was still considered an emerging technology. We've been at it ever since, covering energy conservation and renewable energy around the Pacific Northwest states of Idaho, Montana, Oregon and Washington.

As the editor, I'd like to take this milestone occasion to thank the many, many people who have contributed to Con.WEB in countless different ways over the years. They are far too numerous to mention individually, but they notably include the people of Energy NewsData and the Northwest Energy Efficiency Alliance, myriad others who have shared their time and thoughts with us, and, certainly, our growing readership. This publication--like any other--ultimately exists to serve those who read it.

We appreciate your continuing support of Con.WEB, and we look forward to a "second century" of publishing.--Mark Ohrenschall

CORRECTION

An opinion article in the March 31 issue of Con.WEB, headlined "Efficiency Abandoned in Washington Energy Resource Legislative Debate: Defensible Politics, Bad Policy," included a mistaken claim that House Bill 2333 marked the furthest legislative progress of renewables/efficiency resource standards in Washington. That distinction actually belongs to Senate Bill 6027, which passed the Senate 25-24 in 2001. Con.WEB regrets the error.

1) Newer Northwest Commercial Buildings Use More Electricity, but They're Not Necessarily Energy Hogs
2) Alliance Nears $100 Million Funding Renewal Commitments for 2005-2009
3) Bonneville's C&RD Program Tallies 37 aMW Of Savings, 122 aMW of Renewables, Revived Utility Conservation Infrastructure
4) PacifiCorp Receives 5,600 MW of Bids from Renewables Solicitation
5) Eastern Washington Air Force Base Commits to 100-Percent Renewables, Largest Regional Green Power Purchase
6) Avista Utilities Buys 10 aMW of Stateline Wind from PPM Energy
7) Idaho Governor Vetoes Proposed State Tax Credits for Renewables
8) Washington Demonstration Project to Test Straw Gasification for Power Production
9) Seattle Forum Mulls New Apollo Project for Energy Efficiency, Renewables, Smart Growth


COMMERCIAL

Regional Assessment

Newer Northwest Commercial Buildings Use More
Electricity, but They're Not Necessarily Energy Hogs

Newer Pacific Northwest commercial buildings use considerably more electricity per square foot than those built before 1995, reports a new regional study.

But this provocative finding is likely tied to the changing natures of commercial buildings and their use, and doesn't truly indicate an energy conservation failure, according to officials involved with the study.

"Assessment of the Commercial Building Stock in the Pacific Northwest" surveyed more than 1,100 buildings of varying types, ages, size and locations. Conducted by KEMA-XENERGY and sponsored by the Northwest Energy Efficiency Alliance, Bonneville Power Administration, Energy Trust of Oregon and Puget Sound Energy, this study is intended as a comprehensive look at regional buildings as of 2001 and as a trend-gauger.

Some of the identified trends are clearly favorable for energy efficiency. Indoor lighting power densities have noticeably declined over time, for example. Many older buildings have been retrofitted with more efficient HVAC systems and shell measures.

Yet, one of the findings has aroused concerns and questions. Buildings constructed from 1995-2001 use 29 kilowatt-hours annually per square foot, the study said, while the comparable figure for 1988-1994 buildings is about 21 KWh, and for 1987 and earlier buildings the number is even lower, about 14 KWh. This, despite more than 2,600 average megawatts of regionwide energy savings over the past two decades from programs and energy codes, much of it in the commercial sector.

A number of potential reasons are advanced for this apparent upward energy use curve in newer buildings. They include higher percentages of commercial square footage served by HVAC systems (particularly cooling), increased use of computers and other plug loads, longer building operating hours, greater densities of workers in office buildings and the emergence of huge multipurpose retail stores.

Although the study doesn't offer reasons for this finding, it urges caution in interpreting energy use intensities, and notes that the survey sample of recent buildings was relatively small and had incomplete energy consumption data.

Study Background/Methodology

This study had two "very specific objectives," explained Hossein Haeri of Quantec at a March 10 presentation in Seattle. "One, to produce an accurate characterization of the commercial building stock in the Northwest, establishing a good baseline," he said. The other was "to be able to make some trend analysis, see how things have changed since the last comprehensive regionwide study done" for commercial buildings, in 1987.

"The emphasis was on energy-use intensity (EUI) and penetration of energy-efficient technologies and practices," reads an executive summary.

The assessment began with seven existing studies on Northwest commercial buildings, conducted from 1987 to 2000. "The idea really was, instead of starting by scratch creating a new sample of commercial buildings in the Northwest, we would use as many of these old surveys as possible, and try to cover as many cases in these surveys as we could," said Haeri.

Project officials gathered information on 1,157 buildings, in different categories of age, building type, square footage and state. Data from previous research was supplemented with phone surveys, field visits and energy consumption histories, to the extent possible and necessary. "Instead of trying to collect very detailed information on a very relatively small sample of these buildings ... we thought, 'Let's try to find out as much as we can on as many of these buildings as we possibly could,'" said Haeri.

He described a "painful, time-consuming process" to standardize and combine the accumulated information.

In analyzing this mass of data, project officials applied what KEMA-XENERGY's Miriam Goldberg called a "post-stratification" approach, expanding the surveyed building sample primarily through known regionwide floor space totals. The analysis also included weather normalization.

Overall Energy Use Higher in Newer Buildings

"Newer buildings just seem to be more energy-intensive," said assessment project manager Phil Degens, an Alliance evaluation coordinator. The nearly 30 KWh consumed per square foot for 1995-2001 constructed buildings was "much higher than I would have expected," he said, which leads him and others to wonder why.

One piece of the puzzle may lie in the assessment's finding that many commercial buildings operate longer today. Fifty-seven percent of dry goods retail stores operated 60-plus hours in 2001, while only 36 percent did so in a 1987 survey. This trend held true for other building types surveyed in 1987.

Senior policy analyst Charlie Grist of the Northwest Power and Conservation Council, which actively participated in the study, outlined some other factors: modern office buildings generally have more ventilation, air conditioning, workers per square foot and computer equipment than their earlier counterparts. He also cited the growth of "big box" retail outlets that feature grocery stores, which use large amounts of refrigeration energy. Groceries topped the regional list of commercial categories in energy use intensity as of 2001, at 54 KWh per square foot; only restaurants, at 49 KWh, came close to that figure.

Energy use trends in buildings "tend to encompass a whole lot of social and economic structural changes that are ongoing," said Grist.

He also noted the EUIs reflect averages for the entire commercial sector, masking large variations. The regional average EUI as of 2001 was 16 KWh per square foot.

Nevertheless, the higher EUI for newer buildings has generated attention, according to Grist and from discussion at the March 10 Seattle presentation.

"The bottom line is those of us in the conservation business deal with detractors all the time," said Jean Shaffer, manager of Seattle City Light's commercial/industrial energy management section. "Taken out of context, without explanatory variables, it could be used inappropriately to create a problem." She thought this finding shouldn't be interpreted as a failure of energy codes and conservation programs.

Without those efficiency initiatives, said Degens, the EUIs "would have been a lot higher."

More analysis would be needed to flesh out energy consumption trends, according to Degens and Grist.

Lighting, HVAC Systems

The commercial building assessment contains some positive energy-saving news.

" ... there has been a clear shift to more efficient lighting technologies" since 1987, the assessment said.

One prominent example is a significant decline in indoor lighting power densities among buildings existing in 1987, from 1.5 watts per square foot in 1987 to 1.2 watts per square foot in 2001. "We've made a big progression in re-lighting older buildings," said Grist.

Meanwhile, office buildings constructed in 1987 and earlier showed a 1.4 watts per square foot lighting power density; post-1994 buildings were down to 1.1 watts per square foot.

The assessment also found a decrease in incandescent lighting, with fluorescents accounting for about 70 percent of commercial lighting wattage as of 2001. T-8s account for 45 percent of total lighting by floor area, and T-12s are listed at 31 percent.

Grist found a particular success story in schools, which have 84 percent T-8s as a percentage of floor area; he considers this an indication school-focused conservation programs have made a difference.

High intensity discharge (HID) lamps are on the rise indoors, and have become the most common outdoor lighting source for commercial buildings, at 56 percent of total regional wattage. Photocells exist on 55 percent of outdoor lighting wattage.

The vast majority of indoor lighting controls, 92 percent, are on-off switches. No other type of lighting controls exceeded 7 percent.

In HVAC, the biggest fraction of systems are packaged heating/DX cooling, accounting for about one-third of regional square footage with space conditioning. Boilers heat about 25 percent of floor space, while unitary heating warms 13 percent. Heat pumps serve 10 percent of conditioned floor space, split between air-to-air (6 percent) and groundwater (4 percent).

Natural gas is the main heating fuel, predominant in 65 percent of heated floor space, up 14 percent since 1987. Electricity is at 29 percent.

HVAC distribution occurs primarily through air systems (75 percent of floor space), and economizers cover 40 percent of floor space with distribution systems.

Although variable air volume systems are generally found in less than 20 percent of floor space, the assessment found "some movement away from constant volume systems and toward" VAVs from 1987 to 2001. Energy management systems control distribution for nearly 40 percent of floor space.

HVAC system upgrades occur on average every 17 years, the assessment said, although nearly half of hospitals and 41 percent of schools had upgraded systems in the past five years.

The assessment found 35 percent growth in total regional commercial floor space from 1987 to 2001; the latest figure is 2.4 billion square feet. There are fewer buildings (174,000 in 2001, 201,000 in 1987) but they are larger on average--13,700 square feet in 2001, 8,700 square feet in 1987.

Offices and retail spaces comprise 36 percent of total floor space; no other category, other than other (20 percent), exceeds 10 percent.

Using This Information

Degens and Grist encouraged interested persons to dig through the voluminous data--the assessment and appendices together are about 1 inch thick--for their own uses.

"It's a pretty rich data set, and I think the more we have people looking at it, the more we'll have a set of questions on what further studies might be needed" on commercial building energy use, said Grist.

The Council is using this study for the conservation element of its upcoming regional power plan, according to Grist.

Meanwhile, the Alliance is applying assessment data in its commercial ventures, Degens said, while the Energy Trust and PSE have incorporated some information for their own purposes.

He thinks the commercial building findings can help inform policy decisions, such as energy code changes, as well as conservation program planning, design and evaluation. Market research is another potential application.--Mark Ohrenschall

More Information:

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MARKET TRANSFORMATION

Almost There

Alliance Nears $100 Million Funding
Renewal Commitments for 2005-2009

The Northwest Energy Efficiency Alliance has gained commitments for nearly 85 percent of its planned $100 million funding for 2005 through 2009.

Eight of the Alliance's 14 funding organizations have agreed to proportional contributions to the regional market transformation collaborative over the coming five-year period. Their pledges total about $17 million of the $20.3 million sought annually by the Alliance.

Six other entities have not yet formally committed to this long-term extension, but Alliance officials anticipate their ongoing financial support.

"I'm really pleased that the message we're getting is that the Alliance has done good work, cost-effective kilowatt-hours and market change," said executive director Margie Gardner. The funding entities "want it to continue and we're in the final throes" of securing commitments in a memorandum of understanding.

Bonneville Power Administration is the biggest single contributor to the Alliance, and the federal wholesale power marketing agency has pledged $50 million from 2005 through 2009, or $10 million annually.

In a letter to Gardner, BPA administrator Steve Wright called the Alliance "an important part of Bonneville's conservation portfolio." He praised the collaborative for its "effective regional response to challenges of dealing with dispersed markets for energy efficiency," and for gaining valued, low-cost conservation--about 130 average megawatts to date, since its 1996 formation, at an average cost of about 1 cent per kilowatt-hour.

But Wright also asked Alliance officials to "better communicate and involve key decision-makers, e.g. utility General Managers, in the mission and operation of the Alliance."

Gardner said the Alliance would pursue this opportunity to connect with utility management.

Funding Renewal Status

The Alliance board in January approved a quest for $100 million to continue market transforming activities from 2005 through 2009, after the current regional funding--$100 million from 2000 through 2004--expires at year's end. (See Con.WEB, Jan. 30, 2004.)

This followed an independent evaluation that found the Alliance had made "substantive contributions" to regional market transformation since 1996, that its benefits were greater than its costs, and that there is "strong rationale" for providing additional money and time. At the same time, this evaluation lowered the estimated energy savings attributable to Alliance initiatives, from 134 aMW, as the Alliance had reported, to 98 aMW through 2002. The Alliance has since concurred. (See Con.WEB, Nov. 26, 2003, for more on this retrospective assessment.)

In seeking renewed funding, the Alliance is asking the 14 organizations to pay at their historic proportional levels, which are based on retail power loads.

As of late April, eight had signed the memorandum of agreement for 2005-2009 funding: Avista Utilities, BPA, Clark Public Utilities, Cowlitz County PUD, Energy Trust of Oregon, Eugene Water & Electric Board, PacifiCorp and Puget Sound Energy.

The other six--Grant County PUD, Idaho Power, NorthWestern Energy, Seattle City Light, Snohomish PUD and Tacoma Power--are in various stages of consideration. None are leaning against further funding, according to Gardner. "I think it looks very good," she said. "I do think there are some unique circumstances for each of the remaining folks. It'll just take them a little more time." For example, Seattle has a new superintendent, and NorthWestern is in the midst of bankruptcy proceedings and long-term resource acquisition planning, including the role of demand-side management.

BPA Pledge, Strategic Communications Issue

Bonneville, a key Alliance funder over the past eight years, has decided to extend its funding.

"BPA has gone through our internal process and we've reached the conclusion that supporting the Alliance in moving forward for another five-year period makes sense," said Bonneville energy efficiency vice president Mike Weedall.

He described the Alliance's efforts as regionally valuable, both in transforming markets for energy efficiency and gaining energy savings at low costs.

"BPA has made a $50 million commitment. That's a big deal," Weedall said. "We made that based on the success we've had in the past. We have confidence we'll be able to get similar benefits going forward. We feel good about being able to continue to be partners and to support this. We're looking for others to continue to be partners, too." Weedall hopes BPA's action will influence other publicly owned utilities to sign the memorandum of agreement.

Before pledging additional Alliance funding, Bonneville officials discussed this commitment with its customer collaborative.

This group, which includes leading executives of BPA customer utilities, didn't have any particular complaints about the planned $50 million contribution, according to Weedall. But there was some incomplete understanding about the Alliance among these officials, a "potential disconnect" between them and the utility conservationists engaged in the Alliance's project implementation.

"Steve was making the observation that he thought the (Alliance) could be strengthened by getting that gap closed or diminished, making sure that folks at the strategic level--GMs, etc.--were really recognizing the value" of regional market transformation.

He raised the example of Bonneville's determination to meet its share of regional conservation goals as set by the Northwest Power and Conservation Council. "The amount of funding we put into the Alliance is a critical part of making sure we can hit those targets," said Weedall. "Again, we've got a situation where people around the region in critical positions, such as general managers, aren't really recognizing how that fits our resource acquisition strategy."

Gardner said she's talked with many Northwest utility leaders--as have Alliance board members--and they are "generally aware" of the Alliance and its work.

"I think there are some key issues about the Alliance that probably should be discussed with the region's utility managers," she said, such as the Alliance's goals and fit within Northwest efficiency efforts.

Weedall spoke about this topic with the Alliance board April 20 in Boise, and he described board members as "very open to initiating that exploration" of how to enhance these strategic communications.

"That's a fantastic opportunity, really, to try to work through that," said Gardner.--Mark Ohrenschall

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BONNEVILLE POWER ADMINISTRATION

Interim Report

Bonneville's C&RD Program Tallies 37 aMW
of Savings, 122 aMW of Renewables, Revived Utility
Conservation Infrastructure

Bonneville Power Administration's conservation/renewables wholesale rate discount program has tallied more than 37 average megawatts of energy savings, mostly in the residential sector.

It also has contributed to almost 122 aMW of renewables generation.

Altogether, BPA customer utilities have claimed more than $105 million in rate credits for qualifying conservation/renewables activities under C&RD since the program launched in fiscal year 2001. BPA expects about $175 million in C&RD credits available over the current five-year rate period ending in 2006.

These summary figures come from a Bonneville C&RD program report, published in March with figures available through mid-November.

"I'm pleased with the results that they appear to have accomplished ... a considerable amount of conservation," said Tom Eckman, conservation resources manager for the Northwest Power and Conservation Council.

The 37.3 aMW of reported savings were reaped through $73.2 million worth of claimed C&RD credits. Although the program has received some criticism for its credit generosity and somewhat high energy-saving costs, Eckman said the roughly $2 million per average megawatt fits in the range of historical Northwest utility conservation acquisitions. He also said the actual utility cost for those savings may be lower, "depending on how much credit was passed on to customers."

The program is exceeding timetables for both conservation and renewables, said C&RD program manager Mark Johnson. "In general, the C&RD has been accomplishing most if not all the goals that were originally established. The big question is ... How much of this would have happened anyway due to the energy crisis, if C&RD hadn't been available? Who knows? That's a big if."

Both Eckman and Johnson also credited the rate discount program with helping to revive the region's utility conservation infrastructure.

Rate Discount

The C&RD provides a 0.05 cents per kilowatt-hour wholesale rate discount to utilities for qualifying conservation and renewables spending.

Bonneville determines credit and savings amounts for specific measures, generally following recommendations from the Regional Technical Forum. Conservation credits to utilities are based on the value of energy savings to the regional wholesale power system.

Each utility's total C&RD credit for FY 2002-2006 is figured by multiplying 0.05 cents times its BPA subscription load. "At the end of the rate period, customers pay BPA for any C&RD credits not accounted for," the summary report explained. Johnson described this as a powerful incentive for utilities to avail themselves of the discount program.

"Building the C&RD into the 5-year rate structure protects the credits from the volatility of the budgeting process and gives utility conservation managers the ability to plan consistent programs and hire staff," said the report. "The C&RD was designed to create incremental efficiency gains and renewable energy supplies, and to provide incentives to continue the region's progress in low-income weatherization programs. C&RD also promotes local control and management of conservation and renewable programs."

C&RD by The Numbers

The March report covers 102 utilities that comprise the "vast majority" of BPA load, said Johnson. Thirty-one utilities that buy less than 7.5 aMW annually from Bonneville don't have to file C&RD reports.

Reporting utilities had claimed $105 million of C&RD credits as of Nov. 18. That's about 60 percent of the anticipated $175 million available through 2006, after slightly more than 40 percent of the rate period. Eleven utilities had exhausted their entire five-year credit allotments, and another 21 had gotten at least 60 percent of their shares.

"We expect to see [the program] taper off rather dramatically at some point," said Johnson. "I would guess by year five there may not be very many utilities still doing things" under C&RD. "Hopefully they'll continue spending money in anticipation of the next rate period and keeping their programs alive."

Nearly 70 percent of the total credits to date, about $73 million, have gone for conservation measures.

Residential efficiencies lead the way, with 24.3 aMW of reported savings and $47.3 million claimed. Compact fluorescent lamps are the single biggest measure, with 10.2 aMW of savings and $18.8 million of credits. Air-source heat pump conversions are second, with 3 aMW of savings and $8.1 million of credits. Windows, insulation and clothes washers are the only other residential measures with more than 1 aMW of reported savings, although duct sealing "showed substantial gains" in 2003, the report said.

"Our customers by and large spend money on residential stuff," said Johnson. He believes this trend reflects publicly owned utility leaders responding to their constituents. The C&RD is "very well-suited" to generally more expensive residential conservation, he said, because of its energy-saving valuations.

C&RD commercial savings amount to 5.8 aMW, on credits of $10.3 million. The largest contributor comes under the heading of retrofit projects, most commonly lighting, Johnson said. Industrial savings total 2.5 aMW on $4.6 million in credits, with process efficiencies the largest category. Low-income weatherization measures saved about 0.5 aMW on $7 million in claimed credits and qualifying donations.

In renewables, utilities reported nearly $14 million in C&RD credits. Most went for renewables purchases or production. The remainder consisted of donations to qualifying organizations, green tags and direct solar applications.

Most of the renewables credits supported wind energy, Johnson said. Total renewables generation claimed under C&RD for the reporting period was nearly 122 aMW.

C&RD Effects

With these numbers through slightly more than two years of the five-year rate period, Bonneville considers itself ahead of schedule on both conservation and renewables, Johnson said. The agency targeted 15 aMW of annual savings and $6 million of annual renewables spending through C&RD.

Both Johnson and Eckman acknowledged the prospect of many utilities tapping out their full credits before 2006 closes. Eckman called this a "glass half-empty, glass half-full" scenario. "The fact is there's more demand for conservation, provision of conservation services, than the half-mill [0.05 cents/KWh] allowed. That tells me some utilities want to do more," either with their own funding or through BPA's Conservation Augmentation program.

C&RD also has helped rejuvenate utility conservation around the region. Johnson called the program "very successful in re-establishing infrastructure, getting utilities who had never done anything in conservation and were typically pretty resistant to conservation, to step up to the plate and start doing things."

Eckman agrees. "It got folks back engaged in conservation that haven't been doing it." C&RD, by allowing credits for some administrative costs, also enabled more utilities and their conservation staffs to generate ConAug proposals, he said.

The discount program also has expanded the repertoire of energy-saving measures installed around the region. Eckman cited the example of electric resistance heaters to keep livestock water tanks from freezing--not a big market or conservation resource, but nonetheless an efficiency improvement.

The list of conservation measures eligible for C&RD credits has grown somewhat, with the blessings of the RTF and Bonneville. BPA has the final say, but Johnson and Eckman (who chairs the RTF) said the two entities agree in the vast majority of cases.

Still, not all ideas are accepted. Programmable thermostats were nixed after evaluation data showed no demonstrable energy savings, Eckman said. Larger savings for showerheads, aerators and water-heating measures have been sought, but the forum has not been persuaded.

BPA occasionally takes C&RD stands opposed by utilities. For example, for FY 2004 many utilities wanted BPA to eliminate a third-party certification requirement for duct sealing, but BPA kept it. Bonneville did heed many customer utility wishes in denying a proposed C&RD credit cap on air-source heat pump upgrades.

C&RD conservation credits are based on energy savings values, and are "very generous in a lot of cases," Johnson said. For example, he said many utilities offer lower rebates than they get C&RD credits for heat pump conversions. CFLs have been dropped to $7 credit, after retail costs declined. Eckman said Bonneville has capped C&RD credits for certain premium efficient motors and commercial lights.

BPA officials hear complaints from some utilities about C&RD's generosity, but other utilities appreciate the program's flexibility, Johnson said. "It just depends what your situation is."

Another issue is the cost of C&RD energy savings--roughly $2 million per average megawatt, based on the report's figures.

Eckman said actual utility acquisition costs might be lower. "They did not pay as much as Bonneville gave them credit for, necessarily." He also described the $2 million/aMW figure as "not outrageously high, given the fact you're dealing with lots of small utilities and administrative costs are probably higher ... and you don't have economies of scale."

C&RD emerged at a time of load surpluses and diminished interest in energy efficiency, Johnson said. It was intended to provide financial incentives for utility conservation and renewables efforts.

"Then we had the energy crisis, right about the time we were finishing designing this," he said. "It was more generous than it needed to be to get the kind of activity we wanted. The downside is that C&RD wasn't designed as an acquisition program, but as an infrastructure development program it did that very well ... It didn't acquire conservation in the most cost-effective way."

C&RD's potential future beyond 2006 is tied into the broader discussions about Bonneville's future role. Stay tuned for coverage.--Mark Ohrenschall

More Information:

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RENEWABLES/GREEN POWER

Choices, Choices, Choices

PacifiCorp Receives 5,600 MW of Bids
from Renewables Solicitation

PacifiCorp has plenty of renewable energy choices.

The investor-owned utility, which issued a February solicitation for up to 1,100 megawatts of additional renewables capacity, has received bids totaling more than five times that amount.

Submitted proposals came to 5,600 MW, covering 42 separate bidders and 54 different projects. A large majority of these prospective renewable resources (85 percent) are wind, PacifiCorp announced April 23. Geothermal and hydro venture comprise the remainder.

Most proposals involve new renewables. All are located in the Western Electricity Coordinating Council, which covers all or parts of 14 Western states. Delivery points for the proposed renewables are found all over PacifiCorp's far-flung six-state service territory.

"We received tremendous response to the renewables RFP, and that demonstrates to us there are many sophisticated bidders interested in delivering renewables resources to our customers," said PacifiCorp senior vice president Stan Watters in a news release.

The utility plans to develop a shortlist of finalists, and then announce bid winners in late June.

This solicitation, among the biggest ever for renewables in the Northwest, stems from PacifiCorp's 2003 integrated resource plan, which envisioned a need for 4,000 MW of new resources by 2014, including 1,400 MW from renewables.

In its request for proposals PacifiCorp is seeking 600 MW of renewables for its Idaho, Wyoming and Utah territories, and 500 MW for Washington, Oregon and Northern California. It wants deliveries starting in phases, the first in 2005 and the last in 2010.--Mark Ohrenschall

More Information:

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Going All Green

Eastern Washington Air Force Base
Commits to 100-Percent Renewables,
Largest Regional Green Power Purchase

A U.S. Air Force base in Eastern Washington is entirely powered by renewable energy--at least conceptually.

Fairchild Air Force Base near Spokane has made what is reportedly the largest single green power purchase in the Northwest. The equivalent of its entire 7.5 average megawatt load is now accounted for by a combination of renewables and green tags from Bonneville Power Administration, for which the base pays a slight premium above its rate as a direct service BPA customer. Green tags, or the environmental attributes of renewables, represent more than 80 percent of this deal announced in mid-March.

Fairchild, which started purchasing Bonneville green power in 2001, also carries distinctions as BPA's first customer and the inaugural Northwest federal facility to go all-renewables.

"Fairchild is very proud of its reputation as a good steward of our environment and of the taxpayers' dollars," said Col. Anthony Mauer, commander of Fairchild's 92nd Air Refueling Wing, in a news release. "This is a very cost-effective way to support renewable energy while meeting the goals of executive orders calling on federal agencies to purchase their electricity from clean energy sources."

For Bonneville's part, "What I'm hoping it'll do is send a market signal that people want to buy renewables," said Debra Malin, BPA customer account executive for renewables.

Fairchild Green Power

BPA announced Fairchild's green power arrangement in a March 17 news release. "Our long-standing, sound business relationship with Fairchild made this possible," said administrator Steve Wright. "This kind of support helps diversity our region's hydropower system and sends a strong market signal."

Renewably generated electrons won't necessarily directly flow to the base, but Fairchild's purchase will financially back renewables generation equal to its 7.5 aMW load.

Seventeen percent of this mix is actual energy, from BPA's Environmentally Preferred Power portfolio. Fairchild buys about 1.3 aMW of EPP, Malin said. About two-thirds of that comes from BPA's share of six wind projects: three at the Foote Creek complex in Wyoming, as well as Stateline, Condon and Klondike in the Northwest. The remaining third is a blended product including a small amount of endorsed hydro from Idaho Falls, ID.

The 100-percent wind option carries a 1.1 cents per kilowatt-hour premium, while the blended offering costs 1.05 cents/KWh. Those are above BPA's preference rate, which now averages about 3.2 cents/KWh. Fifty percent of EPP premiums goes to Bonneville Environmental Foundation (a separate entity from BPA).

About 83 percent of Fairchild's purchase is earmarked for green tags, also known as renewable energy certificates. These represent environmental attributes from five of the six wind farms selling power to BPA.

Fairchild is buying green tags from 6.3 aMW worth of annual wind-generated energy, said BPA spokesman Bill Murlin. These green tags cost an additional 0.5 cents/KWh, although he said Fairchild will pay slightly higher premiums in fiscal years 2005 and 2006.

EPP and green tag purchases help offset BPA's cost of renewables.

The federal power marketing agency buys electricity from 198 MW of renewables capacity, virtually all of it wind.

Malin hopes the Fairchild purchase will spur others to go green; fewer than one-third of BPA customers support non-hydro renewables through direct purchases or programs. "Hopefully this will send a signal to utility managers in the region," that renewables are worthwhile, she said.

Natalie McIntire of Renewable Northwest Project also thinks Fairchild's action should be emulated. "We hope that more and more businesses as well as government agencies will take a look at a purchase like this and follow the lead the Fairchild has given us," she said. "We love to see 100-percent numbers." RNP's Web site lists four Northwest businesses buying renewables for all their power, although McIntire said this is incomplete and doesn't include national firms with Northwest operations.--Mark Ohrenschall

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Avista's First Big Wind

Avista Utilities Buys 10 aMW of
Stateline Wind from PPM Energy

Avista Utilities has made its first large purchase of wind energy.

PPM Energy is delivering power to the investor-owned utility from up to 35 megawatts capacity at Stateline Wind Energy Center. Avista anticipates getting about 10 average megawatts annually, about 1 percent of the average load for its Eastern Washington/Northern Idaho service territory.

This power sales agreement--publicly announced and started April 7--covers 10 years at a "very competitive price," said Avista spokesman Hugh Imhof. He declined to divulge the exact price, but indicated it fell in the levelized range of slightly more than 4 cents per kilowatt-hour--"very close to the [wholesale power] market currently."

Avista selected PPM through a request for wind power proposals issued in August (see Con.WEB, Aug. 28, 2003). Ten responses came in from eight bidders, and Imhof said PPM furnished "the most responsive bid." The Portland-based power marketing firm was already supplying close to 1 aMW of wind for Avista's retail green power program.

The new agreement "represents a really important step for us," integrating wind into the utility's system, said Imhof.

"This certainly gives them a product that makes it look like a wind farm and get some experience with that," said PPM spokeswoman Jan Johnson.

Avista's Resource Scenario

Avista's 2003 integrated resource plan showed the utility has sufficient energy resources to serve its customers through at least 2007, "even under critical water and adverse hydro and load conditions," Clint Kalich, Avista's resource planning and analysis manager, told Con.WEB in August.

Stateline Wind Energy Center
(Courtesy of Renewable Northwest Project)

Still, the IOU has an interest in examining wind power. The IRP included a preferred strategy to acquire power from 75 MW of wind capacity in 2008 to 2010, and an action item to study wind integration issues. "We want to get a feel for how wind would fit into our system," said Kalich. Avista is specifically interested in learning the effects and full costs associated with wind integration.

The IOU's ensuing wind solicitation asked for energy from up to 50 MW of wind capacity, through a two- to five-year purchase (or purchases) from 2004 to 2008. Locations were not specified, but Kalich said price--including delivery to Avista's system--would be a "key" consideration for the utility.

Buying Wind

The 300-MW-capacity Stateline wind farm, as it happens, is one of the nearest operating wind projects to Avista's service territory. And PPM, which markets Stateline's entire output, has already been delivering wind-generated electricity for Avista's Buck-A-Block green power program.

Under the new contract, PacifiCorp is transmitting Stateline power to Avista's system, Imhof said.

"We realize that it is an intermittent resource," he said. "We look at this as sort of a learning experience, figuring out how to run our system with the [wind] power in there. We are largely a hydro-based utility, and we expect to use the hydro and other resources that we have to fill in when the wind is not there. We think we can integrate it into our system well."

The first day's delivery "worked just fine," Imhof said April 8, despite some nervousness among the utility's power schedulers. "This is something new for them. They'll figure it out." Avista can reduce its Stateline purchase if integration proves troublesome, he said.

Avista also is buying from PPM an equivalent amount of renewable energy credits from Stateline or other qualifying renewable resources, according to a news release.

With this expanded and rate-based wind energy purchase, Avista will consider restructuring its retail green power program, Imhof said. Buck-A-Block charges voluntarily participating customers $1 for every 55 KWh block, a 1.8 cents/KWh premium over base rates for residential customers. Avista buys wind power to match Buck-A-Block demand; nearly 2,500 customers now participate, with an aggregate annual demand close to 1 aMW, according to utility figures.

The IOU also has longer-range plans to add 35 MW more wind capacity to its resource portfolio by 2008, Imhof said. This could be accomplished through another RFP or by upping the PPM purchase amount. "It's too soon to say," he said.--Mark Ohrenschall

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Taxing Situation

Idaho Governor Vetoes Proposed
State Tax Credits for Renewables

Proposed state income tax credits for renewable energy gained vast support in the 2004 Idaho legislative session, but were vetoed by Gov. Dirk Kempthorne on fiscal grounds.

These tax credits were considered a way to promote renewables in the Gem State, and a disappointed Idaho legislative energy leader told Con.WEB he and others would work with the governor on potential renewables legislation for 2005. Rep. George Eskridge also said mandatory state renewables standards have little support among his legislative colleagues.

House Bill 761 would have allowed an income tax credit of 0.5 cents for every kilowatt-hour generated by new qualifying renewables. House Bill 760 offered a 3 percent additional income tax credit for renewables investments, and more credits for facilities located in economically troubled counties. Both bills were passed by overwhelming majorities in the Idaho House of Representatives and Senate.

But Kempthorne vetoed both measures April 2, citing potential lost state revenues of nearly $4 million in fiscal year 2005. "With the challenges the State will have in funding basic public services over the course of the next two years, and despite the laudable purpose intended to be served by these separate pieces of legislation, we simply cannot afford this additional incentive at the current time," the Republican governor said in his veto message.

Kempthorne did sign bills clarifying the availability of energy savings performance contracting for public agencies and expanding protections for groundwater from geothermal development.

A proposed sales tax exemption for renewables equipment and supplies was introduced late in the legislative session, but expired without any votes.

Proposed Renewables Tax Credits

The tax credit proposals were crafted over the past year by the Legislature's Energy Interim Committee and constituent groups, Eskridge said..

"Our philosophy was, given the nature of the cost of renewable resources at this point, [it's] difficult for them to be competitive," he told Con.WEB. "In the absence of some kind of positive action by the state, there's a concern we wouldn't get any significant development of renewable energy to provide a diversity of energy supply and a stabilization of price. Given we're going from hydro to natural gas-fired generation in some cases, relying on the market in other cases, it leads to instability in supply and price."

The proposed tax credits were intended for all renewables, although Eskridge noted particular interest in wind power and anaerobic digesters at dairy farms.

Idaho has no large-scale wind, geothermal or solar installations, although a number of renewables ventures are in developmental stages. Idaho does host about 120 megawatts of installed biomass capacity, according to "Renewable Energy Atlas of the West."

HB 761 proposed a 0.5 cents/KWh income tax credit for power generated by wind, solar, geothermal, biomass, waste, pumped storage, low-impact hydro in a canal or reservoir (up to 50 MW capacity), cogeneration or any combination of those. Such facilities would have had to be built between Jan. 1 of this year and Dec. 31, 2009. These credits were to be capped at 50 percent of the recipient's tax liability. Credits also were deemed transferable, by a House amendment.

A qualifying renewable facility generating 120 MW annually at a 30 percent load factor would have been eligible for about a $788,000 tax credit the first year, rising exponentially through the sixth and final year, according to a fiscal impact note.

It passed the House 63-6 and the Senate 32-0; the House agreed with Senate amendments 61-0.

HB 760 offered a 3 percent income tax credit for investments in qualifying renewables (defined similarly to HB 761, though without cogeneration), beyond the 3 percent investment tax credit already available. Additional tax credits would have been available for facilities in counties with high unemployment or low per-capita personal income. It would have covered tax years 2004 through 2009, with provisions for transferability and a 50-percent maximum of the beneficiaries' tax liability.

A fiscal impact note estimated a maximum statewide tax credit the first year of $3.1 million.

This legislation sailed through the House 65-2 and the Senate 32-0; the House unanimously concurred with Senate amendments.

Kempthorne, however, took a fiscally conservative position. "While the State may encourage this type of investment in and use of alternative energy, the present question is whether we can afford these additional incentives at this time," he wrote. With various state and federal supports for renewables, "I believe these incentives presently encourage development of this type of power generating capacity."

Eskridge expressed disappointment and surprise at Kempthorne's vetoes. "We had no indication that it was coming," he said. He and other energy committee members plan to discuss the issue in the coming months, "seeing if we can't meet the governor's concerns and come out with another bill next year I would hope would be somewhat similar."

He acknowledged Kempthorne's point about federal incentives, although the 1.8 cents/KWh wind energy production tax credit has expired and has not been renewed. "We don't want to finance what the federal government wants to do," he said. One possibility is to jettison any state production incentive if the federal PTC returns.

Asked about other ways the state might advance renewables, Eskridge said, "Our energy committee is not interested, at this point at least, in a mandatory resource portfolio. Given our economic situation, we don't want to go too far providing incentives. We want to see a partnership between the developers and the state's economic interest and the interest of the energy user."

Uncertain Impact on Idaho Renewables

The effect of the tax credit bills' demise on Idaho renewables development is uncertain, Eskridge indicated.

One potential renewables project in Idaho is an anaerobic digester pilot plant, fueled by cow manure. "These are being used successfully in other parts of the country, and we thought why not try something here," said Mike Field, state director for U.S. Department of Agriculture Rural Development.

Plans focus on the the Magic Valley around Twin Falls, which Field said has more than 200,000 dairy cows--and an odor problem digesters could address. This biomass option also could boost rural economic development, Field said.

This is a joint effort among government agencies, state and federal elected officials, and agricultural interests, Field said. They have secured a $450,000 matching grant through the Farm Bill's energy provisions, and officials are pursuing other federal funding, for a farm-based digester plant. Another opportunity involves a central digester facility, for which a feasibility study is upcoming.

"We're hoping to get a pilot actually going so we can see how it actually works in Idaho," he said.

Asked about the demise of the renewables tax credit bills, Field said, "I don't think it'll necessarily affect [the digester project] for this year, but it could affect it in the future if folks want to do it in a bigger way." Grant money should be sufficient for a farm-based digester pilot, he said.

Another prospective renewable energy venture, a 100-MW-capacity to 200-MW-capacity wind farm planned for Bingham and Bonneville counties in Eastern Idaho, would gain more from a sales tax exemption on renewables equipment than income tax credits, according to Rich Rayhill, vice president of developer Ridgehill Energy. A sales tax exemption measure was introduced in the Idaho House March 9, but went nowhere. Eskridge called it "dead on arrival," and said most energy committee members had balked at the idea as "more than what we needed to do."

Rayhill called a sales tax exemption vital for his company.

"The capital costs [for a wind project] are incurred almost 100 percent up-front," Rayhill said. "Bringing in all this equipment and machinery and you have to pay a 6 percent sales tax--that's a lot of money." Washington, Nevada, Utah and Wyoming have enacted renewables equipment sales tax exemptions (Nevada exempts local sales taxes and levies a 2 percent state sales tax), while Oregon and Montana have no sales taxes, he said. "We just wanted to level out the playing field" in Idaho.

Rayhill said Ridgeline is competing against proposals from those other states in PacifiCorp's renewables solicitation. "We have to somehow find a way to absorb a 6 percent hit on top of it, which they don't. It's really a significant issue for us."

Other Bills

Among other bills receiving legislative and gubernatorial approval, SB 1222 states that cities, counties, school districts and any other political subdivision within Idaho can use energy savings performance contracting. This clarifies legislation passed three years ago enabling ESPCs for Idaho public entities, according to Eskridge; some local jurisdictions weren't sure they were eligible.

Also approved was SB 1296, which prohibits state permitting for a geothermal resource well or injection well if such a well would decrease groundwater availability for other uses, unless the geothermal developer has a groundwater appropriation permit.--Mark Ohrenschall

More Information:

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Biomass Opportunity

Washington Demonstration Project to Test
Straw Gasification for Power Production

Grass seed farmers in the Northwest produce straw. Lots of straw. They have to get rid of it somehow, but burning it--at least in Washington--is no longer allowed for air quality reasons. So what to do?

Enter gasification.

A Spokane County, WA grass seed farm will host a federally funded demonstration project that will turn straw into a combustible gas, which will be fed into a 375-kilowatt diesel generator donated by Bonneville Power Administration. The project's purpose, according to BPA, is to adapt the technology to a farm-scale operation.

"This technology has the potential to provide long-lasting benefits to Eastern Washington," U.S Sen. Patty Murray said after the funding was obtained. "Eventually, our farmers could get paid for their farm waste and our region could have a renewable source of energy."

Scheduled to start operating by fall 2004, the straw gasification venture will examine a host of technical, operational and economic issues.

Gasification Technology

Gasification technology has been around for decades, said Larry Albin, a former Washington state director of the U.S. Department of Agriculture Farm Service Agency and head of Farm Power, which will manage the demonstration project.

Essentially, carbon-based materials are "cooked" at around 1,000 degrees in a low-oxygen environment, producing a synthetic gas consisting mainly of hydrogen and carbon monoxide.

The Spokane County project was funded through a $750,000 federal appropriation secured in November 2003 by Murray. This grant will keep the project going for about one year, Albin said. He is seeking a three-year, $900,000 grant from the federal Energy and Agriculture departments, and hopes to find buyers for the project's power from utility green power programs.

Gasifier
(Photo courtesy of Tom Osborn)

Project partners include Inland Power and Light, BPA, the U.S. Department of Agriculture's Agricultural Research Service, Pacific Northwest National Laboratory and Green Power, Inc., of Prosser, Wash. Larry Gady, a grass seed grower near the Spokane County town of Rockford, will host the project. Green Power, headed by Fred Beierle, will supply the gasification technology, according to Tom Osborn, a mechanical engineer in BPA's Power Business Line.

Beierle has spent more than two decades working on turning wood waste and crop residue into useful energy. Beierle's 100-kilowatt pilot-scale system in Benton County can gasify organic wastes, and also produces activated carbon that he sells to the Los Angeles Department of Water and Power for water filtration, according to PNNL, which has provided Beierle with technical assistance.

Albin said it should be able to generate power at an estimated cost of 4 cents per kilowatt-hour; a more specific figure will be determined with the operating project. He predicted the plant will generate 700 KWh of electricity--enough to run a 20-watt compact fluorescent lamp for 35 hours--for each ton of grass seed straw used.

Inland Power will buy the power at its avoided cost, approximately 2.5 cents/KWh to 3 cents/KWh, said the utility's chief engineer, Richard Damiano. Inland will provide the grid connection at no charge, he added.

Inland, which serves 33,000 customers in Eastern Washington and Northern Idaho, is participating in the project because "we're always looking for ways to help farmers stay economically viable. We want to help farmers lower their costs and create new revenue streams," Damiano said.

Sowing Seeds

Albin said the seeds for the demonstration project were planted in the late 1990s, shortly after the Washington Department of Ecology imposed the ban on burning grass seed straw and growers were seeking alternative disposal methods. At the time, the Farm Service Agency was encouraged to look for joint projects with other federal agencies.

"I got to know the scientists at (PNNL) and two years ago, they called and said they had a gasifier project that might solve the straw problem," Albin said.

In early 2003, a delegation representing BPA, Inland Power and Washington congressional members Sen. Maria Cantwell and Rep. George Nethercutt checked out Beierle's pilot-scale unit. "We saw that it had potential, with modifications, to make it work for ag waste," Albin said.

The most economical way to test the concept, Albin concluded, was to install a gasifier on a farm where grass straw is readily available, avoiding the costs of transporting low-value residues to a centrally located unit.

"My vision is to do this on a real farm, where interested people can see the technology as it's developed," he said. Gady's farm was selected because "he has a good track record" with the Agricultural Research Service as a grower willing to try out innovative ideas.

Technical, Operational, Economic Issues

One goal of the demonstration project is to answer technical questions involving biomass gasification. PNNL will carry out research, Osborn said.

One of the potential problems with using grass seed straw, for example, is that it contains silica. In a 1,000-degree gasifier, the silica would turn into a glass-like substance that would clog the system, Albin explained.

Operational issues need to be resolved as well, said Damiano. "Can a farmer run this as a stand-alone piece of equipment, with minimal assistance? How much straw and what types will achieve optimum efficiency? Straws differ depending on soil types."

Other research questions include processing, storing and delivering raw materials, economic analysis and markets for byproducts.

Sen. Patty Murray and Fred Beierle
(Photo courtesy of Tom Osborn)

Byproducts will boost the plant's economics, according to technical estimates. In addition to 700 KWh of power, one ton of grass seed straw also could produce 60 gallons of liquid motor fuel (worth $60) and 200 pounds of activated carbon (worth $50), David Granatstein of Washington State University's Center for Sustaining Agriculture and Natural Resources, said at a January energy forum in Olympia.

Granatstein estimated all the grass seed and wheat straw produced in the Northwest, assuming one ton per acre, could yield 342 average megawatts of energy.

Albin estimated Washington, Oregon, and Idaho farms produce 6 million tons of grass seed and wheat straw each year. "I see value beyond the energy generation," Albin said. "If we're able to carry this out, we can expand markets for cereal grains, tree fruits and wood products."

The largest biomass gasification project operating in the U.S. is the 50-MW McNeil plant in Burlington, VT, a demonstration project that gasifies wood at a temperature exceeding 1,500 degrees.

"The result is a clean-burning gas with a medium heat content (500 British thermal units per cubic foot) that can fuel an unmodified gas turbine or other clean, efficient electrical generating devices such as fuel cells," explained a U.S. DOE technology brief. Using biomass to fuel combined-cycle systems would nearly double the efficiency of conventional biomass generation, which relies on combustion, it said.

Nationwide, DOE estimates 39 million tons of unused agricultural biomass is produced each year, enough to generate an estimated 7,500 MW through gasification.

More work is needed to validate technologies that could lead to widespread distributed generation using biomass gasification and other renewable technologies, Osborn said.

"Distributed generation sounds good on paper. When you try to put the pieces together, it becomes laborious," he said. "The more experience we and utilities obtain in making projects happen, the better prepared we will be when gas is $6 per gallon. If we can grow some of our own energy from wind, sun, biomass and (ocean) waves, we'll be better off. We need to work on this aggressively."--Jim DiPeso

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POLICY

Clean Energy Movement

Seattle Forum Mulls New Apollo Project
for Energy Efficiency, Renewables, Smart Growth

Organizers of a growing national movement to promote an aggressive 10-year, $300 billion federal investment plan for energy efficiency, renewable energy, smart urban growth and a manufacturing sector revitalized by those industries brought their message to the Northwest earlier this month.

They swept through Seattle April 13 for a day-long forum focused on the importance and feasibility of launching such a clean energy revolution.

The new Apollo Project seeks to supplant the energy bill now stalled in Congress with a large-scale, comprehensive federal commitment, on the scale of $30 billion a year for 10 years, to achieve a more diversified, environmentally benign and efficient energy infrastructure.

This initiative has the backing of major labor unions and environmental groups as well as some national lawmakers, including Washington Sen. Maria Cantwell and Rep. Jay Inslee, who hosted the forum.

"We are suggesting Washington state is the perfect place for this kind of creativity to spread across the country," said Inslee. "It's the perfect place because we have a tremendous pool of the talent source you need for energy ... Now we need to turn the intellectual capital on to energy technology."

New Apollo Project

The Apollo Alliance outlines on its Web site a "Ten-Point Plan for Good Jobs and Energy Independence." It includes investments in more energy-efficient factories and high performance green buildings, greater use of efficient appliances and expanded renewables, along with transportation, electric infrastructure, urban revitalization and hydrogen initiatives.

The Perryman Group, a Texas-based consultancy, reports that the cost of the new Apollo Project would be repaid through $307 billion in additional federal tax revenues from increased earnings during the 10-year implementation period. The group also found the investment program would create more than 3.3 million jobs and stimulate $1.4 trillion in new gross domestic product.

Noting that 95 percent of new power plants now under construction or planned in the Western United States are natural gas-fired, panelist Daniel Kammen, a professor at the University of California-Berkeley and director of the school's Renewable and Appropriate Energy Laboratory, said: "You can bet your bottom dollar that if we don't adopt strategies like the New Apollo Energy Project we will be back here five years from now, with the skies more clouded, with more global warming, wishing back to the good old days when we were only dependent on oil."

At the event Kammen released a new report that said transitioning from a fossil fuel-based economy to a renewably powered one would spur economic growth and provide considerable employment. Comparing 13 recent independent reports on the potential of job growth through clean energy investments of various degrees--including the Perryman report--Kammen said that all point to between slightly under 1 million new jobs to slightly more than 3 million new jobs over the next 14 years.

"Putting Renewables to Work: How Many Jobs Can the Clean Energy Industry Generate?" found that certain sectors of the economy would be net losers, but policy interventions could help minimize the impact of a transition to a portfolio with more renewable and efficient energy. The report also suggests that generating local employment through locally distributed and sustainable energy technologies is an important national security measure.

However, some doubts surfaced in a lively question-and-answer session. Said one attendee: "I think the project ... has a bit of a credibility problem. You've got politicians, unions and environmentalists all holding hands. And they've been sitting on their hands for decades at a time while our American industry has been decimated and outsourced." It was further suggested that an exclusive focus on renewable power would ignore important improvements in oil, gas and nuclear technology.

"There are those folks who argue we should not do research into clean coal technology because coal is sort of inherently evil," said Inslee, adding, however, he believes it is right to research clean coal technology. "There are varieties of ways that have been postulated to [sequester carbon]. Storing it back into the caverns from which it came ... deep sea isolation ... Those are very challenging. I think we need to have a 'no silver bullet' philosophy to this problem. I think we have to break out of our blinders on technology."

Addressing job concerns, Cantwell responded: "If we don't provide leadership, jobs will be outsourced."

A Northwest Energy Entrepreneurs' Perspective

Among the energy entrepreneurs exhibiting at the forum was Lewis Fraas, a veteran solar energy engineer who founded his own solar cell research company--JX Crystals of Issaquah, WA--in 1993.

Fraas believes high efficiency solar cells can become a major source of energy over the next decade; 35-percent efficient solar cells could replace some 17 percent of installed electric generating capacity currently occupied by oil and gas by 2020, or about 140 gigawatts.

The problem, according to Fraas' new book, "Path to Affordable Solar Electric Power & the 35% Efficient Solar Cell," is that while there are no technological showstoppers to making solar electric power cost-effective, there is a huge problem with investment and commitment.

Boosting solar's contribution to 100 GW would require an investment of at least $100 billion, he estimated. In 2003, the federal energy budget for solar cells was $76 million, divvied up between universities, government labs and the U.S. solar industry.

"Who is going to commercialize solar energy?" asks Fraas. "It is probably not the American oil companies, given that they can obtain low-cost oil from the Middle East secured by the American military. It is probably not the defense industry, given that their charter is to develop weapon systems. It is probably not the electric utilities, as they are very conservative and it may not be in their interest for the homeowner to generate his own power."

As the president of JX Crystals, Fraas hoped to find funding to bring a 35-percent efficient solar cell to the terrestrial market. But there has been no interest in peaceful applications here on Earth, he said. Ironically, the technology is being used on the two Rovers on Mars, to power spy satellites guiding military operations in Iraq and in smart munitions "to liberate oil from the Middle East for the free world," says Fraas.--Garrett Hering

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