CWEB.102/June.30.2004
And Puget is examining these wind ventures not for conventional power purchases, but as potential new resource acquisitions by the investor-owned utility.
The three wind proposals--two in Kittitas County and a third in Columbia County--are among seven resource proposals selected by Washington's largest utility for further evaluation and negotiations. This shortlist evolved from a November wind solicitation and an all-source request for proposals issued in February, which combined attracted nearly 50 bids.
"With the very large increase in fossil fuel costs for oil and gas, most renewable resources are becoming more competitive and more attractive," PSE senior vice president of energy resources Eric Markell told Con.WEB. "That's something we have our eye on."
Technology advances and stable prices are major selling points for wind energy generally, Markell said, while specific project viability hinges largely on sufficient wind resource and transmission availability.
He acknowledged risk and uncertainties for Puget's chosen wind ventures, specifically with permitting and the expired federal wind energy production tax credit.
Also under consideration for Puget are a 240-MW hydropower purchase, an 85-MW purchase from an existing coal-fired plant, a 200-MW power purchase from an unidentified supplier and acquisition of a proposed 4.5-MW heat-recovery venture.
Conspicuously absent from this selected group are any natural gas-fired power proposals--several were submitted, but were declined for high cost, price volatility and credit requirement reasons, according to Puget.
Puget hopes to gain 355 average megawatts from these seven prospects; the three wind proposals could furnish roughly 150 aMW. Markell said the IOU hopes to complete one or more letters of intent by summer's end.
These selections "appear to offer the lowest cost and lowest acceptable risk--to PSE and its customers--for obtaining the needed electric supply," a Puget news release said. All seven are either existing plants or potentially operational by 2006, as Puget moves to expand and diversify its resource portfolio amid growing customer loads, expiring power-purchase contracts and reduced hydropower and natural gas-fired generation.
Looking for Resources
Puget's 2003 least-cost plan identified a need for an additional 436 aMW of electric resources this year, rising to more than 1,000 aMW by 2011 and nearly 2,500 aMW by 2023.
Meanwhile, Puget has set a longer-term goal for renewables to meet 10 percent of its electricity supply by 2013, which would equal an estimated 270 aMW of energy, or some 900 MW of wind capacity.
The three wind proposals on the shortlist emerged through the wind and all-source solicitations. "The wind guys were encouraged to submit in both proposals. Virtually all of them did," said Markell.
Out of nearly 50 proposals overall, Puget received 14 wind bids, totaling more than 1,800 MW of capacity. All but one of the 14 proposals named Washington or Oregon locations; the other came from Vancouver Island in British Columbia, according to Puget spokeswoman Dorothy Bracken.
On Puget's shortlist:
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The proposed Wild Horse Wind Power Project would be located in the distant vicinity shown here. (Photo by Mark Ohrenschall) |
Wind proposers were allowed to offer a power purchase and/or utility ownership, and most opted for the latter, said Markell. "We're in the process of evaluating which is the most economic for our customers. Will we consider ownership? The answer is yes." Financing for capital-intensive wind projects--they typically cost in the range of $1 million per installed megawatt--is part of Puget's economic calculation.
If the utility does take an ownership role, he said, "We would most likely enter into an operating agreement with either the developer or another qualified operator."
Wind project viability starts with an adequate wind resource, Markell said, which in turn depends on documented information. "Some [wind proposals] were much more advanced than others in the amount and quality of data that's been collected," said Markell, adding that an independent wind engineering firm is scrutinizing these records for PSE.
The federal PTC, worth 1.8 cents per kilowatt-hour generated as of its December expiration, is "absolutely" a necessity for wind, Markell said. Puget officials are among those awaiting congressional and presidential action on an extension.
Transmission cost and availability, and permitting, are other vital elements, Markell said. The two Kittitas County proposals lie very close to PSE high-voltage lines. The Columbia County venture has farther interconnections, "but they have a good [wind] resource and favorable conditions for obtaining a permit."
None of the three have completed permits, Markell noted, which poses a "development risk," along with the PTC's uncertain future.
Still, the focus on wind marks a change for PSE, believes senior policy associate Danielle Dixon of the Northwest Energy Coalition. "I think the formalization of the [least-cost plan] this last time around showed a shift in the company's thinking on renewables, particularly wind and its potential to be competitively priced," she said.
Evaluations, Negotiations
Puget is further evaluating the seven proposals while also negotiating with the proposers, Markell said in early June. "We are having or intending to have commercial discussions and complete additional due diligence on all of them." Even since the late May shortlist announcement, "Market conditions have changed. Some outlooks and perspectives of proposers have changed. It's a very fluid and dynamic situation." The utility hopes to conclude letters of intent for one or more ventures before the fall, he said.
Other proposals under further Puget review are a 240-MW power purchase agreement with Powerex for seasonal, peak hydropower supplies; a deal with Arizona Public Service Co. for buying 85 MW from an existing Washington coal-fired plant (Centralia is the lone utility-scale coal-fired generating station in the Evergreen State); a 200-MW power purchase from an unidentified but existing Western generating facility; and purchase of a proposed 4.5-MW heat-recovery power venture at a Northwest Pipeline compressor station in Washington.
Natural-gas fired proposals, however, didn't make the cut. "While natural gas is an efficient, clean-burning fuel for power generation, the currently high cost of natural gas, its price volatility, and the credit requirements to buy and hedge natural gas made such resources less attractive at this time," Markell said in the news release.
Also missing were new coal-fired plants, which, "while economically attractive, face significant siting, permitting, and transmission challenges--with no obvious near-term solutions," said PSE's release. Markell told Con.WEB the utility is "very carefully monitoring" potential new coal developments, but these are longer-range resource prospects. "It's not possible to permit and site, construct and put into service a new coal plant much before the end of the decade," he said.
He said Puget also is looking at other renewable resources, but those generally aren't as far along toward development as the wind proposals.
The utility's next least-cost plan is due May 2005, and that could lead Puget to seek further new resources, perhaps by late 2005, Markell said.
The 2003 least-cost plan remains the utility's operative planning document, according to Bracken, but some assumptions have been updated since last year. That includes forecasted higher natural gas prices, which make gas-fired resources less attractive and renewables, with stable fuel costs, more appealing.--Mark Ohrenschall (Steve Ernst also contributed to this article)
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Negotiations have ended between NorthWestern Energy and a wind developer over a power purchase agreement from a proposed 50-megawatt-capacity wind farm in south-central Montana.
A NorthWestern official said the investor-owned utility recently nixed the potential deal after developer Navitas Energy tried to increase the price of the proposed wind power without sufficient explanation.
"They wished to raise the price of energy that they had originally bid to us" in the utility's 2002 request for wind proposals, NorthWestern spokeswoman Claudia Rapkoch told Con.WEB. And, she said, "We did not feel we received adequate written justification," which it needed for regulatory purposes.
Rapkoch said she didn't have information on Navitas' bid pricing, "but obviously it was something we needed to make sure was carefully documented." The utility made "several attempts" to obtain such a written rationale, she said.
Navitas development director Chris Moore said his firm's bid lay dormant for more than a year, through NorthWestern's bankruptcy filing. Consequently, company officials told NorthWestern they wanted to make changes to the bid, and "one of them would have to be price," he said.
This marks yet another setback in NorthWestern's pursuit of wind power, dating to an ill-fated 2001 solicitation for energy from 150 MW of wind capacity.
Nevertheless, both Rapkoch and Moore expressed continuing interest in wind power for Montana, which, despite its abundant breezes, hosts no large-scale wind-energy projects. (A 9-MW-capacity wind venture near Great Falls is planned; see Con.WEB, May 28, 2004.)
The IOU remains in negotiations with Windpark Solutions America for energy from 75 MW of wind capacity planned in central Montana, Rapkoch confirmed. NorthWestern also plans to issue another wind solicitation later this year, she said.
Navitas, said Moore, is looking for a power buyer or buyers for energy from its proposed 50-MW wind project east of Butte.
Long and Windy Road
Navitas and Windpark Solutions were selected from NorthWestern's December 2002 request for wind proposals. That followed a 2001 solicitation ultimately abandoned after the PSC questioned the utility's selection of Montana Wind Harness to supply wind energy from 150 MW of proposed capacity, at an announced price of 3.1 cents per kilowatt-hour over 20 years.
In January of this year, Montana's largest utility released a resource acquisition plan for default supply customers that included 150 MW of wind in its preferred portfolio. Rapkoch told Con.WEB in mid-February that discussions between NorthWestern and the chosen wind developers were ongoing, and agreements were anticipated soon.
However, NorthWestern stopped discussions with Navitas in April, according to Rapkoch.
One possible cause for the recent breakdown may have been additional costs associated with doing business with a company in bankruptcy, industry analysts speculated.
Navitas president Greg Jaunich told Con.WEB in February his company had reservations about NorthWestern's bankruptcy and its ability to guarantee payments for wind energy. Moore, in a mid-June interview, also said the bankruptcy posed a problem for Navitas.
NorthWestern Energy's parent company, NorthWestern Corp. is expected to emerge from Chapter 11 bankruptcy sometime in the fourth quarter of this year. A group of Montana cities has offered to buy the company's assets for $1.2 billion.
Despite the collapse of negotiations, "We still think there's a good project there at Whitehall," Moore said. Navitas is seeking a power purchaser or purchasers and conducting some project development work, but, "We haven't moved it forward to any serious engineering stage," pending "a little bit more definitive answer" on the market for the generated power.
Jaunich told the Billings Gazette that Navitas is still very interested in completing a wind energy project in the state. "There are many places in Montana that have great wind resources," Jaunich told the newspaper. But he said doing business in Montana is very difficult. "It's not like doing business in the East," he said.
Moore said he spoke to a state energy policy panel earlier this year, and listed four primary barriers to Montana wind development, centering on contracting and credit issues. He suggested the state offer wind power incentives for utilities and developers, such as a renewables portfolio standard or, for utilities, financial benefits such as a higher allowed rate of return.
Meanwhile, NorthWestern is still negotiating with Windpark Solutions, which plans a 180-MW-capacity wind farm in Wheatland County, between Judith Gap and Harlowton. Rapkoch had no information on the status or timetable of these talks.
Montana Wind
The potential for wind energy in Montana is huge; according to Renewable Energy Atlas of the West, Montana could generate 116,000 aMW of wind energy annually at suitable sites with moderate or better wind resources.
However, development of wind energy in the windy state has fallen victim to circumstances.
Ann Gravatt, senior policy associate at Renewable Northwest Project, told Con.WEB that the absence of a commercial-scale wind project in Montana isn't because of lack of effort on NorthWestern's part. But the utility's bankruptcy, the expired federal wind energy production tax credit and guidelines governing resource acquisition in the state have all conspired against wind development
"Montana now has some very strong procurement guidelines in place," she said. "And the PSC and the utility are very interested in seeing wind power go forward, so we remain very hopeful that the Judith Gap project will be done."
But the future of the state's wind energy industry may be tied to development of natural gas-fired generation in the state.
"We intended to add wind to our portfolio, but the issue at the moment is that we need a better source of dispatchable generation before we can really add wind of any size," Rapkoch said.
The company wants to purchase 54 MW of peaking power from the proposed 54-MW Basin Creek gas-fired plant,, but the PSC has yet to give its approval.
Rapkoch said the company also plans to release another wind RFP later this year. "It's a little chicken-or-the-egg kind of thing," she said. "Once we get some good dispatchable generation on, we see a good, long-term future for wind."--Mark Ohrenschall and Steve Ernst
A small Washington utility is offering a novel twist to rural electrification: line extensions or solar energy.
Ferry County PUD is launching a program in which qualifying off-grid households within its far-flung and sparsely populated territory can be served with distribution lines or solar electric installations.
The PUD will make the final choice on wires or solar, based on customer load, distance from existing lines, terrain, solar resource and local development plans.
For either option, federal grant dollars will cover installation costs; participants will repay the balance monthly, with zero interest, over 20 years (solar) or 30 years (line extension), in addition to their electric bills. The utility will maintain and own these systems.
Ferry County PUD serves about 3,100 customers in rugged northeastern Washington, but an estimated 175 to 200 households within its boundaries are beyond the utility's distribution system. Most of these people get power from gasoline-fueled generators; some have solar PV already.
"I've lived off the grid for 30 years, and part of the reason why I ran for commissioner is to serve the people, including me," PUD commissioner Gregg Caudell told Con.WEB. "Solar in lieu of line extensions probably works. We're going to find out."
As of late June, the PUD had received more than 70 requests from potential participants, according to conservation director John Friederichs. "At this point we've got 35 to 40 jobs that are probably going to go," he said--about two-thirds for line extensions and the remainder for solar.
The PUD's program approach is, if not unprecedented, at least extremely unusual for a utility, according to sources.
Mike Nelson, photovoltaic project manager for Washington State University's Energy Program, thinks the Ferry County initiative could be replicable for other utilities. "If it's a model that makes sense, it will succeed," said Nelson.
Thinking Beyond Wires
Caudell helped instigate the idea, said Friederichs. The commissioner alerted him to the High Energy Cost Grant Program, from the U.S. Department of Agriculture's Rural Utilities Service.
Another germinating influence was the plight of a mother and daughter, living three miles from the nearest line and getting household electricity from car-charged tractor batteries, who need power for health reasons but couldn't finance a utility connection. The PUD charges $6.50 per foot for line extensions.
Friederichs pursued the RUS grant funding; the PUD sought nearly $900,000. This money is available for situations in which electricity costs 23 cents or more per kilowatt-hour (fully burdened and amortized). The mother-daughter with tractor batteries certainly qualified, Friederichs said. The PUD documented local costs of 23 cents/KWh to 30 cents/KWh for gas generators, and 42 cents/KWh for solar PV.
Also eligible are households for which new electrical lines would cost more than 23 cents/KWh, which Friederichs figured would apply at typical remote sites more than 400 yards removed from the nearest PUD wires.
Solar or Line Extension?
The question of solar or line extension for qualifying off-gridders is ultimately answerable by the PUD, "based upon the most prudent use of the available funds and the impact of the installation on future system growth," according to a program implementation manual.
"The primary consideration in choosing which system, whether solar PV or conventional line extension, will be providing for the customer's anticipated electrical load," it said.
Solar will be ruled out if a customer's daily load exceeds 7.5 KWh. Other disqualifying features: the site has less than 80 percent of maximum available solar exposure on Dec. 21; the property lacks a permanent residence; or the PUD plans a traditional distribution system in the vicinity.
"The PV option would most commonly be used for qualifying consumers whose distance from the Districts existing distribution system make the cost of a conventional line extension prohibitive, or where they are located in an area where terrain would make a conventional line extension impractical," the manual said. The PUD charges $6.50 per linear foot for line extensions, according to conservation/renewables technician Bernie Odegard.
PV systems will be available in daily power production sizes of 2.5 KWh, 5 KWh or 7.5 KWh. Their respective costs will be $10,700, $19,600 and $27,500, said Odegard. SolarWind Energy Systems from Okanogan will supply the solar equipment; the company was chosen through a bidding process.
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Solar electric systems installed under this program won't be sufficient for heating, Friederichs noted. "It will give them lights, maybe fridges, small appliances, television, radio. It'll provide basically anything that will not require to make heat out of electricity."
With either the solar or line extension option, participating households will have financial responsibilities.
RUS funds will pay for installation costs, but customers are required to furnish 10 percent of this expense, up to $1,200.
Payments on the balance will be spread out on the PUD's facilities charge. Terms are 30 years for line extensions, 20 years for solar; for both, minimum monthly expense is $45. Participants also will get conventional electric bills, with a basic charge of $15 and an energy charge of 6.1 cents/KWh for residential/seasonal customers. The PUD estimates an average total monthly bill of $65 for solar participants, Odegard said.
The facilities charge payments will flow back to the program, effectively creating a revolving loan fund without actual lending, according to Friederichs.
Asked about initial reactions to this initiative, he cited widespread interest from around the state, and from officials at the National Renewable Energy Laboratory, who thought this might be replicable elsewhere.
Some off-gridders, meanwhile, have reacted quizzically when told the PUD retains ownership of the PV system even after the payments end. "It's part of our distribution system," Friederichs said, which includes maintenance.
With this venture, Ferry County PUD is meeting its obligation-to-serve requirement in a "legitimate" and "non-traditional way," said WSU's Nelson.
Off-grid applications remain the fastest-growing market in Washington, according to Nelson. A 2002 statewide survey found that off-grid systems accounted for about two-thirds of Washington's 767 KW of installed solar electric capacity.
Beyond a half-mile from the nearest line, solar PV is "fully competitive" with line extension costs, Nelson said.--Mark Ohrenschall
An electric rate ruling with potentially significant demand-side implications for Idaho Power customers, especially during the summer peak-load period, was recently handed down by the Idaho Public Utilities Commission.
The IPUC, in a May 25 order allowing an average 5.2 percent rate increase for Idaho's largest utility, also endorsed inverted block summer rates for residential and small commercial customers, phased-in time-of-use rates for industrial customers, and lower service charge increases than sought by Idaho Power.
"I think it's a continuation of a concern on the part of the commissioners to address demand response," said IPUC Utilities Division administrator Randy Lobb.
For Idaho Power, time-of-use and seasonal rates are part of a coordinated effort to limit energy consumption in summer, when power costs are higher, said regulatory affairs vice president Ric Gale. The utility's upcoming integrated resource plan will likely include peak-reduction programs, he noted.
However, a representative of Idaho Power industrial customers believes TOU rates don't suit this class of customers, most of which are food processors with constant loads.
Idaho regulators also ordered a huge increase in Idaho Power's low-income weatherization funding, from about $225,000 annually to about $1.2 million.
And, in what could be a far-reaching element of these demand-side decisions, the IPUC initiated a proceeding to examine financial disincentives to Idaho Power conservation investments. This will include a look at the link between energy sales and utility revenues
The Natural Resources Defense Council called the IPUC order "a complete victory" toward promoting more conservation by the investor-owned utility and its customers.
Idaho Power has asked for reconsideration of the rate order, but its objections are based on perceived IPUC errors on financial issues unrelated to the demand-side aspects.
Rate Increase
Idaho Power average rates increased 5.2 percent as of June 1, under the IPUC decision. Including an annual power cost adjustment, residential customer rates rose 5.4 percent, small commercial customer rates went up 1.5 percent and large commercial customer rates increased 1.7 percent, while industrial customer rates decreased 5 percent and irrigator rates went down 5.8 percent. These class differences are largely based on costs of service, an IPUC news release said.
The IOU in fall 2003 requested an average 17.7 percent rate increase, to generate $85.6 million in additional annual revenue. Idaho Power, in a news release at the time, said it had not requested a rate increase since 1994 (though it does have a power cost adjustment mechanism) and had since invested more than $850 million in its electric system while adding almost 100,000 new customers.
The IPUC-approved 5.2 percent raise will bring in $25.3 million more annually. Idaho Power's return on equity was set at 10.25 percent, and its overall rate of return at 7.8 percent; the utility had sought at least 11.2 percent and 8.3 percent, respectively.
Demand-Side Elements
The commission instituted summer block rates for residential and small commercial customers, with higher charges for consumption above 300 kilowatt-hours a month in June, July and August.
Idaho Power had proposed a summer rate 25 percent higher than non-summer charges, on the premise that summer peaks force the utility to get power from higher-cost resources. But the utility objected to inverted blocks; a utility official told the IPUC that the blocks "have no cost basis, penalize customer who utilize electric energy for space heating, and provide an artificially low price signal to customers who use less than the second-block threshold amount."
However, the IPUC found those arguments unpersuasive. The 300 KWh first block will still enable "some basic electric usage" at lower rates, such as lighting and home appliances, the ruling said.
"We also believe, contrary to Idaho Power's argument, that it is proper to place emphasis on energy conservation by high-use residential customers because those customers are more likely to have a greater amouint of discretionary use that can be curtailed," the IPUC said.
It set a rate of 5 cents/KWh for the first 300 KWh, and 5.6 cents/KWh above that level, for residential customers. Small commercial rates are 6 cents/KWh for the first block and 6.8 cents/KWh beyond.
For the rest of the year, residential customers pay 5.1 cents/KWh and small commercial customers pay 6 cents/KWh, according to the utility.
Idaho Power also proposed a large increase in the customer charge, now renamed service charge, from $2.51 monthly for residential/small commercial customers to $10 monthly. The utility justified this proposal based on metering, distribution system and service availability investments needed to serve these customer classes.
But other rate case parties opposed the utility's proposal. One counterargument was that a sizable raise in this standard monthly fee would lessen customer motivation for energy conservation.
The IPUC endorsed a 31-percent service charge increase for residential/small commercial customers, to $3.30 per month. It described this as "a reasonable balance between recovering specific customer service costs in a fixed fee while preserving the ability to provide price signals for conservation programs."
Increases in service charges also were adopted for large commercial, industrial and irrigation customers, and in demand and energy charges for large commercial customers at lower levels than requested by Idaho Power.
Industrial Time-of-Use Rates
The commission also approved mandatory time-of-use rates for industrials--the first required TOU rates set by the IPUC.
Idaho Power had proposed this structure with on-peak, mid-peak and off-peak prices for June, July and August, and mid-peak and off-peak rates the rest of the year.
TOU rates encourage customers to shrink peak power use and shift loads to off-peak periods, limiting higher-priced power and making better use of utility power plants, according to staff testimony. "That continues to fit with the desire of the commission to send more appropriate price signals," Lobb said.
However, Industrial Customers of Idaho Power were against obligatory TOU rates. Their impacts on the utility and customers weren't adequately studied, said ICIP attorney Peter Richardson, who called it a "unilateral imposition."
Richardson also thinks this structure won't produce significant energy or capacity savings for Idaho Power, because most of the affected industrial customers are food processors with continuous loads. "They have to run when the product is there ... there's not a lot of wiggle room" to shift consumption, he said.
Nevertheless, the commission opted for compulsory TOU rates for these customers. "The commission believed they were large enough and sophisticated enough to accept that pricing," said Lobb, who noted industrials are also the only class with sufficient metering capabilities (Idaho Power is installing advanced meters in Emmett and McCall homes and businesses as part of a pilot initiative, according to Gale). Seasonal block rates for residential/small commercial customers are "about as far as you can go" on demand response in the absence of metering data, Lobb said.
The IPUC did set a six-month phase-in period before the TOU rates start, during which industrials will get a separate faux bill showing what they would pay under the time-of-use schedule. Commissioners also established a "conservative" differential between peak and off-peak summer prices, less than 20 percent.
Industrial customers also objected to their monthly payment for Idaho Power's energy efficiency rate surcharge, on the grounds that the utility doesn't offer specific energy-saving programs for them.
Commissioners didn't favor any changes to the efficiency surcharge, but did ask Idaho Power, in conjunction with industrial customers, to develop a demand-side management program proposal targeted at that customer class.
Richardson called that "a token," and said industrial customers have long preferred an option to earmark their rates now sent to the utility for conservation programs for efficiency projects in their own facilities. "It's a concept that makes sense, so we're not going to abandon trying to acquire that opportunity," he said.
Low-Income Weatherization Funding, Financial Disincentives Exploration
In addition to rates, the IPUC in its May 25 order addressed two other demand-side issues.
One is a sizable increase in Idaho Power's payments to community action agencies for low-income weatherization assistance, as requested by the Community Action Partnership Association of Idaho and the Northwest Energy Coalition. The IPUC endorsed $1.2 million annually for the next three years starting June 1, up from about $225,000. This amount should fully weatherize 440 homes a year, according to CAPAI.
"The Commission believes that funds devoted to LIWA [low-income weatherization assistance] are a wise investment that will benefit all Idaho Power ratepayers[,] not just those who experience reduced power bills," the IPUC ruled. "Increased LIWA funding can provide significant benefits in terms of lowering uncollectables and creating permanent load reduction. The record reflects that in past years LIWA has run out of funds mid-year."
Idaho Power supports more such funding, Gale said, but the process of determining this increase should have been conducted outside the rate case.
In addition, the IPUC found that "a proceeding to assess financial disincentives inherent in [Idaho Power]-sponsored conservation programs is appropriate and should proceed by informal workshops." The order specifically asked for a look at possible utility revenue changes for abnormal annual energy consumption (high or low), and performance-based DSM incentives.
"The Commission is interested in proposals that could provide Idaho Power the opportunity to share and retain benefits gained from efficiencies, especially where efficiencies are derived from innovation and the use of new technologies," the order said.
NWEC initiated this idea, under the belief that "financial disincentives hinder Idaho Power's investments in cost-effective energy efficiency and clean distributed generation," according to the order.--Mark Ohrenschall
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Somewhere in electricity distribution systems, there is a sweet spot where voltage going into homes or businesses can be regulated to flow at the lowest bandwidth needed for proper equipment functioning, and within levels established by regulatory agencies and standards organizations.
This voltage regulation could also spell substantial energy savings.
A dozen Northwest utilities, in conjunction with the Northwest Energy Efficiency Alliance, are taking part in a search for the right combination of technologies and techniques to maximize the value of their distribution systems by regulating voltage.
One Voltage Reduction Application
Avista Utilities recently commissioned a PCS UtiliData distribution automation technology, called AdaptiVolt, at its Francis and Cedar substation, which promises to purge needless volts at the feeder source without causing low-voltage incidents.
The $380,000 Avista installation is the fifth regional installation of the AdaptiVolt technology. Three Clatskanie PUD substations in Oregon have used the voltage reduction application for more than 18 months, and an installation at an Inland Power & Light substation north of Spokane has operated for more than two years.
On distribution feeders where AdaptiVolt reduces voltage on average from 121.6 volts to 118.8 volts, tests show a reduction in energy use of up to 2.5 percent, and a 3.8 percent reduction in peak load, according to PCS UtiliData president Tom Wilson
"We've also seen a real reduction in reactive power," said Wilson. According to the company, in addition to conservation, the voltage reduction with AdaptiVolt leads to a reduction in reactive power (the magnetizing current needed for inductive equipment), and a reduction in the need for capacitors on the system.
With urban feeders more heavily loaded in an urban setting, the installation at Avista's Francis and Cedar substation differs from the previous four. Wilson said he expects tests will confirm generally better results for energy conservation and demand reduction with such heavily loaded feeders.
PCS UtiliData estimates payback at less than two years for an installation at an investor owned-utility urban substation with six feeders. Such an installation would save 8.5 million kilowatt-hours of electricity a year (nearly 1 average megawatt), or about $299,000 in energy savings, compared to a total installed cost of some $418,000. The company projects about a dozen more installations at substations in the next year.
Distribution Efficiency Initiative
With the installation in Spokane, Avista is the first of 12 regional utilities set to participate in the Alliance's Distribution Efficiency Initiative, a multiyear effort aimed at demonstrating and documenting energy savings for small commercial and residential customers through conservation voltage regulation strategies--both at the substation level and the "point of consumption" level, the latter using the Home Voltage Regulator product from Edmonds, WA-based MicroPlanet.
Alliance industrial/agricultural sectors manager Bob Helm said 500 Home Voltage Regulators are scheduled to be installed at customer sites across the Northwest in the third quarter of this year. MicroPlanet estimates that its units--which attach to residential meters and stabilize voltage going into the home at 114.5 volts--can reduce household energy use by as much as 20 percent. The company also touts its product for improving voltage quality and extending the life of household appliances, light bulbs and electronic equipment.
Testing from all of the installations will help utilities in Idaho, Montana, Oregon and Washington identify whether voltage regulation at the home, the substation, or a combination of both offers the greatest energy savings. After testing, the Alliance will develop design guidelines and other resources to assist regional electric utilities in designing distribution systems with voltage control to achieve energy savings, Helm said.
The venture's overall goal "is to transform the distribution system market, supporting distribution engineers and utility management in adopting DEI strategies and technologies when appropriate to their operations," according to the Alliance Web site.
Utilities participating in the Distribution Efficiency Initiative to date are Avista Utilities, Clark Public Utilities, Clatskanie PUD, Eugene Water & Electric Board, Franklin PUD, Hood River Electric Cooperative, Idaho Falls Power, Idaho Power, PacifiCorp, Puget Sound Energy, Skamania PUD and Snohomish County PUD.--Garrett Hering
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From the Pacific Northwest's cold and poor periphery in western Montana, Jim Morton has been a persistent voice in regional energy policy forums for helping low-income residents with energy conservation, affordable utility rates and bill payment assistance.
Since 1979, Morton has served as executive director of Missoula-based District XI Human Resource Council, which provides low-income services in Missoula, Mineral and Ravalli counties. The Human Resource Council has regularly participated in rate cases and other utility regulatory proceedings before the Montana Public Service Commission. He is also a founding member of the Northwest Energy Coalition.
Morton has been in the thick of numerous issues affecting low-income residents, from yesterday's contentious debates over the Colstrip coal-fired power plants to today's uncertainties over electric utility restructuring.
He sees progress gained over the years in energy conservation. But he also finds some continuing institutional resistance to the demand side, and a too-narrow economic framing of ongoing conservation debates.
Energy Issues
Growing up on the Crow Indian Reservation of southeastern Montana, Morton knew firsthand what it was like to live "with no heat, no running water, no electricity," though he also has fond recollections of the community. "I was blessed in growing up with these folks," he said.
Morton, now 55, was trained as a licensed clinical counselor, and holds bachelor's and master's degrees from the University of Montana.
He has worked with the Human Resource Council since 1970, and was first exposed to regional energy issues in the early 1970s, "when we dealt with people who couldn't pay their utility bills. There was a lot of activism, a lot of social debate, a lot of energy around the issue of why people were poor."
One of the Human Resource Council's first battles was a 1977 intervention with the Montana PSC seeking "lifeline" rates--a basic allotment of electricity to low-income customers at an affordable rate.
"We felt that if large industrial customers received these declining block rates and that was for the good of society, then why not have a similar allowance for the poor, the disabled and the elderly," Morton said.
In the 1970s, the council also implemented residential weatherization programs with funds from the Federal Energy Administration, forerunner of the U.S. Department of Energy.
Morton and the council were in the fray over Montana Power's plan to build four coal-fired generating units at Colstrip. The Colstrip project was caught in a turbulent political environment--anxiety about rising energy prices and future energy supplies, concern that local residents were breathing pollution from power plants built to serve out-of-state customers, and suspicion that consumers were getting hit with the costs of utility overbuilding.
Missoula is 300 miles away from Colstrip, but western Montanans protested the transmission lines delivering Colstrip power westward through their community on its way to metropolitan Puget Sound. "We argued that it didn't make sense to be shipping energy from Colstrip to Seattle given the line losses," Morton recalled.
The Human Resource Council joined a broad coalition of environmentalists, ranchers, tribal and low-income groups fighting Colstrip, which was eventually constructed and now has 2,272 megawatts of capacity in its four units, according to Northwest Power and Conservation Council figures.
One outcome of the Colstrip battle was that the Human Resource Council negotiated with Montana Power to create a Least-Cost Advisory Committee and pay for an expert of the council's choosing to sit on the panel.
Through the committee, the Human Resource Council persuaded the utility and the PSC to adopt a 10-percent rate discount for low-income households participating in the Low Income Home Energy Assistance Program (LIHEAP) and make them automatically eligible for the utility's weatherization program.
In a 2000 interview with the National Center for Appropriate Technology, Morton recalled: "We were able to gain support for the discount from the (Montana Power) management. This was crucial because there were commission staff who held the opinion that a low-income discount was illegal because it favored one customer group over another. We submitted testimony that a low-income discount would decrease terminations and collections and the associated costs; therefore, the discount would be a benefit to all customers."
More recently, Morton's group fought successfully for adoption of a Universal System Benefits Charge--to fund conservation, renewables and low-income initiatives--as part of Montana's 1997 restructuring legislation. In 1999, the PSC ordered that 22 percent of USB funds be spent on low-income programs--1 percent more than the council recommended in its testimony.
Affordable Energy for Low-Income Montanans
Paying for energy has never been easy for many families in Montana, which the federal Bureau of Economic Analysis ranks 44th in the nation in per-capita income. Today, however, Morton has noticed that citizens are less engaged in the political process that leads to decisions affecting their lives.
"In the 1970s, it was easier to get people involved. It was easier to get 300 people to come to a meeting. People seemed to have a heightened sense of civic duty, when Colstrip was stomping power lines through the community," he said.
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| Jim Morton (Courtesy of Jim Morton) |
Morton believes everyday pressures are an obstacle to greater civic involvement. "People are numbed. There is information overload. Montana is a poor state, a very poor state, near the bottom in per-capita income. People are working two jobs. People are so busy trying to survive, they see a news article or a headline, but the importance doesn't sink in," he said.
Despite cynicism about government and large companies, Morton said people are still surprised to find out when their interests in affordable energy have not been met.
"Most Americans trust their public officials, despite the way we denigrate them," he said. "They still feel people are doing the right thing to take care of our energy needs. What you see is anger when people find out that the agencies weren't looking out for them," he said.
The local need for low-income services is high. Each year, he said, the Human Resource Council distributes LIHEAP funds to help 3,500 to 4,000 households pay energy bills. About 15 percent of Montana's low-income population lives in the three-county area served by the District XI Human Resource Council.
Montana receives $10 million to $12 million per year for LIHEAP, for which households with income up to 150 percent of the federal poverty level are eligible.
In fiscal year 2001, the average LIHEAP benefit in Montana was $475 per household, which offset about 38 percent of total household energy bills, according to the Campaign for Home Energy Assistance annual data book. Less than one-fourth of eligible Montana households received assistance, it said.
In addition to bill payment assistance, the Human Resource Council provides weatherization services to 220 to 250 households per year.
And, last year, about 100 households received first-time homebuyers down payment assistance, a zero-interest, $25,000 loan repayable upon sale of the house, Morton said buying a house in Missoula is not easy for people of limited means. "The average house price in Missoula is $165,000. A bare 10,000-square-foot lot will cost you $70,000."
Energy Conservation Progress, Roadblocks
In his 30-plus years of advocating for energy conservation, Morton said progress has been made in both public and institutional attitudes towards energy efficiency and renewable resources.
"When you talk about conservation in housing, that is now routine. Weatherization is an expectation. There is more interest in alternative energy sources. People have an expectation that wind should be harnessed. I got a call recently from a rancher in eastern Montana who wanted to put windmills on his property. He was incredibly well-informed about it," Morton said.
Back in the 1980s, Morton recalled, "We were called socialists" when he and other human services officials asked Bonneville Power Administration to institute programs to help low-income citizens. Today, Morton added, LIHEAP and low-income energy conservation programs enjoy bipartisan support--but he still finds institutional resistance to energy efficiency.
"Even with rising gasoline prices, with natural gas skyrocketing, leaders still signal that they don't think conservation is real," he said. "There aren't as many questions about conservation anymore, but there is still resistance, so they make it into a program, bureaucratic and cumbersome"--for example, with unnecessarily stringent verification standards.
Morton believes the Northwest is approaching conservation from an overly narrow perspective. "We formulate our debates about the question solely with economics. We spend endless amounts of time arguing over measurement, the payback," he said. "I say, throw all that out. We should be good stewards and conserve. It produces jobs, puts people to work supplying the materials. We should just do it, like we did with the Hood River Project. We need to start having that conservation ethic."
Years after the Colstrip and lifeline rate battles, energy remains a tough issue for citizen advocates to master, Morton said. "It's still highly technical and complex, and still an insider's game. Energy has its own jargon, its own twists and turns. You have to be really interested in the economics, physics and engineering, or you'll get blown out of the water," Morton said.
What prevents him from getting burned out is the variety of services offered by the Human Resource Council offers and the one-on-one interactions that make the benefits of energy conservation real for people.
"Our housing programs keep me invested in energy. When you make houses efficient, you help people understand the costs of energy and the impact on their family budgets," he said.
Continuing Service
After a generation of being an advocate and delivering services to people, Morton does not expect to leave the public service arena anytime soon.
He joked that in his later years, he wants to be one of the Northwest Energy Coalition's elderly curmudgeons enjoying the privilege of sitting in the front row at meetings and "interrupting everybody."
"I assume I'll be engaged in something," he said. "That's who I am."--Jim DiPeso
Bonneville Power Administration has reported 57.1 average megawatts of conservation savings for fiscal year 2003, less than 2002 but more than any other year since FY 1996.
Also covered in this month's News Bytes section are numerous items on renewable energy/green power, awards, green building, the federal government and more.
Keeping Score
Bonneville Power Administration reports 57.1 aMW of conservation savings for fiscal year 2003, in the latest edition of its Conservation Resource Energy Data (also known as The RED Book).
This tally is less than the 66.4 aMW BPA recorded for FY 2002, but more reported savings than any other year since FY 1996. The 2002-2003 decline owes almost entirely to BPA taking out residential energy code savings for 2003 onward, "since it is likely that codes would have reached current standards by now," the document stated.
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"The documentation is there that we're continuing to make the progress that we need toward the 220 average megawatts [conservation goal] ... during the [fiscal years 2002-2006] rate period," said BPA energy efficiency vice president Mike Weedall. "We've been making good progress and we just need to make sure that we keep this momentum up ... Despite the financial troubles we've been experiencing, we're staying on track for the [energy-saving] goal."
In 2003, BPA recorded 36.9 aMW of savings from programs in the categories of commercial (13.5 aMW), residential (9.8 aMW), multisector (6.8 aMW), industrial (3.5 aMW) and agricultural (3.3 aMW). BPA also counted 4.2 aMW from commercial energy code savings, and 16 aMW from its share of regional market transformation. These numbers represent first-year savings with some adjustments for measure lives, evaluation findings, line loss credits and fuel choice effects.
With these results, Bonneville's cumulative adjusted conservation savings since FY 1982 amount to nearly 804 aMW. "It'd be hard to go to any other part of the country and find as strong a program result as we've been able to show ... here in the Northwest," said Weedall. "Kudos for everyone involved."
The federal power marketing agency spent $115 million on conservation in FY 2003. "On the cost side, we've been doing better in some areas than others," said Weedall.
Total cumulative conservation costs since 1982 (in nominal dollars) are $2.09 billion. However, BPA cautions against simple math to gauge the cost of acquired savings, because of differences in conservation resource lifetimes and characteristics, and in accounting practices.
For more information on The RED Book, contact BPA's Gene Ferguson, (503) 230-3608, or Roger Maddox, (503) 358-7454.
Renewables/Green Power
Under the new rules, wind turbine noise is considered to be different than noise from natural gas-fired plants, in terms of applications before Oregon's Energy Facility Siting Council. A standard of modeling and measuring noise impacts is included.
Awards
Green Building
Federal
Miscellaneous
BPA also has issued a request for "innovative pilot project proposals" for the Non-Wires Solutions venture. Responses are due by Aug. 19.
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