CWEB.017/May.23.1997
MILESTONES, INNOVATIONS, PRAISE AND CONFLICTS all have their place in this issue of Con.WEB.
First the milestones. New federal energy-efficiency standards for refrigerators will dramatically change the market for this ubiquitous household appliance, come 2001. Our region played a role in this national market transformation. We also report on the milestone first year of the regional market transformation program for compact fluorescent lighting.
Next the innovations. A streamlined contracting method for federal energy-efficiency projects in the West has been unveiled by the U.S. Department of Energy. The Conservation and Renewable Energy System (CARES) is launching an Energy Services Enterprise in preparation for the competitive era. Bonneville Power Administration has reached agreement with a non-profit organization to market BPA’s "environmentally friendly" energy resources, with some of the proceeds earmarked for environmental projects, mostly in the Northwest.
Praise? The Northwest Power Planning Council has plenty of it for BPA and it’s transition to a more limited role in regional energy efficiency.
The conflicts reported in this issue revolve around the Northwest Energy Efficiency Alliance. The Alliance board turned down a duct-system efficiency improvement program amidst sharp debate on April 29, although a revised proposal is scheduled for reconsideration in June. And in Idaho, debate continues over Idaho Power’s proposal to fund its participation in the Alliance with a public-purposes charge. Speaking of the Alliance, we invite readers to check out our updated page on the organization, at http://www.newsdata.com/enernet/conweb/neea.html.
Note: We had planned to summarize restructuring legislation (See Con.WEB, April 25, 1997) and public-purposes funding around the region and the nation in this issue, but it didn’t happen. In any case, as of May 23, Montana is the only Northwest state to have formally adopted public-purposes funding as part of restructuring legislation. Nationally, Congress has yet to act. Stay tuned for more information. And keep in touch, if you wish, via e-mail: marko@newsdata.com.
New federal energy-efficiency standards for refrigerators represent a national market transformation in which the Pacific Northwest played a role and stands to gain about 100 average megawatts of energy savings over the next couple of decades.
The new rules, announced April 23 by the U.S. Department of Energy, are projected to reduce the energy use of typical refrigerator-freezers by up to 30 percent from the previous 1993 guidelines. The actual reductions depend on the specific product, but for the two most popular classes, which account for nearly 80 percent of refrigerator and refrigerator/freezer energy consumption nationwide, the efficiency improvements are slightly more than 29 percent. These standards apply to all refrigerators and freezers manufactured or imported in the United States after July 1, 2001.
Not coincidentally, the new efficiency levels are similar to the standards set by the national Super Efficient Refrigerator Program in the early 1990s. SERP--whose active participants included Bonneville Power Administration, and PacifiCorp--established a $30 million prize for the manufacturer that could design, build and market a CFC-free refrigerator at least 25 percent more energy-efficient than required by 1993 standards. Whirlpool won this competition.
Although sales of SERP models reportedly have been sluggish since they came on the market in 1994, the program nevertheless built a crucial bridge between the 1993 and the 2001 federal standards, according to a number of involved Northwesterners.
"The SERP program was important because it established a refrigerator . . . could be built that could meet that standard without requiring completely new technology," said BPA's market transformation coordinator, Ken Keating. Although SERP may not have significantly changed consumer demand, he and others believe it was critical for the new standards and the market transformation now in process. "I think what we've seen historically with standards and codes is that you have to establish that [a product] can be built before you can make a requirement. It's just politically impossible" otherwise, Keating said.
Charlie Stephens of the Oregon Office of Energy agrees. "The codes and standards, where we have those, are really one of the best exit strategies" for market transformation initiatives. "The trick is to get a reasonably advanced standard, one that leaps you ahead. You have to demonstrate unequivocally that the industry is capable of building such equipment and that it will perform reliably for consumers and that it's cost-effective. That's essentially what the SERP program was." It showed that a 30-percent increase in refrigerator efficiency "was not an unreasonable target," with such technological improvements as better compressors, insulation, controls (particularly for the defrost mode) and heat exchangers.
Stephens, who serves on the National Appliance Efficiency Standards Advisory Committee and co-chairs a working group examining economic analysis issues, called the new refrigerator rules "the first good example of a complete market transformation for a product that has a standard associated with it." He also believes this region played a key role: "To the extent the Northwest was a willing player in the SERP process, we really did start the ball rolling, along with California utilities and New England utilities."
In addition, SERP also led to new refrigerator insulation, a form of technology transfer, according to Liz Klumpp of the Washington Energy Policy Group of the state Department of Community, Trade and Economic Development. "It contributed a great deal beyond the actual savings of the SERP program, and that was the whole way it was designed." As for the new standards, she said they're "good news and everybody's who's worked on it is excited to see it's arrived."
Indeed, the refrigerator rules represent what a DOE press release called "a consensus among a broad coalition of appliance manufacturers, environmentalists, states, utilities and consumer groups." This agreement, though, took several years to materialize. The process extended through most of the SERP program (models of which are still available on the market through this year), a one-year congressional moratorium on new appliance efficiency standards, and the search for an acceptable blowing agent for refrigerator foam insulation.
In 2003, the federal Environmental Protection Agency will ban stratospheric ozone-depleting chemicals now used for these blowing agents. However, all the potential substitutes previously identified were 3 to 5 percent less energy-efficient, according to Stephens. Only recently has a blowing agent emerged with the proper safety characteristics and negligible impacts on energy efficiency, he said. And, not least, manufacturer Allied Signal believes the new chemical--HFC-245fa--can be produced in sufficient quantities to supply refrigerator manufacturers before 2001.
"That's I think what probably brought the final agreement," said Stephens, noting that refrigerator manufacturers didn't want to retool their product lines twice, once for the energy-efficiency standards and again for the blowing agent conversion.
Impacts on Energy Savings, Environment, Consumers
These new standards will have a substantial impact from a number of perspectives.
Regionally, the Northwest Power Planning Council in its draft 1996 power plan estimated that new federal standards that were 30 percent more efficient than the 1993 levels would save about 100 aMW from 1999 through 2015 under a medium-growth scenario. This reflects forecasted additions of 4.7 million new refrigerators and 2.6 million new freezers over the 16-year period. The total levelized cost, taking into account all costs and benefits, would be 2.4 cents per kilowatt-hour (and virtually zero for utilities), according to the Council.
The typical top-mount, automatic defrost refrigerator-freezer will consume about 500 kilowatt-hours annually, compared with a range of 700 to 1,000 KWh for current models, according to DOE.
Nationally, DOE estimates the new standards will save 237 billion kilowatt-hours from 2001 to 2010, or more than 27,000 aMW. This is equivalent, DOE said, to the electricity used by seven million households in a year or the power generated by seven 500-megawatt plants. Annual consumer savings due to this reduction in electric consumption are forecast at $1.1 billion by 2010.
The nation's air also will be cleaner as a consequence of these new standards, according to DOE. It projects emissions reductions of 42,000 short tons of nitrogen oxide and 12 million short tons of carbon dioxide by 2010.
And, of course, the new rules will affect all those people who buy new refrigerators after 2001. Consumers won't really notice changes in features, size and operation, according to Stephens, although less heat will escape from behind the new refrigerators.
The post-2001 models will cost about $80 more apiece, according to DOE. The typical consumer, though, will save about $20 off each year's electric bill, taking four years to recover the added costs (this average payback period is likely to be longer in the low-rate Northwest, assuming regional power rates stay below the national average).
Although the new standards apply beginning in 2001, most refrigerator manufacturers already offer models that exceed current efficiency rules by 15, 20, 25 and even 38 percent, according to Stephens.
He believes the refrigerator standards illustrate the importance of active market transformation initiatives, and he lists the Northwest, along with California, Wisconsin and some other places, as influential nationally in this "market-pull kind of approach to market transformation . . . I really do feel if we stop doing that, that will be very near the end of any kind of radical or progressive leaps in standards. You'll see a long bout of creeping incrementalism."
From his work in OOE's technology development section, Stephens sees the many barriers faced by innovators trying to break into the marketplace, especially those without a lot of money and a lot of targeted help. "I think those barriers are getting higher, not lower," he said.--Mark Ohrenschall
Attachments:
Text of The New Refrigerator Energy Efficiency Standards
DOE Press Release
DOE Fact Sheet
ACEEE's 1996 List of The Most Efficient Refrigerators
NRDC's Super-Efficient Refrigerator Site, Including Listings of SERP Models
The regional market transformation program for compact fluorescent lighting has influenced the marketplace--notably in lower prices and wider availability for high-quality CFs--although substantially more marketing and education is needed for both consumers and retailers to help create long-lasting change.
This conclusion comes from the inaugural annual report of the LightWise (formerly LightSaver) program, a regional utility-funded venture intended to transform the Northwest market for residential compact fluorescent lighting through a $5-per-bulb manufacturer rebate and various promotional activities.
The report, which covers February 1996 through January 1997, highlights some of the initial successes of LightWise: lower retail prices for CF lights from participating as well as non-participating manufacturers, much broader distribution, additional products available. More than 134,000 compact fluorescents were delivered to as many as 300 retail outlets around the region during the report period. Retail prices for the various bulbs averaged $9.99 apiece. Although a variety of wattages and bulb configurations are offered, all LightWise products have high power factor, low total harmonic distortion and good color rendition.
"The report shows some real market changes occurring," said Ken Keating, market transformation coordinator for Bonneville Power Administration. "It also points out the things that need to be corrected if the program is to be as massively successful as it needs to be to change the market."
The annual report touches on the continuing barriers to widespread purchase of these energy-efficient lights, particularly the lack of awareness among the general public and store employees. "Ultimately, consumer awareness and demand for efficient products is the most difficult barrier to overcome," the report finds. "Although utilities have done an excellent job informing their customers of CFLs and their benefits, most consumers are still not looking for or buying efficient CFLs . . . Unfortunately the lack of LightWise awareness is also prevalent at the store level. Most store personnel are not familiar with our program or the benefits of CFL technology in general. Clearly, a new plan of educating the consumer and retail personnel must accompany a new marketing strategy for the 1997 LightWise program."
A number of new marketing initiatives are planned, LightWise program manager Jody Moore told Con.WEB in early May. For example, point-of-purchase manufacturer information is expected to be made available at large retail chains such as Fred Meyer, Home Base, Home Depot and Eagle Hardware & Garden. In addition, LightWise plans to send general information on the program to retailers around the region.
Moore said LightWise wants to engage in regional marketing, including radio and television advertising, to supplement local utility promotions such as bill inserts, fairs and home shows. "We're finding that we're not getting enough marketing of the program" to draw in consumers, he said, and described utility promotion of LightWise as "just too spotty."
The primary LightWise sponsor, the Northwest Energy Efficiency Alliance, has funded the program through June for $698,000, which includes development of a CF fixtures program. A program extension, including expanded marketing and promotion, and a CF fixture element are expected to be considered by the Alliance board in June.
Following are some highlights of the LightWise annual report:
Distribution/Sales
A total of 134,156 LightWise bulbs were shipped to retailers during the program's first year by the two participating manufacturers, Lights of American and Osram Sylvania. This fell short of the 185,000 distribution originally planned. The overwhelming majority of LightWise lights--about 90 percent--came from LOA during the report period. Sylvania actually forfeited nearly 22,000 of its allotted bulbs because it failed to meet purchase order milestone dates.
"This past year's accomplishment by manufacturers is satisfactory, but fell short of our expectations," according to the report. "Greater emphasis must be placed on manufacturers to expand beyond their current distribution and focus on small markets." The addition in 1997 of two more manufacturers--Enertron and MaxLite--as well as a wholesale distributor targeting rural areas is expected to expand LightWise availability, the report noted. Moore said the distributor, Platt Electric, is already faring "very well" in less-populous areas.
In the first program year, the great majority of LightWise products were distributed in the Interstate 5 corridor of Washington and Oregon. More than 85 percent ended up in stores west of the Cascades. And only 1,217 bulbs went to all of Idaho and Montana.
In any case, high-quality compact fluorescents are now much more widely available in the region than before LightWise/LightSaver. As of early May, Moore said the number of participating LightWise retail outlets was close to 280--a nearly tenfold increase from the 30 or stores that stocked comparable CFs before 1996. "It's clear that they got a lot more stores to carry the product than were carrying it before," said Keating.
As for LightWise purchases, figures from two leading retailers, Eagle Hardware and Home Base, show a gradual decline in monthly sales over the reporting period. "Sales numbers mirror promotional efforts," the report noted, although the so-called "turn rate"--a function of inventory levels to sales over an eight-week period--remained above the norm the entire year, even as LightWise sales and product availability slid.
A total of 34,593 survey cards were returned by LightWise purchasers during the year--an extremely high percentage, according to Keating. Of those, 51 percent came from the service territories of Bonneville Power Administration's public-power customers. Seattle City Light topped this category, with almost 5,800 survey cards, followed by Snohomish County PUD (2,037), Tacoma City Light (777), Clark Public Utilities (459) and Eugene Water & Electric Board (496).
Another 22 percent came from Puget Sound Energy territory (formerly Puget Sound Power & Light), and 13 percent of the returned survey cards were traced to Portland General Electric.
The survey cards also revealed that higher-wattage quad lights appear to be the most popular type.
Price
Consumers paid considerably less for LightWise products than the retail standard for high-quality CFs of $16 to $21, the report noted. Based on visits to participating stores, LightWise products retailed from $8.88 to $12.99 apiece, with an average of $9.99. "The [manufacturer] buy-down has been effective in bringing the price down to the consumer," Keating said.
Even lower prices are forecast for 1997. Already, Moore said, LightWise bulbs at Fred Meyer stores are available for less than $8, and Price Costco selections are anticipated to be below $7. "By doing volume, manufacturers can lower their wholesale costs. That's just bottom line," he said.
Significantly, as an example of changes in the market, these lower prices also have extended to other CF bulbs of comparable quality. "We're seeing a lot more products from non-participating manufacturers at the $8 range," Moore said. The report found that these manufacturers increased rebate coupons and reduced prices by $3 to $5 per light, "keeping step" with LightWise. This helped overall sales of all compact fluorescents, it noted.
In addition, the report said a new flicker-free magnetic ballast is expected to lead to more CFs in the marketplace and even lower prices.
In-store Marketing
The returned survey cards suggested that most LightWise purchasers heard about the program through store displays, which, according to the report, "played a significant role in developing initial awareness." However, prominent displays early in the year were often temporary. "Once end caps and isle markers were removed and product placed on shelves or in a non-lighting area, consumers had a difficult time locating product." Funding uncertainty contributed to a scarcity of available bulbs by late fall.
Keating said LightWise products are "tending to disappear off the shelves" and this problem will likely persist until these bulbs are included in retailer computer-ordering programs, and not dependent on retail staff decisions.
Conclusions
"Identifiable results were achieved over the past year," the report concluded. "However, changes must be made for [the] LightWise CFL program to be considered an effective market transformation effort."
A Northwest "marketing campaign must target specific customer groups in support of promotional efforts by utilities," it said. The program needs to collaborate with retail chains, wholesale distributors and manufacturers to educate consumers about the benefits of energy-efficient compact fluorescent lighting.
CF power quality must support the Northwest's market transformation objectives, according to the report. "Currently, participating utilities adopted specifications that demand manufacturers to produce separate CFLs for utility programs. Therefore, once the program funding stops, so will availability of this type of CFL. We must remember consumers purchase CFLs based on price and potential energy savings and do not understand power quality."
Major chains such as K-Mart, Target and WalMart haven't purchased LightWise bulbs because they are products not normally stocked by retailers, the report said. "This can limit distribution and overall penetration in the region."--Mark Ohrenschall
A proposed residential duct-system program that the Northwest Energy Efficiency Alliance board of directors narrowly voted down amidst sharp debate last month will be reconsidered, with some revisions, in June.
The April 29 duct deliberations brought forth a number of differences of opinion among Alliance board members--on the proposal itself as well as broader issues of the board's function and even the organization's direction. In any case, the revised proposal will address some of the specific concerns raised during the Seattle-area meeting.
Also on April 29, the Alliance board unanimously endorsed a market transformation partnership with local government associations in the four Northwest states. In addition, the board discussed Alliance staffing--four new positions are in the works--and larger issues related to the organization's size, structure and function.
Duct Proposal
The duct proposal takes a multifaceted approach to address the widespread problem of leaks in residential forced-air distribution systems. Tighter duct work, according to an Alliance staff memo, "represents the largest cost-effective [residential] space heating conservation measure" available in the region today.
As proposed by the prime sponsor, the Oregon Office of Energy, this market transformation project has two primary goals. It wants to establish duct-system retrofitting as a viable and profitable business enterprise around the region, and it wants to create "sustained demand for efficient residential . . . [duct] systems in new residences by changing expectations regarding the minimum qualities that home-buyers, builders, realtors and mortgage lenders perceive as affordable, energy-efficient, safe and comfortable housing."
OOE's plan has five primary elements. One would verify the costs and benefits--to consumers and the electric system--of reducing duct leakage in new and existing homes. Another would test and refine standards for the selection of homes, duct-system testing and remediation, system performance and contractor/duct-system certification. A third aspect would develop, test and refine a marketing plan and related materials. The project also would establish a trained group of contractors and trade allies, and develop a self-supporting training and certification program for duct-system contractors.
The proposed first-year budget is $700,000, of which OOE requests $600,000 from the Alliance (the Electric Power Research Institute is expected to provide an additional $100,000).
This proposal seeks to clear four primary barriers identified by OOE. Consumers as well as contractors are unaware of the impacts of leaky ducts on a home's space-conditioning use, comfort and occupant health and safety. In addition, contractors don't realize how design and installation practices affect air leakage in duct work. Contractors also lack the information and skills to profitably market improved duct systems. Finally, there is no "understandable and credible means of identifying and verifying the benefits of efficient air-distribution systems improvements."
The potential market and energy savings for more efficient duct work are substantial, according to the OOE proposal. Electric forced-air heating systems may consume 50 percent of the power used for Northwest residential space heating, which itself accounts for about one-third of all electric consumption in homes. Some 600,000 residences in the region have electric forced-air systems at the moment, and another 800,000 may be added over the next 20 years. If duct tightening in 25 percent of new and existing single-family homes and existing manufactured homes made their air-distribution systems 14-percent more efficient on average, regionwide savings could total 30 average megawatts over 10 years, the proposal said. Levelized cost for electric savings averages about 2.1 cents per kilowatt-hour in the most cost-effective segment of new and existing homes.
Duct Vote and Debate
Despite an endorsement by the Alliance staff--which described the duct proposal as "a modest investment in what is presently the largest 'untapped' cost-effective efficiency improvement remaining in residential space heating"--and affirmative votes from a majority of the board members present, the OOE proposal fell one vote short of approval, according to a tally by Alliance deputy director Margie Gardner.
One of the primary concerns raised was uncertainty over the potential marketplace for duct-system efficiency improvements. Several board members balked at the $600,000 funding request in the absence of a more comprehensive assessment of the market and how the barriers can be addressed. Board member Brian Hedman said he supported the $150,000 piece for verifying the costs and benefits, but added, "There's a big difference between $150,000 and $700,000." Board chairman Dave Houser also cited market concerns, and noted the proposal's lack of applicability in the service territory of his utility, Montana Power--which drew an admonishment from board member Nancy Hirsh, who said Alliance board members should vote from a regional, and not a local, perspective.
In defense of the duct proposal, board member Ken Keating called it "a monster effort" that tapped many years of expertise and covered 26 single-spaced pages. Hirsh labeled it "an excellent proposal" with some admittedly soft spots, and said, "I think it's a mistake not to approve the proposal this time."
Board member Liz Klumpp said she was "very disappointed" in the outcome; the proposal was cost-effective, fit within the context of regional conservation potential and would allow testing of various strategies. Klumpp also raised a larger issue: "This discussion suggests we will never know 100 percent the correct answer . . . I for one am willing to live with a less than 100-percent comfort level." With this proposal, she said, "We got into a level of detail we can't afford to be at . . . I'm hoping we're all going to accept less than 100 [percent certainty], because we're never going to get it . . . Let's move on and test it and learn something."
The board is scheduled to reconsider the duct proposal at its June 9-10 meeting in Portland, with two primary revisions, according to OOE's Tom Hewes. One is a more complete venture-management plan--as recommended by Alliance staff--and the other is the establishment of various decision points at which the Alliance could drop the proposal without committing to the full $600,000 first-year budget. For example, the board could opt out if a literature review and market research showed insufficient potential for the program.
Local Government Associations
In contrast to the duct proposal, the Alliance board on April 29 approved a market transformation initiative from Northwest local government associations with much praise and without a single dissent.
These statewide associations will help recruit water utilities for the Alliance's resource-efficient washing machine program (WashWise), market the building operator certification program, communicate with their hundreds of members regionwide, and support energy codes. Other market transformation initiatives also may be undertaken under the one-year, $235,000 budget. The four new Alliance partners are the Association of Idaho Cities, Montana League of Cities and Towns, League of Oregon Cities and Association of Washington Cities.
Board members found considerable value in working with these associations and their members to promote market transformation initiatives. Hirsh called these groups "a sector of the community the Alliance really needs to leverage with." Hedman noted the relationships developed between the associations and local government officials around the region.
Keating described the four groups as "our natural allies, if we are willing to educate them and their constituencies." He added that the "long-term credibility and legitimacy of the Alliance . . . is dependent on a general perception in the region that we are working in a larger society and not just the people around this room. I've heard some very negative things about this organization [the Alliance], outside this organization. We have to be careful that we treat everyone who's part of this community in this market transformation effort with respect for what they bring to us."
Alliance Staffing
A board discussion about staffing levels for the Alliance revealed some lingering differences over the nature of the now six-month-old organization. Some board members--but not all--strongly supported plans to hire two professional and two administrative positions, and the possibility of adding a third professional staffer at some point.
"We need to think strongly how we should be operating in a different way," said board member Stan Price, suggesting that "perhaps we're having some difficulties letting go of things on an operating level." He wants to "empower and entrust a very capable professional staff to do the work of the organization" while the board provides "strategic-level guidance."
Some board members, though, were hesitant about the staff-developed staffing plan. "Do we need to ramp up that fast if the work flow isn't that great immediately?" Houser asked. Hedman also raised this concern.
Later, Hedman explained that the Oregon Public Utility Commission--which regulates his utility, PacifiCorp--had considered the Alliance's originally proposed 10-percent administrative budget as high for what was thought to be a funding entity. "To the extent the staffing levels and the jobs envisioned by [executive director] Will [Lutgen] and Margie in NEEA exceed or approach that 10-percent level, there needs to be some sort of justification or explanation . . . of the difference the staff would play from strictly a funding organization." This, he added, reflects a larger concern that the Alliance has "a lot of money floating around . . . and a lot of people who think they can make a career out of spending that money . . . Now we're forming a new bureaucracy. I think the work will definitely grow to the level of staff. They'll find something to do, and it may not be the most efficient use of NEEA funds."
Lutgen, meanwhile, told the board he wants some flexibility on staffing. This initial period of the Alliance, which includes setting up the organization and screening and developing market transformation projects, "is a little more time-consuming than what some of us originally envisioned . . . We are changing the way this region has traditionally done business, and that takes time."
As of mid-May, four new Alliance staff positions--evaluation/market research, communications/administration and two administrative assistants, one each in Bellevue and Portland--were in the works, according to Gardner.
In another piece of business April 29, the Alliance board approved $200,000 for separate evaluations of three current projects--WashWise, building operator certification and premium efficiency motors--and an undetermined additional project.--Mark Ohrenschall
The Idaho Public Utilities Commission hasn't reached a decision on Idaho Power's request to implement a public-purposes charge to recover its costs for participating in the Northwest Energy Efficiency Alliance.
Commissioners discussed the Idaho Power proposal at a May 8 meeting at which two of the three commissioners questioned the benefits the Alliance would provide to Idaho customers, according to IPUC spokesman David Scott. But commissioner Marsha Smith's suggestion that NEEA be viewed in the larger context of utility restructuring led the IPUC to agree on the need for a pre-hearing conference to consider the issue. Scott said the conference would "bring together [interested] parties to hash out their viewpoints and make a determination on what route to take" to handle Idaho Power's proposal--hearings, filing of briefs, a modified procedure--"to help facilitate some kind of solution."
Part of the Commission's uncertainty is related to the large number of public comments the PUC received on the utility's plan--nearly all of which were negative (see Con.WEB, April 25, 1997). While some commenters objected to the mechanics of the meters charge rather than the concept, others didn't like the idea of Idaho Power collecting money from them to give to NEEA, period. Several claimed the proposal was a rate case in disguise.
Under the utility's original proposal, residential customers would pay a flat rate of 25 cents per month, larger business and commercial customers would pay $2 per month, and special contracts and large industrial customers would pay $70 per month. Irrigation customers would be charged $6 per month during the irrigation season. The proposed public-purposes charge would collect about $810,000 in 1997 and $1.6 million in the following two years--all of it earmarked for Idaho Power's participation in the Alliance.
Idaho Power’s Jim Baggs said some of the comments the PUC received indicated a lack of understanding about the Alliance. At the same time, the utility has made some changes in its proposal to address some of the concerns expressed in the comments.
Baggs said Idaho Power has amended the proposal to divide irrigation customers into three size groups to better reflect the diversity of the class and to make the charges more equitable. And while he acknowledged the commission's concerns about whether NEEA would benefit Idaho customers, Baggs was encouraged by the fact that two of the three commissioners said participation in the Alliance should be viewed in the broader context of the Regional Review. NEEA may "never get to an exact dollar-for-dollar" exchange of benefits to Idaho customers, he acknowledged, but the Alliance is "heading down the path to a fair allocation of resources."
Idaho Power hopes to answer "as many questions as we can" at the pre-hearing conference, Baggs added. Still undetermined, as of Con.WEB deadline, is the date of the conference. Scott said on May 21 that the PUC was considering June 9 or June 10, but that's when NEEA will be holding its next board meeting, in Portland.
However, said Baggs, "It's more important to get our hearings behind us and get our participation authorized." The utility had hoped to start collecting the public-purposes charge as of July 1. As of mid-May, Idaho Power had yet to provide the Alliance with its allotted share of funding. Baggs said Idaho Power's commitment to fund NEEA is tied to a positive order from the IPUC. "If they don't approve our participation as well as our collection mechanism--or some variation of our collection mechanism"--Idaho Power will not participate in the Alliance.--Jude Noland
A new streamlined contracting method for energy-efficiency improvements in federal facilities throughout the West--including Washington, Oregon and Idaho--promises to lead to conservation projects potentially worth hundreds of millions of dollars.
Super Energy Saver Performance Contracts were unveiled May 21 by the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy and the Federal Energy Management Program with the announcement by Secretary of Energy Federico Peña of five eligible contractors--The Bentley Co./BMP Team, Puget Sound Energy and MacDonald-Miller Co.; Energy Pacific, a joint venture of Enova and Pacific Enterprises; ERI Services; Johnson Controls; and Honeywell.
Under the Super ESPC, federal agencies with facilities in any of eight Western states and Pacific Trust territories can submit requests for proposals for efficiency work to this pool of pre-qualified contractors. This is expected to create a "much more manageable" process than a standard federal energy-efficiency RFP that draws 20 to 30 responses, according to Seattle-based FEMP financing specialist Cheri Sayer.
Super ESPC should greatly reduce the time required to implement conservation projects in federal buildings. An efficiency idea hatched by a federal official could lead to a signed contract in as little as six to seven months, according to Sayer. One reason: a project delivery order under Super ESPC is about 20 pages long, compared to 200 pages for a standard ESPC contract, which, according to DOE, can take one to three years to develop.
Sayer said federal energy officials "see this as one tool, one option" to help federal managers meet their goal of reducing energy consumption in federal facilities 30 percent by 2005, compared to a 1985 baseline. Other ongoing possibilities include utility demand-side management programs, separate RFPs and contractor-generated proposals. "The [federal] agencies will be the drivers," she said. "They have the ability to move." Already, a number of federal departments have expressed interest in Super ESPC; FEMP has planned several workshops tailored to specific agencies and two workshops this summer open to all agencies.
Simplified Energy-Saving Performance Contracting
Sayer described Super ESPC as "similar but simplified" compared with standard energy-saving performance contracting, in which private-sector firms finance and implement efficiency improvements at federal facilities and share in the resulting savings over time. ESPC, however, has not proven very popular among federal agencies, as it requires considerable time and staff work. "We knew we needed to do something different," she said.
Super ESPC was envisioned by former ESPC project manager Joan Stone and Doug Dale of the National Renewable Energy Laboratory, according to Sayer. It has evolved into a regional approach led by the West. An RFP covering Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Washington and the Pacific Trust territories was released in August 1996. It generated what Sayer called "a responsive turnout" and led to the contract awards.
A total of 12 technology categories have been established, from lighting and HVAC to renewable energy, cogeneration and distribution systems. Whatever efficiencies a federal energy manager has in mind, "Most likely it'll fit under one category or another," Sayer said, adding, "We'll always encourage them to go comprehensive" in their project approach.
Participating agencies will put together so-called "delivery order" RFPs for efficiency projects--with technical assistance arranged by FEMP if need be--and the five eligible contractors can respond. "There will still be competition" for federal work, Sayer said, but the selected contractors will have "more equal access to most of the projects." Federal agencies could choose one of the five contractors without competition, she noted, but that may be difficult to justify economically.
This initial Western region Super ESPC program runs for three years, although projects undertaken can include repayment periods and operations and maintenance/service agreements for up to 25 years.
Not all federal facilities will be appropriate for Super ESPC, Sayer acknowledged. Still, the potential market throughout the West for the three years is estimated at somewhere between $100 million and $750 million worth of efficiency projects. No energy-saving goals have been established.
The pool of Super ESPC contractors was chosen based on six criteria, according to Sayer. Three were general in nature: past experience, capability with energy conservation measures and regional project-management approach.
The other three criteria related to real-life potential efficiencies at three federal sites, including two in the Puget Sound region. FEMP identified major categories for bidding at each of the facilities: lighting, motors and chillers at the Federal Aviation Administration's Seattle Air Route Traffic Control Center in Auburn; lighting and HVAC at the National Oceanic and Atmospheric Administration's Western Administrative Support Center in northeast Seattle; and lighting, energy management system, shell measures and steam plant improvements for a U.S. Coast Guard facility on Kodiak Island in Alaska. "This gave us overall a range of technologies [contractors] could address . . . any way they wanted," Sayer said.
For each of the three projects, respondents were judged on their recommended energy conservation measures, baseline and energy-saving assessments (including monitoring and verification) and site-specific management approaches.
After passing through various evaluations, the final choice of contractors was made by deputy FEMP director John Archibald.
FAA, NOAA Like Super ESPC
Officials with two of the three federal agencies involved in this initial Super ESPC solicitation have already found it valuable. "I think the FAA has really received a lot of benefits," including education about the workings of ESPC, said Deb Beattie of the Renton FAA Regional Office. She also appreciates the collaboration with FEMP. "The U.S. Department of Energy has really gone to great pains to keep our comfort zone, our comfort level high," she said.
For the Auburn site, FAA hopes to do lighting and motor replacements and chiller and boiler plant improvements. Contractors will "go in and and analyze the facility and actual uses and come back and give us an idea where we can save energy or improve operations," said Beattie. "Typically we have done small-scale" projects such as water-saving improvements. "It'll be nice to do a large-scale project."
Jesse Hurtado, facility manager for NOAA's WASC in Seattle, also appreciates the Super ESPC. "It makes it easier for you to enter into a contract, simply because there's no [government] money up front," he said. Contractors provide financing and also project analysis, number-crunching, design and--not least--performance guarantees. His facility already has upgraded lighting and motors, but, he said, "If you don't have the money up front to do those projects, you just kind of put them on hold." Hurtado also likes the ability under Super ESPC to aggregate efficiency projects with agency facilities in other areas.
He praised DOE people for their efforts in developing this new contracting method. "They've done 90 percent of the legwork and I'm glad they have. It's something to take advantage of; budgets are shrinking and you're looking anywhere you can to get dollars to do things."
For more information, phone Sayer at (206) 553-7838, or send her an e-mail at cheri.sayer@hq.doe.gov.--Mark Ohrenschall
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Bonneville Power Administration is successfully narrowing the scope of its energy-efficiency work, according to a new Northwest Power Planning Council report that praises BPA's responsiveness to the guidelines set by the Regional Review steering committee in late 1996.
"Bonneville's task is one of transforming itself from a major force behind energy-efficiency in the region (and the country) to more limited roles as market facilitator for other federal agencies and private sector energy-efficiency business development," concludes the Council's May 1 report, which was requested by and presented to Congress. "Thus, both the nature and magnitude of Bonneville's transformation makes it particularly arduous. It is a testament to the dedication of Bonneville's management and its staff that the agency's metamorphosis is occurring smoothly and with minimum resistance." Council chairman John Etchart called this "a big change for Bonneville, but it is a necessary change and one that responds to increasing competition in the electricity business."
Terry Esvelt, BPA's energy efficiency vice president, said he is "obviously pleased that our efforts in complying with the Regional Review's guidelines have been noted and appreciated."
The Council lauds BPA for being "very responsive" to the 13 principles established by the Review to guide Bonneville's so-called "market development" activities for energy efficiency.
Specifically, the Council reports:
"Bonneville has been working to support projects and create partnerships that will facilitate the expansion of the region's energy-efficiency marketplace." The report cites BPA energy efficiency work with the U.S. Postal Service, the Hanford Site, Fairchild Air Force Base and General Services Administration, among others, and references a BPA summary of 10 projects (including these) that describe the efficiency work involved as well as the respective functions and compensation for Bonneville and private-sector firms. In virtually all 10 cases, private contractors will earn more money--in many instances, considerably more--and perform more tasks than Bonneville, whose roles have been predominantly auditing, project administration and/or financing.
BPA has convened an advisory committee--as the Review suggested--to monitor BPA's compliance with the 13 principles and to help Bonneville identify opportunities to enlarge the regional energy-efficiency marketplace. It consists of representatives from utilities, governments, private companies and public-interest groups. At its April 23 meeting the committee endorsed the Council report, but "noted that barely four months have passed since the Review's final recommendations were adopted, and therefore, many important implementation details remain to be developed." (See the Con.WEB April 25 issue for a story on this meeting.)
Bonneville is focusing its market-development activities on federal agencies and its utility customers, as the Review recommends. Specifically, the Council notes that BPA is working with agencies to help accomplish their federal energy-saving goals and is "packaging private-sector services for Bonneville's wholesale customer utilities to in turn market to their end-use customers."
Bonneville has financially structured its market-development work within the Review's guidelines, according to the Council. It has committed to become financially self-sufficient by September 1999 or to cease all such activities. And its fiscal year 1998 budget proposal "is consistent with the limitations" set by the Review, which include full repayment for U.S. Treasury borrowing, maximum annual spending of $5 million in Treasury funds (restricted to federal agencies) and a net-cost limit of $8 million for fiscal years 1997 through 2001.
Bonneville has officially renamed its former Energy Services Business unit to Energy Efficiency.
BPA earlier this year formally revised the energy services aspect of its 1995 record of decision for firm non-requirement products and services contracts.
The revision outlines BPA's intent to offer, through its market development role, conservation rebates or incentives, demand-side management services, power-quality services and "tracking and accounting for the use of power and other services under the terms of customized contracts.
"The fundamental purpose of these products and services is to help enlarge the energy efficiency marketplace," according to the revised document. "Using its unique characteristics as a Federal agency with extensive experience in managing conservation efforts, BPA will serve as a catalyst or facilitator in making energy efficiency happen. While BPA must be financially self-sufficient, it will not compete with the private sector. Instead, BPA will work with private business partners, government and the utility community to help overcome barriers to conservation and efficiency efforts. BPA's success will be measured by its ability to make a difference, increasing the amount of conservation investments and expanding the business opportunities for private sector partners."
Bonneville administrator Randy Hardy concluded in the Jan. 21 document that "the focus of BPA's energy efficiency market development role is to enlarge the energy efficiency opportunities beyond that which is currently being profitably captured by the private sector. This decision remains consistent with BPA's Market-Driven approach for participation in the increasingly competitive electric power market. BPA is ensuring continued public benefits while being responsive to its customers' needs."
The Council report also provides a brief history of BPA's energy services/energy efficiency plans for the competitive era, leading up to the Review recommendations approved in December 1996. The report also has several appendices: the BPA project descriptions; a membership list, charter and Feb. 26 meeting minutes for the advisory committee; and Hardy's revised record of decision.
For a copy of the report, call the Council at 1-800-222-3355 and ask for document 77-3.--Mark Ohrenschall
The Conservation and Renewable Energy System (CARES) is preparing for the competitive electricity market by developing a set of new products for its eight Washington PUD members and other public utilities.
CARES' Energy Services Enterprise intends to offer a broad range of energy services and financial instruments aimed at keeping the organization's mission alive after its Bonneville Power Administration funding disappears in 1999.
CARES members voted May 23 to officially form the Energy Services Enterprise, a project aimed at providing energy services that members and other public-power utilities will need in the competitive market. ESE services approved in April include resource accounting, customer-focused audits and power quality. Still in the pipeline are a series of financial products.
"We are very excited about this and think it is timely," said CARES managing director Mike Burnett. "We think utilities other than CARES members will be interested in what we're doing, and once we get it formed, we'll be seeking some additional partners." Burnett said the ESE will have an annual budget of $350,000 during its first two years.
"Utilities in the Pacific Northwest are used to running energy conservation resource acquisition programs, and CARES is operating a conservation acquisition contract with Bonneville that has about another two years," Burnett said. "The question is: What's next?" With the end of BPA funding and the "change in the landscape of the industry with the move to competition, we took a look at where we want to be, and that led to the ESE."
ESE will be CARES' third major project, after the Bonneville conservation contract and a 25-megawatt-capacity wind-energy project it is developing in Klickitat County in south-central Washington.
ESE will offer "energy services" under the broadening definition of that term, namely energy conservation plus value-added services, Burnett said. "The products are being offered in the marketplace by other entities, so we want to be able to offer them to our members, too."
One of the products already approved is resource accounting--giving customers a profile of their usage of a number of resources besides electricity (such as natural gas, oil and water) in meaningful terms such as dollars or kilowatt-hours per square foot of space.
Customer-focused audits would expand facility assessments to include not just energy use, but power quality, environmental compliance and productivity. Power quality, meanwhile, involves products and services ranging from residential surge protectors to uninterruptible power supply equipment for industrial customers.
Other products being considered are financial. Since BPA will no longer be funding CARES, the organization is looking at alternative sources of capital to pay for conservation and other energy services. CARES is working on a residential loan program using funds from the Federal National Mortgage Association (also known as Fannie Mae) that will offer a broader spectrum of measures than were available under the BPA program.
CARES also is working on an energy-efficiency leasing program focused on institutional and business customers, and a plan to set up a line of credit for members to use for the rental market. The goal is to have a financing mechanism for every market niche, Burnett said.
Other possible areas of product development include consolidated billing, specialized metering and a program-management service to help customers oversee the development of energy-efficiency projects--Ben Tansey
Bonneville Power Administration has signed a brokerage agreement with a non-profit environmental trust that will market "environmentally friendly" BPA resources and reinvest the money in fish and wildlife and other environmental projects.
Environmental Resource Trust, which was founded with help from the Environmental Defense Fund, will fund these programs with the proceeds of BPA's brokerage fee and the amount of any above-market premium it secures from new clients. ERT takes what it believes is a unique approach and plans to find clients BPA cannot, especially as new retail markets start to open.
Bonneville and the Environmental Resource Trust have signed a marketing agreement under which ERT will broker a set of "environmentally beneficial" BPA resources, such as incremental hydro flows and renewables. The partners have identified five categories of BPA resources for which some end-users or wholesalers may be willing to pay a premium or which might even be less expensive than their current supply.
In exchange for supplementing BPA's marketing efforts, ERT will collect from BPA both a 25 cents per megawatt-hour brokerage fee and an "environmental premium" equal to any amount above BPA's market price that ERT is able to get for the supply. As a broker, ERT will not own power; it will find and negotiate with new customers, who will then sign an agreement with BPA.
BPA customer account executive Dennis Oster said the agreement, which runs through the end of 1998, looks like those Bonneville has with other brokers such as Eurobrokers or Prebon, except that ERT's resources will have guaranteed environmental benefits. "We think this is a great deal because it promotes clean, renewable resources and also has the potential to grow the pie for other fish and wildlife projects."
Proceeds from the two streams of revenue will be reinvested, in accord with ERT's charter, in environmental projects such as fish and wildlife habitat, watershed restoration, pollution control, acquisition of water for fish flows and renewable resources. ERT has committed to spend at least 75 percent of the proceeds for such projects in the Pacific Northwest.
Zach Willey, an ERT director and senior economist with the Environmental Defense Fund, said the product will be marketed as "environmentally beneficial" so as to avoid a widening national debate over the meaning of "green power."
"We are not trying to set a standard for what green power is," Willey said. "We are just saying these sources have environmental benefits, and are trying to test the idea that there is a differentiated market out there for these products."
In the Western power grid, Willey believes the potential market for environmentally beneficial power is greater than 1,000 average megawatts. He said clients may be willing to pay a premium for such a product of between .2 cents per kilowatt-hour and .5 cents/KWh above market prices.
The first category of environmentally beneficial power identified by ERT and BPA is electricity generated as a result of flows mandated for salmon under the National Marine Fisheries Service's biological opinion. Based on surplus power studies, they estimate the amount of this power at 129 aMW.
The second category is "light load power" made available as a result of spill reduction. The concept here is that buyers would pay for power generated with water that would have otherwise been sent over a dam, or spilled--water that could have contributed to potentially lethal gas-bubble disease in migrating salmon.
The third source of environmentally beneficial power is incremental hydro flows. This product involves the purchase or lease of industrial and agricultural water rights and transferring them from out-of-stream purposes back into the river as dedicated stream flow. The Environmental Defense Fund, which helped create ERT, has pilot projects of this type on the Snake, Deschutes and Yakima rivers.
The fourth source of power under the agreement would come from Bonneville's prospective portfolio of renewable resource projects. BPA currently has several such projects under environmental review, including the proposed 25-MW Conservation and Renewable Energy System (CARES) wind-energy project in south-central Washington and the proposed 30-MW Glass Mountain geothermal project in Northern California. However, since the agency has made no final decision on whether to commit to these particular projects, this category instead refers generically to BPA renewable projects, to which the agency has committed $15 million in annual spending.
Even so, when a deal is consummated, buyers will receive a disclosure form specifically outlining which environmentally friendly resources are dedicated to their supply.
The final category is thermal displacement. With this product, ERT would try to find clients who would use one of the other four product categories to displace power that would otherwise be generated by high-emission sources. This would be in addition to the displacement program BPA already has in place.
Except for the first category, BPA and ERT don't have estimates of how much power the sources identified under the agreement might supply.
BPA already markets a "green power" product, but both parties said ERT may be able to reach markets BPA can't. While BPA focuses on power traders and sales between trading floors, ERT will approach top officials of power suppliers or eligible retail customers, offering them a product that is "good for the environment" and stressing the public-relations element of such purchases.
Oster said the participants of regional market-access pilot programs will be targeted, as will new retail prospects as that market opens to competition.--Ben Tansey
The fifth annual Architecture + Energy Awards, which recognize innovative Northwest non-residential design that integrates energy efficiency, will take place June 5 and 6 in Seattle.
The two-day function--sponsored by the American Institute of Architects/Portland Chapter, Bonneville Power Administration, Portland General Electric and Battelle Conference Center--begins with a June 5 dinner and panel discussion in which jury members will present examples of their own work and explore the issue of integrating architecture and resource efficiency.
On the morning of June 6, selected award-winners from past years will discuss lessons they learned from their projects. The afternoon will feature an informal discussion of projects submitted for this year's contest, followed by the 1997 awards presentation.
Registration fee is $110 for the entire program. For more information, contact Felicia Megdal at AIA/Portland; phone, (503) 223-8757, e-mail, aiapdx@teleport.com.
Three Energy Exchange workshops sponsored by the Northwest Public Power Association will be held in June at different locations in the region.
Each of the all-day workshops will feature roundtable discussions of utility activities, summaries of state electric industry restructuring legislation, a talk on business planning for the transition from regulation to deregulation, and display tables staffed by vendors and utility groups.
The workshops are scheduled for Friday, June 13, in the Seattle area; Friday, June 20, in Bend, OR; and Friday, June 27, in Missoula, MT.
For more information, contact Jim Brands at NWPPA; phone, (360) 254-0109, or e-mail, jim@nwppa.org.
The Oregon Office of Energy has received a $10,000 grant from Sandia National Laboratories to develop and promote solar photovoltaic systems.
OOE plans to use the money to develop a model PV water-pumping system to demonstrate the efficiency of providing water to cattle at remote sites away from streams. This will put to use a renewable energy resource and also help prevent potential stream contamination from cattle, benefiting salmon, according to OOE.
OOE will seek a private agricultural partner to install the PV system once it is developed. The energy office will provide assistance through the state's Business Energy Tax Credit program.
For more information, contact OOE's Mark Kendall; phone, (503) 378-8444, e-mail mark.w.kendall@state.or.us.
A two-day conference titled "The Essentials of Indoor Air Quality" will be held June 25 and 26 in Olympia, WA.
Presented by the federal Environmental Protection Agency and Washington State University Cooperative Extension Energy Program, the conference will cover indoor air pollution sources and their health effects, building operations, guidelines to identify indoor air-quality hazard levels, and recommended approaches to prevention, diagnosis and mitigation of indoor air-quality problems. The link between indoor air quality and energy efficiency will be explored.
Registration cost is $150 ($100 for government, tribal and non-profit group representatives). Deadline for registration is June 15. For more information, call or fax Chris Eder of WSU Cooperative Extension in Pullman; phone, (509) 335-2954, fax, (509) 335-2959.
The LIGHTFAIR INTERNATIONAL 1997 New Product Showcase is now available on the Internet through inter.light at http://www.light-link.com.
Showcase categories include commercial fluorescent fixtures, downlights, decorative fixtures, outdoor lighting, lamps, ballasts, controls and specialty lighting products (including fiber optics). More than 90 new lighting technologies from the past year that were unveiled at the April LIGHTFAIR trade show and conference in New York City can be viewed on this Web site, along with request forms to order catalogs and specification literature directly from manufacturers.
For more information, check the inter.Light Web site or contact Dave Burtner; phone, (541) 344-1909, fax, (541) 344-2646, e-mail, dkb@light-link.com.
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