CWEB.019/July.25.1997
Special Update/August.7.1997
Five months into the job, Will Lutgen has resigned as executive director of the Northwest Energy Efficiency Alliance. Lutgen cited personal reasons for his decision, which surprised and disappointed board members of the regional market transformation collaborative when they learned of it earlier this week. The Alliance’s executive committee has recommended deputy director Margie Gardner for the executive director position. NEEA officials said Lutgen’s departure won’t appreciably slow the Alliance’s work, although one board member suggested the abrupt resignation should prompt some introspection within the relatively young organization. More on Lutgen’s sudden departure. |
IN THE EARLY 1990S, wind energy was considered a very promising source of new power for the region--until it ran into a litany of troubles, including declining wholesale power prices, competitive fervor in the electric industry, concern over land-use and environmental impacts, and the bankruptcy of the leading domestic wind-energy firm, Kenetech.
Now wind energy is making at least a small comeback in the region, as highlighted by two significant developments in this month's issue. One is the coming together of a wind-energy project in Wyoming that will be owned by PacifiCorp and EWEB; Bonneville Power Administration will buy some of the wind-generated electrons. Another piece of news is the awarding of a $15 million federal contract to a Washington firm to develop an advanced wind turbine that could produce energy for as low as 3 cents per kilowatt-hour by early next decade. We also highlight Klickitat PUD's plans to market green power, including energy from the region's other pending wind-energy project, by the Conservation and Renewable Energy System (CARES) near the Columbia River Gorge.
On the demand side, Bonneville Power Administration has already surpassed its fiscal year 1997 conservation target--halfway through the year. BPA does forecast big declines in the coming years as shrinking budgets squeeze Bonneville-funded energy savings.
We also take a retrospective look at one of the premier market transformation programs in the region and the nation, the Super Efficient Refrigerator Program. It didn't create a huge near-term impact--but it did influence a major change in the market that will become apparent after the year 2000. Meanwhile, the Idaho Public Utilities Commission has endorsed Idaho Power's participation in the Northwest Energy Efficiency Alliance, although not the utility's proposal for a public-purposes funding charge.
Finally, this issue features our inaugural Opinion section. This particular article, by Michael Lane of the Lighting Design Lab, was solicited because it is thought-provoking. We encourage readers to let us know if you have opinions of your own you'd like to share in our cyber-pages. You can reach us with your ideas via e-mail [marko@newsdata.com], telephone, (206) 285-4848, or fax, (206) 281-8035.
Will Lutgen’s short tenure as the first executive director of the Northwest Energy Efficiency Alliance will end in the near future, after his decision at the beginning of August to leave the market transformation consortium.
"For personal reasons, I have decided to resign," Lutgen told Con.WEB on Aug. 5. He declined to elaborate, although he said, "I have told everyone I’m not mad at anyone in particular, or unhappy. I have my reasons." Lutgen said he did not have any specific plans after leaving the Alliance.
It was unclear how long Lutgen would remain on the job, although the Alliance’s six-person executive committee moved quickly on Wednesday, Aug. 6, to unanimously recommend deputy director Margie Gardner as new executive director. Her appointment is to be considered by the full 18-member Alliance board at a meeting in Whitefish, MT Aug. 11 and 12. "What we’re going to try to do is certainly try to make the transition as smooth as possible," said NEEA board chairman Dave Houser of Montana Power. "Will is very amenable to doing what it takes to keep the organization moving. It’s a friendly separation."
Houser said he doesn’t foresee "any major problems with this continuity." Still, he described NEEA as a "lean organization that does not have redundant staffing." Lutgen and Gardner have been the only full-time management staff for the Alliance, although Houser said "there are a number of personnel actions pending," including hiring a handful of full-time staffers and arranging for loaned staff and contracted services.
"If you lose anybody, it’s going to impact how rapidly you can get things done," Houser said. "We intend to keep moving forward . . . I don’t believe at this point it will have any effect" on Alliance programs.
NEEA, which formally debuted last fall, through June has committed to 14 regional market transformation projects with a total budget to date of about $12 million. A number of additional proposals are expected to be considered in coming months. The utility-funded collaborative is chartered through 1999 with a maximum three-year budget of $65 million. (For more information, see Con.WEB’s Alliance Web site, at http://www.newsdata.com/enernet/conweb/neea.html.
"The organization is well-established," said board member Ken Keating of Bonneville Power Administration. "With the policies, [project] contracts and strategic plan in place, we don’t expect to lose any momentum."
Nevertheless, board members expressed surprise and disappointment at Lutgen’s exit. "We are pleased with the performance of all of our staff to date," said Houser. "It’s disappointing to see any of those [people] move on to other things." He noted that the decision to leave was Lutgen’s, not the board’s.
"I was surprised, as I think everyone was," said board member Stan Price of the Northwest Energy Efficiency Council, a trade association for energy-efficiency businesses. "And I was disappointed, certainly, because I felt that Will was a very good choice to lead the Alliance, both from . . . an organizational development standpoint as well as someone who had a strong sense of market transformation as a concept."
Lutgen’s abrupt departure after just a few months, Price said, is "probably an indication NEEA needs to take a pretty strong look at itself as an organization and what kind of issues must be there that are obviously not getting addressed, certainly to the satisfaction of someone who is a capable executive director. I don’t think this is a pure personnel turnover issue for NEEA."
Working with an 18-member board is "a difficult proposition" for any executive director, Price said. "At any given point in time there’s always going to be some philosophical differences in relation to the board, and issues of control are clearly there. I can’t say that I’m going to put my finger on one of those things" as the reason(s) for Lutgen’s resignation.
In Price’s view, the Alliance as a whole is greatly challenged by the transition from 15 to 20 years of regional demand-side management programs largely based on financial incentives, toward the practice of seeking to enhance markets for energy-efficient products and services. "This has proven to be clearly as difficult a proposition to accomplish in reality as many of us conjectured it to be in theory when we first looked at the notion of a market transformation organization."
Price believes there is "still work that needs to be done [within the Alliance] to talk through the issues that are involved in that, and to come to reasonable decisions that are openly discussed and put out on the table and dealt with in an open and professional and collegial discussion. This [Lutgen’s departure] may well be an indication that more of it needs to happen."
Houser said, "Certainly we’re going to try to determine if there are problems that need to be dealt with."--Mark Ohrenschall
One of the premier market transformation programs in the Pacific Northwest and the nation has come to an end, leaving a legacy of mixed near-term results but contributing to substantially greater refrigerator energy efficiency in the 21st century.
The Super Efficient Refrigerator Program (SERP) officially concluded June 30 in the service territories of its 24 utility sponsors, including Bonneville Power Administration and PacifiCorp. SERP models--which exceeded current federal energy-efficiency standards by as much as 41 percent--are being discontinued in the marketplace by their manufacturer, Whirlpool. No comparable replacements are foreseen in the immediate future.
What, then, has SERP accomplished?
Based on information from Whirlpool, SERP, participating utilities, appliance dealers, government energy agencies, conservation groups and a Pacific Northwest National Laboratory report, the Super Efficient Refrigerator Program is likely to have a much greater impact in the next decade than in the 1990s.
Since the first SERP models appeared in retail outlets in 1994, overall sales have been relatively sluggish and are almost sure to fall short of the 250,000 units originally envisioned nationwide. Consumer awareness of and attitude toward energy-efficient refrigerators does not seem to have markedly changed. Nor have other manufacturers rushed in with their own versions of SERP efficiency-level refrigerators, although Whirlpool and its competitors have introduced a number of other high-efficiency models since the program began.
" . . . few observers would attribute major market changes to [SERP]," according to a 1996 evaluation of the program in BPA service territory by PNNL's Allen Lee and Robin Conger.
Still, SERP has played a crucial role in a number of important advancements.
Most notably, the program contributed in a substantial if hard-to-define way to a 30-percent increase in federal refrigerator efficiency standards, effective in 2001. This new national standard, roughly equal to the original SERP efficiency levels, is projected to result in energy savings of about 100 average megawatts in the Northwest alone.(Also see Con.WEB, May 23, for a story on the new federal standards.)
SERP, according to observers, helped establish in particular the technological and manufacturing viability of super-efficient, CFC-free refrigerators.
"As anticipated . . . SERP's most significant lasting impact could be its effect on the next generation of refrigerator efficiency standards," according to the Lee and Conger report. "SERP demonstrated that efficiency improvements of as much as 41 percent over the 1993 standards could be accomplished without the use of CFCs or exotic technologies."
Others concur with this view.
"In essence, I truly believe that we have contributed significantly to the transformation of the market," said SERP chairman Ray Farhang.
"The ultimate goal was to transform the market so that super-efficient, environmentally friendly models were the only ones to get sold," observed David Goldstein of the Natural Resources Defense Council, an early and major proponent of SERP. "That has been achieved almost beyond our wildest hopes by the adoption of the [federal] Department of Energy Standards." He thinks SERP is the most successful market transformation initiative in the country--at least to date.
He also credits SERP as a catalyst for the creation of the Consortium for Energy Efficiency, a Boston-based group overseeing a number of market transformation initiatives.
Less tangibly, there is some belief that SERP's collaborative process involving utilities, manufacturers and other stakeholders has nudged the federal rule-making process for energy-efficiency standards toward a more consensual and less confrontational model.
And even with its shortcomings, SERP has provided potentially valuable lessons for future market transformation endeavors.
History
SERP was established in 1991 to produce extremely energy-efficient refrigerators that were also free of chlorofluorocarbons (an ozone-depleting substance also known as CFCs). "SERP arose out of utility and environmental group concerns that refrigerator efficiency improvements were likely to slow dramatically when . . . limitations on the use of CFC refrigerants went into effect" in 1996, according to Lee and Conger.
A consortium of 24 electric utilities around the country--including BPA and PacifiCorp from the Northwest--joined to offer a $30 million prize to the manufacturer who could design, manufacture and sell CFC-free refrigerator models at least 25 percent more efficient than existing federal standards. "This level of improvement was chosen because it was high enough to induce production of a substantially more efficient unit, yet low enough to not discourage manufacturer participation," wrote Conger and Lee. "SERP planners believed that if one major manufacturer developed a significantly more efficient unit sooner due to the incentive, competitors would follow in order to protect their market share, thus accelerating the introduction of energy-efficient refrigerator technology into the marketplace."
Each utility's financial contribution was set proportional to the size of its service territory. BPA, for example, committed slightly more than $2 million. The winning manufacturer would receive payment for each SERP model sold to a customer of a participating utility (the incentive payment was about $100 per refrigerator).
John Graham, formerly of PacifiCorp and now conservation and energy services program manager for the Conservation and Renewable Energy System (CARES), recalled SERP as "one of our [PacifiCorp's] early market transformation projects . . . what we thought was the opportunity . . . to take part and hopefully provide some useful and critical mass to the national effort." PacifiCorp liked the "good energy and support being provided by key utilities around the country," including Southern California Edison, Pacific Gas & Electric, New England utilities and Bonneville, among others.
Lee and Conger reached a similar conclusion: " . . . utilities found the broad geographic scope of SERP appealing because it allowed funds to be pooled to influence the national market for refrigerators and generate enough SERP refrigerator sales to lead to high volume production. Utilities could not hope individually to influence a national market."
In addition to this national organization targeting manufacturers for refrigerator efficiency, "It seemed like the technologies were there and ripe for commercialization," Graham said.
A total of 14 manufacturers submitted proposals, and, according to a SERP brochure, "Whirlpool Corporation was selected because its design clearly demonstrated the energy-efficient technology needed to realize the projected energy savings called for by SERP."
Technology/Energy Savings
Here are some of the key technological features of SERP refrigerators, as outlined by a SERP brochure:
Energy savings from SERP models are tremendous, particularly from a historical perspective. The average SERP model uses 620 kilowatt-hours a year, according to SERP, about half the consumption of a typical side-by-side refrigerator in 1990 and about 25 percent of the power used in an average 1972 model. Average energy savings for SERP refrigerators are 331 KWh annually, Lee and Conger report.
SERP models also offered a number of popular features, including "flexible, convenient storage options and a crushed ice-and-water dispenser."
SERP Sales
Despite the energy efficiencies, features and competitive pricing with comparable models, SERP refrigerators did not fare particularly well in the marketplace.
"I wish I could tell you people are just dying to go out and buy an energy-efficient refrigerator," but that's not the case, reported Whirlpool spokeswoman Carolyn Verweyst.
As of the end of April, two months before the program's formal conclusion, almost 100,000 SERP units had been purchased nationwide, according to program administrator Dave Gardner. "Whirlpool has shipped a lot more units than have been sold," he acknowledged, and many are "either in dealer showrooms or in somebody's warehouse. There's also a lot of units [sold] that haven't been reported . . . largely due to independent dealers who have not the reporting skills that Sears-Roebuck does."
A number of reasons are advanced for the slow sales, according to an American Council for an Energy-Efficient Economy 1996 report on market transformation programs. Whirlpool points to the burdensome "time and effort required of dealers to process the paperwork necessary to receive a rebate," according to co-authors Margaret Suozzo and Steven Nadel. Other potential factors cited by Suozzo and Nadel are Whirlpool's limited promotion and training for dealers and distributors, and the relatively small market niche (about 30 percent of the total market) of side-by-side refrigerator-freezers such as SERP models.
In addition, Lee and Conger cited higher SERP retail prices--an average of $84 more than for comparable units in the BPA area, and $101 nationwide. "This has diminished SERP sales, which appeared to be very sensitive to price," they wrote.
Although a final sales tally will not be known for several months, Farhang believes the total could reach 200,000 but won't meet the 250,000 initially projected. Specific figures for the Northwest were unavailable.
SERP refrigerators were sold under the Whirlpool, KitchenAid and Kenmore brand names, with some variations between models. Retail prices reportedly ranged slightly up or down from $1,400 apiece, according to Gardner. Approximately 1,000 dealers nationwide carried SERP models, he estimated.
Marketing/Consumer Awareness, Demand
The sluggish sales of SERP refrigerators also reflects to some extent the program's sporadic marketing, primarily to consumers but also to retailers.
At the beginning SERP reaped what Verweyst called "huge amounts of publicity" around the nation, and Whirlpool and utilities provided some promotional support through the years. However, the initial splash turned into "diminishing ripples of local promotion" over time, according to Lee and Conger.
"We didn't really develop a real concerted communications plan," said Graham. "We really needed to think about this and have a communications structure around it . . . You can't cease to communicate with your customers about all this."
Goldstein believes SERP suffered from the lack of a national advertising campaign (other than by Whirpool) as well as a dearth of special labeling, retailer awareness programs and incentives from non-SERP utilities.. "Basically Whirlpool had to do all the work by itself," he said, adding, "The participating utilities helped a little bit" with marketing and publicity.
Lee and Conger found "some evidence that consumer awareness about energy efficiency increased because of SERP, leading buyers to purchase more efficient units as a result, even if not SERP models."
Lee and Conger identified the presence of SERP display models in stores, along with promotional materials, as important promotional elements. But only about one-third of BPA-area SERP dealers put SERP units on their display floors. At the same time, about two-thirds of those dealers reported that customers did inquire about energy efficiency--although these customers were generally in the minority. They found "some evidence that consumer awareness about energy efficiency increased because of SERP, leading buyers to purchase more efficient units as a result, even if not SERP models."
This consumer understanding is vital, according to their report. "Several of the manufacturer representatives that we interviewed observed that consumer interest in energy efficiency was critical if the industry were to make additional efficiency improvements," they wrote. "Manufacturers typically felt that consumers were not demanding higher efficiencies and that, at best, efficiency was only a tie-breaker" in purchasing decisions. "Manufacturer representatives generally felt that SERP had done little to affect consumer perceptions or interest in energy efficiency, particularly after the first few months."
This point was reinforced by two Seattle-area refrigerator dealers.
"It's something the public hasn't really been asking for," said Marv Lillquist, a salesman with Almvig's Appliances and Cabinetry. His store sold only a few SERP models, and lack of awareness was the biggest reason: "Nobody's coming in asking for it." People looking for new refrigerators consider size first, then price, then various features, he said. The energy efficiency of SERP models has "not been a big technical selling point."
Monarch Appliance discontinued its line of SERP refrigerators toward the end of 1996, according to manager Bill MacNeil. "They were all right," he reported, but, "I didn't have enough interest" among customers.
Graham, among others, believes SERP didn't adequately work with refrigerator retailers, under the assumption Whirlpool would do so. "We worked really hard on the manufacturers. We didn't think as much or as well about all of the distribution and retail side," he said. "What we forgot or didn't realize was the fact the stuff being new, being unfamiliar in the distribution chain, it didn't have the profile with distributors and retailers that it had for us . . . You've got to create a lot of pull demand with customers coming in. The retailers are really attuned to that . . .
"You need the manufacturer, you need the distributor and the retailers and you also need the creation of the market from the consumer demand side," Graham concluded.
The Market for Super-Efficient Refrigerators
After SERP, Whirlpool has no plans to continue producing similarly energy-efficient refrigerators, according to Verweyst.
As for other manufacturers, "They basically didn't" offer models comparable to SERP, Goldstein said. "As far as I understand it, Whirlpool was trying to do a marketing play with this product, trying to gain market share," he said. "I don't think they lost market share. I think it was just sort of status quo."
At the same time, however, consumers today still have plenty of energy-efficient refrigerators from which to choose. ACEEE lists more than 130 separate models available in 1996 that exceed the 1993 federal energy-efficiency standards by at least 15 percent.
" . . . the SERP contest, together with a handful of aggressive utility incentive programs, is believed to have motivated other manufacturers to develop and test market similar high-efficiency products," wrote Suozzo and Nadel.
Lee and Conger concluded that "SERP was partially responsible for significant efficiency increases in numerous Whirlpool refrigerators and a modest increase in the average efficiency of other brands." The energy efficiency of all side-by-side units improved between 1993 and 1996, they found. For non-Whirlpool models the average consumption in 1996 was 7.5 percent below 1993 standards, while Whirlpool's average was about 25 percent less than those standards.
In mid-1993, they pointed out, "no major manufacturers were producing refrigerators in any style and size that had consumption levels 25 % less than the 1993 standards . . . by January 1996, however, more than 75 units were available that consumed at least 25 % less than the energy level set by the 1993 standards and were CFC-free . . . From a simple cost analysis and dealer comments, we have concluded that SERP, at least partially, motivated manufacturers to produce such high efficiency units."
In addition, Lee and Conger believe it "unlikely that the efficiency gains in Whirlpool's non-SERP models and other manufacturers' products would not remain when SERP ended. To the extent that these gains were related to SERP, SERP would have lasting effects on efficiency levels in the future."
New Federal Standards
In any case, as of July 2001, the typical refrigerator/freezer sold in the United States will exceed the 1993 energy-efficiency standards by about 30 percent, as a result of new Department of Energy rules announced in April.
Although a direct relationship between SERP and the new standards is difficult to pinpoint, most observers credit the program with playing a substantial role in this ultimate market transformation coming in the next decade.
"The trick is to get a reasonably advanced standard, one that leaps you ahead," said Charlie Stephens of the Oregon Energy Office, who serves on the National Appliance Efficiency Standards Advisory Committee. "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."
BPA's Ken Keating agrees that feasibility is crucial. "The role of SERP in getting the standards in place is usually considered subjective," he said, but added, "I think what we've seen historically with standards and codes is that you have to establish that it can be built before you can make a requirement." Otherwise, "It's just politically impossible."
Goldstein noted that refrigerator manufacturers "universally supported" the new DOE standards. Asked why, he replied, "This product existed and could be mass produced."
Lessons Learned
SERP has provided a number of useful lessons for other market transformation initiatives, according to observers.
Among them:
The 24 electric utilities combined to form a huge nationwide market that enticed Whirlpool and many of its competitors to investigate super-efficient refrigerators. "This was going to pull them to a different direction [and to] spend a lot of resources to try to do something they weren't doing" at the time, said Farhang. Because of the major commitment this entailed, SERP officials were unsure up to the very last minute whether manufacturers would submit serious bids.
SERP's collaborative process also led to "a real opening of some dialogue that led to a consensus" among stakeholders in the federal standard-setting process, according to Graham. "Federal standards got set in a much more negotiated consensual manner. In the past it had been more controversial." He believes SERP has even influenced non-refrigerator guidelines. "The whole process of setting federal standards now is much more that consensual, negotiation kind of process . . . [SERP] was the beginnings of more dialogue between utilities and manufacturers on their long-term interests. How can we work together?"
SERP could have benefitted from even more collaboration, Goldstein thinks. "Another generic lesson is that one single program operating in a vacuum doesn't do as well as a bunch of complementary programs. To the extent SERP was not as successful as it could have been it's because it had to carry all the water by itself."
Whirlpool would have liked more participating utilities. As it was, Verweyst said, the manufacturer could sell SERP products in only about 20 percent of the country; many people learned about SERP through various media but were unable to purchase qualifying models because they didn't live in the service territories of SERP utilities. That was a frustration, she noted.
"A lot of expense and a lot of trouble was incurred in the SERP program by trying to track where the fridge went, whose service territory, and get the right utility to pay for it," said Goldstein. "If the utilities could have agreed to do this more on a statistical sampling basis, rather than one-by-one tracking basis, it probably could have cut a third of . . . the total costs."
The Idaho Public Utilities Commission has approved Idaho Power's involvement in the Northwest Energy Efficiency Alliance, but not the company's proposal to recover its NEEA costs through a public-purposes charge.
In a July 16 ruling, the IPUC said Idaho Power should capitalize and defer its investment in NEEA and request cost recovery "at a future date, when the prudency of the expenditures can be determined."
While Idaho Power is disappointed the commissioners turned down its request for a public-purposes charge, customer service manager Jim Baggs said the utility intends to continue its participation in the Alliance and follow the PUC's recommendation for capitalization and amortization of costs. Idaho Power will probably request recovery of NEEA costs before the organization's three-year sunset date at the end of 1999. In about a year there should be "a substantial portfolio of projects to demonstrate that NEEA is doing the right thing," he said.
Baggs also said the company will file a request for clarification with the IPUC, to ensure the commissioners' direction to capitalize NEEA investments includes a return on the investment--as it has with other conservation investments.
The commission's denial of a public-purposes charge for Alliance funding does not mean the IPUC is opposed to the concept itself, said commissioner Marsha Smith.
In 1994 the IPUC approved Washington Water Power's proposal to establish a systemwide distribution charge for recovery of future DSM costs, and in January of this year approved a three-year extension that includes NEEA costs. Smith said Water Power's case was different, since the utility already has established a different mechanism for recovering DSM costs. There's a historical difference in the way Water Power and Idaho Power recover these costs, she said, and in the issues each case presented to the commission. "We were simply looking at what was proposed in this case and deciding based on the record," she said. "We were hoping this [ruling] would be a positive statement for Idaho Power's participation in NEEA."
The IPUC received comments from 35 individuals and/or groups on Idaho Power's application for a NEEA-related public purposes charge, which was filed in December 1996. (See stories on the proposal in Con.WEB issues of Jan. 24, April 25 and June 27). Many of those commenting opposed the company's proposal. Some suggested the charge represented a rate increase that violated the company's rate-freeze agreement with the IPUC. Others were concerned about the Alliance's lack of a track record, and many suggested funding of such a non-profit organization should come from Idaho Power shareholders, not customers.
In its order, the IPUC said the company's request to recover NEEA costs does not violate the rate moratorium. In approving the settlement agreement establishing the rate freeze, the PUC provided an exemption for DSM expenditures "to allow Idaho Power the opportunity to continue to invest in DSM and to be free to seek cost recovery in a more timely manner than in the past." The commissioners view Idaho Power's participation in the Alliance as a "continuation of its overall commitment to DSM and not as some new program not envisioned at the time of the settlement agreement."
Nonetheless, the Alliance is a "relatively young organization and the various programs it proposes to fund have not yet proven their cost-effectiveness." Any DSM investment must be prudent if it's to be recovered from customers, and "it is premature at this juncture to determine whether any or all of the various programs funded by NEEA will ultimately prove to be prudent." Therefore, the IPUC rejected the public-purposes funding proposal in favor of capitalization and deferral of the investment until more data is available on the prudency of various NEEA programs. In making such a determination, the commission "will consider all of its various projects as a whole rather than make a cost recovery determination on a project-by-project basis."
The commissioners rejected the argument that NEEA costs should be recovered by shareholders, pointing out that shareholders "reap financial benefits from the sale of electricity, not its conservation." Customers, on the other hand, benefit when their use of electricity is reduced and the acquisition of new resources can be avoided as a result.
At the same time the IPUC denied current recovery of Alliance expenditures, it encouraged Idaho Power to initiate a proceeding for a comprehensive review of its existing DSM investment and recovery. Commissioner Smith said the utility's conservation investments are deferred and amortized over 20 years, and "we're looking at a shorter period for recovery."--Jude Noland
Halfway through fiscal year 1997, Bonneville Power Administration conservation programs have already exceeded their aggregate energy-saving target for the entire year.
BPA reported total energy savings of 31 average megawatts by its utility customers from October 1996 through March 1997; the goal for the year ending in September is 29 aMW.
"It's really quite amazing," said Terry Esvelt, BPA vice president for energy efficiency. He thinks aggressive utility initiatives financed with the remnants of their BPA conservation monies and a robust Northwest economy are the primary reasons for the solid showing midway through FY 1997.
At the same time, Esvelt cautioned that the long-anticipated decline in Bonneville-funded energy savings--predominantly a function of sharply reduced budgets--is looming on the near horizon.
BPA's total conservation spending peaked in the 1990s at $172 million in FY 1994, and has plummeted to an estimated $99 million this fiscal year. BPA conservation budgets are projected to continue dropping steadily in the coming years, to $53.6 million in FY 2001. This ramping down is even more pronounced in BPA's traditional conservation programs, since the total budgets from FY 1995 onward include significant spending on market transformation and market development activities.
The surprising midyear 1997 results follow an equally surprising FY 1996, in which BPA reported total energy savings of 59.9 aMW--virtually double the 30 aMW target. "BPA conservation programs are still delivering a lot of savings . . . which probably comes as a surprise to a lot of people who thought we'd dropped out of conservation programs altogether," Esvelt said earlier this year.
As in FY 1996, the midway FY 1997 conservation numbers are primarily attributable to multisector programs and residential and commercial energy codes.
Of the 31 aMW of utility-reported savings to date, 17 aMW came from the multisector category. This includes the likes of the Conservation and Renewable Energy System (CARES), Oregon Municipal Energy and Conservation Agency (OMECA) and municipal utilities in Seattle and Tacoma, as well as so-called "flex agreements" that allow utilities to stretch their BPA conservation dollars.
"Last year those multisector contracts were going gangbusters. That's obviously continuing," said Esvelt. "Basically they're handing us almost double the kilowatt-hours for the same amount of money.
"The whole theory behind it is [utilities] are closer to their retail markets and know better how to manage the money across sectors and through time than the old [BPA] programs, which were sector-segregated," he continued. "When they have the ability to manage the total budget through time, it caused them to be better managers and go after the best opportunities. I think it's a real compliment to those local utilities that are managing those programs."
Previously, according to Esvelt, many Bonneville utility customers had conservation contracts that called for them to obligate BPA funds by the end of FY 1997. Although most of these contracts have since been modified to allow more latitude, "A lot of utilities had plans to get out by the end of '97 and had been working on that schedule. They're sort of making their big push at this time. I think it'll start to ramp down in '98 and '99 pretty significantly."
In addition to multisector initiatives, BPA utility customers reported 6 aMW of industrial-sector energy savings midway through FY 1997 and 1 aMW in commercial. There were no energy savings reported in the residential sector, although Esvelt said this "could be a reporting anomaly," since there are ongoing BPA-funded conservation activities in Northwest homes.
Another significant portion of FY 1997 savings to date has come from more stringent commercial and residential energy codes around the region, which accounted for 7 aMW. Esvelt early this year noted that Bonneville "made a huge investment all through the '80s and early '90s setting the table so local jurisdictions would take building codes" to higher efficiency levels; thus BPA takes credit for code savings in the service territories of its public-power customers.
A strong regionwide economy has boosted energy-code conservation, Esvelt said. "The more building activity, the higher the savings levels. Some of this is not wonderful management and planning."
Looking ahead to the remainder of FY 1997, Esvelt said there are already indications that the brisk pace of the year's first half won't be sustained in the second half. "As utilities start using up all their budgets, there's just a natural slowing down," he said. "I don't think we'll get to 60 [aMW]. I don't think 31 is halfway; maybe two-thirds. If we get to 50 I'd be pretty pleased."--Mark Ohrenschall
The first commercial-scale wind-energy project to directly serve the Pacific Northwest is nearing the start of construction, following a series of crucial agreements and approvals in July.
First came the July 8 signing of a development agreement between PacifiCorp, Eugene Water & Electric Board and SeaWest Energy for a 41.4-megawatt-capacity wind farm in the Foote Creek Rim region of south-central Wyoming.
Next, on July 17, the federal Bureau of Land Management granted rights-of-way for construction of the wind plant and an associated transmission line.
Finally, on July 21, Bonneville Power Administration signed a 25-year agreement to buy slightly more than a third of the power output.
Construction is scheduled to start in August, and the project is anticipated to begin spinning out electrons by late 1998 or early 1999.
The July 8 agreement between PacifiCorp, EWEB and developer SeaWest was a vital step for the Foote Creek Rim project in Wyoming's Carbon County.
"This agreement is what allows us to move forward with construction and development of the project, once permits are received, so it's a key document," said project manager Gail Miller of PacifiCorp, which will own nearly 79 percent of the project. "We're excited about it. It's I think a very significant development," agreed Ken Beeson of EWEB, which has about a 21-percent ownership share.
Rachel Shimshak of Renewable Northwest Project hailed the development agreement as "a very exciting and very significant step for renewables in the region. Given the changes in the [electric] industry it is a tremendous accomplishment that Bonneville and PacifiCorp and EWEB have persevered and made this project a reality. The uncertainty in the industry has chilled investments in conservation and renewables, but they have continued to move forward. " Shimshak believes this "signals great promise for renewables in the region . . . I hope this project shows it can be done."
The July 8 agreement outlines a development schedule for the $62 million project, which includes the placement of 69 wind turbines of 600-kilowatt-capacity apiece, as well as construction of a new substation and a 29-mile, 230-kilovolt transmission line. The wind farm itself is estimated to cost $50.4 million, and the substation and transmission facilities add another $11.9 million. PacifiCorp and EWEB will pay SeaWest for the wind plant when it is completed and operating, according to Beeson, while the utilities will be responsible for constructing and maintaining the substation and transmission line. SeaWest will operate and maintain the wind farm once it is built.
Energy costs are projected at 4.5 cents/kilowatt-hour, Miller said, which for PacifiCorp includes a 1.5 cent/KWh federal production tax credit for 10 years if Foote Creek Rim is operating by June 30, 1999. EWEB
is eligible for a 1.5 cent/KWh federal production incentive payment, which, however, is subject to congressional appropriations, a situation Beeson called "a little problematic . . . I'm pretty optimistic we'll get it. If we don't our 45- to 50-mill [wind] power looks like 60- to 65-mill power."
Under the power-purchase agreement with Bonneville, the federal power-marketing agency will lay claim to 37 percent of the Foote Creek Rim power, or 15.3 MW of the 41.4 MW capacity. It will pay a levelized cost reportedly in the range of 4 cents/KWh to 4.5 cents/KWh.
"This agreement reflects BPA's interest in maintaining our quality of life in the Northwest by continuing to provide clean energy for the region," said BPA administrator Randy Hardy. "We consider this power purchase to be a meaningful part of BPA's energy portfolio and plan to continue to pursue our renewable energy responsibilities."
Green-Power Marketing
Of Bonneville's Foote Creek Rim power purchase, Salem Electric will lay claim to 7 average megawatts under a green-power purchase deal with BPA.
With their retained shares--PacifiCorp will keep 19.6 MW of project capacity and EWEB 6.5 MW--both utilities plan to look into green-power marketing opportunities of their own.
Miller said PacifiCorp has already had interest in Foote Creek Rim energy.
EWEB, meanwhile, expects to develop a green-power program among its retail customers for the slightly less than 3 aMW of Foote Creek Rim power anticipated to figuratively flow to Eugene each year. Although no decisions have been made and customers will be consulted for their opinions, Beeson said utility officials are considering selling 100 KWh monthly blocks of wind energy--priced to cover the higher costs, perhaps $2.50 to $3 for each such block. "We think there's a pretty good level of interest in our community" in buying green power, said Beeson.
Neither utility has immediate plans to pursue other wind-energy projects. Both PacifiCorp and EWEB want to learn from this initial endeavor in Wyoming's cold and windy climate. "There's a lot of opportunities to learn about wind operations and where there needs to be some technological improvements in the wind turbines and operations," said Miller.
"My sense is there is a real increasing level of dialogue about green power in the country, and it's kind of my sense that there are customers and people who are interested in purchasing it," said Beeson. "I think that's a growing kind of a sentiment . . . There's certainly opportunity at this site for expansion, if the market's there." Under the permit conditions this wind farm eventually could be expanded to as much as 500 MW capacity at Foote Creek Rim and neighboring Simpson Ridge, noted Walter George, project leader for the BLM's Rawlins District Office.
History, Site Characteristics
Foote Creek Rim is many years in the making as a wind-energy project. The so-called Wyoming Windplant was one of two wind projects chosen by BPA in early 1993 for power-purchase negotiations (the proposed Conservation and Renewable Energy System [CARES] wind project near Goldendale, WA--which is still under development--was the other). Public Service Co. of Colorado and Tri-State Generation & Transmission Association were among the early prospective owners, but they later abandoned the project, whose potential capacity was at one time as high as 70 MW. The original developer was U.S. Windpower, which as Kenetech ran into assorted troubles and declared bankruptcy in early 1996. "That delayed things a year and a half," according to Miller.
California-based SeaWest acquired the Foote Creek Rim project assets in a bankruptcy proceeding in late 1996, according to Beeson, and contract negotiations between the developer and the utilities culminated with the July 8 agreement.
Among other differences, SeaWest will use a different technology and site configuration than proposed by Kenetech. The 600-KW Mitsubishi turbines are larger (135 feet tall) and have longer, slower-turning blades than the Kenetech 350-KW model, Miller said. And there will be fewer of them--69 altogether compared with Kenetech's projected 200.
As a wind-energy site, Foote Creek Rim is very promising for energy production as well as relatively uncontroversial.
Located north of Interstate 80 near the tiny rural community of Arlington, Foote Creek Rim is described by BLM's George as a mesa seven to nine miles long, one-half to two miles wide, with a gentle, treeless upslope that acts "almost like the leading edge of a wing of an airplane." It lies in a gap in the Rocky Mountains where prevailing westerly winds funnel through and actually accelerate. "It is a premier site for wind resources," George said. "The winds are not excessively variable. They tend to be strong and persistent . . . The topography is very unique and very appropriate for placing wind energy."
Average wind speed year-round is 22 to 24 miles per hour, a substantial blow. EWEB's Beeson estimated Foote Creek Rim's capacity factor could exceed 40 percent, which he said is nearly double the national average for wind-energy plants.
Although sparsely populated by humans, the area is home to many large mammals--including elk, mule deer and pronghorn antelope--as well as what George called "a very rich and diverse" population of birds--including bald and golden eagles, hawks, peregrine falcons, passerines and mountain plovers.
Bird deaths are one of the primary real and potential environmental impacts of wind-energy plants, and this was indeed a major issue in the environmental review of Foote Creek Rim.
In the end, according to Beeson, the environmental impact statement process concluded "this plant could be built and could be operated without having a detrimental effect on the species in the area."
The lead EIS agency, BLM, engaged in "very extensive consultation" with the U.S. Fish and Wildlife Service and the Wyoming Game and Fish Department, according to George.
The project has a special-use permit from the federal wildlife service that outlines a process should bald eagles or peregrine falcons--both listed species under the Endangered Species Act--be killed by the wind turbines. "What it does is provide for some pretty active involvement and oversight" involving the wind-farm owners, operators and government agencies, Beeson said.
In addition, George said, under a separate U.S. Fish and Wildlife Service permit the project will be allowed to kill up to 10 birds per species of more-sensitive migratory bird species each year and up to 100 birds per species of less-sensitive migratory bird species annually. "We're not expecting to come anywhere near" that level of bird kills, George said.
Should bird deaths develop into a significant problem, mitigation measures could include noise-making warning devices on turbines or limiting turbine operations. "This is just kind of a bag of possibilities," said George. "None of those are identified or contemplated as mechanisms that would be followed at this time."
The project also has been designed to accommodate birds. Miller said all the distribution lines between turbines will go underground, the turbine towers will be tubular and without perches, the turbines will be moved away from the rim of the site where birds like to fly, and the blades will rotate more slowly than some other wind turbines. "We're implementing as much as we know . . . trying to reduce [the risk to birds] to as great an extent as possible. I'm sure we will learn over time," Miller said.
The Foote Creek Rim project has broad popular support in Wyoming, according to George. Local and state governments, nearby residents and the Wyoming Outdoor Council, an environmental group, are among those who have expressed support, although a smaller environmental group remains opposed. The project will generate an estimated $575,000 in one-time impact assistance payments, as well as $2.3 million in sales and use taxes in the first two years and $1.1 million in property taxes in the first three years. "It will have a very significant impact on the revenue stream of the county," said George.--Mark Ohrenschall
A Washington state firm has been awarded a $15 million U.S. Department of Energy contract to design, build and test an advanced wind turbine anticipated to produce energy for a levelized cost in the range of 3 cents per kilowatt-hour--a roughly 40-percent cost reduction from current wind-energy technology and competitive with new fossil-fuel generating plants.
The Wind Turbine Company of Bellevue, WA is one of two U.S. firms to win an advanced wind-turbine development contract from the DOE’s National Renewable Energy Laboratory. The other is Enron Wind Corp., formerly known as Zond and now a subsidiary of energy giant Enron, which has established a major Northwest presence in the Northwest by merging with Portland General Electric.
This is a long-term enterprise: wind turbines developed through these contracts are not expected to be commercially available for another four to five years. But if they reduce the levelized cost of wind energy to the DOE’s target of 2.5 cents/KWh (at a good wind site), they can potentially make significant inroads into the market for new electric power supplies.
"What that does is it puts it in a category that is certainly competitive and probably the lowest [levelized, life-cycle] cost of energy for any new generating facility," including coal and natural gas-fired power plants, said NREL senior project manager Paul Migliore. "We think it’s achievable and the [program] goal is to make wind energy the lowest cost for new capacity."
Advanced Wind Technologies
The Wind Turbine Company and Enron Wind were selected through a competitive process over the past three years involving 13 domestic wind-turbine manufacturing companies, according to Migliore. "We perceived that the technology that was being offered by The Wind Turbine Company was rather innovative and, if successful, had the potential for offering significant reductions in the cost of energy." Enron Wind’s turbine design is more conventional but also holds great promise for shrinking energy costs, he added.
WTC co-founder Ken Deering said his small firm--it now has four employees--plans to reduce costs primarily through improved turbine structural dynamics and electronic control systems.
"The Wind Turbine Company uses a rather unique rotor design, which is intended to reduce structural loads and that reduction in structural loads leads to lighter weight and lower costs" of materials, explained Migliore. "The lighter weight of the rotor ripples through the whole turbine."
Diminished materials cost contributes directly to reducing the cost of producing electricity from the wind. "You have to get the cost out of the structure," Deering said, since wind-turbine development is dominated by first-cost considerations (once the turbines are spinning out electrons, there are no fuel costs and only minimal operations and maintenance expenses).
Enron Wind, meanwhile, employs a "more robust design," according to Migliore. He said the company is "fully engaged" in variable-speed rotors (also featured in the WTC design) that allow the turbines to operate at optimum efficiency at a wider range of wind speeds. Advanced aerodynamics, a new blade manufacturing process and larger turbines are expected to combine to reduce energy-production costs for Enron Wind.
Challenges of Raising Capital
For both companies DOE will fund 70 percent of the turbine development costs, which for WTC represents about $15 million. "For us it is make or break, no two ways about it," said Deering.
WTC in the past has received money from outside investors, including The Dow Chemical Co. Still, under the DOE contract the firm needs to raise several million dollars on its own. Although a number of potential investors are interested, "It’s premature to really announce anything yet," said Deering.
Raising money is a struggle, he acknowledged. The vast majority of venture capitalists have no inclination to invest in WTC: the company’s product is in too early a stage and it takes too long for commercialization. "Most people in venture capital want something like software," said Deering. "It materializes in a commercial product instantly. It takes very little testing. They all want another Microsoft."
Deering and WTC also have to contend with the wind-energy industry’s battered reputation. "There’s a certain sort of perceptual residue that a lot of people have given wind energy a try and have not been successful," he said. The 1996 bankruptcy of Kenetech, the leading domestic wind-energy firm, "certainly didn’t help.
" . . . It’s a tough deal. You’re coming into an existing, established regulated market and it’s not that you can suddenly generate electricity for half the cost of any other method," Deering continued. "You just work like hell to get close to the existing players. We think it will be a triumph if we can get into the ball game with fossil fuels . . . The price issues tend to drive most decisions, most thinking processes. That makes it tough."
In addition, electric industry restructuring has created what he called "a great deal of turmoil in the market . . . that turmoil situation contributes to difficulty in raising money."
Yet, over time, Deering believes retail electric competition will prove greatly beneficial for wind energy, by creating opportunities for green-power marketing. Many surveys have shown broad public support for renewable electric sources, he noted, and if wind energy is competitive in price, "I think a lot of people will go for it."
In the first stage of its DOE contract, the Wind Turbine Company will develop what Deering called a "proof-of-concept machine . . . Mainly it’s to prove all the basic concepts that we think will lead to the cost reductions." This 250-kilowatt-capacity version is scheduled to be operating on a test basis by late 1999 at an abandoned wind-turbine site in south-central Wyoming, fairly close to but not associated with the Foote Creek Rim wind-energy project (see story above).
The full-scale 1-megawatt turbine--100 meters high, with a 55-meter rotor sweep--is scheduled to be up and running 18 months later.
WTC will market both its smaller and larger turbines. "There is no one machine for every possible application," Deering said. Although the 1-MW turbine could work in the Northwest, he noted that wind-power demand is growing fastest overseas. And domestically, "Realistically, the really large wind-energy potential in this country is in the Great Plains."
Government’s Role in Wind Energy Development
While describing himself as "quite optimistic about the capability of the technology" forthcoming from WTC and Enron Wind, Migliore believes the U.S. wind industry needs more from its government.
"I think they were chosen as being the best alternatives presented for advanced wind turbines. I don’t want to characterize them as the best hope of the industry," he said. "The best hope for the U.S. industry is for our government and the Congress in particular to support development of renewable and sustainable energy. Our country does not support the development of wind energy anywhere near the extent European government does." This is manifested, he believes, in a "huge economic advantage" for European wind companies. "They’re doing billions of dollars worth of business and we’re not."
European government wind-energy development budgets are four or five times greater than in America, he said. "More importantly, the government incentives or structuring of their utility industry encourages and promotes and in some cases even mandates the use of wind turbines." Migliore also described in Europe a "very significant public acceptance of turbines being a renewable resource and also being a creator of jobs and a tremendous export market."
The DOE contract awards indicate the U.S. government is at least aware of the opportunities. "These partnerships with the wind-energy industry will help speed advanced clean energy technology to the marketplace," said Secretary of Energy Federico Peña in a press release. "It is important for the wind industry to be in a position to take advantage of domestic and international markets that are expected to grow rapidly over the coming decade."--Mark Ohrenschall
Klickitat County PUD has three renewable energy projects under development, and the utility is willing to sell the output of those projects to other utilities or power marketers that want to offer a "green power" package.
In early July the south-central Washington PUD issued a solicitation for proposals for the purchase of output from a hydro project, a landfill-gas generation project and a wind-energy project. While buyers would pay more for this power than on the spot market, Klickitat thinks it's marketable as a niche product.
"It's probably potentially economically attractive as a premium product," said PUD general manager Brian Skeahan.
Klickitat, he added, is sending its solicitation to three distinct groups of potential buyers: power marketers, utilities whose service territories provide some of the municipal solid waste that will generate the landfill-gas power, and non-traditional power marketers interested in carving out a specific green power niche.
The McNary Dam fishway hydro project, which Klickitat is developing with Northern Wasco PUD, will be the first to go on line, in September 1997. The project is expected to enhance fish passage over the existing dam on the Columbia River. Klickitat owns half the 10-megawatt project and is offering its full 5-megawatt share to interested buyers.
The other two projects are expected to be in operation by the beginning of 1999.
Skeahan said the PUD is negotiating the final details of an arrangement with Rabanco, owner of the Roosevelt Landfill in eastern Klickitat County, for construction of a landfill-gas generation project at the site, under which the PUD would own the power generation facilities and Rabanco would own the methane gas collection system at the landfill. The PUD wants to start by installing enough 1.6 MW internal combustion reciprocating engines to provide about 4 MW of energy from methane gas, but Skeahan said that could increase to 20 MW by 2001. "As there's more solid waste [in the landfill], there's more methane, so there's more options."
The wind power Klickitat is offering would come from a 25-MW-capacity project being built by the Conservation and Renewable Energy System (CARES), of which Klickitat is a member. The project, which has all the necessary permits, is awaiting a final record of decision from Bonneville Power Administration. Pre-construction work has already started at the site near Goldendale, WA.
Skeahan said Klickitat is most interested in proposals that include a three- to 10-year term for the green-power purchase, but it's willing to look at other offers. "We're encouraging people to be somewhat creative with their responses," he said. Proposals should also include the preferred delivery point, where the power is to be wheeled and a proposed transmission path, as well as provision for transmission services. Proposals must be received at the PUD's office in Goldendale by July 30. --Jude Noland
When the Oregon Legislature ended its 1997 session July 5, lawmakers joined their Idaho and Washington counterparts in deferring electric utility restructuring legislation until the next session--which, in Oregon's case, is two years away.
The issue won't go away in the meantime, however, and while there is a potential for some interim committee activity before 1999, there is only speculation as to what will actually occur.
Most of the Legislature's restructuring activity actually ended in early June, when the House Power Deregulation Committee decided not to send its restructuring measure, House Bill 2821, to the House floor after it was clear the measure lacked the votes to move any farther. The committee did print the final amended version of HB 2821 as a new measure, HB 3747, so lawmakers can start with a clean copy of the proposal the next time it's considered.
As it now stands, HB 3747 would establish a statewide public-purposes standard for electric utilities and Bonneville Power Administration direct-service customers, equal to a charge of at least 3 percent of the total revenues from the sale of electricity services. The money raised would be earmarked for energy conservation, renewables and low-income energy services.
Still unresolved is administration of this public-purposes fund. There appeared to be consensus that the fund should be administered by an independent board or a state agency, like the Oregon Office of Energy, rather than the utilities. But Portland General Electric representatives reportedly objected to that approach, saying utilities should be responsible for administration. In addition, some large industrial customers objected to paying the full 3-percent charge and argued they should receive credit for conservation investments they make.
When the session ended, Rep. Cynthia Wooten, House Power Deregulation Committee co-chair, indicated she might hold educational town hall meetings on restructuring. Nothing has been scheduled at this point, however. House leadership could appoint an interim committee to work on restructuring issues. But a staffer in the legislative policy and research office said such decisions aren't made until the end of the summer and pointed out that the committee's chair, Rep. Jim Welsh, didn't seem to favor that approach.
Regardless, the issue is sure to come up next session. Steve Weiss of the Northwest Conservation Act Coalition, a member of the Fair and Clean Energy Coalition, said the group decided recently to "try again next time" and work on consumer education in the meantime. But Weiss said he's also concerned the coalition forged late in the session between public-interest groups and industrial customers may come apart. Forty percent of the state's industrial customers have obtained open access through special contracts approved by the Oregon Public Utility Commission, according to Weiss. "If all the industrial customers get what they want [without legislation], there won't be much push to get open access [for the rest of the state]."
In the absence of restructuring legislation, Industrial Customers of Northwest Utilities will focus on working with individual utilities to develop pilot programs and other tariffs that provide market-based pricing, said ICNU attorney Melinda Horgan. "I think we can get part of the way there without legislation," she said--but that doesn't mean industrial customers will renege on commitments to public-purposes groups. ICNU has said it will support the Regional Review's recommendations on issues such as public purposes: "We have no intention of backing off on that."
While restructuring legislation didn't make it through the Legislature, Oregon lawmakers dealt with some other energy-related issues.
HB 3283, which amends the state's energy facility siting law to eliminate the requirement that developers demonstrate need for power from a project and replaces it with carbon dioxide mitigation standards, passed easily. Gov. John Kitzhaber signed the bill into law on June 26, making Oregon the first state in the nation to place restrictions on the emission of greenhouse gases from new power plants (see story in Briefs, below).
HB 5036, which provides funding for the OOE's Small Scale Energy Loan Program, passed late in the session. The bill provides the loan program with the authority to issue bonds of $35 million per year, which can be used for renewable resource and waste-heat projects.--Jude Noland.
by Michael Lane
Lighting Design Lab
I remember the reaction from end-users, contractors, energy services companies, and manufacturers the day the utilities announced the end of rebates. You would have thought that the world had come to an end.
Energy efficiency was dead, they said. We can't afford to use energy-efficient products if you (the utilities) don't pay us to use them, they said. All the energy savings you (the utilities) have worked for will disappear if you don't continue to subsidize them, they said. These utility rebate programs were like a drug, a very powerful drug, to many companies. Going cold turkey was going to hurt, but it was the only way out for most utilities.
In the design community a silent cheer was heard that day. Many designers, myself included, felt that the utility subsidies were a detriment to lighting quality. The focus of most utility programs has always been just three things: SAVE ENERGY, SAVE ENERGY, and SAVE ENERGY. Unfortunately, there are too many facilities across the country that now have terrible lighting quality because of a utility rebate program.
So, were the utility programs bad? No way! They transformed the market. T-8 lamps, electronic ballasts, compact fluorescent lamps, halogen incandescent lamps are all now building standard for retrofit projects and new construction. Yes, they all existed before the utility incentive programs, but would we be using them in the quantity that we are today without utility incentive programs? Doubtful.
T-8 lamps were introduced in the early 1980s, but didn't really take off until utility dollars virtually paid end-users to use them in the 1990s. The Energy Policy Act of 1992 wasn't necessary because of the utility programs, at least for the 4-foot lamp. By October 1995, who was using T-12 lamps for new construction? Very few of you. In existing buildings that had not been retrofitted to T-8's by utility programs, end-users now use "energy-saving" T-12 lamps that cut the energy by 15 percent, cut the light level by 14 percent, and cost more. Sounds like a good deal to me!
Electronic ballasts were plagued with failures and had a marginal market share before utilities pushed them. Utilities forced electronic ballast manufacturers to produce electronic ballasts with less than 20 percent THD (total harmonic distortion) while the new standards for electronic ballasts (ANSI C82.11-1993) said that 33 percent THD was OK.
Compact fluorescent lamps were available in 5-, 7-, 9-, and 13-watt twin-tube versions before utility programs. And luminaires for the lamp were limited to a few wall sconces and downlights. Today, there are also 18-, 26-, 32- and 42-watt quad- and triple-tube, pin-base, versions. Luminaires exist for downlights, wall sconces, pendants, flood lights, bollards, low-bays, exit signs and more.
Compact fluorescent "screw-in" lamps, which were not always liked by utilities, are available in a variety of wattages and sizes. Actually this is one area that the utility programs did not fully transform the market. Manufacturers still make screw-in CFL's that have high THD (more than 125 percent) and normal power factor (50 percent or less). Manufacturers claim that the end-users of screw-in CFL's (residential customers) will not pay for high power-quality products. Utility programs dried up about two years too early. It will probably take another five years for this part of the market to transform itself.
Halogen incandescent lamps were seldom if ever pushed by the utilities, but still the virtues of halogen lamps were promoted and touted over the inefficient standard incandescent lamp. The NCQLP (National Council on Qualifications for the Lighting Professions) has been formed and will start testing and certifying lighting professionals this fall. The NCQLP was formed in part to respond to utility incentive programs and the lack of knowledge shown by many of the participants. When the goal is to save energy and give away money, lighting quality can easily suffer. It is time to certify lighting professionals.
I won't get carried away and give utilities all of the credit for these market transformations. They did have a large impact on moving the lighting industry, but so have energy codes. In fact many of the utilities eliminated programs because energy codes forced designers to use energy-efficient products to meet stringent wattage-per-square-foot requirements. These stringent energy codes didn't leave energy savings for the utilities to pay for, and the utilities weren't going to pay you to meet code.
The Environmental Protection Agency's Green Lights Program has been a strong promoter of T-8 lamps, electronic ballasts, and compact fluorescent lamps. I do wonder how effective Green Lights would have been if utilities had not been funding many of the Green Lights retrofit projects.
So what's next for the utilities? That is a good question: deregulation scares the utilities. They like their monopolies and want to keep them. To this end, many utilities have tightened their belts on both people and assistance programs to be able to sell their customers the least expensive kilowatt possible. This has happened in the Pacific Northwest in the last few years, but something else has happened.
The utilities in Idaho, Montana, Oregon and Washington have banded together to form the Northwest Energy Efficiency Alliance. The goal of the Alliance is to promote and fund market transformation of energy efficient products. I think that the utilities have finally found the right path. Fund programs that help transform the market from energy-inefficient products to energy-efficient products, and let the designers do the design work with these energy-efficient products.
Under new energy-facility siting standards set by House Bill 3283, which recently passed the Oregon Legislature and was signed into law by Gov. John Kitzhaber, developers of new combined-cycle gas-fired cogeneration projects will be required to reduce the overall amount of carbon dioxide emitted from new power plants by at least 17 percent. This can be achieved through such initiatives as energy conservation, renewable-energy development, tree-planting and the application of power-plant steam for other purposes.
One way for developers to meet the requirement is to pay 57 cents per ton of CO2 emissions to the Oregon Climate Trust, which will use the money to purchase CO2 offsets for the state.
Recently members were appointed to the board of the Trust, a non-profit organization. Peter West of Renewable Northwest Project was elected chair, while Oregon Energy Facility Siting Council chair Terry Edvalson was named vice chair. Nicole Cordan, fellow and program co-chair for the natural resources law institute at Lewis and Clark College's Northwestern School of Law, is secretary; John Bohling, PacifiCorp's senior vice president of electric generation, was elected treasurer. Other members are Anna Goldrich, former executive director of the Oregon League of Conservation Voters; Susan Anderson, director of the city of Portland Energy Office; and Dave Yaden, head of strategic planning for Tri-Met.
The Climate Trust's first meeting, July 9 in Portland, was primarily procedural for taking care of business matters related to formation of the Trust, according to Sam Sadler of the Oregon Office of Energy. The seven-member board will hold its first real work session Aug. 28, when it has scheduled an all-day annual meeting.--Jude Noland
The Northwest Energy Efficiency Alliance has won a 1997 energy conservation award from the National Energy Resources Organization, a group of private-sector energy and industrial companies.
"This award recognizes a body of work with the electricity industry to provide efficiency improvements through innovative market-based mechanisms, including the Pacific Northwest's success in creating the nation's most ambitious multi-state utility-financed initiative to transform equipment markets, helping manufacturers build more efficiency into product designs," reads the NERO citation, passed along by Ralph Cavanagh of the Natural Resources Defense Council. "The Northwest Energy Efficiency Alliance is a model for cooperation and energy efficiency progress in the utility industry."
Previous recipients of this award include Dow Chemical, United Parcel Service, 3M and United Technologies.
An illustrated guide to energy-efficient commercial building design is available from B.C. Hydro.
"Design Smart: Energy-Efficient Architectural Design Strategies" includes sections on evaluation, daylighting, building envelope, mechanical/electrical systems, codes/methods/materials and case studies/material references. The 78-page book offers implementation ideas, technical information, graphs, reference tables, and do-it-yourself quick calculations, according to B.C. Hydro. It is intended for architects, designers, engineers, building owners and anyone else interested in designing energy-efficient buildings.
The book costs $39 (US) in the United States and $47.08 (Cdn) in Canada. For more information, call B.C. Hydro's Energy Information Centre at (604) 540-8883, in the Lower Mainland, or 1-800-663-0431 elsewhere.
Holiday Inn's Vancouver Airport Hotel is the first new lodging facility in British Columbia designated as a Power Smart Green Hotel.
The 82,000-square-foot hotel uses low-flow showerheads, faucet aerators and refillable shampoo and soap dispensers in guest rooms, fluorescent lighting rather than incandescents in some areas, recycled paper products and non-toxic chemicals for cleaning. The Holiday Inn site also has an energy manager on staff to oversee the energy management and recycling program.
"We set out to build the most energy-efficient and environmentally friendly building possible," said developer Doug Day. "Investing in energy-efficient technologies such as higher-efficiency lights brings long-term benefits, including energy savings, lower operating costs and low maintenance."
Keith Tsukishima, the hotel's general manager, described a "growing awareness of energy and environmental protection issues by the traveling public, and this designation lets our customers know we are doing our part to be environmentally friendly."
The Power Smart Green Hotel program recognizes and promotes hotels that implement energy efficiency and environmentally friendly measures. It is a joint project of B.C. Hydro and hotel associations in British Columbia and Yukon Territory.
A publication entitled "Buying Energy Efficient Products" has been published by the Federal Energy Management Program.
The publication, for use by federal purchasing officials, includes background materials, tips for buyers and case studies. It also contains a listing of recommended energy-efficient products to help federal agencies implement an executive order calling on federal purchasers to select energy-using products that are cost-effective and among the 25 percent most efficient models available in the market.
"Buying Energy Efficient Products" is available by calling 1-800-363-3732. The recommendations, meanwhile, are also accessible on the World Wide Web at http://www.eren.doe.gov/femp/procurement/begin.html
"Common Place: Toward Neighborhood and Regional Design" is the title of a new book by University of Washington architecture and urban design professor Doug Kelbaugh.
The book contains "quite a bit about energy, environment, economics and the city," according to Kelbaugh, who was featured in the April 25 issue of Con.WEB discussing urban sprawl, architecture and energy issues.
Published by the University of Washington Press, "Common Place" can be ordered by calling 1-800-441-4115.
OFFICES: Mail-P.O. Box 900928, Seattle, WA 98109-9228. EXPRESS: 117 West Mercer, Seattle, WA 98119. TELEPHONE-(206) 285-4848. FAX-(206) 281-8035. E-MAIL-newsdata@newsdata.com.
Con.WEB was created by the Energy NewsData Web team, including:
Publisher-Cyrus Noë; Editor-Mark Ohrenschall; Associate Editor-Jude Noland;
Contributing Editors-Pamela Russell and Ben Tansey; Web Editor-Denise Lee;
Webmaster-Whitney Dickinson; General Manager-Brooke Dickinson;
Office Coordinator-Christina Smith; Graphic Designer-Michael Katayama.
Please contact Denise Lee at dlee@newsdata.com if you have questions or comments
about this website or call 206/285-4848.
Return to Contents