CWEB.020/August.28.1997
ROAMING AROUND THE REGION this last full month of summer, we find a number of noteworthy developments.
The Northwest Energy Efficiency Alliance is in the throes of personnel change, headed by a new executive director, Margie Gardner, who replaces the resigned Will Lutgen. The Alliance also is starting to sort through 36 market transformation proposals it received from a summer solicitation. Meanwhile, one of the Alliance's current projects, the WashWise venture promoting resource-efficient clothes washers, is reporting booming sales and widespread consumer interest.
We also take a look at a new study of Washington's Non-Residential Energy Code, which finds that overall code compliance is middling but that overall commercial building energy efficiency has risen significantly between 1990 and 1995.
In the industrial sector, a central Washington-based cold-storage firm has shown a steadfast commitment to the practice of energy efficiency. Improved competitiveness is one beneficial result for Columbia Colstor.
Oregon has passed legislation allowing state income tax credits for certain energy-efficient appliances, a move that could enhance their marketability.
And, a Northwest environmental group is helping a California-based company develop a green power product for the Pacific Northwest retail market.
Enjoy the waning days of summer, and keep in touch if you wish, with marko@newsdata.com.
The Northwest Energy Efficiency Alliance has a new executive director and a new batch of 36 market transformation proposals to consider.
Margie Gardner is the new leader of the Alliance, following the early August resignation of former executive director Will Lutgen. Gardner, who formerly served as NEEA deputy director, was named acting executive director by the Alliance board at its Aug. 11-12 meeting in Whitefish, MT, with the clear expectation she would take the position permanently.
"I'm really pleased to be your executive director," she told the board in Whitefish. "I really believe in what the Alliance is doing . . . I'm really pretty enthusiastic about it all." At the end of the two-day meeting, board member Charlie Grist publicly thanked Gardner for taking on what he jokingly described as "this gruesome task" of directing the regional market transformation collaborative.
In addition to selecting Gardner as Lutgen's successor, the Alliance board also decided to close the NEEA office in suburban Seattle--it is now officially shuttered--and locate the headquarters in downtown Portland. The new phone number for the Portland office is 1-800-411-0834.
During this transition period Lutgen has been working to wrap up or hand over various Alliance duties. The Alliance also has hired a contracts and project management staffer and plans to bring on an evaluator with market research experience and a program manager, in addition to administrative positions, according to Gardner. The Alliance also is putting to work staff people loaned from the Northwest Power Planning Council and Bonneville Power Administration.
And in another piece of Alliance personnel news, board chairman Dave Houser announced he is leaving NEEA after his term ends in October because of a reorganization at his utility, Montana Power. "It's been a great experience," he told his colleagues in Whitefish. "I've really enjoyed it. I'm going to miss you all."
A new chairman and other officers will be elected at the Alliance board meeting in October, tentatively scheduled for Oct. 28 and 29 in Portland.
Three Dozen Market Transformation Proposals
In the midst of all this shuffling of people, the Alliance also will be considering three dozen market transformation proposals it received from a solicitation this summer. Decisions on all 36 are anticipated by year's end, under a planned timetable sketched out at the Whitefish meeting.
A preliminary list of the proposals shows 12 of the 36 are categorized as commercial, followed by seven in commercial/residential, five in industrial, four in all sectors, three each in residential and commercial/industrial, and one apiece in irrigation and education.
They cover a broad array of technologies--including lighting, motors, refrigeration, compressed air, heat exchangers, commercial design software, roofing, geothermal, solar and windows--as well as such services as neighborhood and regional education, irrigation scheduling, lighting research, lighting technical assistance, commercial building design, building operator certification and building commissioning.
Most of the proposals--26--originate in the Northwest. The other 10 are predominantly from California and New York. The proposals came from private firms as well as from utility, government, trade association, education and non-profit entities; many of the would-be Alliance projects already exist in one form or another.
Gardner, in a memo to the board and also in discussion in Whitefish, initially doubted the Alliance could make decisions on these proposals in 1997, given NEEA's internal transitions, including the hiring of staff, and the board's habit of relatively detailed consideration of project proposals. "There's just no way you can deal with all these in the manner we've been dealing with them this year," she said. Board member Ken Keating agreed: "It's impossible for us to spend an hour and a half twice on each proposal," and still make decisions by December.
Several NEEA board members were troubled by the prospect of project decisions drawn out into 1998. The Alliance's credibility will suffer if delays are too long, Houser argued. "Responsiveness is critical," he said. "Our reputation is critical." Board member Nancy Hirsh concurred, saying, "Now is the time to not set a bad precedent." Board member Jim Baggs said this is only the first project solicitation by the Alliance, and future processes could yield a far greater number of proposals. The issue of how to assess them is "likely to be a continuing problem," he said.
Eventually, Gardner and the board reached consensus on a process that should result in decisions on all the proposed projects by the end of the year--albeit with a streamlined approach to board deliberations. "We as a board have to rely on our staff to do more work," said Houser.
Under this mutually agreeable scenario, Alliance staff will prepare short summaries and recommendations for each proposal for the scheduled meeting in Portland Sept. 29 and 30. In the meantime board members can read any of the full proposals if they choose. The September meeting will serve as a discussion session, followed by the October meeting at which the board is expected to vote yes or no on proposals that have clearly gained favor or disfavor. Remaining proposals--those still on the bubble after October--are anticipated to be voted on during the November and December board meetings.
"It's forcing consensus very early in the process," Gardner noted, but board members appeared comfortable with this approach.
In addition, many of the 14 projects previously authorized by the Alliance board are coming due for decisions on funding extensions. "I think you can manage that [process]," Grist told Gardner. Houser encouraged her to "bring staff on board as fast as you can and call on whatever resources you need" to get the work done.--Mark Ohrenschall
Resource-efficient clothes washers are tumbling into Northwest homes at a surprisingly quick rate.
Brisk sales and substantial consumer interest have highlighted the first three to four months of the Northwest Energy Efficiency Alliance's WashWise program, which promotes energy- and water-saving horizontal-axis washing machines through customer and dealer rebates, marketing and advertising.
WashWise, a culmination of earlier efforts, is creating a noticeable impact on the regional washing-machine market.
Approximately 2,850 WashWise machines had been sold in the Northwest as of Aug. 22--a number already exceeding initial projected sales for the entire year. "It just went crazy," said Dana Banks of Portland Energy Conservation Inc., which administers the program. "It exceeded anybody's expectations." In addition, PECI reports 80 to 120 calls daily from consumers seeking locations of the 450-plus participating Northwest WashWise dealers. PECI had expected 10 to 20 calls a day, according to project manager Lois Gordon.
Such is WashWise's unanticipated popularity that the Alliance board in June established a $170,000 contingency fund to cover 1997 rebate payments beyond the program's original $1.2 million total budget. In August, as the numbers continued to climb, the board upped the ante by approving a budget increase of $872,500 through December. And if that's not enough to fund rebates at the current level of $130 for consumers and $20 for dealers, board members signalled a willingness to spend even more money if need be this year.
"We're just thrilled it's getting the attention," said Alliance acting executive director Margie Gardner. "It really is a very successful program. We have a chance of making a bigger impact than we had as a goal. That's really positive."
WashWise's primary goal, as she reminded the Alliance board in Whitefish, MT, in mid-August, is to influence upcoming revisions to federal energy-efficiency standards for clothes washers.
Those new guidelines are scheduled to be issued by the U.S. Department of Energy in fall 1999, according to the Oregon Office of Energy's Charlie Stephens, who serves on the National Appliance Efficiency Standards Advisory Committee. "The clothes washer standards . . . right now are dependent on proving to the manufacturers that these [resource-efficient] products will sell and that consumers will like them," he said. "We don't really have a lot of proof of that yet. They haven't been around that long."
WashWise's effect on the DOE standards won't be known for some time. It is also too early to gauge the program's effectiveness in truly transforming the market for resource-efficient washers, despite the progress to date in such program goals as gaining satisfied customers, increasing product availability and decreasing the price.
Still, the initial consumer reaction to WashWise machines is clearly favorable. Alliance and PECI officials believe a combination of factors have contributed to the booming sales and widespread consumer interest.
One reason for the higher-than-expected sales lies with faulty forecasting. "We underestimated the number of sales of any kind of washing machines" and thus the anticipated WashWise sales as a percentage of the overall market, Gardner told the Alliance board. The program aimed for a 3-percent market share for resource-efficient washers for 1997, which led to the initial projection of (and budget for) 2,785 machines sold.
However, the Northwest economy has performed strongly this year, Gordon noted. She also said the original estimates were made without knowing the production schedules of manufacturers, which have targeted the Northwest and its environmentally conscious citizenry as an attractive market for resource-efficient front-loading washing machines. Banks said manufacturers have described California/Northwest sales as the highest of any region in the country.
The main program elements--the consumer and dealer rebates, along with advertising and marketing efforts to educate consumers--have worked well in combination, according to Gordon. "Today's market [for resource-efficient washers] is not the same market," she told the Alliance board.
Northwesterners are starting to learn about these machines, variations of which have long been popular in Europe but have not recently been common in this country. "Consumers were very unaware of them," said Banks. "There weren't as many American models on the scene . . . People are much more interesting in purchasing the American" resource-efficient washers. In fact, the top-selling WashWise machine is made by Frigidaire, and the second most-popular comes from Maytag. These two models account for more than three-fourths of WashWise sales to date.
The consumer rebates, meanwhile, help bring down the retail price of resource-efficient washers, which generally range from $700 to $1,000 apiece, a premium over conventional top-loading models. For participating retailers, meanwhile, the $20 payment for each sale "causes the dealer to push the machine a little harder," said Banks. "The rebate isn't necessarily going to sell the machines to the consumers. It helps; it's a bonus. It allows the salespeople to sell it on the machine's merits. That's what counts."
Already, there is talk of reducing the Alliance rebate amount after this year. "My guess is it's going to be something less" in 1998, Gardner said. WashWise models are already dropping in cost, according to Banks, but more research is needed to find out the nature of this price decline and the relative role of rebates, increased competition (eight manufacturers have sold 16 separate models under the program) and other factors.
In addition to the Alliance rebate, a number of electric and water utilities offer rebates of their own to local WashWise purchasers. Among them are Eugene Water & Electric Board ($175), city of Ashland, OR ($200 for residents with electric water heater, $75 for residents with gas water heaters), Seattle Public Utilities and its water-supplier customers ($50), a group of wastewater utilities in the Olympia, WA area ($70), and a handful of water and electric utilities in the San Juan Islands ($20 to $30). "We're hoping the program's going to continue into the next year, and hopefully allow some of the other water utilities to come on board," said Banks. Another possibility is joining with entities in California, which Gardner said would help the program "dramatically."
As it is, WashWise sales are now heavily concentrated in Washingon (1,494 rebates to date) and Oregon (968). Idaho and Montana together account for slightly more than 350 rebated sales. By utility service territory, Puget Sound Energy has recorded the most WashWise sales (623), followed by Portland General Electric (423) and Pacific Power (251). The rest are scattered among investor-owned and publicly owned utilities around the Northwest--although a tiny number have ended up outside the four-state region.
A comprehensive consumer survey is forthcoming, but anecdotal information collected from WashWise purchasers is quite favorable. "These people just absolutely love them," said Banks. "They'll never go back" to conventional washers.
A WashWise brochure quotes buyers praising the gentle and thorough cleaning ability, quiet and energy- and water-saving features of the resource-efficient washers.
Banks also acknowledged a few complaints, including a couple of leaking machines and a number of people who apparently put in too much detergent and ended up with "over-sudsy" loads of clothes. "They have to re-learn how to wash their clothes," she said. "You don't just dump in a whole big cupful of detergent anymore. It doesn't require as much."
Although the early success of WashWise may appear to be a sudden development, Gardner and Alliance board member Liz Klumpp both noted that WashWise did not simply materialize this year. "This program isn't just lucky," said Klumpp. It built on several years of research and development work, notably The High Efficiency Laundry Metering and Marketing Analysis (THELMA), an Electric Power Research Institute tailored collaborative supported by, among others, a number of large Northwest electric, water and gas utilities (see Conservation Monitor, April 1995, for a story on THELMA).
"Manufacturers weren't producing these machines," said Gardner. "R & D efforts, talking with manufacturers, letting them know we were serious, convinced them to take a try in the market . . . The utilities individually should take credit for all the work and preparation that went into this. What we're seeing now is reaping some of the harvest."--Mark Ohrenschall
Just 61 percent of buildings permitted in 1995 complied with all aspects of Washington's Non-Residential Energy Code, according to a new study by two Northwest energy-consulting companies. That's a compliance rate only 10 percent higher than found in a similar random sample study of 1990 structures,
At the same time, however, the 1995 buildings are considerably more energy-efficient than their 1990 counterparts, reports the June study by Ecotope of Seattle and Pacific Energy Associates of Portland for the recently defunct Utility Code Group.
In addition, the NREC is more accepted, understood and incorporated by building design professionals.
"Although the compliance levels noted in this review are somewhat discouraging, the impact on building practices and component selection has been fairly pervasive, resulting in significant energy savings in the nonresidential sector, " concludes the report by David Baylon, Aaron Houseknecht, Jonathan Heller and Les Tumidaj. "The improvements in the 1994 Nonresidential Energy Code [compared with the previous standards] more than compensated for the relatively constant level of compliance."
"The main effect is that compliance is not appreciably better, but building performance is appreciably better," said Baylon.
Baylon said he and his colleagues also found "real good evidence of very substantial market transformation [between 1990 and 1995] with respect to certain efficient lighting technologies." T-8 fixtures with electronic ballasts were used in more than 90 percent of the fixtures seen in the 1995 sample; in the 1990 group, they were evident in less than 10 percent.
Study Background
The Ecotope/Pacific Energy Associates study was undertaken with several goals. Among other objectives it sought to review compliance with the NREC, assess code enforcement practices, characterize building practices, gauge code acceptance and knowledge among architects, engineers, contractors, building owners and developers, and assess NREC attitudes and acceptance among local government building officials, plans examiners and inspectors.
This review follows a 1992 Ecotope study of 70 non-residential buildings permitted in 1990, which found, according to the current study, "almost half of all the buildings constructed in Washington during the study period did not comply with at least one aspect of the energy code" in effect at that time. "This non-compliance was primarily attributable to the attitudes of design professionals and lack of enforcement by building officials. The interviews with architects and engineers indicate that the lack of attention paid to energy efficiency issues by code officials led some designers to decide that the standard was optional and not to be taken seriously. Most distressing, the lighting installed in the sample buildings used significantly more energy than the energy code allows." (See Conservation Monitor, August 1992, for a report on the 1992 study.)
The revised 1994 NREC included simpler but in many cases more stringent energy-saving requirements for non-residential buildings, according to the recent Ecotope/PEA study. In addition, the Utility Code Group was formed to help implement the NREC through training and technical assistance for design professionals and local building officials
The current report examined 88 buildings permitted in Washington in 1995, representing what Baylon called "a fairly sophisticated random stratum sample." Of those 88 buildings, 30 are smaller than 30,000 square feet, 37 range in size from 30,000 square feet to 122,000 square feet, and 21 are larger than 122,000 square feet. They encompass a wide variety of commercial uses; warehouse, retail and office buildings are the top three by specific category. Slightly more than half the 88 buildings in the study are in the Puget Sound region.
Each of the buildings was assessed--through document reviews as well as on-site inspections--for its NREC compliance in building envelope, mechanical HVAC systems and lighting.
In addition, the study included interviews with various professionals involved in the buildings, as well as local building officials and plans examiners/inspectors.
Overall NREC Compliance
The overall compliance rate of 61 percent found in this study is 10 percent higher than the 51 percent recorded from the 1990 sample. Broken down by NREC components, the compliance rate for the 1995 group was 86 percent for HVAC, 84 percent for building envelope and 81 percent for lighting. Compliance figures for the 1990 sample were 80 percent for envelope and 76 percent for both HVAC and lighting.
However, "the individual buildings in the current sample are actually much more efficient than those studied earlier," which the co-authors described as a "counterintuitive finding."
What's up?
However, overall energy code compliance came in below 50 percent in each of the state's four most populous counties--King, Snohomish, Spokane and Pierce. "In one case, this is the result of a direct public decision by a major building department to ignore the energy code," according to the study. "Another factor is that the most complex buildings which experienced difficulty complying with the lighting code tended to be located within these four counties." Taking out those four counties, overall NREC compliance throughout the state reached about 80 percent, according to the study.
In addition, 83 percent of 1995 buildings reviewed by a Special Plans Examiner/Inspector were in compliance with NREC. SPE/Is have been certified through a utility-funded program to assist local building departments with code enforcement. "Our research indicates that the most significant factor in achieving more efficient buildings was the SPE/I program . . . even though the SPE/I did not usually conduct an on-site inspection," the study reported. It also described the UCG training and reference materials as "very helpful as design guidelines, and in convincing the building departments and design professionals that it is important and desirable to build efficient buildings that comply with the NREC."
Aside from the UCG activities, the utility role has clearly diminished. "The decline in utility funding of nonresidential energy conservation has had the effect of nearly eliminating the impact of utility programs on compliance or construction practices," the report said. "Only about 6 percent of the sample buildings received incentives for energy conservation measures," primarily for energy-efficient motors, lighting and equipment. Of the five buildings in the study that received utility money, only three were in full NREC compliance, although the compliance rate was 100 percent for the individual components (envelope, HVAC, lighting) funded by utilities.
"They [utilities] essentially did enforcement and implementation of the code, as opposed to direct subsidy of the building practices themselves, through Energy Smart Design or some other kind of incentive program," Baylon said.
Design Professionals, Building Officials Discuss NREC Issues
The Ecotope/PEA study also included interviews with 187 building design professionals, including architects, lighting and mechanical designers, general contractors, owners, consultants and others. Engineers were found to be "primarily responsible for design and energy code compliance issues related to all building components, and typically work for the architect," according to the study.
One of the most striking findings from these interviews was a changed attitude.
"There was a great deal more acceptance in the design community than there was in the 1990 sample," said Baylon. "You basically hear not the kind of resistance that you saw in the 1990 sample. It doesn't translate into full compliance, but in building components it showed up. Especially in non-retail, there was much better compliance with lighting, building envelope . . . The only way you could really explain that was the design professionals themselves read the code, know what it says and accept, yes indeed, that's what they're going to do."
A separate UCG survey released in May found that 99 percent of subcontractors, 97 percent of architects and engineers, and 89 percent of general contractors and suppliers interviewed knew about the 1994 NREC.
Meanwhile, the Ecotope/PEA interviews revealed that 63 percent of design professionals were generally satisfied with the NREC, while 25 percent disliked or were hostile toward it. Some 43 percent reported the code had influenced their design. And although 78 percent of those interviewed thought NREC compliance was not too difficult, there was considerable sentiment for a simpler code, along with specific suggestions for improvements in the lighting, HVAC and envelope components. By far the single most common recommendation from designers was an increase in the lighting power allowance.
As for the building officials interviewed, 66 percent support the NREC and 34 percent are described as indifferent or resistant. These people place a higher priority on the NREC building envelope requirements than the lighting and mechanical system standards. As with the design professionals, many building officials believe the NREC should be simplified. Many suggested making the code more prescriptive, to make it easier to understand and enforce.
Ecotope/PEA reached this conclusion about NREC enforcement: "The results of this survey and previous research efforts clearly show that inspections are the critical weak link in the enforcement process. Comments from . . . inspectors suggest that the lack of time, growing work loads, higher competing priorities (i.e., health and safety requirements), and an inadequate understanding of the NREC's benefits and justification account for this attitude."
For more information on the study, call Ecotope at (206) 322-3753.--Mark Ohrenschall
At Columbia Colstor, energy efficiency is more than a vaguely good idea.
Throughout the 1990s the Washington company has committed substantial money, staff time, bidding practices and corporate philosophy to using energy as efficiently as possible in its business of storing frozen food and other products and providing freezing services.
Colstor has recorded total energy savings of more than 2.6 average megawatts this decade at its plants in central and western Washington. In addition, Colstor's numerous efficiency projects have contributed to enhancing its position in an intensely competitive industry. The company spends less on energy--a major operating cost--and its plants operate better than they would without the energy-saving measures.
To be sure, the Moses Lake-based firm has benefitted greatly from Bonneville Power Administration conservation programs that have funded about $2 million of its $3.3 million investment in energy efficiencies between 1990 and 1996.
While BPA is credited by Colstor officials with nurturing their interest, the company has come to embrace energy efficiency to the extent that it is spending a considerable amount of its own money for energy-saving technologies at its new plant in Kennewick. These measures include optimized computer controls, variable-speed drive controls on evaporator and condenser fans, fast-acting doors, increased insulation, oversized evaporator coils, defrost heat-pump compressors and heat-recovery heating under floors--many of which Colstor has applied at its other facilities.
"We had really worked very hard with BPA financing," said Tim Luke, Colstor's corporate engineer. "We became proficient to the point, 'Hey, this really works.' Well, now [BPA conservation funding is] gone. Now what do we do? Do we go back to our pre-conservation design methods, or do we try to compete at today's market rates with a higher capitalized cost of structure [owing to the extra costs of energy-efficient technologies]? It was a real dilemma for us . . . It really puts your philosophy to a test."
Ultimately, Colstor decided to go with extensive efficiencies at its Kennewick plant. "Ten years ago it would not have made the first cut," Luke said. "We've come a long ways and that's due to the fact the Bonneville programs were there. Had they not been there, conservation would have never occurred for us."
Now it's integral to the family-owned business, a part of everyday operations and a guiding principle for the company.
Colstor's energy policy mission statement reads: "Columbia Colstor is committed to providing superior quality freezing services to food processors in the most energy efficient method possible. By the year 2000 we plan to reduce energy usage in all new and existing facilities to offset forecasted power rate increases and provide competitive rates which contribute to lower consumer food prices and more available power in the future."
Here are some of the company's conservation goals:
All this is no passing fancy, believes consultant Marcus Wilcox of Cascade Energy Engineering, who has worked with Colstor on most of its efficiency projects. "We're confident that Colstor is going to remain committed to conservation regardless of utility programs and regardless of utility deregulation." He described his client as "a long-haul company. They want to be doing the right thing. If they can get the money at the bank to do it, they'll do it." He also described Colstor officials as "sensitive to non-energy-related improvements when they're considering the economics of something," and open to innovative ideas.
Not only has Colstor ingrained conservation internally; Luke promotes the energy-saving message to external audiences at conferences and other forums, noted BPA's Ann Brady. "It's kind of unique," she said. "A lot of these large industrial users . . . pay such low rates that energy conservation for them is not a priority. Even when we were giving them the money, when we were using conservation as a resource acquisition program . . . they still wouldn't do it unless we held their hands all the way through. It was too much work for them. It's just not a priority."
Rod Noteboom of Grant County PUD, who has worked on three multifaceted efficiency projects with Colstor, also has noticed the company's long-term perspective and conservation philosophy. He described the firm as "our most aggressive industrial company when it comes to conservation . . . What I really like about Colstor is I get support at all levels on the project, the management and the front-line workers . . . That is why I believe the projects are successful."
Luke said this attitude comes from the top of the organization. "First and foremost, our ownership [the McGraw family] believes in conservation. They believe in recycling, protecting the environment, enhancing and working in the local communities . . . That's kind of part of the overall philosophy of the company."
Luke takes special pride in Colstor's efficiency work in Grant County, where industrial electric rates are particularly low, ranging from 1.3 cents per kilowatt-hour to 2 cents/KWh. "We were told we couldn't actively do energy conservation in Grant County," he said. "I think we've demonstrated you can do it anywhere."
From Skepticism to Conversion
Colstor's deep-seated belief in the value of saving energy was not always apparent. "When we had that first meeting with them, probably four or five years ago, they were very skeptical for two reasons," Wilcox said. One was the company's experience with a Kennewick efficiency project in which it took Colstor more than a year to receive its BPA incentive payment. Another was a prior Colstor refrigeration consultant who had qualms about certain efficiency measures from a design standpoint.
Since then, however, "The immense success really swung them over to the positive attitude camp," said Wilcox. "They became real converts."
Colstor's premier early efficiency project was the 1993 construction of a new plant in Woodland, along Interstate 5 between Longview and Vancouver. This facility provides about 120,000 square feet of refrigerated storage space for items ranging from frozen meat to fruit to popsicles to tree seedlings. And it saves about 3.8 million KWh of electricity each year through various energy-saving measures, which include computerized controls for the refrigeration system, two-speed evaporator fans, variable-speed drive control on the condensers, good insulation and energy-efficient motors and lighting. BPA's incentive of $788,000 covered most of the approximately $1 million added cost of the efficiencies.
The Woodland plant was honored by the Northwest Power Planning Council in 1994 as the top industrial conservation project in the region.
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| Dennis Wagner & Dan Kline of Columbia Colstor |
Another significant issue arose, common to new construction projects: determining a baseline from which to measure improved efficiency--and consequently the amount of BPA funding. Brady credited Wilcox, who at that time worked for BRACO Energy Services, for much of the technical engineering analysis that helped establish the energy savings at the plant.
Then, too, Colstor needed to come up with a substantial amount of financing to supplement the BPA incentive payment--and to do so based on essentially theoretical calculations. "There's a lot of risk involved in spending a lot of money thinking that the engineering's going to be correct," said Luke. It takes "a lot of trust, a lot of integrity. You have to know who you're working with. They have to understand you and your company, what your goals and objectives are. They have to be able to work really within the constraints you have." Cascade Energy Engineering has fit the bill, he noted.
Cost/Benefit Perspectives
A highly energy-efficient new refrigerated storage facility costs about 5 percent to 10 percent more to build than a standard plant, Luke estimates.
Utility incentive dollars certainly have helped Colstor, but the firm has still furnished some of its own financing. "It's difficult for conservation to compete with other capital investments--forklifts, concrete paving, that type of thing," Luke acknowledged. "You're trying to convince people [within the company] to spend capital to save operating costs. That's a tough sell."
From a strictly financial perspective, the benefits take some time to materialize. The Woodland plant, for example, repaid Colstor's investment through lower energy bills in about three years. Colstor efficiency projects at all its plants (excluding the new Kennewick facility) have an average simple payback of 3.5 years--far exceeding the typical industrial firm's threshold of one to two years, or less.
But a strict adherence to return-on-investment schedules is shortsighted, believes Wilcox. "It's always going to be possible to build a facility for a least cost," he said. "When you look at the cash flow over time from . . . these energy-efficient facilities they may be as good or better, but even if they're only as good it's still a wise thing to do. These facilities have a life of 20 to 50 to 100 years. You can't just look at simple payback. You've got to look at the big picture."
In the refrigerated storage business, according to Wilcox, the major expenses include facility loan payments, labor, equipment and energy. Although energy is not a large percentage of total costs, it can make a big difference in profitability. "The margins are so slim, when Colstor has a facility that uses 50 percent less energy, that gives them that advantage [in] bidding out storage space on a cost-per-square-foot [basis]," he said.
A Competitive Edge
Despite its initial costs, energy efficiency contributes to a competitive edge for Colstor. "In the long range, we definitely plan to be more competitive than our industry [peers]," said Luke. "I don't know how you're going to compete with a very efficient system if you have an inefficient system."
And this is an increasingly competitive business, with the regional supply of cold storage space currently exceeding demand, according to Woodland plant manager Dan Kline. "Because the [Colstor] system runs so efficiently, it makes us more competitive in the marketplace. Being more competitive in the marketplace is good for us and our customers in dollars and cents." Because of the plant's efficiency, he said, "We're able to charge slightly less than our competitors . . . I'm sure we picked up some business because of that," although he couldn't specify how much.
Colstor's efficiencies do more than save energy and dollars, according to company officials. They enhance operations in a number of ways.
For example, at Woodland, the computerized controls for the refrigeration system are a vital tool, according to chief engineer Dennis Wagner. "We can see exactly what's going on in any part of the building," he said, and make virtually instantaneous adjustments to, say, the speed of an evaporator fan or the head pressure on a condenser.
The Woodland plant has extremely tight temperature control, which has distinct benefits for certain food products. Luke told of the Woodland plant's built-in capability to take in freshly plucked pears at 80 degrees and blast-chill them, without freezing, to 29 or 30 degrees. "We can pull the field heat out of there in a matter of a couple of days, then ship it off to the storage facilities . . . Our system is so controlled so we can do that without damaging the fruit. If the system didn't have the capacity to do that, it would take a long, long time . . . It's an operation that takes a lot of design and foresight to set up." The Woodland facility also provides for a broad range of storage temperatures for specific items, from slightly above freezing for meat and dairy products to minus 20 degrees for ice cream. "We isolate each zone and operate it independently," said Luke, with help from well-insulated partition walls.
Another example of multiple benefits are so-called "fast-acting" freezer doors, which are being installed at Colstor's new Kennewick plant with funding from the Conservation and Renewable Energy System (CARES). These devices save energy, but they also open more quickly, which saves time, and are less apt to break when inadvertently hit by a forklift. "Some of these things are not just driven by energy; they're driven by operation functionality," noted Luke.
Over the years Luke has learned an important lesson: "You have to balance your projects. You have to have operation efficiency and you have to have system efficiency. You may have a very, very efficient system and if you leave the doors open and run excess equipment and never turn off the lights you're going to wipe out a lot of the savings that you could have had. If you have very good operations but lower R-values, inefficient motors, the best operators still can't overcome the system inefficiency. We're always trying to combine both."
He has also come to appreciate the value of teamwork between Colstor, utilities and private-sector contractors.
In addition, Luke has become a proponent of including energy-efficiency considerations in competitive bids for work on Colstor facilities. A bid package on a freezer building, for example, will contain various specifications for R-values in walls, ceilings and floors. "If you have four or five general contractors putting in a bid on a 200,000-square-foot warehouse, they will not jeopardize the big bid" over the relatively minor costs of the efficiency measures. This results in very competitive offerings, with low markups, for energy-saving features.
Ripple Effects
Columbia Colstor's energy efficiency has provided clear benefits for the company and its customers, and it also may contribute to the larger society. Brady recounted how Luke spoke at a conference about Colstor's energy savings and how, if his company stays competitive as a result, so do fruit growers and farmers and small grocers and all the other links in the economic chain between food source and consumer. --Mark Ohrenschall
Oregonians who buy certain energy-efficient appliances for their homes will be eligible for a state income tax credit starting in 1998, under an innovative new law passed by the Oregon Legislature and signed by Gov. John Kitzhaber on July 14.
Believed to be the first of its kind nationwide, the new legislation expands Oregon's current residential tax credit program for alternative energy systems (primarily solar water-heating) to include energy-efficient appliances. These are defined as "a clothes washer, clothes dryer, water heater, refrigerator, freezer, dishwasher, appliance designed to heat or cool a dwelling or other major household appliance that has been certified by the [Oregon] Office of Energy to have premium energy efficiency characteristics." The legislation provides a maximum credit per appliance in 1998 of 48 cents per kilowatt-hour saved in the first year, up to $1,200, and 40 cents per KWh saved, up to $1,000, in 1999 and each tax year beyond.
Many important implementation details--including a determination of eligible appliances and qualifying efficiency levels--remain to be clarified through an OOE-led rule-making process later this year. "We haven't really dissected this thing and we haven't made the rules," said OOE's Charlie Stephens in mid-July.
Nevertheless, Stephens believes this new income tax credit for homeowners could enhance the market for selected energy-efficient appliances.
"It's open for us essentially to set in rule," he said. "We will have to make some decisions what constitutes 'premium energy efficiency characteristics' . . . We can safely say that clothes washers are at the top of the list of what we're being concerned about, because of the [Northwest Energy Efficiency Alliance's] WashWise program and the national effort being focused" on resource-efficient clothes washers.
WashWise (see story above) provides a $130 incentive payment to buyers of resource-efficient washers (also known as horizontal-axis machines). That, combined with an Oregon tax credit projected in the range of $200, "will bring the incremental cost to the consumer of these high-efficiency clothes washers to very near zero," said Stephens, compared with premium conventional models.
He believes these financial incentives could substantially boost sales of energy-conserving horizontal-axis products, and also help influence upcoming revisions to federal energy-efficiency standards for clothes washers. The U.S. Department of Energy plans to issue these new standards by fall 1999, according to Stephens, who serves on the National Appliance Efficiency Standards Advisory Committee. "The clothes washer standards, especially, right now are dependent on proving to the manufacturers that these [resource-efficient] products will sell and that consumers will like them," he said. "We don't really have a lot of proof of that yet. They haven't been around that long."
In addition to clothes washers, other energy-efficient products mentioned by Stephens as possible candidates for the appliance tax credit include refrigerators/freezers, dishwashers, heat pumps and air-conditioners. "We might only be able to do tax credits for four or five different things before we run out of money," he said. The market conditions for a particular appliance and the timeliness of federal standards "are the things we keep in mind as we try to decide what to do and how." He also noted that the tax credit program can adapt to changing circumstances. For example, when new federal energy-efficiency standards for refrigerators take effect in 2001, "We won't need to provide the level of incentives for them. The number of products that will qualify . . . will diminish substantially."
However the energy-efficient appliance tax credit evolves in Oregon, it is thought to be unique among states.
"We wanted a few minor adjustments to some of the tax credit programs that we already had, to allow us to do things like coin-op clothes washers," Stephens explained. The idea of a tax credit for energy-efficient appliances gained broad support among various stakeholders as well as in the Oregon Senate and House of Representatives; only one lawmaker voted against the legislation. "It was a fairly popular thing once everybody agreed this would be a useful thing to do," said Stephens, adding that a late-session forecast of an additional $100 million-plus in state tax revenues helped the cause as well.
The legislation also reversed a downward trend in Oregon's alternative energy devices tax credit, which had dropped from a $1,500 maximum to $1,200 but was restored to $1,500 this session, effective in 1998.
Oregon's alternative energy tax credit has been continuously offered since 1978, according to OOE's Sylvia DeLaRosa, even surviving the demise of federal solar energy tax credits in the mid-1980s. The credited amount and the eligible technologies have varied slightly over the years, but have generally included such renewable energy systems as solar, wind and geothermal for residential applications. About 21,000 such installations earned Oregon tax credits between 1978 and 1996; more than 17,000 of those went for solar water heating.
The tax credit program has had "fairly steady" activity since 1978, said Stephens, who acknowledged, "We've been a little disappointed in the failure of the costs of these systems to come down pretty much in all the years that we've been providing the incentives."
In addition to adding energy-efficient appliances, the new legislation also encompasses the purchase or modification of alternative-fuels vehicles--including those fueled by electricity, natural gas, ethanol, methanol and propane--as well as related equipment or fueling stations. A separate provision allows a business tax credit for contractors who build such home-fueling stations or who build the homes where they are installed.--Mark Ohrenschall
Northwest Environmental Advocates will be assisting Foresight Energy in developing a green power product the California-based company plans to offer in the Pacific Northwest as retail markets open. NWEA will help Foresight design and assemble programs that will be part of Ecopower, which is described as an "environmentally preferred electrical service."
Ecopower will offer "as high a content of renewables as possible within certain price parameters," said Foresight executive vice president Warren Byrne. The company asked NWEA to help develop Ecopower because of its "long history of advocacy on energy and environmental issues," Byrne said, as well as the group's track record in working with utilities and knowledge of issues.
Having NWEA's input will also help with credibility, Byrne added. "We really see the whole greenness of power issue as not being immediately transparent with the public." Foresight wants to offer a product that is understandable and that truly qualifies as a green, or renewable, resource.
Eugene Rosolie, director of NWEA's green power program, said his group has been talking with Foresight for about six months about helping the company put together a portfolio of environmentally responsible resources that can be sold in the Northwest. Rosolie said Foresight will meet with NWEA to discuss specific projects, which NWEA will essentially rate for environmental responsibility. The two will then come to an "understanding" regarding the final portfolio, he added.
"Clearly there's going to have to be some weighing of various issues," Rosolie said--including price. While surveys indicate consumers would be willing to pay more for electricity from environmentally benign sources, Rosolie doesn't think the premium is as large as some people think, especially in the Northwest, where power is already relatively inexpensive.
Byrne is aware of the issue and hopes to keep the price of Ecopower at no more than 10 percent above the low-priced option available in a particular market. That will be difficult, he said. Under California's restructuring plan, for example, residential customers will automatically see rate decreases of 10 percent. "It will be hard for competitive players to come in at any rates much below that. It leaves you in a difficult position to compete on price."
As a result, competing on an environmental basis will be important. "The goal is to include as much renewables as possible and hit that price point," Byrne said. Environmentally the balance of the non-renewable power in Ecopower will also be "significantly better," such as energy from small hydro projects or state-of-the-art natural gas-fired plants. There will be no coal or nuclear power in the company's portfolio.
Byrne isn't concerned about finding renewable resources to meet potential demand. "A range of sources are available," according to Byrne; the question will be how quickly they can be brought into operation. The company doesn't want to repackage existing projects, he added, but would rather work with new ones that are under development. A strong response to Ecopower will act as a catalyst for such new development, Byrne said.
Foresight hopes to offer Ecopower to potential customers in some states, including Oregon and California, by January 1998.--Jude Noland
Klickitat County PUD has received 11 offers to buy the output from three renewable-energy projects--hydro, landfill-gas and wind--the PUD is offering as green power (see Con.WEB, July 25, 1997).
PUD general manager Brian Skeahan said the proposals came from five respondents and fall into two basic categories: re-marketing proposals for wholesale sales and purchases for retail sales. There are more of the former, he said; these would generally set a short-term market-based price and share the profits on re-marketing. The other group, under which suppliers would buy the green power for direct sales to the retail market, offers somewhat higher prices. Skeahan said Klickitat will focus initially on this group.
Most of the respondents sought anonymity, he said, but he confirmed that Snohomish County PUD made a proposal for retail sales and Bonneville Power Administration did not submit any proposals. Other respondents include a Northwest investor-owned utility, a national marketing entity, a Northwest marketing entity and a California "specialty marketer."
In addition, Skeahan said Klickitat will respond to a solicitation from Edison Source/Southern California Edison for proposals for the sale of green power in preparation for the 1998 restructuring of the California energy market. Skeahan said the Edison proposal happened coincidentally with Klickitat's.--Jude Noland
Onsite Energy Corp. and the state of Washington have reached agreement for energy-efficiency equipment and services at a state facility in Sedro Woolley, about 60 miles north of Seattle.
The agreement includes a lighting retrofit of 21 buildings, new energy-efficient electric motors, HVAC improvements and the installation of an energy management system. Onsite will also provide monitoring and verification services for 10 years after the projects are completed, according to a press release from the California-based energy services company.
In addition, Onsite will install a new boiler system that is anticipated to save the state about $166,000 annually in operation and maintenance expenses. Onsite also will provide commissioning and training services to the facility's staff.
Altogether the agreement is expected to result in $1.3 million in gross revenues for Onsite.
A conference and trade show titled "Sustainable Building Northwest: Breaking Through the Barriers" is scheduled for Oct. 27 through 29 in Seattle.
The event is intended to offer "real-life solutions faced by the public and private sector when trying to put green building theories into practice," according to a press release. Themes to be explored include "Smart Policies for Smart Buildings," "The Economics of Sustainable Buildings" and "Innovative Systems and Technologies."
Speakers include Paul Hawken, author of "The Ecology of Commerce"; Alana Probst, vice president and director of economic development at EcoTrust; Ray Anderson, head of Interface; and David Gottfried, founder of the U.S. Green Building Council.
The conference and trade show at the Seattle Center will also include technical sessions, a green building showcase, an executive forum, vendor booths, a tour of award-winning buildings, and more.
Major sponsors are Public Technology, Inc., city of Seattle, King County Solid Waste, Electric Power Research Institute and the U.S. Department of Energy.
For more information, look up the conference Web site or contact O'Brien and Company at (206) 842-8995, e-mail, obrien@halcyon.com.
A qualifying examination for individuals who want to become a registered Special Plans Examiner/Inspector for Washington's Non-Residential Energy Code is scheduled for Oct. 18, and the deadline to register and pay fees is Sept. 8.
In addition, preparatory classes for the SPE/I exam are scheduled for Oct. 4 in Spokane and Oct. 11 in Tukwila.
For more information on the exam, call the Washington Association of Building Officials at (360) 586-6725. For more information on the prep classes, call 1-800-722-0394.
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