CWEB.027/March.31.1998
THE IMPLICATIONS ARE LARGELY POSITIVE for developments in Northwest energy conservation and renewables covered in this first 1998 springtime issue of Con.WEB.
First, a regional panel examining Bonneville Power Administration costs has scaled back its recommended budget cuts for BPA conservation and renewables after 2001. For those who wonder whether public comment makes a difference in energy policy, it clearly did in this case; after many protests, more than half the committee's initially suggested cuts were restored in the final report.
Elsewhere, the Northwest Energy Efficiency Alliance made three major project decisions in late February, including the undertaking of an ambitious and wide-ranging venture to improve energy-efficient building practices around the region. The Alliance also is issuing a request for proposals for new market transformation ventures. Also in the marketplace, an innovative program in Washington state promises to simplify energy savings performance contracting--and expand energy efficiency work--in schools and local governments around the state.
In renewables, Snohomish County PUD has agreed to buy landfill-gas energy from a project planned in south-central Washington by Klickitat County PUD. Renewable Northwest Project meanwhile, has honored three people who have played critical roles in the Wyoming Wind Energy Project.
And, in Idaho, the state's proposed commercial energy code hit a wall in a state Senate committee. Although a statewide code now appears gone for the foreseeable future, efforts will continue to promote energy-efficient building practices on the local level.
Enjoy the spring, and keep in touch if you wish, with marko@newsdata.com.
Note: A case study of efficiency in the Northwest microelectronics industry, originally planned to run in this issue, will now be published in the April issue.
In reducing proposed budget cuts for Bonneville Power Administration energy conservation and renewable energy initiatives, a regional panel reviewing BPA's costs heeded the broad support for Bonneville's public purposes expressed in public meetings and in the Regional Review.
The Bonneville Cost Review Management Committee's final report, issued the second week of March, recommended $9.3 million in annual spending cuts for BPA conservation and renewables for fiscal years 2002 through 2006. Although still substantial, that's less than half the $22.4 million in annual BPA public-purposes cutbacks suggested by the committee in its draft recommendations from January.
Specifically, beginning in 2002, the committee recommended Bonneville spend $10 million a year on market transformation (down from BPA's planned $14.6 million) and reduce its projected spending on existing conservation contracts by $2.5 million a year. The committee also endorsed an extension of low-income weatherization contracts around the region.
And, in renewable energy, the cost review panel suggested BPA fund its three ongoing projects, along with some research, development and data collection, with an annual limit of $15 million for these total BPA renewables costs to exceed project revenues.
Altogether the committee outlined about $145 million in recommended annual spending 
reductions for BPA's power business for the five-year period beginning in 2002, as a means to cut Bonneville costs and enhance the attractiveness of BPA power for Northwest utilities. In addition to public purposes, the panel's targeted savings included the following areas: improved power system cost management (estimated $48 million annual savings), cost allocations between transmission and power ($30 million), reduced debt service ($20 million), Washington Nuclear Plant-2 ($19 million), BPA power marketing ($14.7 million), administrative and other support system costs ($14.5 million), transmission ($1.5 million) and the Northwest Power Planning Council ($1.1 million).
The non-binding recommendations from the 11-member committee have been sent to BPA, the four Northwest governors and to relevant places in Congress. Ultimately, according to the final report, "Responsibility for decision and action lies with the [BPA] Administrator."
Partial Restoration for Public Purposes
Why did the panel restore more than half its preliminary spending cuts for conservation and renewables?
Mike Kreidler, a Northwest Power Planning Council member who also served on the cost review committee, told Con.WEB that the revised public-purposes section "more closely reflects . . . the comments we heard in the . . . process of submitting the draft to public review." A number of speakers at two public meetings objected to the panel's first plan for Bonneville conservation and renewables, although others voiced support. (See Con.WEB, Feb. 26, 1998, for a story on the range of public comments.)
"There were individuals that appropriately reminded us of obligations Bonneville had accrued as part of the Regional Review, and I think to some degree the obligations of a public agency in dealing with public purposes," said Kreidler. "In combination, it was a clear indicator to the [committee] that that was indeed an activity Bonneville had to recognize appropriately."
This outcry "absolutely" played a role in the final recommendations, Kreidler said. Committee chairperson Todd Maddock, also a Power Council member, agreed in a Council news release: "The committee listened carefully to public comments. We believe the committee's recommendations now reflect Northwest concerns about the future of Bonneville and how to ensure the agency can meet its legal obligations and sell power in a competitive marketplace in the future."
The final report also follows guidelines established in the Regional Review. "To go back on those obligations was very difficult," said Kreidler. "It would have represented a breaching of a good-faith effort on the part of very diverse parties to come to agreement."
At Bonneville, meanwhile, "We're pleased and gratified that there was a lot of support for a continued role in Bonneville in supporting conservation and renewables and that the cost review board responded positively to that input and changed their recommendation," said energy efficiency vice president Terry Esvelt. "We agree we have a [public-purposes] responsibility. We think Congress expects us to play that positive role, and we think we should and we think we can."
Esvelt said the committee's recommendations are "consistent with our own beliefs and values. We've always said our commercial success is a means to an end, that is, serving the public's purposes that have been defined for us by Congress. This is sort of a validation . . . When tested, it got validated. We're pretty encouraged by it."
From another vantage came a decidedly lukewarm response to the cost review panel's work. The Northwest Energy Coalition (formerly Northwest Conservation Act Coalition) was "heartened to see that, to a large extent, the committee backed off from the outrageous cuts to public purposes it had first proposed," according to a statement from NWEC director Sara Patton. "However, the committee is still recommending that Bonneville reduce its funding for common sense investments in conservation that will lead the region toward a clean and affordable energy future." The coalition "urges Bonneville to reaffirm its commitment to the citizens of the region by choosing not to implement the wrong-headed reductions to conservation."
The cost review committee's suggestions for reduced spending on Bonneville public purposes fall into three categories: market transformation, existing conservation contracts (also known as legacy conservation) and renewable energy. Following is a closer look at each of the three.
Market Transformation
The committee's suggestion for $10 million a year in post-2001 BPA spending for regional market transformation is in line with the Regional Review, which called for BPA to fund market transformation in proportion to its percentage of the region's firm electric load.
Bonneville, on behalf of its public-power and direct-service customers, now provides about $15 million a year for the Northwest Energy Efficiency Alliance to pursue enhanced markets for energy-efficient products and services around the region. That funding represents about 57 percent of the Alliance's maximum budget through 1999. The remainder comes from the region's six major investor-owned utilities.
This funding arrangement should be re-examined over time, the committee suggested. "The availability of other funding for market transformation and the appropriateness of continued Bonneville funding should be reviewed by 2004," said the panel, specifically endorsing state public-purposes funding for market transformation and other conservation initiatives. Bonneville should join utilities and states to seek this type of financial support.
In its draft recommendations, the committee had proposed that BPA end market transformation funding after 2001.
"We could not have gotten better publicity and more support than we got by having somebody threaten to cut the funding for us," BPA market transformation coordinator Ken Keating told his colleagues on the Alliance board in Boise in late February, after learning of the cost review panel's intended changes. "You've got to have some enemies before you can rouse the troops." Although the future is not entirely clear, he added, "The fact that it got this kind of reaction from the public, interest groups, those who took part in the Regional Review and forgot the recommendations, really leaves us in a different spot."
Existing Conservation Contracts
This category, also known as legacy conservation, involves some 250 still-active BPA contracts with utilities and others around the region. These commitments are estimated to cost BPA a maximum of $10 million annually after 2001--primarily for debt service, since most of these contracts expire by 2000.
The committee suggested the $10 million can be reduced to $7.5 million each year, saving $2.5 million annually.
"Given historical spending patterns, utilities likely will not spend the maximum contract amounts," the cost review panel said. "If that occurs, further staffing cost reductions can occur. Thus, Bonneville should reduce its projections of further expenses associated with the existing conservation contracts."
Esvelt agrees with the committee's logic, although he said the $4.5 million initially targeted in legacy savings "quite frankly was too much of a stretch. These are all post-2001 savings," he noted, and because BPA isn't embarking on new programs those savings will largely accrue in debt service. Freeing up $4.5 million in this fashion would require much greater capital savings than that in the near future--which he said BPA couldn't manage within the terms of its contracts.
Bonneville's $60 million conservation budget for the current fiscal year includes about $40 million for legacy contracts, Esvelt said. And although much of the implementation is now up to utilities, Bonneville officials believe the agency continues to need some ongoing contract management. "We still have a ton of money at stake here, and we think it's absolutely prudent and appropriate that we provide some oversight of how that money is being spent," he said.
The equivalent of about 15 full-time BPA employees now work on legacy contracts, Esvelt said, and this will probably drop to less than 5 FTE by 2000. The cost review panel "perhaps has gone a little further in [cutting] oversight capability than we'd planned, but not much. It's definitely in the range of what we've been planning."
The committee also explicitly endorsed an extension for BPA low-income weatherization contracts with the four Northwest states "to be consistent with the end of the legacy contract commitments to the utilities." In its preliminary recommendations, the panel suggested BPA's legacy contracts not be modified or extended at all.
"It's a relatively low cost," said Kreidler, when asked about the committee's change of heart for low-income weatherization. BPA's contracts with the states were signed in 1995 for a collective $8.5 million, according to Esvelt. Extending the time (the amount of allocated money won't change) will add an estimated $500,000 in annual debt service costs to BPA after 2001.
In addition, this subject would have been "very contentious" had the committee stuck with its draft recommendations, Kreidler said--especially since BPA had expressed a willingness to extend the low-income weatherization contracts when requested by the states last year. "We made indications we thought this was doable," said Esvelt. "It's reasonable to characterize we had created expectations."
BPA will extend the low-income weatherization contracts through September 1999, and beyond that, said Esvelt, "We suspect there will be more discussion." The future of this particular initiative hinges on what the states do--or don't do--with public-purposes funding, which is intended to eventually replace BPA's money. "We never promised nor would we entertain an open-ended obligation," he said.
Renewable Energy
Under the committee's final recommendations, BPA should fund three renewable resource projects now in various stages of development--the Wyoming Wind Energy Project, the planned Conservation and Renewable Energy System (CARES) wind venture in south-central Washington, and a geothermal plant of some description. BPA also should fund renewables research and development and data collection at current levels.
For all these endeavors, BPA should limit its annual costs to no more than $15 million more than the revenues it receives from these projects. And it should only embark on new projects if the costs are fully supported by revenues. These provisions should save about $2.2 million each year from 2002 through 2006.
"The underlying assumption is that Bonneville should honor its previous commitments, but its core business strategy should not include development of new renewable resources or additional related research," said the committee.
The $15 million cap represents "an extrapolation of what came out of the Regional Review," said Kreidler. "It put better bookends on the costs for renewables that were included in the Regional Review."
In its draft recommendations, the committee had suggested BPA limit its post-2001 renewables funding only to the three projects to which it had already committed.--Mark Ohrenschall
Attachments:
The Northwest Energy Efficiency Alliance is embarking on a wide-ranging project to improve the energy efficiency of residential and commercial building practices around the region.
This ambitious venture--which could cost up to $6.7 million over three years, more than 10 percent of the Alliance's current budget--was approved by the Alliance board of directors after considerable discussion in Boise Feb. 26 and 27.
The board in Boise also endorsed an expanded informational role for the Energy Ideas Clearinghouse, along with a completely revamped program to transform the market for premium efficiency motors. In addition, the board agreed to 1998 membership in the national Consortium for Energy Efficiency.
The Boise meeting also included discussions about a new request for market transformation proposals and a series of regional meetings on Alliance activities (see related stories in this issue).
Alliance Progress Report
Almost halfway through its initial three-year funding period from 1997 through 1999, the Alliance now has a portfolio of 26 market transformation projects--including public information and infrastructure activities--with a total committed project budget of about $44 million--more than two-thirds of the maximum $65 million pledged by Bonneville Power Administration and the region's six major investor-owned utilities.
Alliance chairperson Jake Fey later offered his thoughts on the Alliance's progress: "After 
attending a [recent] national conferenceon market transformation it's clear
that once again our region is way ahead of the rest of the country. For
the most part we have efforts under way in all sectors and covering most
of the best opportunity areas. In addition, we have a well-functioning
governance structure that allows us to move effectively ahead as
opportunities present themselves. Also, we have a staff that ought to
be the envy of any entity wanting to effectively advance market
transformation.
"Finally, with respect to the [Boise] meeting and the projects we approved, it seems to me that the building [practices] proposal and the EIC show a recognition on our part that information and education approaches will be a key to the overall success of market transformation and are more desirable than other approaches in certain market areas," Fey said.
Northwest Building Practices
This venture evolved from the Alliance's efforts to develop a long-term strategy for energy codes throughout the Northwest. After many months and many meetings with many stakeholders, a three-year proposal emerged. The proposed project is designed to generate demand through a regional public information campaign stressing the benefits of making homes and commercial structures more energy-efficient. The project also includes a baseline study of current building practices--to gauge the amount and direction of future efforts--and various initiatives to help develop and support better building practices in the four states.
"Energy codes are seen as a crucial part of the Alliance's strategic investments for overall energy efficiency throughout the region," consultant Doug Mahone of the Heschong Mahone Group told the board in Boise. "They really are integrated with most of the energy efficiency efforts in the region [and] integrated with the Alliance's efforts. They also play a key role with the market for new construction, residential and commercial, and all the renovations and remodels, setting a floor for performance that the entire market can deal with--builders, designers, manufacturers, equipment distributors, suppliers."
Board member Carol Brown said this approach reaches the residential and commercial markets, and fits in with other Alliance ventures. And in addition to pushing energy-efficient building practices, the project seeks to "pull" the market through greater consumer demand for homes and commercial buildings constructed to higher efficiency levels. "When you get both of those pieces together, you really get market transformation," said Brown.
This project also takes a fundamentally different tack than many previous utility-funded efforts to enhance the energy efficiency of building practices. These past initiatives relied more on sticks than carrots. "This is focused more on the market, on consumer needs and interests, than on the enforcement side," said Alliance board member Liz Klumpp. With "very little interest" among legislators for new state energy codes, the Alliance in this venture can "take what we know about codes and energy-efficient homes and work on the consumers . . . building people's expectations of value in their homes."
The centerpiece of this venture is a $3 million regional public information campaign, with the expressed goal to "craft and deliver the message that energy codes in the Northwest have created substantial and valuable benefits to the environment, the economy and the users of buildings." The target audiences include the general population, home buyers, owners and tenants of commercial buildings, and government building officials.
"The public doesn't really have energy codes on their radar screen," Mahone explained, despite the many benefits of efficient buildings. "If you could increase public support and awareness, that would have the effect of improving the entire effectiveness" of the code process.
Eventually, Klumpp suggested, the public's interest could lead to increased support among politicians and government building officials for more energy-efficient building practices.
A second major element is a study of the current level of energy efficiency of new homes and new commercial buildings around the region, which is expected to provide useful baseline information for this and many other Alliance activities.
Five other specific components are included: seed funding to support development of more efficient building practices, regionwide coordination of efficient building efforts, special projects within the four Northwest states, transition funding for the existing energy code support infrastructure, and ongoing funding for code development infrastructure. A principal long-range aim is to create a "permanent and sustainable support system" for improving energy-related building practices that "doesn't rely as heavily on the utilities," said Mahone.
Most Alliance board members looked favorably upon this project.
Said Nancy Hirsh: "Codes are one of the foundations . . . underneath all the work the Alliance is doing. Codes are that important and that fundamental to all of our work." Although there are risks, she acknowledged, "I think we have some certainty with this kind of broad-based effort we're going to influence a lot of decision-makers."
Board member Stan Price sees this project and its outreach components as an opportunity to help "depoliticize energy codes . . . We can be far more effective in terms of effecting progressive energy codes if we have processes actively soliciting and involving people involved in construction of these buildings."
Board member Brian Hedman thought the project is "well-structured" and "innovative," but he questioned the timing, given the Alliance's need to show--in a relatively short time--that it can succeed in transforming markets. "Our focus has to be on projects that are visible and have very demonstrable results," he said, adding that even if this venture does succeed it's likely to do so behind the scenes.
Some Idaho and Montana board members were more skeptical about the $6.7 million project, the second-most-expensive project in front of the Alliance, behind only the WashWise venture for resource-efficient clothes washers.
"I think the risk is very high and I'm afraid we're going to spend a lot of money and possibly not see the success the way it's projected at this point," said Larry Bryant. A fellow Idahoan on the Alliance board, Shirley Lindstrom, worried that the political climate may not be supportive of energy codes in her state at this time.
Gary Mahugh also was among the doubters. "The timing is very poor right now, given what is going on in the [electric] industry" with restructuring. "My gut feeling is we'll spend $6 million and in two or three years we'll be exactly where we are today, but $6 million poorer. I don't think it's going to move very far in Montana," his home state.
In the end, the project narrowly passed in two separate votes. The first vote covered all elements except for the ongoing funding for existing state energy code infrastructure; this package was approved 10-4. The separate program for existing infrastructure received a 12-2 nod.
Energy Ideas Clearinghouse
The Energy Ideas Clearinghouse, based in Olympia, WA, has provided energy information services to the Northwest throughout the 1990s. With this new venture it will continue to do so through the Washington State University Cooperative Extension Energy Program, but with a decidedly different approach. The new approach is based on a tiered information system, much of it electronic, intended to promote energy efficiency by providing credible, current, convenient, centralized and comprehensive energy-related information, particularly to people making energy-related decisions for business, industries and governments.
"We're still calling it the Energy Ideas Clearinghouse, but much in here is totally new and reinvented . . . from a market transformation perspective," Clearinghouse manager Lee Link told the Alliance board in Boise.
This revised approach will make the Clearinghouse--which is already influencing decisions in the marketplace--more proactive and cost-effective in delivering useful information, said Alliance staffer Tom Eckman.
Each of four tiers will provide certain types of information, Link said. The intent is to serve the most people through the top tier of electronic media, then filter down for fewer and fewer people to receive personalized responses.
One of the key features in this top tier of electronic media is an Internet-based product database "to help people about to purchase products do it more easily and take advantage of energy-efficient features," according to Link. The Clearinghouse's Rob Penney said this element takes advantage of the growth in Internet access and electronic commerce. It provides very specific information on many types of equipment and appliances, along with simplified economic analysis tools. "The real value is to catch people at the cusp of a decision and get them to purchase a more energy-efficient product up front," Penney said.
In this top tier various other electronic information services will be incorporated in the Clearinghouse Web site, as a means to enhance "the awareness and use of energy-efficient products and methods," according to the Clearinghouse proposal.
The second tier offers targeted projects of short duration for specific audiences, and particularly opinion leaders within these groups. The third tier offers personalized customer service--through toll-free hotlines, e-mail, fax and even traditional mail--followed by a final tier of customized technical assistance.
All but one Alliance board member endorsed this venture, which was approved for three years for up to $1.35 million in Alliance money (the Clearinghouse anticipates receiving an additional $6.1 million from other sources over the three years).
"I like the concept," said board member Charlie Grist. "I think it is very market-oriented in influencing the way the market operates, the way people buy products." Board member Doug Kilpatrick said he sees much value in the Clearinghouse promoting other Alliance projects. And, according to Hirsh, "This to me represents the most comprehensive technology information services piece . . . we're funding."
Premium Efficiency Motors
With this essentially new venture, the Alliance will seek to institutionalize energy-efficient motor practices among customers that use high-horsepower motors and those that buy motors in large volumes.
This new approach goes in a much different direction from the former Alliance project that, in partnership with motor dealers, encouraged the stocking and sale of premium efficiency motors for businesses and industries around the region. This older venture will continue until the Alliance conducts market research to help design the revised approach, which will focus on transforming customer policies for the purchase, upkeep and repair of motors.
This new direction stemmed from an Alliance evaluation of the original premium efficiency motors program. "This isn't working like we thought it would," acknowledged executive director Margaret Gardner at the Boise meeting. She later called this "an opportunity to find new and creative ways to reach the target audience."
The initial venture tried to increase the availability and sales of premium efficiency motors, while encouraging manufacturers to make, distribute and market these types of motors. The main strategies were dealer education, dealer sales incentives for replacement motors of between 2 and 60 horsepower, and motor testing.
In its evaluation of the original motors project, the Alliance found that the great majority of motor sales with dealer incentives occurred in the Interstate 5 corridor, for smaller horsepower models, and that eight customers accounted for fully half the sales. Although interested in the program, most dealers have not actively marketed premium efficiency motors, nor have they widely used the dealer rebate as a sales incentive. Only one-fifth of all qualifying motors have received incentives. In addition, only a handful of motors have gone through testing.
Alliance and program staff came to several conclusions. Stocking practices aren't a big obstacle for premium efficiency motors, nor are dealers a major influence in what type of motors their customers buy. In addition, the smaller horsepower motors represent less than half of the cumulative horsepower of purchased motors. Recently adopted stricter federal efficiency standards for motors mean fewer inefficient models will be available, thus reducing potential energy savings from new market transformation projects, especially in lower horsepower models.
Nonetheless, the Alliance believes motors are still a key target for market transformation, because they consume about two-thirds of all non-Direct Service Industry electric energy in the region and they are ubiquitous within industries.
From all this emerged a general direction for a revamped premium efficiency motors program. It will focus on companies that buy high-horsepower motors (50 horsepower and above), or buy a lot of motors (one HP and above). And it will try to influence these companies' practices in buying, maintaining and repairing motors, so premium efficiency becomes the standard.
"Energy efficiency alone is probably not enough to inspire large customers to pay attention or change their policies," Alliance lead project coordinator John Jennings told the board. "Other benefits can be bundled into a package of benefits, which include, beyond energy efficiency, shorter down time and reliability."
Among the potential means the Alliance could use with these customers are sample procurement policies, lists of qualifying motors, analysis tools, on-site testing, repair guides and specifications, case studies, newsletters, workbooks, technical assistance and staff training.
By a 9 to 5 vote the Alliance board adopted this staff-recommended approach, which has already started with market research; eventually, the current program will give way to the revised and refined venture. Maximum budget for two years is $775,000, which includes a no-cost extension of the existing premium efficiency motors program.
Consortium for Energy Efficiency: The board unanimously approved the Alliance's 1998 membership in the Consortium for Energy Efficiency. The consortium is a Massachusetts-based non-profit organization that works nationally to transform markets for energy-efficient technologies, such as resource-efficient clothes washers, premium efficiency motors and other products the Alliance also is promoting. "The consortium does give us a lot of benefits on the national level," said Gardner. The Alliance's 1998 dues are $50,000.--Mark Ohrenschall
A new initiative to promote energy efficiency projects in Washington schools and local governments is being launched by the state's Department of General Administration.
The program--believed to be the first of its kind nationwide--encourages energy savings performance contracting (ESPC) for cities, counties, schools and other local governmental units throughout Washington. It simplifies their ESPC process by creating a pool of pre-qualified firms to do efficiency projects at the behest of participating public agencies. Projects can be financed privately or through the state treasury, according to GA's energy program manager Ray Anderson, but ultimately, "All of the costs associated with the projects are . . . paid for out of energy savings."
Although Washington's state government has extensively used ESPC since the mid-1980s, schools and local governments have rarely taken advantage of this efficiency strategy. Of the state's nearly 300 public school districts, probably fewer than 10 have done ESPC projects, estimated Anderson, who is spearheading the new initiative. Only a couple of Washington's 39 counties have worked with ESPC.
"The process for most of them is probably pretty daunting . . . They don't do this on a day-to-day basis," said Anderson. "We're trying to do the bureaucratic stuff and get that cleared away so they can jump right in and go ahead and hire an energy services company, get the audits done, negotiate, and get the work done."
The potential is large. Washington school districts in aggregate could save about $25 million by cutting their energy bills an average of 20 percent, Anderson estimated, although he acknowledged the ESPC program initially won't attract all or even a majority of school districts and local governments.
Uncle Sam as Role Model
Washington's effort is patterned after a federal initiative known as Super Energy Saver Performance Contracts, which offer federal agencies with Western facilities a group of preselected contractors from which to choose for ESPC ventures (see Con.WEB, May 23, 1997). In fact, the Washington project has received financial and other support from the U.S. Department of Energy, which helped develop Super ESPC.
Washington is the first state to establish this type of program for schools and local governments, according to Curtis Framel, regional coordinator of the Federal Energy Management Program. The Evergreen State's simplified version of Super ESPC offers public agencies "an easy mechanism to do energy efficiency" with private-sector capital instead of budgeted monies. This improves local infrastructures while allowing tax dollars to be spent on other needs--such as schoolbooks, for example.
Framel hopes other states will emulate Washington's ESPC program. Oregon already has expressed interest, he noted.
"This is where it's starting," said Anderson. "The ultimate interest that we all have is how can we make things operate better and use less energy."
The Way It Works
GA and an advisory committee of school and local government officials plan to go through a request for proposals process with interested energy services companies, beginning in April, Anderson said. They hope to select the eligible contractors this summer. Among the selection criteria will be ESPC experience, project management arrangements, financing capabilities, plans to monitor and verify savings, and cost-control methods.
Anderson said he knows of about a dozen firms active in ESPC work in Washington. Although the RFP process can't and won't explicitly favor Washington companies, firms with a presence in the state will have a competitive advantage in showing how they will serve local school districts and governments.
In the first year Anderson anticipates five firms will be chosen for the contractor pool, although for any given participating agency the list will most likely be trimmed, and the schools and local governments will make the final choice. The selected ESCO will perform an audit, identify cost-effective projects, and the agency will decide which--if any--projects to pursue. If an agency says no to all the possibilities, the agency would have to pay the cost of the audit. The chosen work could take several years, and the monitoring and verification of savings could last up to 10 years.
Meanwhile, the contractor selection process likely will be repeated anew each year, and even previously chosen ESCOs will need to reapply.
Anderson recently met with several members of the Northwest Energy Efficiency Council, a trade association of the region's efficiency industry. NEEC members considered the ESPC program "a pretty good idea," according to Anderson.
On the customer side of this efficiency equation, Anderson has nearly reached his target of 25 participating agencies for the first year.
He is spreading the ESPC word to school and local government officials, and answering "a lot of questions" about the process. Many officials, he said, have heard "horror stories" about ESPC in which energy savings were easily accomplished and short-lived, while companies profited handsomely. Anderson tells them: "No, that's not how we do it. Those are the old days, these are the new days. The way people make money [now] is to do a bigger project and do everything they possibly can."
Under the Washington program, companies that don't provide financing are required to guarantee energy savings for 10 years, and will be paid from those savings. "They're not going to be providing some kind of project that's not going to work," said Anderson. "They're not going to be providing schlock equipment."
Contracting firms also could be required to do maintenance, although in most cases Anderson believes the schools and local governments will keep that role for themselves. "We can't go in and say, 'Just fire half your maintenance staff here and this thing will pay off,'" said Anderson. "The existing staff is the one that is really going to make it work."
Among the likely specific targets are lighting, HVAC, control systems and water conservation, Anderson said, along with potential work on boilers and chillers.
He also wants to pursue joint ESPC ventures among neighboring schools and local governments. "If you're a water district you probably have a small city nearby . . . and there may be a library in town. We'll try to put a package together that will make it worth everybody's while to go out and do a project." Among other advantages, this cooperative approach will likely lead to more projects as well as economies of scale in purchasing equipment.
Anderson emphasized that participating schools and local governments have no obligation to use the state's ESPC process, although he expects each involved agency to pursue at least one project. Public agencies also have flexibility on administration--they can do it themselves, or the state can do it for them.
"I'm excited about doing this," said Anderson. "I think it's going to allow the schools and municipalities to participate in I think a much more comfortable level than they would have by going out and doing [ESPC] themselves." For more information, call Anderson at (360)902-7260.--Mark Ohrenschall
The Northwest Energy Efficiency Alliance is in the market for market transformation ideas.
The Alliance is issuing a request for proposals for market transformation initiatives. Although all submissions are welcome, the Alliance is particularly interested in projects for the commercial and industrial sectors.
Proposals are due to the Alliance by May 8, following bidders' conferences around the region in April. The Alliance will scrutinize the potential ventures, and the board will make decisions on them by September.
For more information, visit the Alliance Web site at http://www.nwalliance.org or call the Alliance at 1-800-411-0834.
Snohomish County PUD plans to be purchasing renewable energy from decomposing garbage by next year at this time, under a recent agreement with Klickitat County PUD.
Snohomish PUD commissioners voted Feb. 24 to sign a contract to buy part of the output from a landfill-gas energy project Klickitat plans to build at the Roosevelt Regional Landfill in south-central Washington. Klickitat's board approved the contract the same day, according to PUD general manager Brian Skeahan.
Skeahan said the agreement will provide Snohomish with about 2.5 average megawatts of energy generated by landfill gas. The contract runs five years (with renewal clauses) and the price of power is a sliding scale ranging from the mid- to upper 2 cents per kilowatt-hour range to the mid-3 cents/KWh range, depending on project output. Delivery is planned to begin in March 1999, Skeahan said.
Snohomish PUD plans to sell the energy as green power, said spokesman Andy Muntz, rather than meld it into the utility's resource mix. The utility still has to develop a marketing plan and pricing for the resource, he added. Muntz also pointed out that 23 percent of the municipal solid waste that goes into the Roosevelt Landfill originates in Snohomish County.
Skeahan said Klickitat PUD continues to work on a contract with Rabanco, owner of the Roosevelt landfill. While there are no insurmountable hurdles, Skeahan said there is still distance between Rabanco and the PUD on some issues.
As initially proposed, the PUD would own the power generation facilities and Rabanco would own the methane gas collection system at the landfill in eastern Klickitat County. Klickitat wants to start by installing enough 1.6-MW-capacity 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 [are] more options."--Jude Noland
The inaugural Clean Energy Award from the Renewable Northwest Project has gone to three regional energy officials for their work on the Wyoming Wind Energy Project.
RNP has recognized Dennis Steinberg of PacifiCorp, Ken Beeson of Eugene Water & Electric Board and George Darr of Bonneville Power Administration for their contributions to the first commercial-scale wind-energy project that will directly serve the Northwest.
"The leadership and perseverance of these three individuals really made it happen," said RNP director Rachel Shimshak.
PacifiCorp owns about 80 percent of the $62 million project, and EWEB owns the rest. BPA has committed to purchasing about 36 percent of the plant's output, which will have a capacity of 41.4 MW when it is completed later this year or in early 1999. It is located on Foote Creek Rim, in southeastern Wyoming between Laramie and Rawlins. (See Con.WEB, Oct. 31, 1997, for a story on the project.)--Mark Ohrenschall
After fizzling in the state Legislature, a proposed commercial energy code for Idaho appears to be an idea whose time may not come anytime in the foreseeable future.
The would-be energy efficiency standards for envelope, lighting and HVAC systems in new commercial buildings were unanimously rejected in early March by the Idaho Senate’s Commerce and Human Resources Committee, according to Ken Baker, of the Idaho Department of Water Resources Energy Division. The panel officially voted to hold the measure in committee, "which is the same thing as saying it’s not going anywhere," he said.
And with that IDWR’s long stakeholder-assisted campaign for a statewide commercial energy code--stemming from a federal Energy Policy Act requirement--also came to an end, at least for the moment.
"Our strategy from here on out is to basically allow local jurisdictions to adopt our code, and to support them in their adoption," Baker said. "I don’t think the department at this point at time is interested in pursuing legislation. It’s just too difficult. We still don’t have a mandatory statewide UBC [Uniform Building Code]. Without that, it’s kind of difficult to get a commercial energy code."
What Happened?
The proposed commercial code, which began its development upon a request from Gov. Phil Batt in 1995, had gained a measure of backing from Idahoans.
A survey last summer of Idaho local government officials, chambers of commerce and code stakeholders found that 88 percent supported the suggested commercial building energy standards.
"The code is concise, only 28 pages in length, clear in content and easy to understand," according to a letter accompanying the survey. "It has been adopted by a national code group as a template for other states to use in meeting federal code requirements. The efficiency measures called for in the code address wall, ceiling and floor insulation, window type, equipment efficiencies, and lighting density; follow good design practice; and utilize existing technologies and available products. Buildings constructed to the code will offer increased comfort and safety to occupants and will be of higher value to consumers."
Based on the poll results, the Consumer and Public Purposes subcommittee of the link Governor’s Council on Hydroelectric and River Resources recommended to Gov. Phil Batt that he support the proposed commercial code.
Batt, in turn, forwarded the latest code plan to the Legislature. "That was a big step," said Shirley Lindstrom of the Northwest Power Planning Council’s Idaho office. In 1997, Batt declined to submit a substantially similar commercial energy code measure to the Legislature; his spokesman said at the time that some Idahoans had concerns that required further discussion. (See Con.WEB, March 28, 1997). Since then Baker said he had met with numerous stakeholders around Idaho, including elected officials, architects, engineers and others.
The code hadn’t changed in any substantive way since a draft version emerged in November 1996, Baker said. Similar in format to Oregon’s commercial energy code, although with somewhat different thermal standards reflecting Idaho’s different climate zones, the proposed commercial building standards were judged to meet or exceed ASHRAE/IES Standard 90.1-1989--as states are required to do by EPACT. The code has been considered user-friendly for compliance, as well. And, Baker said, according to an analysis by Mike Kennedy of Ecotope, the code at the end of 20 years would annually save an estimated 25 average megawatts of electricity and 73 billion Btu of natural gas. "For a state our size, that’s pretty good," he said.
Objections
Yet, when the proposed commercial energy code came before the Commerce and Human Resources Committee, a number of naysayers emerged.
"There was a lot of opposition to it from different groups," Baker reported, including the Idaho Association of Commerce and Industry, the Idaho Realtors Association and a mechanical contractors’ organization. "None of these people had come forward to us with their concerns," Baker said.
IACI expressed fears that the code would extend the construction permitting process, he said. Realtors, meanwhile, wanted a consistent statewide code and objected to a provision giving local jurisdictions a choice on adopting the code; if a jurisdiction chose not to adopt, owners of new buildings in those areas would have had to arrange for private inspections for code compliance.
Committee members, meanwhile, grilled IDWR Energy Division administrator Bob Hoppie, according to Baker: "The nature of the questions mainly were, ‘Why are we doing this? What’s forcing us? It seems to us the Energy Policy Act doesn’t have any teeth in it.’"
And previously, a Boise mechanical engineer, among others, had questioned the need for a code, believing that the vast majority of new Idaho commercial buildings already meet these standards.
"We feel like we’re doing an extremely good job," Ken Tewksbury told Con.WEB in March 1997. "We can see that the education, putting together of the code, the administration, the certification of inspectors, the payment for the inspectors, all is going to cost us a lot of money. It’s going to be an extremely expensive thing to do. We’re not sure the bang for the buck is there." Although he acknowledged that "some of the [buildings] schlocked in by a contractor or developers need to be tightened down a little bit," Idaho professional engineers meet the proposed code’s standards "99.9 percent of the time" and should be allowed the latitude to make their own energy-related decisions.
Baker, for his part, believes that "building practices are actually pretty close throughout the state" to efficiency levels in the proposed code. "What’s not there at this point in time is the actual inspections to ensure a building as designed is built that way."
Public buildings constructed in Idaho are required to meet the ASHRAE/IES Standard 90.1-1989, he noted. In addition, the cities of Lewiston and Couer d’Alene have adopted equivalent standards for new commercial buildings. On the residential end, according to Baker, those two cities along with Idaho Falls, Nampa, Caldwell and Canyon County--jurisdictions collectively representing at least 30 percent of new construction in the state--have adopted Model Energy Code standards.
IDWR will continue to work with local governments on commercial and residential energy codes, providing training and technical assistance among other features. Without statewide standards, Baker said, "It’s not going to move ahead as quickly . . . [but] it’ll move as surely."--Mark Ohrenschall
The Idaho Public Utilities Commission has set a May 26 public hearing on Idaho Power's request to accelerate its recovery of more than $42 million in deferred costs related to demand-side management programs.
In November, the utility filed an application to increase rates by about 1.8 percent, proposing to amortize DSM costs in five years, rather than over the course of the 24-year period originally approved by the commission. (See Con.WEB, Dec. 31, 1997, for a story on Idaho Power's initial filing.)
Idaho Power senior attorney Larry Ripley said the IPUC encouraged the company to file its request for a shortened amortization period because of regulatory uncertainties. "The commission's recent orders have indicated that, in light of [electric industry] restructuring possibilities on both the national and state level, 24 years is not a realistic time period" in which to recover the costs, he said.
The abbreviated amortization period and the resulting rate increase would allow Idaho Power to recover about $8.5 million in DSM expenses annually for the next five years. This would cover conservation program costs accrued before and after 1994, interest on deferred amounts and associated income taxes.
Not included in these DSM expenses, however, are costs associated with Idaho Power's membership in the Northwest Energy Efficiency Alliance. The IPUC has ruled that Alliance costs must be capitalized and deferred "until the prudence of those expenditures could be determined." (See Con.WEB, Sept. 26, 1997)
At a Feb. 20 pre-hearing conference, Idaho Power and interested parties, including Industrial Customers of Idaho Power, FMC Corp. and the Idaho Citizens Coalition, devised a list of issues that remain to be resolved in the cost-recovery case.
Among the most important and perhaps the most contentious is the length of the proposed amortization period. "As the time frame is shortened, the amount of money we need to collect each year increases," Ripley explained. Additionally, issues of allocation need to be addressed. "In the past, large customers have footed a bigger portion of the DSM bill because they buy proportionally more power," Ripley said. But in view of potential changes in regulation, "some are asking whether costs should be allocated to customer classes that see more of the benefits of DSM programs."
Discovery requests and responses in the case will proceed through April. Intervenor and staff testimony must be filed by May 4, with Idaho Power's rebuttal due May 18. The hearing will take place in Boise May 26.
Idaho Power Lighting Program Goes Dark
In a separate but related matter, Idaho Power recently received IPUC approval to discontinue its Commercial Lighting Energy Efficiency Program. In a request filed with the IPUC in January, the utility cited declining participation in the program, its membership in the Alliance, and its desire to reduce deferral of DSM expenditures for later recovery.
The IPUC granted the IOU's request Feb. 27. In its order, the commission noted that the Alliance is funding a number of similar but more wide-ranging lighting efficiency programs. But perhaps most significantly, the IPUC ruled that while it remains committed to conservation, "adding to Idaho Power's deferred accounts increases Idaho Power's stranded cost exposure as the industry moves toward restructuring . . . That is not a risk worth taking for a conservation program that has outlived its useful life."--Angela Becker-Dippmann.
The Northwest Energy Efficiency Alliance will hold a series of regional roundtables in April and May to update utility staff and others on current activities of the regional market transformation organization.
Alliance-sponsored projects will be reviewed, along with more in-depth descriptions of the WashWise, LightWise and Energy Star Fixtures residential programs. The meetings are designed to give utility energy and customer service staff information and tools to help their customers gain benefits from these Alliance programs.
Here is the meeting schedule, along with locations: Wednesday, April 15, Snohomish County PUD, Everett, WA; Wednesday, April 22, Boise State University, Boise, Idaho; Thursday, April 23, University of Montana, Missoula; Tuesday, April 28, Washington Water Power, Spokane; Tuesday, May 5, Aldersgate Conference Center, Salem, OR.
For more information or to register, call Stacey Hobart of the Alliance staff at (800) 411-0834, ext. 228, or e-mail to shobart@nwalliance.org.
When fine design combines with efficient energy use, a building serves both form and function, beauty and sustainability. This blend is showcased by the Northwest Energy Efficiency Alliance through "Architecture + Energy: Building Excellence in the Northwest," an awards and workshop program for commercial buildings.
Entries for this year's awards program are open through June 5.
"This is a very unique program in that it's looking for the integration of architectural excellence and energy savings," said Dorothy Payton of the American Institute of Architects/Portland Chapter, which administers the program. The venture includes a juried competition but also stresses education. "We're really looking at this as being a learning opportunity," says Payton. "We can all get examples and see how those different projects and different building types can approach energy efficiency."
Buildings need not display the latest and greatest energy-saving technologies, Payton notes. "We're looking for strategic plans, strategic maneuvers that architects, consultants and clients put into place to integrate design of their building in order to save energy."
This year's awards program--scheduled for June 25 and 26 in Portland--is open to any completed non-residential building in Idaho, Montana, Oregon or Washington. Submittals will be judged on energy performance, treatment of energy-related elements, climate-responsive design, resource efficiency and creativity. Nominations can come from any source. Entries are due to AIA/Portland by June 5. Award-winners will be featured in a four-color spread published in a national design magazine.
The 1997 Architecture + Energy awards program honored the following Northwest buildings: the REI store in Seattle; the Pacific Gas Transmission building in Portland; Widmer Bros. Brewing Company Expansion No. 2 in Portland; City of Portland Bureau of Environmental Services Water Pollution Control Laboratory in Portland; and the F.W. Olin Science Center at Willamette University in Salem. (See Con.WEB, June 1997, for a story on the 1997 program.)
In addition to the 1998 awards, a workshop highlighting successful energy-efficient design is planned later in the year east of the Cascades.
For an entry packet and/or more information, contact AIA/Portland at (503) 223-8757, phone; (503) 220-0254, fax; aeprogram@aiaportland.com, e-mail.--Mark Ohrenschall
The 1998 BEST Business Awards for Portland-area businesses with notable energy and environmental accomplishments will be presented Friday, April 17, at a breakfast meeting in Portland.
The Breakfast of Business Champions will feature U.S. Rep. Earl Blumenauer of Oregon issuing the 1998 BEST Business Awards to six local businesses for achievements in energy efficiency, water conservation, waste reduction and recycling, and efficient transportation. Local author Robin Cody will give the keynote address, based on his 1990 canoe journey down the length of the Columbia River.
The BEST Business Awards are sponsored by the city of Portland, the Association for Portland Progress, the Environmental Federation of Oregon, and The Business Journal. BEST stands for Businesses for an Environmentally Sustainable Tomorrow, a service of the Portland Energy Office.
Tickets cost $25 for the 7:30 a.m. breakfast at the Benson Hotel. For more information, call the Portland Energy Office at (503) 823-7222.
OFFICES: Mail-P.O. Box 900928, Seattle, WA 98109-9228. EXPRESS: 117 West Mercer, Seattle, WA 98119.
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