CWEB.046/OCTOBER.28.1999
Bonneville Power Administration will include energy conservation and renewable energy in its plans for new energy supplies to meet substantial additional loads anticipated in the next decade.
Top BPA officials are unsure how much--and in what form--conservation and renewables will amount to in the extra 1,100 average megawatts the agency expects to need to fulfill power subscription obligations for its next rate period, beginning October 2001. But they will have a place.
So said BPA adminstrator Judi Johansen at the Northwest Energy Coalition's Clean & Affordable Energy Conference Oct. 1 in Seattle. "We are carving out a piece of that portfolio for conservation and renewables investments," she said, adding, "I don't have a number for you."
She expects Bonneville to be "informed and advised" by the Northwest Power Planning Council, which is developing an issue paper exploring this subject.
BPA energy efficiency vice president Terry Esvelt called this "a big topic" for Bonneville. "As we work to augment our power supplies with short-term power purchases we are definitely going to make a concerted effort to involve conservation and renewables," he told Con.WEB. "It's definitely on our policy screen. Details to follow."
Esvelt cautioned it is "way too early" to determine what specific initiatives might arise for conservation and renewables. But he suggested BPA's proposed conservation and renewables wholesale rate discount may be a starting point. "I think the C and R discount is a good foundation to launch something on top of it. The biggest question is how might they intersect. I don't know the answer to that question." He added that the power supply expansion "is not obviating the need of the C and R discount. It reinforces the need."
Johansen told the NWEC conference that Bonneville is "considering an RFP process for soliciting some of those" conservation and renewable energy supplies. The federal power marketing agency wants to "get as much renewable and conservation resources into our portfolio as possible" to supplement the power it needs to serve expected loads for its utility and direct-service and industrial customers from fiscal year 2002 to FY 2006.
Augmentation, Not Acquisition
Although the exact amount of additional power is not solidified, Esvelt said the current figure in the rate case exceeds 1,100 aMW that "we need to buy in the market to meet the loads we think we need."
He called this "augmentation rather than acquisition. In today's marketplace, almost nobody's going out and buying a power plant anymore. It's a marketplace where you don't have to buy the power plant; you buy the kilowatt-hours."
The 1980 Pacific Northwest Electric Power Planning and Conservation Act gives resource priority to, in order, cost-effective conservation, renewables and "generating resources utilizing waste heat or generating resources of high fuel conversion efficiency," followed by "all other resources."
"Our interests are going to be driven by the regional act's parameters," said Esvelt.
BPA will have a specific interest in resources that help it meet peak loads, according to Esvelt. "We don't need augmentation power in the spring months. We've got runoff coming out of our ears . . . We're much more interested as time goes on in peak loads. That's when we're buying open market power more and more," especially as the federal hydropower system grows more constrained because of salmon-recovery operations.
Esvelt said the money needed for additional BPA power supplies--hundreds of millions of dollars--is included in the rate case that is scheduled to conclude by mid-2000. "The dollars are already there," he said. "To the degree it can displace power purchases at the same price or even cheaper, economically the conservation can make a lot of sense."
Five-Year Horizon
One important factor for Bonneville is the five-year horizon for additional energy resources needed to serve contracted loads. Johansen noted many conservation measures have payback periods exceeding five years, although she added, "I think that's an issue we'll be able to work through."
In any case, said Esvelt, "Conservation won't displace the entire need for augmentation, of course. It took us 18 years and $1.7 billion to get 750 average megawatts" of energy savings attributed by BPA to Bonneville-funded initiatives.
"Conservation is something we've learned can't be done in great big gobs," he said. "You've got to do it incrementally. It does have implications for how you manage conservation as a resource. It could well be different than in the past."
Although Esvelt declined to speculate on the nature of augmentation conservation, it appears unlikely it will resemble the big-budget centralized programs of the early to mid-1990s.
"There's not a lot of enthusiasm for going back and doing it the, quote, old way," said Council conservation manager Tom Eckman, talking to the Regional Technical Forum in September about BPA oversubscription and resource issues. The RTF's work to develop recommended measures for BPA's proposed C and R discount "may have more import if Bonneville is back in the game in a bigger way than the rate discount," he told RTF members.--Mark Ohrenschall
They came together, they saved lots of energy at a very low cost, and then they parted.
Members of the Oregon Municipal Energy and Conservation Agency (OMECA) are doing something very unusual for a public entity: they are disbanding after a successful mission.
"We were founded for a very specific purpose and we've accomplished that purpose and so we're closing," said OMECA manager Cathy Higgins, whose Portland office shuts down effective Oct. 31.
That specific purpose was collaborative conservation among participating Oregon municipal utilities. With $11.4 million in Bonneville Power Administration funding, OMECA members captured 5.64 average megawatts of energy savings from September 1994 to September 1999, at an average levelized cost (in 1993 dollars) of 1.5 cents per kilowatt-hour. The original targets were 4.2 aMW of savings at a cost below 2.4 cents/KWh.
"It was a much more successful program than I think any of us could have imagined when we started," said Dick Wanderscheid of the city of Ashland, whose utility was joined in OMECA by Forest Grove Light & Power, McMinnville Water & Light, Milton-Freewater Light & Power, city of Monmouth and Springfield Utility Board.
OMECA could have metamorphosized after its September deadline to finish BPA-funded projects, but the members had decided to shut it down. "There was some talk" of sustaining the agency in a different form, said Keith Lockhart of Springfield Utility Board. "It kind of fell back to, 'What was its purpose when it was originated?' The board felt that it had done its job."
"We were all a little sorry to see it end," said Wanderscheid. "We went out in style; we didn't drag the organization on and make up some way to keep it alive. We felt it achieved its goals and it was a success."
Higgins, who led OMECA since its inception, noted that 
many entities provide energy services available for municipal utilities. "It's more economical and sensible to leverage existing resources rather than become one ourselves . . . I'm kind of proud of the board to recognize they got what they asked for and more, and take that and build on it internally without perpetuating a third-party entity."
Although OMECA will cease to exist, member utility staff people plan to continue to meet and share information and potentially even work on collaborative projects through Oregon Municipal Electric Utilities.
OMECA's Legacy
Asked about OMECA's legacy, Higgins said, "It was a very efficient and cooperative mechanism to enhance and stabilize the energy efficiency activities of small publics, with stabilize the key word."
The agency officially came into existence in January 1994, when the regional energy conservation future via BPA funding looked increasingly murky. Bonneville--then in the early stages of its "conservation reinvention" that would reduce funding and shift program controls to local utilities--had initially agreed to provide $11.4 million in bond financing for OMECA. When the bond idea subsequently fizzled, BPA instead came up with direct funding.
"They really worked well to put a concept together that worked for small utilities," said BPA energy efficiency vice president Terry Esvelt. "The small utilities have never had the capability to devote a lot of resources to that stuff. OMECA, by pooling their efforts together, the theory was they could do more, more with less. I think Cathy Higgins, especially, deserves tremendous credit for making that not just a success, but a tremendous success."
With an approach focused on collaboration, flexibility and local orientation, OMECA, "has worked closely with its member utilities to help plan and deliver energy efficiency services that benefit their communities, "states a summary document." Strategies, information, technical tools, and assistance were readily exchanged between members, extending their separate resources. Working together over the past 5 years has resulted in significantly greater program activity and savings than would have occurred individually, and at a levelized cost 30 percent lower than before OMECA."
Most OMECA energy savings--3.16 aMW--came from the commercial sector. A total of 909 commercial customers gained energy efficiencies by an average of 30 percent per measure, saving them a cumulative total of $832,440, according to the summary.
"Sometimes the customer merely wanted information about their energy use and bill, but usually we performed thorough audits of customers' existing energy equipment and provided recommendations for efficient upgrades; operational change; product information; contractor contacts; estimated energy savings; and financial analysis that included internal rate of return, financing options, and incentives."
Residential programs accounted for about 1.1 aMW of OMECA savings, from programs for weatherization, low-flow showerheads, water heaters, new construction, solar water-heaters, high-efficiency appliances and heat pumps, and duct sealing. And the industrial sector brought in aggregated savings of .7 aMW, from 38 projects that saved participating industrial customers an estimated total of $205,338. OMECA also received an adder for conservation benefits for transmission and distribution, according to Higgins.
OMECA reports nearly 20,000 customers of its member utilities participated in these various efficiency initiatives, which also resulted in more than $17 million of economic activity in member utility communities.
Beyond the numbers, OMECA "really put the ownership into the hands of the utilities for designing and running continued programs," Higgins said. This empowerment led utilities to consider OMECA successes their own and their communities the beneficiaries.
OMECA Utility Perspectives
OMECA member utilities will continue to offer conservation initiatives, at varying levels. Looking back, they appreciated their participation in the collaborative as well as the work of Higgins.
"We were in a period of stagnation and it just rejuvenated everything," said SUB's Lockhart. OMECA enabled Springfield to enhance its residential programs and create energy-saving initiatives for commercial and industrial customers, which "wouldn't have happened on the level we were able to do it" absent the collaborative.
OMECA's sharing of resources--information, expertise, training, funding--helped all the members.
"We formed this really powerful group of utilities that was truly much bigger than the sum of its parts," said Ashland's Wanderscheid. "The amazing thing about it was we could operate as a large utility because we had different strengths from different utilities." SUB staff, for example, was well-versed in computer modeling and engineering solutions, while other, smaller utilities brought program experiences from the field. "We ended up with some programs that were very cost-effective and very well-accepted by customers," he said.
Ashland launched solar water-heating and duct-sealing initiatives under OMECA that "we may never have done on our own." Wanderscheid's utility plans to continue all its conservation programs post-OMECA, with budgets exceeding the 3 percent of revenues recommended for public purposes by the Regional Review. "We're still committed to conservation," he said. "We still believe it's the right thing to do."
At McMinnville Water & Light, conservation manager David Christie called OMECA "a tremendous help to our community." The agency helped McMinnville with programs for manufactured housing, heat pumps, residential windows and commercial software, among others, and altogether helped gain local efficiencies at a cost of about 1.3 cents/KWh. "We're using what we learned from [OMECA] as a transition from the original BPA conservation programs, the legacy programs, to start up our own programs," Christie reported. "We're not fully ramped up, but we're planning to offer continued energy services with incentives for residential, commercial and industrial."
Christie and other OMECA utility conservationists all praised Higgins. Forest Grove's Dave Willer, relatively new to the utility, said she has helped him with commercial auditing and generally offers "a tremendous wealth of information which maybe goes beyond what OMECA was actually designed to do."
Christie described Higgins as an "excellent project manager," and Lockhart called her "a major, major component" of OMECA's success. "We were very, very fortunate to hire Cathy Higgins to run the organization," said Wanderscheid. "She not only believed in the goals, she understood local government and also understood Bonneville because she worked at Bonneville. She was able to bring some real powerful strengths to the table to be able to leverage the system as best we could."
Higgins--who plans to go into resource efficiency consulting--believes that even though OMECA is finished, energy services are not. "The most noteworthy thing after five years is that there's still amazing demand for energy services from the community sector, from all sectors," she said. "There's still a lot of customer interest and a lot of customer potential for things not yet addressed, things that need improvement, new technologies where applicable."--Mark Ohrenschall
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The Bonneville Environmental Foundation is looking for Northwest renewable energy ideas.
BEF has set a Nov. 20 deadline for its first open solicitation for renewable energy and watershed restoration initiatives. From the letters of inquiry it receives the foundation will decide which ideas merit consideration as full proposals, with funding decisions anticipated from the BEF board in April.
The fledgling foundation has already made one renewable-energy investment--up to $62,500 for the Solar Ashland project in southern Oregon--and provided two watershed grants totalling $28,850. These are funded out of its revenues from green power sales and other contributions, which amount to about $2.7 million altogether.
Those initial projects, however, were sought out by the foundation. This new solicitation represents BEF's first foray into the open market for renewable and watershed works in the Northwest.
"I think it shows the [BEF] idea is beginning to grow roots and the foundation is becoming the beneficiary of a number of power sales in the region and being looked to as a place where credible things can happen," said BEF board member Rachel Shimshak of Renewable Northwest Project. "The goal of the foundation the first few years is to demonstrate a solid, credible set of investments to . . . signal its path for the future."
Nurturing Renewable Energy Generation
Although BEF executive director Angus Duncan isn't quite sure what will arrive from the solicitation, the foundation has established goals, criteria and preferences to guide its decisions.
For renewables, BEF is primarily interested in nurturing energy production. "Our greatest contribution is going to be focused on putting actual generation on the ground," said Duncan, calling that "the unique contribution we think we can make because we understand the markets pretty well."
But buying even a single wind turbine, he noted, would "exhaust the renewable energy side of what we have to give. We don't want to quite do that. We'll probably have fewer renewable energy projects and they'll probably tend to be larger types of projects where we can take a limited amount of money and leverage a substantial amount."
In Ashland, for example, BEF is providing funds on a 1:2 matching basis to help the city and several local entities install solar photovoltaic systems, and a potential second phase would incorporate green power purchases from and/or PV siting at local residents and businesses. This project could result in several hundred thousand dollars worth of 
additional investments beyond BEF, according to Duncan. "It makes for a very nice, very respectable, very substantial project, and without our $60,000 it probably wouldn't have happened."
Solar Ashland also fits with BEF's mission of stimulating both the supply and demand sides of renewable energy.
Duncan said BEF "will look as much like an entrepreneurial company as it is like a foundation. We will be looking to do deals. We won't physically buy and sell the power, but we'll be as close to that as you can be without actually stepping over the line. We will find ways to make actual capital investments in the projects."
Shimshak believes this initial solicitation will be particularly suitable for smaller-scale renewables. "With the amount of money that's available, distributed renewables are more likely to benefit from the first round," she said. "We're hopeful that people will get together and come forward and have some good projects, and we're hoping among them some can be implemented and replicated in other places."
Goals, Criteria, Preferences
BEF has established two policy goals for its renewable energy activities, as outlined on its Web site: "Over time to displace thermal generation resources in the Pacific Northwest with new, low-environmental-impact renewable energy resources," and, "To build the technical and financing capability within the region necessary to support such a transformation."
As for specific renewables resources, Duncan listed five on which BEF will focus: wind and solar the most likely, but also geothermal, landfill-gas and biomass.
Any BEF-funded project must be located in the Northwest and/or serve regional loads. Also, the foundation will limit its investment in a generating project to 33 percent of total capital costs (zero in operating costs), and, "In no event will BEF funding go to costs which can be met at prevailing market price."
Preferences for BEF renewables include projects "not otherwise easily funded through conventional sources," and those that are replicable, respect cultural values, expand consumer understanding, show demonstration value, afford leverage and occupy a promising niche.
Resource assessments, technology demonstrations, marketing/education/information and training activities will be considered, but, "As a general rule, BEF will not fund conferences, studies, political advocacy or lobbying. It will not provide general organizational support. The Foundation will not invest in or provide support for existing projects."
For watershed projects, Duncan said BEF's leading funding criteria include an involved local community, scientific understanding of the watershed, and a connection between identified problems, budgets and measurable results. Duncan anticipates BEF will target watershed projects with funding in the range of $5,000 to $25,000. The foundation has received land acquisition propositions costing hundreds of thousands of dollars, but, he said, "At this point that's simply beyond our capability, good ideas or otherwise."
BEF will continue to seek out prospective renewables and watershed initiatives, Duncan noted, and the eventual funding portfolio "will probably be a mix of projects that come in from solicitations and projects we go out and prospect for."
BEF Progress
In a recent mailing, the foundation outlined its progress on various fronts during its first year of existence.
It listed seven green power sales--to Emerald PUD, Snohomish PUD, Orcas Power & Light, Flathead Electric Cooperative, city of Idaho Falls, Midstate Electric Cooperative and Goldendale Aluminum--totalling 16.2 average megawatts. The foundation's green power portfolio comes from 20 aMW of hydro, .75 aMW from Bonneville Power Administration wind energy and 1 aMW from Klickitat PUD's landfill-gas project. All are certified "low environmental impact" by Northwest Energy Coalition, Renewable Northwest Project and Natural Resources Defense Council.
BEF's share of revenues from these green power sources is anticipated to bring the foundation $1.7 million, available for "reinvestment in watersheds and new renewable resources." Corporate contributions totalling $185,000 have come from New Energy Ventures, Enron, ScottishPower and Southern California Edison. An additional $800,000 from the Hewlett and Packard foundations "ensure that all BEF administrative costs through 2000 are covered."
Duncan said the foundation continues to pursue more green power sales, while also looking to add to its green power portfolio and set up a more formal certification process for eligible resources.
"I and the board and the two foundation funders . . . put a very high emphasis on us rolling back out the money these first two years that comes in," he said. "I expect we will, assuming the projects merit it, pretty nearly empty the treasury with this next round of projects. Then the emphasis will shift back to fund-raising."--Mark Ohrenschall
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Portland General Electric plans to provide its customers the option of buying "Salmon-Friendly Power"--electricity generated from salmon-friendly renewable resources.
The investor-owned utility announced in early October it will file a tariff with the Oregon Public Utility Commission to allow residential customers to purchase two 100 kilowatt-hour blocks of Salmon-Friendly Power at a premium of $5 per block. Customers will also have the option of purchasing wind power in the same manner.
Half the premium would cover the extra costs of producing power from such salmon-friendly sources as solar and so-called "low-impact" hydropower; the other half would be devoted to local salmon habitat recovery projects.
Commercial and industrial customers would also be able to select Salmon-Friendly Power or wind power. The number of kilowatt-hour blocks they could purchase would vary, depending on their size, said PGE project manager Rick Weijo. Small commercial customers could purchase from two to four blocks, while large industrial customers could buy from 20 to 100 blocks. But the price of each block would be the same as in the residential sector.
"This is not just a pass-through" of higher renewable resource costs, according to PGE spokesman Kregg Arntson. "Fifty percent goes toward the actual energy component, while the other 50 [percent] goes to habitat restoration or further wind development."
Salmon Recovery
PGE announced its proposal at the annual Salmon Festival Oct. 10 at Oxbow Regional Park near Gresham, OR, by signing an agreement with For the Sake of the Salmon, which will receive the habitat recovery funds collected through the tariff. Bill Bradbury, executive director of the salmon recovery organization, said the funds will be used for watershed-based salmon recovery efforts in the lower Willamette Valley.
Bradbury described For the Sake of the Salmon as a "coalition of a diverse group of stakeholders" in California, Oregon and Washington. Members include governors of the three states, 11 Native-American tribes, the Northwest Indian Fisheries Commission, federal agencies, utilities (including PacifiCorp, Eugene Water & Electric Board and Avista), the Public Power Council, forestry associations, environmental groups, 12 local governments, fishing groups and farm organizations.
Bradbury said For the Sake of the Salmon has formed a non-profit organization, the Pacific Salmon Watershed Fund, into which the funds will be deposited.
"We have a set of criteria," he said, "and we're negotiating with the Oregon (state) Watershed Enhancement Board to do project selection"--which Bradbury noted the board already does. He's also hoping the board will agree to match PGE funds 
dollar for dollar, but that won't be determined for several months.
According to the criteria, proposals supported by the fund must benefit salmon and be undertaken in watersheds where anadromous fish of the species oncorhynchus are present. Proposals can include protection of healthy habitat, as well as restoration of degraded habitat; and they must be consistent with a "watershed approach" that includes scientifically sound watershed assessment, watershed plan development and project prioritization (also based on scientific assessment). Also eligible for funding are monitoring, evaluation and plan refinement, as well as "community organization, coordination and outreach or education" that directly support one or more of the other eligible activities.
The fund will also give greater priority to proposals submitted by groups with "a broad representation of interests in the watershed," the criteria indicates, or groups implementing a proposal developed by such a group. The fund also sets minimum requirements for a matching cash or in-kind contribution from the local community, state, or other non-federal sources "to further demonstrate support for the effort."
Bradbury said For the Sake of the Salmon has been working with Northwest utilities for some time, and, "It's thrilling to get to the point where PGE is about to offer it to their 600,000 customers." He added that the Salmon-Friendly Power option "gives urban residents a good opportunity to participate in a meaningful way in salmon recovery."
What's Salmon-Friendly Power?
Just what constitutes Salmon-Friendly Power--a term trademarked by For the Sake of the Salmon--hasn't been completely decided. Renewable energy from wind and solar sources will qualify; Portland General already buys the output of the 24.9-megawatt-capacity Vansycle Ridge wind project in northeastern Oregon.
In addition, Bonneville Environmental Foundation will provide PGE with "low-impact" hydropower from its resource portfolio. In exchange, according to BEF executive director Angus Duncan, "an equivalent amount of [Vansycle Ridge wind power will be] going into BPA's green power mix. BPA will also remarket wind energy to PGE from a new wind farm, yet to be settled upon and built. BEF will receive a premium from the sale to PGE, which we will invest in the new facility."
The Salmon-Friendly and wind power proposal needs Oregon PUC approval to be offered. PGE and OPUC staff have met to discuss the proposed tariff, and the utility expects to make a formal filing within the next few weeks, Weijo said. Once it's filed, the commission has 30 days to decide whether to approve it.
"The time is right to propose something like this before SB 1149 [Oregon's restructuring legislation] goes into effect," said PGE's Arntson. --Jude Noland
Seattle City Light is abandoning coal-fired energy resources and moving toward new renewable energy.
The Northwest's largest publicly owned utility will invest at least $2 million annually in new non-hydro renewable resources, under the terms of a resolution unanimously adopted by Seattle City Council Oct. 4. This renewables commitment is intended as a replacement for City Light's 8-percent share of the Centralia coal-fired plant in west-central Washington. In May, the eight-utility consortium owning the 1,330-megawatt-capacity facility announced sale of the plant and adjoining coal mine to Transalta Corp.
Centralia provides 5.4 percent of Seattle's system generating capability, or 107.4 MW of capacity. With the sale, City Light would become an all-renewable energy utility in the resources it owns and operates, according to the resolution. (The municipal utility gets some power from other sources that include non-renewable energy.)
Although the form of Seattle's new renewables investment is not yet known, one possibility floated by City Light is swapping non-firm hydropower for energy from new renewable resources in California.
"I don't think we want to take the limited view and measure our success in new renewables by how many dollars we spend," said City Light spokesman Larry Vogel, who added Seattle would look for "ways we can leverage our non-firm energy to encourage development of renewables elsewhere . . . The view is that we're talking about a renewable that would displace a [fossil fuel-fired] thermal plant. Clean air there is clean air here when we're talking about global warming and degradation.
"The broad view," Vogel continued, "is the City Council is sending us the message they want to make sure renewables are part of our power portfolio."
New Renewables Resolution
The resolution originated in the council's Utilities and Environmental Management Committee, which is chaired by council member Margaret Pageler, sponsor of the resolution that passed the full council by an 8-0 vote.
It begins by "reaffirming the City's commitment to conservation and renewable resources as the first priority for energy resources to replace the energy currently provided by the Centralia coal plant . . ." The resolution acknowledges "significant benefits" gained from City Light's part-ownership of Centralia, and states that a sale "would be economically desirable and can be accomplished while ensuring that the new owners will operate the plant in an environmentally responsible manner." Transalta has pledged to install pollution control equipment to reduce Centralia sulfur dioxide emissions by 90 percent, as previously agreed to by the plant's current eight owners.
The resolution goes on to cite Seattle's "long history of developing and using environmentally responsible renewable resources to serve Seattle ratepayers"--the utility's oldest currently operating hydropower project went into service in 1904--and its "proud record of being a model for energy conservation, environmental responsibility and concern for future generations."
Consequently, according to the resolution, "the plan for replacement energy for the Centralia coal plant should be based on these qualities and historic record, and revenues received from the sale of the share of the Centralia coal plant should be used in ways which will further this mission."
The resolution directs City Light superintendent Gary Zarker to invest a minimum of .49 percent of Seattle's annual revenues, about $2 million, for "new non-hydro renewable resources as part of the Strategic Resources Assessment Update. "this amount reflects the new renewables target recommended by the Regional Review.--Mark Ohrenschall and Jude Noland
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Call it what you will--education, marketing, information-sharing, propaganda--but by any name, spreading the message holds the key to expanding green power.
And despite its relatively small market share, retail green power numbers can be interpreted as encouraging, as can growing utility interest. But time, money and plenty of communications will be needed to build a substantial green power market--however green power is defined.
These messages came from a green power panel discussion at the Northwest Energy Coalition's Clean & Affordable Energy Conference Oct. 1 in Seattle. The panel featured two Northwesterners--moderator Rachel Shimshak of Renewable Northwest Project and Barrett Stambler of PacifiCorp--along with two Californians, Kirk Brown of the Center for Resource Solutions (which operates the Green-e certification program) and Joe Costello, consultant for the Center for Energy Efficiency and Renewable Technologies.
Spreading The Green Power Word
Shimshak's questions on the discrepancy between customer surveys supporting green power and actual market response, and on the most important factor influencing people to opt for green power, both elicited public communication as a decisive ingredient.
"The most important step is education," said Costello, whose organization is working to inform Californians they have choices on electricity supply, including green options.
That's a challenge, he acknowledged, given the widespread public apathy on energy and electricity. He cited polls showing fewer than 2 percent of California residents are aware they can buy renewable energy, and 65 percent know little or nothing about their choice in power supply. "That's the very big hurdle," Costello said. "Every time we do talk to people and explain what's going on, they are very supportive." Toyota Motor Sales, Patagonia, Fetzer Vineyards and the city governments of Santa Monica and Chula Vista have all chosen 100-percent green power supplies, and these can serve as exemplars.
Brown and Stambler agreed on the importance of spreading the green power word, and doing so continuously, not just once or twice. As in marketing any product, Stambler said, "People have to be hit with something eight to 10 times."
Brown emphasized the connection between energy and environment--"Producing electricity is one of the most destructive things we do as people," he said--as a means to promote green power. "People are going to rally to our cause" if they understand this link.
Stambler downplayed green power survey data, explaining that surveys chronically inflate positive responses, regardless of the queried product. "People have a tendency to say what they think the person surveying wants to hear." He also advocated patience for green power advocates. AT&T, he noted, had 100 percent of the long-distance telephone market 20 years ago, and 66 percent 10 years later. Now it's around 50 percent. "MCI is about 20 percent of the market, after about 20 years and billions of dollars of marketing."
In PacifiCorp's 1998 pilot direct-access program in Klamath Falls, Stambler reported, 8 percent of eligible customers chose to switch to one of three options, and of those, 28 percent selected a green power product combining 80-percent geothermal and 20-percent wind, priced at a $10 monthly premium.
This happened despite a short 30-day decision period, no direct PacifiCorp marketing of any specific product, and in an area not considered a bastion of environmentalism. "I was concerned it would backfire and hurt our efforts to do more green power," said Stambler, but PacifiCorp officials were "shocked" by the reasonably robust numbers of switchers. "I think our expectations are way too high, that you're going to get 50 percent of the people to switch in 30 days. You've got to be realistic how markets work."
Utilities such as PacifiCorp are discerning real business potential in green power. "I am actually startled at the amount of interest and change that is occurring in the utility business around green," he said, citing utility research studies that green business will be a multibillion-dollar industry in the U.S. within the next 10 years. "I think it's reason for optimism."
Marketing Questions
NWEC's Steve Weiss wondered why retail should be the favored means to promote green power, compared with wholesale. "It's way more costly," he said.
Costello considered marketing a positive feature for green power, as it creates a more "educated public" that can advance renewable energy in political and regulatory forums.
Stambler brought up restructured Pennsylvania, where some green power marketers can beat the utility benchmark rate of 5 cents to 6 cents per kilowatt-hour. And even when green power products cost more, marketers are capturing customers. "People are willing to pay more for green," according to Stambler.
What about marketing to sympathetic niche audiences such as environmental groups? Sheryl Carter of the Natural Resources Defense Council reported that her organization identified environmentally preferred power products available in California, and sent information on them to NRDC's 80,000-plus Golden State members. But NRDC, being a non-profit group, isn't able to aggregate its members for green power purchases.
NWEC's Nancy Hirsh noted that in Montana, which opened to retail competition in 1998, "Not a single marketer has approached that market and there's no education being done, nobody trying to get anybody to switch." Does the marketer precede the educated consumer or vice versa, she wondered?
"The market may not be big enough to get in in an aggressive way," acknowledged Brown. Montana does have 2.4 percent of electric revenues earmarked partially for renewables, Stambler noted.
Asked about green power success stories, Stambler cited Public Service Co. of Colorado's green pricing program, in which customers can buy 100-KWh blocks of wind power for a $2.50 monthly premium. (More than 14,500 customers have signed up since 1997, including more than 250 businesses, PSCo reports on its Web site). Stambler praised this initiative as simple, understandable, easily marketed and directly connected to new wind turbine installations. "I do think customers are differentiating between products with new renewables and not," he said.
The Green-e certification program requires at least 50-percent renewables content for qualifying products, Brown said, with any non-renewables required to be "as clean or cleaner than the system mix. We're seeing marketers move towards 100-percent renewables, and also seeing them aggressively moving away from using any coal or nuclear power." In addition, he noted, "We haven't seen marketers touting nukes as emissions-free."
Stambler began his renewables career in 1979 as a solar lobbyist in Washington, D.C., where he testified in favor of PURPA (Public Utility Regulatory Policies Act) legislation that unleashed the independent power industry. He later worked for the now-bankrupt Kenetech Windpower, seeking to develop what he called "the lowest-cost [renewable] widget. After that I said, 'What's left?' We tried to do it in a regulated environment and we can talk about nice little victories . . . On the scheme of things we have not made a huge impact on the renewable resource front." But the dawn of customer choice, he indicated, represents a whole new opportunity.--Mark Ohrenschall
The exorbitant costs of meeting peak electric demand offer substantial opportunities for energy conservation and renewable energy strategies that moderate high loads, such as more efficient heating of buildings.
So believes energy consultant Tom Foley, speaking to the Northwest Energy Coalition's Clean & Affordable Energy Conference Oct. 1 in Seattle.
"This industry is in a state of flux and we have to continually examine the role of conservation and renewables in it, and determine where we can do the best for the [electric] system and how we pay for them, both directly and indirectly," said Foley, a longtime regional energy figure and former manager of conservation and resource assessment at the Northwest Power Planning Council.
Higher wholesale power market prices are a major factor for conservation today, Foley noted, making efficiency generally more cost-effective than in the mid-1990s. Also at play is the growing disparity between peak and off-peak prices, ranging from a typical gap of .5 cents per kilowatt-hour to occasionally as high as 5 cents/KWh. In other areas of the country, the differences have been far more dramatic and could be a harbinger of things to come in this region. This offers "opportunities to focus conservation at high load hours and/or shift peak loads to low-load hours, to take advantage of dollar values."
Under these circumstances, "Levelized prices aren't as important as they used to be," Foley said. Energy efficiencies gained at 2 cents/KWh but only available at off-peak times may not be cost-effective, while efficiencies costing 4 cents/KWh, for example, and saving peak-time energy may be very cost-effective.
For a typical utility, Foley said, transmission and distribution systems are built to serve loads that seldom occur. Fully 25 percent of the T&D system is in place to serve loads that only occur perhaps 4-5 percent of the 8,760 hours in a year. For those peak periods, transmission costs alone are about 8 cents/KWh, assuming a cost for transmission capacity of $24 per kilowatt per year. Add distribution expenses of roughly 16 cents/KWh and energy costs of up to 10 cents/KWh, and total costs can soar to 34 cents/KWh to serve those loads. "There are ways to serve those loads cheaper than paying 34 cents per kilowatt-hour," he said. "Locally sited generation, targeted conservation and load management are three examples."
In another example, Foley projected a comprehensive program to install compact fluorescent lamps would cost about $18/year for each kilowatt of peak load conserved. That compares to $43 for a simple-cycle combustion turbine, which if not sited within the distribution system, would require transmission at $24 and distribution costs on top of the $43. The compact fluorescents could be easily financed by the foregone transmission costs. "It seems to be a no-brainer," he said.
Foley also cited "looming transmission constraints" and the "extremely high costs" charged in the restructuring world for peak generating capacity.
Load Management
"What I think we need to do is take this targeted conservation approach and combine it with load management, shifting loads, shedding loads when prices peak," said Foley. This could include demand-side bidding, as is proposed for California's Independent System Operator, as well as shared-peak-savings programs between utilities and their customers, as B.C. Hydro is doing in a pilot program.
Distributed generation also could play a role in reducing peaks as well as enhancing system reliability, since most outages are caused by failures in wires, not generating facilities, he said.
Building operations can be changed to make a difference, Foley believes, particularly in large commercial settings. "If you heat some of these buildings early, instead of waiting until just before they're occupied, the thermal mass of the building can carry that building before the peak, and the energy penalty in the morning is more than made up later in the day. They spike these buildings up and when people come in they have to start cooling, even in very cold weather.
"Can we shift loads away from the peak by using cheap, clean energy at night, typically marginally low-polluting . . . and stay away from high peak prices? Every dog and cat generator is running on peak, which are typically all of the dirty ones," he said.
Dollars saved through peak-shaving efforts could be directed to fund additional conservation and renewables, he suggested. "We can work with utilities to do that," Foley said. "In many cases it's in their best interests also."
Seattle city councilwoman Margeret Pageler, joining the question-and-answer session after Foley's talk, noted Seattle City Light is starting to see summer peak loads with the big growth in plug loads and electronic equipment. The utility historically has peaked in winter. "We're looking much more closely at how we can partner with building owners of big commercial buildings downtown to develop some load- and peak-management systems," she said, adding that City Light's proposed 10 percent annual increase in rates for medium and large downtown network customers would provide "some cost incentives for business owners to work with us on that."
Asked about the delivery of energy conservation services for this peak-savings approach, Foley offered, "If we really had retail competition, there would be a lot of stuff that would come out of the woodwork. Storage devices for heat would be on the market for residences because of the vast differences in price from hour to hour. Even in that scenario there's a lot of learning that needs to be done . . . Until we get there, it's basically still the utilities, I think."
He did foresee and advocate a role for efficiency businesses: "If I were a building owner in Seattle and a big user of electricity, I'd first hire a good engineer who knew my business and knew energy . . . I'd go pound on my utility's door and say, 'Look, I want to capture some of this value,' and work with them."
NWEC chair Deborah Smith asked Foley how investor-owned utilities without their own generation sources could be persuaded to invest in conservation and renewables. Foley noted that distribution utilities still pay for transmission. "If they cut loads and save on the need for transmission and distribution, they need to be assured it won't affect their rate of return," he acknowledged.--Mark Ohrenschall
By Jeff Lettau and Launa Morasch
Pacific Northwest National Laboratory
(Editor's note: The following article originally appeared in the July/August issue of Facility Management Journal, published by the International Facility Management Association. It is published here with permission.)
In the early 1990s, new construction at Pacific Northwest National Laboratory in Richland, WA, provided facility managers an opportunity to study energy use in two office buildings.
Building One was completed in 1993. When a second building was designed with the same floor plan, PNNL staff encouraged a design that would incorporate energy conservation measures, such as low-emissivity windows, T-8 lighting, carbon dioxide ventilation control, energy-efficient motors for the HVAC system, and light-emitting diode (LED) exit lights.
Building Two was completed in 1994, and the mirror-image buildings stand side by side--one with extra energy conservation measures, the other without. This presented an opportunity to examine energy use in a real-world setting and determine what could be achieved through state-of-the-art system controls, energy-efficient windows and lighting, and sound facility management.
PNNL installed monitoring equipment in both buildings to monitor energy use for HVAC, lighting and outlets. This monitoring and subsequent analysis were supported by the U.S. Department of Energy's Federal Energy Management Program (FEMP). Energy conservation measures incorporated into Building Two were expected to save about 21 percent in energy costs compared to Building One, and occupant satisfaction was expected to be higher.
Initial data indicated the energy conservation measures may have worked. For the first two years of operation, Building Two showed less energy consumption than Building One--but not 21 percent. Then, in 1997, Building Two showed a surprising increase in energy consumption. By the end of 1998, Building Two was using 40 percent more energy than Building One and occupant complaints from Building Two were the highest of any building occupied by PNNL.
What Happened?
The only known changes to either building during this time involved the operating strategy of the heating and cooling systems. Facility managers made changes in response to occupant requests for increased comfort, particularly during evening and weekend hours. However, there was no record of when or why these manual adjustments were made. These manual changes continued to put the system out of alignment.
Software control experts theorized the heating and cooling systems were not being used to capacity. Upon investigation, staff found the heating and cooling system software had been manually altered and the temperature set points locked into place. Consequently, the system could no longer provide the designed level of control. The ability of the system to adjust temperature set points automatically to respond to changing outdoor conditions and indoor requirements was eliminated, which increased energy use and operating costs. In short, the heating controls were fighting the air-conditioning controls: Building Two was running the heating system and air-conditioning at the same time.
Staff from PNNL's facilities and operations department and the building sciences group tried to solve the problem by standardizing the operating schedules and analyzing the continuously collected data. Although four years of data were available, continual changes to the building operating schemes made it difficult to compare energy use.
The facility manager placed the controls for both buildings at the same settings (those specified for normal use) so variances in energy use could be attributed to the differences in the energy conservation measures installed in Building Two, rather than differences in how the buildings were operated.
Resetting the buildings to the same schedule required reprogramming the individual zone settings, duct settings and reference settings. In addition, special attention was needed to ensure identical damper controls. A preliminary analysis on the system hardware further eliminated differences in the buildings.
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| Courtesy of Pacific Northwest National Laboratory |
Identical Control Strategies
The control strategies for the two buildings became identical in January 1999. On Jan. 5, 1999 the operating schedules of the two facilities were standardized. Four days later, someone discovered the duct temperature set point for Building Two had been manually set at 57 degrees. This resulted in mechanical cooling, even on the coldest days. The Building One duct temperature set point was also set low (61 degrees). The duct temperature set point in both buildings was reset to 67 degrees and was restored to automatic control so the heating system was not fighting the air-conditioning system.
On Jan. 13, 1999, the static pressure sensors for several ducts were found to be not working properly. Some appeared to have been inoperable since construction. This caused air handlers to run at full output, even though a reduced output would have sufficed. When the controls were set as specified, not only did the daily energy use drop significantly for both buildings, but Building Two is now using less energy than Building One--as it was designed to do.
The temperature set points for this normalized program were agreed upon by the facility managers, building owners and occupant managers. They agreed to a system setting of 72 to 76 degrees during daytime hours (6 a.m. to 6 p.m.) and a nighttime setting of 65 to 80 degrees. The energy management control system for each facility is a "smart" system, designed to attain the desired set point temperature at the desired time, 72 degrees at 6 a.m. The greater the temperature difference between indoor and outdoor temperature, the earlier the space conditioning begins. Thus, the control system "learns" from its previous experiences and is able to account for different building requirements and compensate accordingly.
The facility managers agreed that all calls from occupants regarding comfort would be investigated. If an office was outside the target range, it would be assumed a malfunction had occurred and appropriate actions would be taken.
Dramatic Improvements
Resetting the control systems produced dramatic results. Improvements in comfort level of the buildings and energy performance were noted immediately. When January 1999 days were compared to December 1998 days with the same average outdoor temperature, Building One total energy use had dropped 25 percent (2,400 kilowatt-hours per day) and Building Two had dropped by 47 percent (5,900 KWh/day). During the investigation into the software control systems, hardware problems were also identified that are now being fixed. Curing these problems will add even more to the efficiency of the buildings.
Buildings One and Two are now in adjustment. Some zones require continued efforts to keep the control systems in adjustment, but complaints about comfort have decreased, as the heating and cooling systems are no longer fighting each other.
Many Lessons
Many lessons can be learned from this experience.
The facility manager's first concern--after the safety of the occupants--is the proper operation of the facility. Once everything is working correctly, comfort issues can be addressed. More often than not, comfort issues will correct themselves once the system is working properly.
Also, the facility manager may want to determine if there is an incentive operating agreement with the utility or building owner that encourages energy conservation. In this particular case, there was no incentive agreement and PNNL paid the high utility costs without question, so there was no incentive to investigate high energy costs. The facility managers felt an incentive operating agreement might have helped solve the problem at an earlier stage.
The PNNL team learned there are no one-time solutions to these situations. Making energy management systems work requires continual supervision. Good configuration management and control is necessary if a building is expected to perform at the best possible level.
Without an ongoing monitoring program, energy use will drift out of control. Facility managers must be vigilant about tracking energy usage, logging changes to the system and tracking occupant complaints. This gives them the data they need to find solutions to system problems.--Jeff Lettau and Launa Morasch
More Information:
A new regional energy management certification program combining classroom education and an on-the-job project will debut next spring.
This program, developed by the Eugene-based Northwest Energy Education Institute, includes two weeks of energy management training in Oregon, followed by a workplace initiative to demonstrate capability in the field. It is designed for professionals in energy-related professions.
"To receive this certificate you need to have implemented a project," said NEEI's Roger Ebbage. "That's what makes us different." So different, in fact, "No one else in the country has delivered this curriculum to date, that we know of," said Andy Ekman of the Northwest Energy Efficiency Alliance, which provides funding to NEEI.
The performance-based element is "the thing I believe is missing from a lot of training," Ebbage said at the Up Periscope conference in Eugene in mid-August. "You can actually do what you're being trained on and you're able to measure outcomes.
"Graduates will be able to identify and implement a broad range of energy management initiatives which cost-effectively reduce energy use and utility costs," he continued. "Employers receive a maximum return on their investments . . . We're really looking at this as being revolutionary."
The required workplace initiative "can be as little as developing an energy management team for the company and implementing an energy accounting strategy, all the way through to replacing old chillers with brand-new energy-efficient merchandise," Ebbage told Con.WEB. "The curriculum will cover everything between those two degrees of implementation."
NEEI's target audience for the certification program includes engineers, technicians, architects, facility, property, maintenance and energy managers, administrators, and representatives of utilities, governments and schools--anyone with "some need to have some energy efficiency understanding" in their professional lives, according to Ebbage, who sees increasing demand for energy management certification.
Ebbage said program marketing will focus on the Northwest, including on utilities "that can benefit from quantifying some energy savings through investments with their clients."
Program Details
The inaugural energy management certification program will begin April 17 at Western Oregon University in Monmouth, between Corvallis and Salem. Over a two-week period students will get 11 days of training, covering electric industry and energy management overview; energy use in the built environment; lighting and electrical fundamentals; glazing, insulation and building envelope; heating and cooling; secondary HVAC systems; controls; industrial fundamentals; plant equipment; energy auditing; conservation methods; and operation and maintenance opportunities.
In addition to technical training, the in-residence portion of the certificate program will delve into presentation techniques, team development and other people-oriented skills needed for effective energy management. "We're finding that's more and more important," said Ebbage.
After completing the classroom training, students will set out to work on their projects. NEEI will offer continuing help with engineering issues, product identification, resource allocations and other needs as they arise over the project duration. "We'll be there with them all the way," Ebbage said.
Certification will become official after the project is finished and the energy savings are monitored and verified.
Program fees will be in the range of $3,000 to $3,500, excluding nominal room and board (if necessary) for the in-residence period. Ebbage anticipates employers will cover some or all of the costs for their employees to take the certification program. This expense includes the two weeks of training, ongoing interaction with NEEI and energy-saving work for the employer through the project, he noted.
The certificate will be comparable to an advanced academic degree, Ebbage believes. "We think the work is detailed enough it will be at a master's degree level." He told Up Periscope the certification process should take about 600 hours.
NEEI has received a grant from Honeywell Controls for the certification program, and may seek other funds from utilities. The Institute will offer continuing education credits for Oregon engineers taking the certification program. And the Alliance will play a role through its financial support of the Institute.
The program represents "unknown territory," said the Alliance's Ekman. "I think that's both exciting and challenging." It remains to be seen how many people will sign up, pay the fees and spend the considerable time and effort needed to gain certification, he noted. "If [NEEI] gets the participants, I think maybe this can be the start of something really very productive and beneficial to the region, to have that caliber of training available to any practitioner who's got the wherewithal to attend."
Ebbage said he got the idea for this program from a similar venture in New Zealand, although he made some modifications. NEEI plans to offer the certification program at least once a year, and perhaps twice a year eventually. "We'll test this first one and see how it works."--Mark Ohrenschall
More Information:
The Northwest Energy Efficiency Alliance has awarded a total of $350,000 for four projects designed to support energy code activities in Washington, Oregon and Idaho.
In Washington, the State Building Code Council, which manages the energy code development process and provides technical support to building officials, received $69,796. Washington State University Cooperative Extension Energy Program, which provides energy code information and support primarily to the residential building industry and consumers, was awarded $69,420.
The Oregon Office of Energy, which supports energy codes through technical assistance and helps with the code development process, will get $132,000. And the Idaho Department of Water Resources Energy Division, which provides code support and assists local entities in code adoption, was awarded $78,631.
More Information:
Portland General Electric's Earth Smart residential building program, which is designed to promote construction of energy- and resource-efficient homes, is now officially under way.
Three builders--Don Denning Homes, Charter Homes and Coquille Land Corp.--have signed up to participate in the program, and the utility has launched an Earth Smart Web site: http:// www.earthsmart.com.
The Oregon Public Utility Commission approved PGE's Earth Smart proposal in June (see Con.WEB, June 29, 1999). Builders of single-family, multifamily and manufactured homes are eligible to participate in the program, which provides assistance in building and marketing gas or electrically heated homes that exceed current building codes for energy efficiency, healthy indoor air and resource conservation.
Participating builders choose from a menu of measures to meet Earth Smart program standards. They pay PGE an initial contract fee and an additional certification fee per home built. PGE provides technical support, home inspection and certification, newspaper advertising, Earth Smart hotline referrals, marketing materials and promotions. In addition, participating builders will be featured on the Earth Smart Web site. --Jude Noland
More Information:
Northwest energy agencies and the American Lung Association of Washington state have been awarded U.S. Department of Energy funding for energy efficiency work related to factory-built housing.
Washington State University Cooperative Extension Energy Program will receive $115,000 "for research, development and testing services to increase the energy efficiency of industrialized housing in the Northwest," according to a DOE news release. The Oregon Office of Energy was awarded $10,000 and the Idaho Department of Water Resources will get $5,000 for collaborating with WSU "to increase the energy efficiency of housing in their respective states."
The ALA of Washington was awarded $7,000 "for providing workshops on home energy efficiency and indoor air quality to home builders and the medical community."
DOE's funding of $800,000 for the Building America Industrialized Housing Partnership will be complemented by an additional $321,000 in cost-shared funding from the Florida Department of Community Affairs, the Northwest Energy Efficiency Alliance and members of the partnership project team, whose principal contractor is the Florida Solar Energy Center.
Three federal energy-related facilities in the Northwest have been awarded U.S. Department of Energy funding for industrial energy efficiency projects aimed at improving manufacturing processes, DOE announced in an Oct. 21 news release.
Pacific Northwest National Laboratory in Richland, WA, was awarded a total of $2.3 million for two projects in the forest products sector and one in the mining sector. Idaho National Engineering and Environmental Lab in Idaho Falls was awarded a total of $988,000 for three mining sector projects, and the U.S. DOE's Albany Research Center in Albany, OR, was awarded $264,000 for one mining initiative.
Boise Cascade Corp. in Boise, Idaho, was awarded $75,000 for a plant-wide energy assessment.
DOE plans to invest nearly $33 million altogether in 56 energy-saving research, development and deployment projects in the aluminum, forest products, metal casting, mining and steel industries. "It is expected that the projects will help improve many everyday manufacturing processes," said the DOE news release.
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