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Funding Support from the Northwest Energy Efficiency Alliance

CWEB.050/Feb. 25, 2000


Special Section: Conversations on Conservation
1) Avista's Bruce Folsom Bullish on DSM Distribution Charge
2) HVAC Manufacturers Rep Dennis Heller Sees Promising Conservation Signs
3) Boise Cascade Undertakes Broad Array of Economic-Based Conservation Initiatives
4) NEEA's Margie Gardner Believes Markets Ascendant in Conservation World

5) OPUC Endorses Non-Profit Administrator for Oregon Public-Purposes Funding
6) Idaho Industrials Seek 'Self-Direction' for Their Alliance Funds
7) Public Information Campaign to Promote Energy-Efficient Commercial Buildings
8) Distributed Energy Resources Moving from 'Vaporware to Hardware'
9) Peak-Reducing Energy Conservation Highlighted at NEEC Forum
10) BRIEFS: Building Operator Certification Expansion; New Energy Management Certification Program; Northwest Climate Wise Progress; Climate Change Roundtable Summary; Energy Ideas Clearinghouse Media Packet; Green Building Workshop

Conversations On Conservation

Sustainable DSM

Avista's Bruce Folsom Bullish on
DSM Distribution Charge Funding

Bruce Folsom believes his utility has developed a robust and sustainable approach to energy efficiency.

His Avista Utilities (formerly Washington Water Power) helped pioneer public-purposes funding, which Folsom thinks will become commonplace in coming years. The investor-owned utility
Bruce Folsom
focuses its demand-side initiatives on serving customers in its eastern Washington/northern Idaho territory, without spending huge amounts of money.

Folsom, Avista's special project coordinator, believes historical trends are at work in the energy efficiency arena. The Pacific Northwest Electric Power Planning and Conservation Act of 1980 triggered "the first era of conservation in the Northwest, which I would call rebate and incentive programs. The concept being, if you provide money you will save power. That was a pretty simplistic attitude which worked for the time" and led to "an awfully lot of good conservation being done in the mid- to late-80s."

The second major era launched in the mid-1990s, with a "focus on technical consulting and financial consulting, on the theory that the rebate and incentive programs wouldn't work in going forward into a deregulated or restructured environment," Folsom said. As capital-intensive utility conservation budgets dwindled, other means arose to deliver efficiency programs.

Case in point: Avista's demand-side management tariff rider. Started by Avista (then WWP) in 1995, it earmarks 1.5 percent of utility retail revenues in Washington and 1 percent in Idaho for energy efficiency programs. This provides about $4.5 million annually for the IOU's current mix of market transformation via the Northwest Energy Efficiency Alliance, low-income initiatives, traditional rebate and incentive offerings, and technical and financial consulting. The utility's programs save about 2.8 average megawatts annually, according to Folsom.

Avista, when it first proposed the concept, expected its DSM tariff rider to be supplanted by electric industry restructuring legislation with public-purposes provisions, but neither Washington nor Idaho has taken the restructuring leap. Folsom believes "some form of restructuring is possible within the next two to five years" in those two states, depending on key variables such as Oregon's experience implementing restructuring, federal legislation and market power prices.

"Avista and Idaho Power have the lowest electric rates among IOUs in the country," he said. "Obviously, customers who draw power from a hydroelectric base want to protect that endowment as their own, as they rightfully should. However, we're still seeing customers who want choice. This may be choice for the sake of choice even though the vast majority of customers would elect to stay with their incumbent utility."

Folsom said Avista pioneered "portfolio access," which allows customers to either keep their current rate structure--including low-cost hydroelectric generation--from their serving utility, or purchase power at market rates, again through their existing utility. This concept was developed as an alternative to "direct access," in which all customers must buy power from an alternative energy provider. Direct access has been the standard restructuring approach adopted in states with higher energy costs. Oregon, though, based its 1999 restructuring legislation on the portfolio access model for residential customers.

DSM Contentment

In the meantime Avista remains quite content with the DSM tariff rider, which, among other plaudits, helped earn the utility a 1999 Headwaters Award from the Northwest Energy Coalition.

"It provides an excellent way for businesses and residential customers to utilize DSM for customers' benefits," Folsom said of the tariff. Customers have consistently supported Avista's pursuit of conservation, regardless of utility resource needs, he noted.

The tariff rider also benefits Avista. It provides stable energy efficiency funding, enabling longer-term planning and staffing. It also reduces capital budgets--"We expense DSM on a current basis rather than putting it on the books for capital expenditures," he explained--and prevents efficiency dollars from having to compete with other (and higher) utility priorities.

Without the tariff rider, "I think we would have less" in the way of efficiency initiatives, Folsom said.

Public Purposes

Outside Avista's service territory, he noted, the utility's first-of-its-kind non-bypassable distribution system charge for energy conservation has "shown the way to public-purposes charges in Oregon, California, Montana" and elsewhere.

Folsom views this mechanism as the conservation wave of the future. "As long as utilities have distribution functions they will remain as monopolies, and the regulatory compact for a monopoly suggests that there be public policy and some social benefits, as opposed to the pure competitive mechanisms." Folsom, a former Washington state regulator, also said DSM should remain an electric distribution system responsibility so as not to "skew the [power] generation costs," since generation is "basically a different line of business." This also minimizes DSM-associated stranded costs with restructuring.

Folsom believes two major public-purposes funding issues need resolution. One is a question of inclusion: Should all customers pay equally, and should all utilities--publicly and investor-owned alike--participate? Secondly, "Do the funds go to a centralized new super-agency or super-organization, or do the funds stay with the incumbent utility for distribution within that utility service territory?" Folsom said Avista's practice of collecting and distributing the funds "has worked very well for our customers. There may possibly be efficiencies in a statewide entity. We're still looking at the benefits and costs."

Technology Future

Looking ahead, Folsom predicted "programs based on e-commerce and the Internet, and new technologies" will play a significant role in energy conservation.

As an
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example, he cited Avista Advantage's ACIS energy management software package now used at more than 40,000 customer sites around the country. "We're finding from a DSM and energy purchasing standpoint, that's muscling out some other functions in the industry." When a customer has access to energy commodity pricing through an e-commerce tool such as this, he explained, the importance of a power marketer is diminished.

Folsom also notices continual developments in "what I would call smart DSM; little devices with chips in them that can run equipment in a smart but more energy-efficient manner." These include the Vending Miser, a "very new technology" that attaches to soda machines and chills the contents only as needed, and the Guest Energy Management System used by lodging facilities as occupancy-sensing energy-saving tools. "My point is that new technologies will surprise us as we go forward in the energy efficiency industry," he said.

The advent of the services era in energy efficiency has opened new opportunities, Folsom believes. "Once you're into a client's premises on a service-related issue, hardware soon follows. For example, some of our best programs are [in] schools . . . where we help janitors, principals and students use power better. Savings from these behavioral-based programs end up frequently in hardware acquisition," such as lighting upgrades.

Another promising technology Folsom cites is the fuel cell, and specifically Avista Labs' own brand of modular proton exchange membrane (PEM) fuel cells, which are now being field-tested. "We have a technology that is sized and designed for the smaller user, which will have potentially a very large impact on the industry down the road," he said. "The question becomes how can you commercialize such a technology and drive down the costs associated with broader commercialization. We think distributed generation in general, and fuel cells in specific, will be here sooner rather than later."

Exciting Times

On the whole, Folsom sees an interesting future for energy efficiency in 2000 and beyond.

"I think it's going to be very exciting for participants in the energy efficiency industry as public policy focuses on both the funding and delivery mechanisms, and then new technology and new delivery systems, including e-commerce, step forward," he said. "Those companies, be they utilities or energy services providers, who have maintained a presence in the last few years have done some very creative and innovative things for the benefits of participating customers, and that should only increase as we go forward."--Mark Ohrenschall

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Good Times Ahead

HVAC Manufacturers Representative Dennis Heller
Sees Promising Signs for Conservation

Dennis Heller has worked on the private enterprise side of energy conservation for the better part of two decades. He has experienced the ups-and-downs and evolutions of utility programs, technologies, policy issues and business climates.

Now, the Seattle-based manufacturers representative for HVAC equipment
Dennis Heller
sees good times ahead. "I'm optimistic," said Heller, vice president of sales for F/M HVAC Sales and board member of the Northwest Energy Efficiency Council.

Among the promising signs he cites are a prospective resurgence of Bonneville Power Administration conservation, the emergence of sophisticated energy services companies in the region, electric industry restructuring (if attentive to conservation) and the rise of NEEC as a trade association for energy efficiency businesses.

"The opportunities, I think, are going to be there for conservation, with NEEC as a significant force in helping guide, or at least blow the whistle when it's going the wrong way, and letting people know there are smart ways to do conservation and not-so-smart ways."

Efficiency Business

Much of Heller's business focuses on saving energy; he estimates 40 percent of F/M's dollar volume of sales comes from energy conservation-related equipment. The firm sells products from 31 manufacturers in categories of heating/cooling, ventilation, air conditioning, and measurement and control. F/M sells equipment primarily to contractors, although some is sold directly to building owners. The company's overall sales are split about 60 percent/40 percent between new construction projects and retrofits.

Heller migrated to the Northwest in 1992. "We had a couple of real quiet years there" in his business, he recalled. "That was due to the combination of the economy being pretty flat and the conservation business being pretty flat in the mid-1990s. The last three or four years have been very good for us, as much from the general construction economy and the general economy."

Heller also praised the 1994 Washington State Non-Residential Energy Code for its role in energy conservation. "Government programs can make a very, very positive difference. They get knocked heavily, but those are government programs that have done a lot of good." Educating Washington building professionals about the code also has helped, Heller believes. "Buildings are being built better, and a lot of energy has never been used because of the way the buildings have been put together."

Utility Programs

Northwest utility conservation programs also are very influential, he believes, especially given the region's low-cost electricity. "Many of the conservation retrofit projects in this area in the last 15 years have been driven by BPA and utility companies. The fact that conservation was done was motivated through organized programs, as opposed to always having paybacks that owners will buy into." Northwest electric prices make for "a tough sell for conservation," he said. "If we had [Pacific Gas & Electric] prices for electricity around here, we would never again need any help from utility companies or BPA in terms of justifying conservation."

And that help has clearly diminished. "An awful lot of what otherwise would be viable conservation projects simply don't get done. A lot of opportunities are being lost," Heller said, noting that "utility programs make the difference at the margins."

As an example of a helpful utility initiative, Heller cited a recent project in which a large industrial company installed 28 variable-frequency drives and upgraded controls, with a "significant" utility financial contribution. "It becomes a win-win situation on the part of the owner, the contractor, the supplier, and ultimately on the part of the utility company due to significantly shaving demand and adding capacity to work with on other projects." Nevertheless, industrial firms in particular generally require energy-saving projects to pay for themselves within two to three years.

Despite the recent decline in utility conservation spending, Heller sees promise in BPA's planned pursuit of energy savings--potentially about 150 average megawatts --to augment its power supplies from fiscal years 2002-2006. "It looks like a new situation, where maybe there's a recognition that we have to focus more attention and focus programs on conservation and demand reduction," he said. Heller cautioned that BPA could miss some "very good opportunities for conservation" if it goes "heavily in the direction of [buying] increased capacity."

ESCO-Design/Build Sophistication

From his vantage point selling energy-efficient equipment, Heller has also noticed an expanded and more sophisticated corps of energy services companies working in the region. Firms such as Honeywell and Abacus Engineered Systems have been joined in recent years as big players by the likes of Siemens Building Technologies and Johnson Controls--although he noted other strong ESCOs came and left the Northwest market for the better payback conditions of higher energy-cost regions.

With this enhanced supply-side capability and the prospect of increased BPA funding, "The potential for making a real conservation impact in the Northwest is tremendous," he said. Compared to five or 10 years ago, he added, "We have the infrastructure in place right now so we can better take advantage of some of the utility-type programs."

Heller also lauded around Puget Sound the "very sophisticated engineering firms or sophisticated design/build firms that meet and often exceed the energy codes" in their projects. That's relatively unusual, he noted, especially compared to Southern California, where design/build often means "cheap and poor construction."

Technology, People Advances

In his conservation career Heller also has seen many advances in energy-saving technologies, such as variable-frequency drives for motors, variable-air-volume systems for laboratories, and heat-recovery equipment.

VFDs, for example, once were considered exotic and temperamental, but now are standard items. "Very, very few medium to large commercial projects go in without VFDs . . . It's become an almost trouble-free product."

Heller believes the march of energy-efficient technologies follows a pattern. "You always have some missionaries, and thank God for the missionaries. In general . . . people try to make decisions on what's going to make their lives easiest. Things that create mechanical problems or electronic problems--if it stands out, if you know it's there--are not going to survive."

People also make a significant difference in how energy-saving technologies work in practice, Heller said.

"A majority of facilities mechanics are very comfortable with the DDC [direct digital controls]
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system and electronic controls, which wasn't true 10 or 15 years ago. Facilities people used to say, 'Give me the suck-and-blow system. I know how to work around it. I can pull a tube and figure out what's wrong.' To me, that's a huge change," he said. "Part of that is a generational change. There are a lot more people in facilities management who grew up with computers and electronics and microprocessors and DDC systems and [know] this is how you run equipment . . . I don't see anybody fighting those anymore."

He also pointed to NEEC's Building Operator Certification program as "very, very useful" in educating facilities professionals in this regard.

NEEC Role

Heller is bullish on NEEC, the regional efficiency industry trade association that formed five years ago and now numbers more than 70 member companies. "A wonderful foundation throughout the four-state area, especially Washington and Oregon, has been in laid in terms of a professional organization representing the energy conservation community," he said. "We're in a position to really make a difference. We already have a voice, and I think that voice is going to be . . . more influential all the time in helping design policy."

Those policies include utility conservation initiatives, as well as electric industry restructuring, both federal and state. Conservation interests need to be well-represented in restructuring debates, Heller believes, as they were in Oregon. Otherwise, the efficient use of energy could be short-shrifted.--Mark Ohrenschall

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Energy Matters

Boise Cascade Conserves to
Minimize Energy Costs

Boise Cascade Corp. cares about its energy costs.

It takes a lot of energy for the Idaho-headquartered company to make the paper and wood products it sells into highly competitive global markets. "Energy is a major operating expense," said Norm Beckert, Boise Cascade's director of purchasing. "It is the number three cost after fiber and labor," accounting for 15 percent of the Paper Division's manufacturing costs.

Using energy wisely is fiscally important for Boise Cascade, and Beckert said his company undertakes "a fairly broad array of activities that are aimed at energy conservation."

The company's Paper Division staff includes
Norm Beckert
four people in energy-related positions, including a full-time energy manager concentrating on energy use and conservation, in addition to Beckert, who handles the commercial responsibilities of sourcing energy and utility relationships. Each Boise Cascade pulp and paper mill also employs an energy engineer charged with tracking energy consumption, seeking conservation opportunities, and following through on the implementation of energy-saving projects. Boise Cascade also works with external parties, such as its serving utilities and energy consultants, to identify and implement energy efficiencies.

"We continue to receive reinforcement from management to drive down energy costs and energy use," Beckert said. "It is hard to separate cost and use; they are interdependent."

On a cost basis, electricity comprises about two-thirds of Boise Cascade's purchased energy consumption. This power is primarily applied to electric motors and drives. Fossil fuels are the company's other major purchased energy source, predominantly natural gas used to generate steam. In addition, said Beckert, "Approximately 50 percent of the total energy consumed in the pulp and papermaking process is coming from an assortment of byproducts such as bark, wood trim and rejects, and liquor from the chemical recovery process."

Expansive Conservation View

Two recent projects illustrate the company's expansive view of energy conservation. At its mill in St. Helens, OR, Boise Cascade studied energy-saving opportunities in its compressed-air systems. Funding support came from Portland General Electric, and assistance came from a consultant. The mill followed the recommendations of the study team and was able to reduce its compressed-air electric power load by approximately 20 percent. As a result, the mill was able to place one of its compressors on standby service.

Another recent initiative involved a series of studies at its paper mills jointly funded by Boise Cascade and its electric power utilities through their membership in the Electric Power Research Institute (EPRI). These studies, known as PINCH studies, use sophisticated mathematical models of the pulping and papermaking processes to identify areas where excess heat is available, and to match and thermally optimize such sources of heat with process streams where heat is required. Process units, such as heat exchangers, allow the transfer of waste (excess) heat from one process to another process where heat is required.

"Such exchanges of energy can reduce the amount of fuel needed and, in some cases, reduce the amount of pumping horsepower," Beckert explained. "These studies have been successful, leading to the implementation of several projects at each mill. A substantial list of projects also remain under technical review or await funding."

Over the years Boise Cascade has also systematically replaced burned-out motors with high-efficiency replacements, changed its motor specifications to high-efficiency units, added variable-speed drives, matched pumps and control valves to required flow rates, and upgraded to more energy-efficient lighting systems. "We have been identifying and implementing many of the demand-side management initiatives consistent with the programs promoted by the electric power utilities," he said.

Economic Considerations

For Boise Cascade, "Energy conservation at any cost is not a viable project investment decision," Beckert explained. Economics guide the company's energy-savings investment evaluations.

Boise Cascade adheres to Economic Value Add (EVA) guidelines whereby, at a minimum, investments must provide a return on investment meeting the company's cost of capital. Discussions with financial analysts familiar with the paper industry and a review of Boise Cascade's annual report would suggest that a pretax return of 16 percent is needed to justify new capital investment. "Projects that do not meet the corporate financial guidelines are not funded unless required to meet safety, environmental compliance or asset protection considerations," Beckert said.

Interestingly, some projects have been implemented by Boise Cascade that increase the amount of energy per unit of production. For example, having the opportunity to burn recyclables, such as wood waste, often results in lower boiler efficiencies; however, wood waste is a lower-cost fuel. Burning will also often reduce landfill volumes.

Diminished Utility Role

Looking ahead, Beckert sees a diminishing utility role in energy conservation. "My forecast is that we'll see less technical service and financial assistance or direct funding of demand-side management initiatives by utilities. The utilities' structures will change from being vertically integrated providers of generation, transmission and distribution, to becoming three separate entities. Ratepayers of all classes may contract with providers other than their current electric power providers, causing a shift in the 'who' and 'how' of sponsorship and promotion of DSM."

In Oregon, for example, the new restructuring legislation provides for public-purposes funding, including a conservation component likely to be provided to the Northwest Energy Efficiency Alliance for investment in market transformation projects. Throughout the Northwest, Beckert said, both investor-owned and publicly owned utilities are directing ratepayer-provided funding to the Alliance as an alternative to utility-managed conservation programs.

Boise Cascade will maintain its in-house energy management experts, Beckert said, and will enlist external consultants when needed. Smaller industrial firms are more likely to rely on outside experts than a large company like Boise Cascade, he indicated.

Self-Directed Conservation Funding

Beckert strongly favors allowing industrial customers to manage conservation funds collected by utilities and passed on to other entities to invest in conservation efforts. This notion of "self-direction" is under discussion for Oregon's upcoming public-purposes funding.

"What industrial ratepayers prefer is to be able to invest their own energy conservation funds," said Beckert. "Rather than have part of our rates going into a pool that some agency manages, we'd rather those funds be available so we can make the choice as to how to achieve energy savings specific to our business. We support being able to self-direct the portion of public-purpose funds aimed at conservation to bring about acceptable and auditable projects. We believe our track record demonstrates that we can set and achieve targets for energy conservation."

This extends to the Alliance, said Beckert, who joined its board last year as a consumer
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representative. He believes he can help increase the Alliance board's understanding of the industrial sector. Beckert said he also brings a focus to issues of benefit-based investments and paybacks.

Beckert described ratepayers--not utilities--as the true funders of the market transformation collaborative. "Industrial customers would prefer to self-manage the funds collected from them, rather than have NEEA determine the programs to accomplish that objective," Beckert said. "The perspectives are different. NEEA will contribute to energy conservation through market transformation, but many of the new investment initiatives will tend to be long-term in realizing benefits. Industry, in general, is looking for more immediate results. Customers and the impact of the global economy mandate competitive production costs or we may not survive."

Renewable Resources

While Boise Cascade is willing to examine renewable energy projects beyond its already high use (50 percent) of wood and process recyclables, Beckert said his company is cautious about investments in today's high-cost, low-return projects such as wind power, solar energy and fuel cells. Boise Cascade and many other paper makers have already demonstrated leadership with their investments and use of self-generated energy, he believes.

Continuing Efficiency Interest

Beckert believes Boise Cascade will retain a keen interest in the efficient use of energy. "We believe energy will continue to be a significant part of our manufacturing costs," he said. "We don't think energy costs are going to dramatically diminish. You can take either side of the argument on the price impact of electric power deregulation--whether deregulation will bring price increases or price reductions. I personally believe we will see reduced prices for electric power, as we have seen for almost all of the formerly regulated commodities, such as natural gas and telephone service.

"Whatever the price, energy will remain as a significant element of our manufacturing costs and prompt us to continue spending resources on minimizing our energy utilization." He concluded, "There will be rewards for effective management of our energy requirements."--Mark Ohrenschall

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Market Ascendancy

Margie Gardner Sees Greater Market Role in
Energy Efficiency, Promotes it Via Alliance

Margie Gardner has approached Northwest energy conservation from the varying perspectives of advocate, analyst and now marketeer.

Gardner--a former Natural Resources Defense Council energy staffer and Northwest Power Planning Council conservation analyst--serves as executive director of the Northwest Energy Efficiency Alliance, which works to improve markets for energy efficiency.

Gardner believes markets are ascendant in the
Photo of Margie Gardner
Margie Gardner
conservation world. While the concept of energy conservation as a resource still remains important among policymakers, more recently "it gets tempered a lot with, 'What do consumers want in a marketplace? And what are they willing to pay? There's more discussion around that . . . than maybe in the past. I think there's more attention to who is in a position, businesswise, to afford the costs of conservation or energy efficiency. It can sometimes be a high up-front cost that pays over time. There's more acknowledgement of this as the electricity market opens up; utilities or consumers are more risk-averse in some cases about investing something they're not sure will get recovered."

The Alliance

The Alliance focuses on transforming markets for a broad range of energy-efficient products and services (see the Alliance Web site for details, and see Con.WEB, June 29, 1999, for a special section on market transformation and the Alliance). It formed in late 1996 as a regional utility-funded collaborative--a unique niche, then and now. Gardner took over as executive director in late 1997, after the resignation of her predecessor, Will Lutgen.

"We've been trying to do the right thing and do the thing right to gain credibility," she said. "I feel very good about the track record we've produced in the last three years," as evidenced by the prospect of renewed funding for another five years. "That's very positive all around."

With additional money from Northwest utilities, the Alliance now looks ahead to a longer-term future. "Where we're headed is to keep our focus on our core mission, which is influencing buyers and sellers of energy-efficient products in markets, and yet still be flexible enough to link with other groups such as utilities and agencies that are delivering energy efficiency by working one-on-one with individual consumers."

Gardner sees a growing partnership between the Alliance and Northwest utilities, as, for example, promoting Energy Star lighting fixtures with the Alliance's torchiere turn-in event kit, or collaborating with utilities on Bonneville Power Administration conservation initiatives. "Our focus is to acquire savings through changing markets," she said. "A local utility might need to acquire savings by working with individual customers. Our end goals of saving energy are the same; we go about them slightly differently."

Gardner anticipates the Alliance will "try to keep some level of broad portfolio" of market transformation initiatives in coming years. The collaborative "might be more willing to enter into some further marketing-type ideas" intended for "changing consumers' attitudes and opinions and values toward energy efficiency," as with the regional public information campaign promoting energy-efficient commercial buildings (see related story in this issue). Accountability for results from this type of strategy has been and will be "a big challenge," she acknowledged.

She also expects the Alliance to continue soliciting ideas from outside the Northwest energy conservation community, as it did with the Bac-Gen BioWise Wastewater Treatment Initiative. "I feel strongly about trying to maintain an open process to find innovative projects where their business interests and our business interests overlap."

And internally, the Alliance board will likely be somewhat reconfigured to take into account state public-purposes funding and the prospect of direct Alliance funding from large publicly owned utilities that don't get all their electricity from Bonneville Power Administration. "My guess is, in the end, it's going to be an evolution from the current system and not a revolution at all," said Gardner of the coming changes. "We'll end up with the same types of constituencies, maybe a little broader and a little bigger on the public-interest side . . . While we do need to evolve to changing circumstances, we'd hate to take something apart that is working."

A Little History

Before there was an Alliance, market transformation or public-purposes funding, there was the Pacific Northwest Electric Power Planning and Conservation Act of 1980. Gardner, who joined NRDC shortly after the act's passage, considers that landmark legislation the real beginning of energy conservation in the region. It "set up least-cost planning as a goal, with conservation treated as a resource equal to generation resources."

The regional act led to BPA conservation initiatives, she noted, and with regulatory support also fostered energy-saving programs by investor-owned utilities. Northwest energy codes became much more stringent on efficiency. And a "conservation power plant the size of any nuclear plant built in the Northwest" was created in the region, with about 1,000 average megawatts of utility program savings reported to the Council by 1996.

"It's the framework that had been used for a decade and a half," she said. "Things started changing in the 1990s." Gardner thinks low natural gas prices and the widespread use of small-scale gas-fired turbines generating much cheaper electricity triggered the fervor for electric industry restructuring. Marginal electric costs used to be very high compared to rates, and now they are lower; industrial companies, particularly, don't want the cheaper marginal costs averaged with their rates anymore. They want to pay the low cost, she said.

Restructuring, both real and prospective, "has had strong implications for the electricity industry, and certainly for conservation." It has created "a huge amount of uncertainty, so that most of the institutions that used to be very reliable in delivering energy efficiency suddenly had to ask completely new questions." Those include: "What business am I in, wires or transmission? Who are my real customers? . . . Is energy efficiency part of my package of services?"

Although some utilities have remain committed to energy efficiency during this transition, most are still sorting through their roles as restructuring unfolds. "It's just made progress incredibly difficult" on the demand side.

Northwesterners have a strong environmental ethic, she believes, but average citizens haven't really been mobilized on energy issues since 20 years ago when BPA rates were skyrocketing and nuclear power plants were proposed around the region.

"Energy efficiency is not very sexy," said Gardner. "It's invisible in a lot of cases. It's a little bit harder to get excited about a product that looks like a refrigerator you used to have, but uses fewer kilowatt-hours." Resource-efficient washing machines have a new look as front-loaders, but she said they are "not nearly as identifiable as some of the solar or renewable technologies."

Optimism

Nevertheless, Gardner is "actually very optimistic" about the future of Northwest conservation. Bonneville will continue pursuing energy efficiency, as will the historically avid conservation utilities, and others that will want to help their customers benefit from energy efficiency--"especially since we're identifying more and more customer benefits that sometimes accompany energy efficient efforts, such as productivity gains."

She also sees "a little more clarity" forming around restructuring in the next few years. And demand-side management packaged with distributed generation offers load-management potential.

Energy
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efficiency is "never going to look like it used to, but I still am pretty confident in it being a key part of the region's resource mix and the region's ethics."

And don't forget technology improvements. Gardner remembers when new refrigerators consumed about 1,600 kilowatt-hours annually; efficiency advocates thought trimming it to 1,100 KWh would be great. New refrigerators now typically use about 700 KWh, made possible by improvements in insulation and motors.

"Things that were never dreamed of in 1982 are producing kilowatt-hour savings today in people's homes and businesses," she said. "I think that's going to continue, and that continuously opens up opportunities for the better use of our resources."--Mark Ohrenschall

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PUBLIC PURPOSES

Public-Purposes Provision

Non-Profit Organization to Administer Oregon
Public-Purposes Funding Endorsed by OPUC

The Oregon Public Utility Commission has endorsed the concept of a non-profit organization to administer most public-purposes funding as part of the state's electric industry restructuring.

Meanwhile, public-purposes funding allocations and large customer credits are covered in OPUC staff proposed draft rules for implementing the state's electric industry restructuring legislation. Other proposed rules include a renewable energy option for residential customers, and power source and environmental impact information on customer bills.

These and other draft restructuring rules will be the subject of OPUC workshops and public hearings in March and April. Written comments are due April 10. A draft PUC order is scheduled for circulation in mid-May, with final adoption of the rules planned for June.

Oregon's restructuring takes effect in October 2001 for customers within PacifiCorp and Portland General Electric service territories. Publicly owned utilities can choose whether to offer direct retail access for customers.

Administering Public-Purposes Funding

The electric industry restructuring bill passed by the Oregon Legislature and signed into law by Gov. John Kitzhaber last summer (see Con.WEB, July 30, 1999) called for 3 percent of total electric revenues to be collected for public purposes, for 10 years from the beginning of open retail access. The bill also specified allocation percentages for categories of public-purposes funding.

Senate Bill 1149 also called on the OPUC to direct how public-purposes charges are collected and spent, and it specifically listed a "nongovernmental entity" as a potential vehicle for investing the funds.

The independent administrator idea was outlined in a Feb. 15 memo from OPUC staffer Lynn Kittilson. "Many parties are interested in fostering a competitive environment for delivery of conservation and renewable resources with the public purpose funds," she wrote. "Staff and a majority of the parties believe the funds should be administered by an entity charged specifically with the sole purpose of achieving the goals of the public purpose legislation. We believe a nonprofit organization operating similarly to the Northwest Energy Efficiency Alliance . . . is a good model to use. In addition to being best suited to promote competitive delivery of programs, we believe a nonprofit organization would be the most cost-effective option for administering the public purpose funds."

This entity would have technical advisory groups for both conservation and renewables, charged with creating strategic plans and discussing spending proposals. A board of directors would make program and other decisions, and the PUC would provide some as-yet-undetermined level of oversight. A competitive bidding process would be used to implement and evaluate programs.

"People have generally been pretty supportive of what we proposed," Kittilson said, noting no expressed opposition at the PUC's Feb. 22 meeting at which the non-profit organization was endorsed in concept. The next step will be to form an advisory group to further discuss the proposed organization.

Public-Purposes Funding Categories

The OPUC draft rules specify five distinct funding categories, and allocate the dollar percentages in each: energy conservation in schools (10 percent); local and market transformation conservation (56.7 percent); renewable energy resources (17.1 percent); low-income weatherization (11.7 percent) and low-income housing (4.5 percent).

The proposed non-profit entity would administer the local/market transformation conservation and renewable energy funding, while school money would go to local education service districts and the low-income dollars would flow to the state Housing and Community Services Department.

One exception to the 3-percent public-purposes funding rule would be granted to aluminum plants with average annual electricity consumption greater than 100 average megawatts; they would pay 1 percent of total electric revenues. Those plants and any other large electric consumer (defined as using more than 1 aMW annually at one site) would also be able to receive credits against public-purposes charges "for qualifying expenditures incurred for new energy conservation and the above-market costs of new renewable energy resources." The Oregon Office of Energy would establish qualification rules and credit processes for these "self-directing" customers.

At least two other provisions in the draft restructuring rules pertain to renewable energy. One would require PacifiCorp and PGE to offer renewables in a portfolio of service options for residential customers, with "significant new" renewable resources. "The electric company must acquire the renewable supply resources necessary to provide the renewable energy resource options through a Commission-approved bidding process," the draft rules state. The rules also would mandate that price, power source and environmental impacts of various electric service options be shared with consumers to enable "informed choice." Rachel Shimshak of Renewable Northwest Project believes these two items should benefit renewables in Oregon.

Exciting Opportunity

In the aftermath of SB 1149, many Oregonians involved in energy conservation and renewables consider the public-purposes provisions as an exciting opportunity.

Ten years of stable funding at 3 percent presents a great opportunity, OPUC commissioner Ron Eachus told a Northwest Energy Coalition conference in Seattle in October. "It gives us the opportunity here to completely recast our approach to energy efficiency and renewable resources, not only on a financial basis, an assurance for it," but also to "recast the programmatic development and targeting of those funds and the ways in which they are delivered."

Eachus advocated development of a "competitive energy efficiency market . . . If we go 10 years and we're still relying on utilities, we will not have made any progress in energy efficiency, or creating a job sector, an employment sector based on those kinds of skills. Nor will we have created the political constituency base needed to revise the building codes from time to time."

The 3-percent public-purposes figure translates to about $50 million annually from PacifiCorp and PGE territories, according to Jason Eisdorfer of the Citizens' Utility Board of Oregon. That represents a big increase from current spending, he told Con.WEB in October. "I think it's about time we got back to the point of appropriate expenditures on conservation and renewables and low-income weatherization. There's already a significant amount of interest from service providers in figuring out innovative ways to spend that money."

He described "an enthusiasm that hasn't been felt for awhile. Least-cost planning the last five years has been sort of depressing and on a downward trend."

Although SB 1149 excludes publicly owned utilities from public-purposes funding unless they opt for open access, Eisdorfer cited calculations by Emerald PUD's Alan Zelenka that Oregon publics collectively are at 92 percent of the 3-percent spending level.

Cathy Higgins, former manager of the Oregon Municipal Energy and Conservation Agency (OMECA), called SB 1149 and its public-purposes provisions "exceptionally beneficial to the energy services industry." She said the consistent and substantial funding will create "a market pull that's going to trickle out to all areas of Oregon and overflow into adjacent parts of Washington. It will really ramp up the availability of services and hopefully lower the costs of implementation of services."

The cost-effectiveness issue will be challenging, believes PacifiCorp's Brian Hedman. "I think it is exciting" to have public-purposes funding, he said last fall, but "it's going to raise a lot of questions about what is cost-effective. Utilities, both Pacific and PGE, have consistently met their cost-effective [conservation] targets as identified in their least-cost plans at levels substantially below 3 percent. Now you have a dollar target instead of a cost-effective target. You don't want to be spending money on non-cost-effective programs . . . I think it's going to require a different definition of cost-effective."--Mark Ohrenschall

More Information:

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MARKET TRANSFORMATION

Industrial Issue

Idaho Industrial Customers Seek 'Self-Direction' of
Rate-based Funds Now Earmarked for Alliance

An Idaho industrial customer group wants to withdraw its rate-based dollars earmarked for the Northwest Energy Efficiency Alliance, and instead spend them on internal energy-saving projects.

This proposed funding "self-direction" by Industrial Customers of Idaho Power stems from their dissatisfaction and skepticism about the Alliance and market transformation, according to ICIP attorney Peter Richardson.

Alliance officials, however, are concerned this could hamper their efforts to transform markets for energy-efficient industrial products and services, and even affect the collaborative's future efforts in the industrial sector, particularly if industrial customers in other states also self-direct Alliance funding.

The immediate forum for this issue is Idaho Power's pending application to the Idaho Public Utilities Commission for authority to continue its Alliance funding from 2000 through 2004. Idaho Power wants to stick with the Alliance for $1.3 million annually--assuming the PUC approves of the idea as well as a means for cost-recovery--but the December 1999 application takes no position on industrial self-direction. Richardson said industrial customers collectively account for about 35 percent of Idaho Power's load.

Filings on Idaho Power's continued Alliance participation are due to the IPUC March 9, and industrial self-direction will be addressed, ICIP's Richardson told Con.WEB in mid-February. "We are in active negotiations with all the players here in Idaho to try to reach a compromise we can file on March 9, reflecting some form of industrial customer self-direction of their conservation dollars," he said. "If we're not successful reaching a settlement among the parties, we will file that proposal anyway."

Richardson is "optimistic that we'll have something that will work for everybody," and said recent discussions have involved ICIP (whose members are industrial customers with loads between 1 and 25 aMW), Idaho Power's four large special-contract customers, the Alliance, Idaho Power and the Northwest Power Planning Council.

Richardson's idea is that Idaho Power would still fund the Alliance on behalf of its customers, but industrial companies would earmark their dollars for their own "bona fide" conservation inititives, monitored by an independent entity with PUC oversight.

Industrial Dispute

ICIP members have grievances with the Alliance itself and the concept of market transformation, according to Richardson.

ICIP members "have always been skeptical of NEEA, from its inception," Richardson said. The group initially opposed Idaho Power's funding of the Alliance, and in 1999 lobbied unsuccessfully for an industrial customer "pod" on the Alliance board, he explained. An industrial representative, Norm Beckert of Idaho-based Boise Cascade Corp., was subsequently approved to join the Alliance Board.

"We're not seeing a lot of immediate benefits to us of NEEA's efforts," Richardson said. However, Alliance officials note that current Alliance industrial projects, including some with direct ICIP member participation, are projected to save at least 1.2 aMW in Idaho in the near future, and 22 aMW by 2010.

"We think that we can do a couple of things better than NEEA in terms of effecting cost-effective conservation for the industrial class, by bringing it home, if you will," said Richardson. For one, "Industrial processes in large part are unique to each industry, and therefore a generic NEEA approach [to industrial sector market transformation] doesn't seem to be effective for us."

"The Alliance approach, far from being generic, is targeted towards specific opportunities to bring new energy-efficient products and services into the marketplace", said Alliance director of planning and implementation Susan Hermenet. "While some Alliance industrial projects cut across all industries, i.e. the use of compressed air, other projects target specific industrial processes that are transferrable to other Northwest plants," as for example with the Silicon Crystal Growing Facilities project.

Richardson also questions how regulated utilities can demonstrate prudency in spending money on market transformation, since it occurs in the future, if at all. Alliance initiatives are internally scrutinized for cost-effectiveness, said Alliance evaluation/market research manager Ben Bronfman, as well as by regulators overseeing investor-owned utility funding of the Aliance. Alliance-attributed energy savings to date have cost less than 1 cent per kilowatt-hour.

With the Northwest facing imminent power capacity shortages, Idaho industrialists believe they can better serve the region by gaining conservation in the near term--not through what Richarson called the Alliance's "long-term-horizon view of the world." But, said Hermenet, "Although the overall Alliance mission is to achieve long-term market impacts through market transformation, we have already secured, in tbe near-term, 16 aMW of savings to the region."

"We are not arguing that industrial customers should not do some self-directed conservation. In fact, we encourage it," said Alliance utility communications coordinator Elaine Miller. "But it should not be at the expense of market transformation efforts in Idaho."

Richardson said he has talked with ICIP member energy managers, who find self-direction "very attractive. These are dollars the company has already budgeted to give to Idaho Power. If they can get these dollars back, they can use this money for their wish-list conservation projects that frankly get put down on the bottom of the priority list."

Richardson believes there are "tons of [industrial conservation] opportunities right now that are going begging because of the priority of funding. Out in the competitive world, they don't have the money to spend on them." With self-direction, "I am confident you're going to see a lot more conservation taking place here in Idaho in its factories."

In addition, Idaho industrial companies are generally distant from the markets they serve, Richardson said, and, "Any competitive advantage we can reap by making our processes less expensive through energy conservation makes the industrial base in Idaho more viable and stable."

Chilly Reception by Alliance Board

Boise Cascade's Beckert outlined the Idaho industrial self-direction idea to his Alliance board colleagues at the board's Jan. 25 meeting, where it received a chilly reception.

"It grieves me greatly," said board chairman Charlie Grist. "To me, that is a huge loss for us. I believe there are great opportunities in industrial. It pains me to see this." He acknowledged "a certain inevitability to it," given prospects for industrial self-direction in Montana and Oregon. Still, "I have a hard time swallowing it . . . and I'm having a hard time seeing this board weighing in in support of this."

Board member Jake Fey believes silence may be the best official Alliance response in the pending Idaho PUC proceeding. He also observed that one-third of the total load served by his utility, Tacoma Power, goes to four large industrial customers. "I'm hoping my customers wouldn't be doing this, asking for this kind of relief . . . Fundamentally I don't think this is something we should say is a great idea."

It would set "an uncomfortable precedent" for the Alliance to state an opinion on this intra-Idaho issue, said board member Nancy Hirsh. However, she did allow that "it could have a domino effect that might undermine the effectiveness of the organization."

Board member Liz Klumpp suggested the Alliance's current industrial sector programs "to some degree will become vulnerable if Washington is the next domino to fall" with industrial self-direction.

Other Alliance board members noted a fundamental difference between local conservation and regionwide transformation of markets for energy-efficient products and services. Industrial energy-saving projects "might be reproducible, but facilities tend to be proprietary about their information," said Doug Kilpatrick. "They have energy efficiency, but it's not the market transformation type of effort, which is what this organization is set up to do."

Idaho Power Perspective

The Boise-based investor-owned utility supports the Alliance and its goal to improve energy efficiency and reduce consumer costs of energy-efficient products and services. "Idaho Power believes that in its first three years of existence NEEA is fulfilling that public interest purpose," the utility said in its Dec. 30 PUC application. "In light of the uncertainties surrounding the electric industry, Idaho Power also believes that to the extent it is in the public interest for Idaho Power to engage in DSM (conservation) programs, participation in NEEA is the best way to accomplish that goal." Idaho Power has discontinued virtually all other energy-saving initiatives.

The IOU's ongoing Alliance funding, however, depends on PUC-endorsed cost reimbursement. Idaho Power recommends it continue to tap revenue-sharing funds for its planned $1.3 million annual Alliance bill from 2000 through 2004: "That method is simple, straight-forward and causes no change in the rates charged to Idaho Power's customers." And enough revenue-sharing funds accrued in 1999 to provide five years worth of Alliance funding.

Another possibility raised in the application is a separate customer charge dedicated to DSM funding, as Avista Utilities has. Idaho Power said it could accept such a plan, which "could also exclude a customer class from the requirement to pay a NEEA charge (i.e. Idaho Power's four special contract customers). That class could then be determined to be ineligible for participation in NEEA sponsored programs."

But Idaho Power's application lacks any yes-or-no position on industrial self-direction, saying only, " . . . if a NEEA charge is authorized, customer input is required on how that charge should be structured."--Mark Ohrenschall

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BetterBricks.com

Public Information Campaign to Promote
Productivity Benefits of Energy-Efficient Buildings

Coming soon throughout the Northwest: a regionwide public information campaign promoting energy-efficient commercial buildings.

This multifaceted program will include media advertising, a Web site called BetterBricks.com, and a referral service. These are jointly intended to stimulate demand for energy-efficient buildings among employers and employees--by emphasizing increased worker productivity--and to connect interested people to like-minded building professionals.

This is the major and most visible element of the Efficient Building Practices Initiative run by the Northwest Energy Efficiency Alliance. The $3.4 million budget for the public information campaign--including $1.4 million for media, $400,000 for television production and $400,000 for the Web site--received approval from the Alliance board Jan. 25 on a 14-2 vote.

Advertising is scheduled to begin appearing in Northwest media outlets in May, concurrent with the public debut of BetterBricks.com.

The advertising will include television commercials on network and cable stations in larger and smaller markets around the region. "It won't be like seeing McDonald's advertising [but] it will be a substantial schedule that should make a difference," Steve Kokes of project contractor Cole & Weber told the Alliance board. Also planned are program sponsorships by the campaign, along with radio, newspaper and trade journal advertising.

"All the advertising is really geared to the idea that we want to intrigue people, pique their interest and get them to go to the Web site," said Alliance project coordinator Mike O'Brien.

In promoting energy-efficient commercial buildings, the campaign will focus on enhanced productivity, which emerged from regional market research last year as "By far . . . the most motivating benefit of energy efficiency," according to a written summary. (See Con.WEB, Nov. 1999, for a story on the market research).

"What we found in focus groups," said O'Brien, "was that most people seem to have a repertoire of experiences in buildings that are negative, where something around thermal comfort or lighting or something to do with the building got in the way of their work." Yet at the same time, "People don't want to be perceived as complainers or whiners . . . Part of the goal of the Web site is to deal with these issues constructively."

BetterBricks.com will provide substantial research-based information on the productivity benefits of energy-efficient buildings, such as improved employee retention. The Web site also will enable curious people to seek more information, via an e-mail "help desk." Their interest levels will be assessed and responded to accordingly, O'Brien said.

BetterBricks.com also will offer a referral service to qualified architects, engineers, development firms and other building professionals who are "sympathetic supply-siders" for energy efficiency. For those with a keen and pressing interest in efficiency--"hot-ticket contacts," in O'Brien's words--energy advisors will be dispatched to discuss their specific circumstances and get them further assistance.

"All the way through this, the underlying theory is to get end-users interested in these ideas, in productivity, and then give them some help to make it happen," he said.

Measuring Effectiveness

Although the Alliance board endorsed the public information campaign's revised budget (up from $3 million previously), board members had questions--in particular on measuring effectiveness.

Carol Brown, an Alliance board member who presented the campaign to her colleagues at the Jan. 25 meeting at Skamania Lodge in Stevenson, WA, emphasized the long-term nature of influencing the way people think about buildings. "This is not a short-term, tomorrow you get kilowatt-hours" program, she said, especially given the long process of commercial building construction or major renovation.

She believes "probably the most impactful piece" will come from more building owners requesting their designers to create higher energy-efficient buildings than would have otherwise occurred.

The campaign's progress can be followed, noted Alliance evaluation and market reseaarch manager Ben Bronfman, through such measures as changes in awareness and Web site hits. "Like a lot of our market transformation projects, we're going to have proximate indicators of success," he said. "I don't think there'll be a single measure you'll be able to take at the end of the year." Another metric will be referrals for efficiency-related services, said board member Ken Keating.

From the advertising perspective, surveys will provide insights into the campaign's effect among the intended audiences of employers and employees. "Certain aspects of our message may come through better than others," said Kokes, and adjustments can be made.--Mark Ohrenschall

More Information:

***Return to Contents


DISTRIBUTED ENERGY

Cautious Enthusiasm

Distributed Energy Resources Moving From
'Vaporware to Hardware,' But With Challenges

An energy market that needs additional resources, consumers who want to buy green power and technology developing at warp speed are moving the Northwest market for distributed energy resources "from vaporware to hardware," said Bonneville Power Administrative senior vice president Steve Wright at the Distributed Resources, Renewables and the Environment conference Feb. 2 in Portland.

Wright and other speakers also pointed to reliability and environmental concerns as additional market-movers, but cautioned that figuring out how distributed resources will fit with the existing energy supply and delivery systems is a complex and compelling issue.

The conference featured serious discussion of the barriers the industry faces in attempting to not just absorb, but capitalize on emergent and "disruptive" DER technologies.

For complete coverage, visit Energy NewsData's conference Web site, which also includes an agenda and list of conference attendees.

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POLICY

Peak Targets

Energy Conservation to Reduce Peak Electric Loads
Highlighted at January NEEC Forum

Targeting energy conservation to reduce peak electric loads will likely be increasingly emphasized in the Northwest in coming years as a response to marketplace conditions.

This attention to peaks arose at a Jan. 26 forum in Seattle on Bonneville Power Administration's inclusion of conservation in its strategy to augment its wholesale power supplies in fiscal years 2002-2006 to meet anticipated higher demand. Bonneville estimates an overall need for more than 1,000 additional average megawatts over that period.

Northwest Power Planning Council conservation manager Tom Eckman, BPA energy efficiency vice president Terry Esvelt and energy consultant Tom Foley all addressed the peaking issue at the forum sponsored by the Northwest Energy Efficiency Council and the Association of Energy Services Professionals.

"It isn't an energy problem," said Eckman of Bonneville's situation. "It's a load shape, peak problem. The differentiation on peak is somewhat akin to what it was looking at energy costs 10 years ago," when avoided costs were 10 cents per kilowatt-hour.

The Council, in a recent draft issue paper, suggested BPA pursue a minimum of 150 aMW of energy savings from 2002-2006. "Is 150 [aMW] . . . the right number for Bonneville?" Eckman asked. "A lot depends on when it is and where it is. We never talked about that in the past."

Eckman said the notion that it doesn't matter where BPA's 150 aMW comes from "is categorically wrong today. We have some really different pricing, where customers pay 5, 6, 7 [cents per KWh at retail] and the market is 10, 12, 15 [cents per KWh at wholesale peaks] . . . The problem we have with augmentation is it's very narrowly focused," hinging on such factors as geographical and transmission constraints, daily and seasonal variations, marginal power costs and severe weather events that drive up power consumption, such as summer heat in California and cold in the Northwest.

Esvelt earlier in the forum noted Bonneville conservation programs have saved 750 aMW over the past 18 years, at a total cost of $1.7 billion. "We could do that again," Eckman said, but "it wouldn't solve the problem" faced today in "targeting the source of conservation and demand-side management."

Eckman raised two other questions. One is "whether Bonneville has the tools in the kitbag to get whatever it needs when it needs it," including money and sufficient infrastructure. And two, "Will Bonneville be able to identify a delivery mechanism out in the marketplace to actually pull that together?" following the "rapid disassembly" of demand-side services in the mid-1990s. "We have to have that infrastructure in place," he said. "Otherwise, [Bonneville] will go to the [power] market, the course of least resistance, and it's available."

Peak Opportunities

Foley, meanwhile, sees opportunities aplenty for energy efficiencies that reduce peak demand. He envisions "a lot more" than 150 aMW available for Bonneville. "The reason is, I believe, the analysis that has been done to support 150 [aMW] has been done on a regional basis, and hasn't focused enough after very, very disaggregated levels, on the variability of prices in the marketplace and the very valuable energy out there to be saved."

Power prices on the wholesale market can soar during extreme weather, Foley said, citing a 3-percent rise in midday loads one hot August day last year in California, matched by price increases of 400 percent on the California Power Exchange. "That could happen here, and it's not so unlikely" with the interconnected West Coast market.

The cost of serving peak loads is very high, according to Foley. A hypothetical utility with a 1,000 aMW peak load would serve loads above 750 aMW only about 300 hours in a typical year (4 percent of the time), but that incremental service costs upwards of 20 cents/KWh for energy and transmission.

Similarly, the value of lowering peak costs is "tremendous," Foley said. "You basically could use conservation as part of a package; look at distributed generation, using a customer stand-by generator as the primary [energy source] and the grid as backup; look at shifting loads, simply changing the way you operate buildings . . . Heating buildings earlier in downtown Seattle helps you save a lot of this high-cost power and serve it at low cost."

Foley acknowledged this scenario won't fully materialize until retail energy markets are open and competitive. Eckman offered the example of irrigation: "It used to be irrigation got almost zero credit [for energy savings] anytime. Now, irrigation savings in August, when farmers are watering potatoes, is really expensive energy and really valuable to save. The problem is the marketplace hasn't passed that price signal out."

Another cautionary note came from an audience member who wondered about "pretty high capital costs" to shave peak loads for relatively few hours, which could prove financially difficult. "The serving utility has to offer the private sector the opportunity to make money," Eckman said. "Those 300 hours are costing somebody a lot of money."

BPA on Peak

BPA's Esvelt, meanwhile, outlined Bonneville's conservation history and the more recent conditions leading to the 2002-2006 power augmentation needs, which he reiterated will include "at least 150 aMW" from conservation.

Bonneville will pay attention to peaks in its augmentation strategy, according to Esvelt. "We've got to have enough generation to supply that peak energy demand; we've got both peak and energy needs." BPA's transmission business is solely focused on peaks: "I can do lots of energy conservation, but it it doesn't save the peak at 6 p.m. on the coldest winter day, they don't care," said Esvelt. "Only when they start getting close to peak do they worry about" new transmission system investments.

Bonneville doesn't know yet how it will pursue augmentation conservation, but Esvelt sounded some urgency to get definitive by this fall, a year before the start of the next rate period in October 2001. "We're still a blank slate," he said. "We need to have dialogue with utility customers and you [energy efficiency businesses]. It's got to work for everybody."

Efficiency firms--many of which were represented at the forum--are especially interested. "NEEC continues to advocate for a strong and direct opportunity for private sector energy efficiency businesses to work directly with BPA in this augmentation process," according to the February NEEC newsletter. "This issue may represent the single greatest market opportunity that the industry has had since the rollback in utility conservation efforts 3 years ago."--Mark Ohrenschall

More Information:

***Return to Contents


BRIEFS

Building Operator Certification
Program Expands in Region, Nation

The Building Operator Certification program is expanding around the region and nationwide.

BOC training courses will be offered in nine new locations in Washington and Oregon in 2000. Those sites are Portland, Eugene and Medford in Oregon, and Spokane, Olympia, Bellingham, Kent and Everett in Washington.

BOC is a professional certification for staff people who operate and maintain commercial and public buildings. It is administered by the Northwest Energy Efficiency Council in Washington and Oregon, and by the Northwest Building Operators Association in Idaho and Montana, with funding support from the Northwest Energy Efficiency Alliance. The Alliance's funding support has ended for Washington, where BOC is now financially self-sufficient, according to NEEC's January newsletter.

More than 200 people received BOC certification in 1999, and NEEC project manager Cynthia Putnam hopes to certify another 200 people in 2000.

For more information on BOC, call (206) 292-4793, extension 2; e-mail to cmputnam@aol.com; or visit the Web sites of NEEC and NWBOA.

In addition to this Northwest expansion, NEEC recently signed a license agreement with the Northeast Energy Efficiency Partnership giving NEEP the rights to operate BOC in eight Northeast states. "NEEC is actively looking for other potential partners for BOC in other areas of the country as well," so "the BOC program can grow to become the definitive market indicator of high quality building operations and maintenance," the NEEC newsletter reported.

Alliance executive director Margie Gardner concurred. "As building managers become more aware of the certification, they will start looking for it on resumes of the people they hire and requiring current employees to take the training," she said. "We hope that this step [with NEEP] is the first of many that will lead to BOC training being offered nationwide."

New Energy Management Certification
Program Begins This Spring

A new regional energy management certification program combining classroom education and an on-the-job project will debut this spring.

This program, developed by the Eugene-based Northwest Energy Education Institute and designed for professionals in energy-related fields, begins with pre-workshop preparation and assignment in March. It then moves to a two-week energy management workshop at Western Oregon State University in Monmouth, April 24 to May 5, followed by a workplace initiative--with NEEI support--to demonstrate capability in the field.

One objective is to provide a return on investment for employers who enroll their employees in the certification program, by giving tailored knowledge to participants as well as partnerships with the energy sector and energy efficiency professionals, according to a NEEI brochure.

More Information:

Northwest Companies Join Climate Wise,
Complete Action Plans in 1999

Eight companies joined the Climate Wise partnership and another eight companies completed Climate Wise action plans in 1999, according to the inaugural newsletter from the Seattle and Northwest region Climate Wise program.

Completed action plans came from The Boeing Co., Total Reclaim, Lafarge Corp. (Seattle plant), King County West Point Treatment Plant, Rudd Co., Hytek Finishes Co., Starbucks Coffee Co. and Canyon Creek Cabinet Co. Other new companies joining the program in 1999 were Naval Submarine Base Bangor, Trace Engineering and Tyee Aircraft.

Also in 1999, two Climate Wise regional peer-exchange forums were held in the Seattle area; a third is planned in 2000. Other goals for this year include "continued marketing and recruitment of Climate Wise partners, a focus on transportation efficiency improvements, and attention to establishing CO2 emission baselines and tracking reductions," according to the newsletter.

Climate Wise helps companies develop cost-effective emission reduction strategies, including energy efficiency, and also offers public recognition for such efforts, the newsletter noted.

More Information:

Climate Change Roundtable
Available in Summary Form

A free summary of a December regional roundtable on climate change and its meaning for the Northwest is available from the Pacific Northwest Pollution Prevention Resource Center.

Topics covered in the PPRC special session include an overview of climate change, prospects for the Northwest's renewable energy industry, solar potential in the cloudy Northwest, Energy Star partnerships and Earth Day 2000, which is focused on clean energy. The summary also includes synopses of presentations about Washington State University Cooperative Extension Energy Program, the Northwest Energy Efficiency Alliance, Climate Wise, Resource Efficiency Program and sustainable buildling projects in Seattle.

For a copy of the summary--in either printed or electronic format--contact Jim DiPeso of PPRC in Seattle: phone, (206) 223-1151; e-mail, jdipeso@pprc.org.

Energy Ideas Clearinghouse
Offers Media Packet

The Energy Ideas Clearinghouse has a media packet available for people interested in spreading the word about this free Northwest energy information service for business, industry and homeowners.

The packet includes EIC articles, notices and advertisements suitable for newsletters, Web sites, staff training and other uses. It is available in print form or from the EIC Web site, which also includes the Energy Solutions Database, Energy Jobs Database, Energy Events Calendar, regional energy news, fact sheets, technical reports, software and more.

For more information, contact EIC project manager Linda Witham: phone, 1-800-872-3568; e-mail, EnergyLine@energy.wsu.edu.

Systematic Approach to Green Building
Topic of April Workshop in Portland

A systematic approach to planning and constructing green building projects will be covered in a one-day April workshop in Portland.

Designed for architects, builders and contractors interested in green building, the April 14 workshop will be led by consultant Robert Pojasek, whose national practice focuses on planning and implementing programs for energy efficiency, water conservation, cleaner production and pollution prevention, according to a news release from the the city of Portland Bureau of Environmental Services, which is co-sponsoring the event with the Portland Energy Office.

For more information, contact Margaret Nover: phone, (503) 823-7623; e-mail, margaretn@bes.ci.portland.or.us.


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