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Funding Support from the Northwest Energy Efficiency Alliance

CWEB.056/Aug.31.2000


1) Portland Study Finds Green Building Pays Big Over Time
2) Avista Utilities Seeks 300 MW, Including Efficiency and Renewables
3) Ashland Solar Electric Project Combines Education, Green Power
4) Distributed Energy Seen as Reliability Solution
5) California PUC Picks Efficiency Programs to Address Energy Shortages
6) Energy Benchmarking Tool Coming from Puget Sound Utilities
7) Roundtable Group Talks About Conservation
8) BRIEFS: Portland High School Solar Installation; Washington Firm's Role in 100-KW Solar PV System; Avista BEST Awards; ENERGY STAR Clothes Washer Promotion; Grimiest Soccer Team Contest


GREEN BUILDING

Green Building Pays

Portland Study Finds Green Building Initially Costs Slightly More,
But Brings Substantial Long-Term Benefits

Green building initially costs slightly more than conventional construction but brings substantial long-term benefits--especially in employee productivity--according to a new city of Portland study.

The study concluded that three city buildings could have been constructed to national green building certification standards for additional costs ranging from minus 0.3 percent to 2.2 percent. And green building measures would have saved the city about 15 percent of the total construction costs over each building's anticipated 25-year lifetime. Improved worker productivity would account for most of those savings; energy efficiency, water conservation measures and use of salvaged materials also would notably reduce long-term costs.

"It's another piece of information that you can build a green building at a fairly modest additional cost," said study co-author Allen Lee of XENERGY. "It shows the life-cycle benefits." XENERGY and SERA Architects prepared the June report for the Portland Energy Office, with funding from the Northwest Energy Efficiency Alliance. The market transformation collaborative is looking into potential applications for green building rating systems for commercial structures, according to Alliance project coordinator John Jennings.

"Many people were surprised that the bottom line was either a slight decrease or less than a 2-percent increase in up-front costs," said Rob Bennett of the Portland Energy Office in a news release. "More importantly, it demonstrated that sound economic criteria could be used to minimize first costs and maximize future benefits to the City, building occupants, and the public."

Curt Nichols of the Portland Energy Office acknowledged the city can take a long-term perspective on buildings, knowing it will occupy them for some time. "It's a little tougher for somebody in a speculative market," he said, "unless they knew potential tenants would really step up for a green building. I think what we'll see is that will happen in the future."

XENERGY's Lee noted that the first-cost analysis to go green would apply to any building, public or private, for a "fairly minimal" premium of 1 or 2 percent. He believes it's vital to create a market demand for green building and its benefits. "You actually make a better environment for people working in the building. The productivity improvements can just be tremendous." While some studies have shown double-digit-percent productivity boosts in resource-efficient buildings, the Portland study assumed 1- to 2-percent gains attributable to building commissioning and better indoor air quality and comfort.

Learning About Green Building

XENERGY and SERA undertook the study for Portland's Green Building Initiative, which aims to promote resource-efficient practices through education and technical services.

The firms wanted to learn the "green" level of three relatively new city buildings: the 1900 Building, seven stories and 143,200 square feet, built in 1999; the East Precinct Community Police Station, two stories and 23,000 square feet, built in 1997; and Fire Station 17, two stories and 4,900 square feet, built in 1994.

The study examined each building and analyzed ways the original design could have been changed to qualify the building under the LEED system established by the U.S. Green Building Council. It looked at "the most reasonable changes that could have been implemented to the materials, equipment, construction process, and design without requiring a significantly different building design . . . there are probably ways that each building could have been designed from the very beginning to be green, but with lower first and life cycle costs than our retrospective analysis suggests."

None of the buildings came particularly close to meeting basic LEED certification. The 1900 Building scored 20 of 32 needed points, while the fire station chalked up 17 points and the police station 12 points. "Generally, the LEED categories in which the biggest percentage gaps existed between the rating and points possible were Water Efficiency, Energy and Atmosphere, and Materials and Resources."

BuildingPercentage Increase in First Cost for Green Building
Lowest First Cost ApproachLowest Life Cycle Cost Approach
1900 Building0.3%1%
East Precinct1.3%2.2%
Fire Station 17-0.3%0%

Source: "Green City Buildings: Applying the LEED Rating System"

Nevertheless, the study reported, the buildings "could have been designed to meet the requirements for a relatively small (if any) increase in first cost." Construction costs would actually have dropped 0.3 percent for the fire station using a lowest first-cost approach, and gone up 0.3 percent for the 1900 Building and 1.3 percent for the police precinct. A lowest life-cycle cost approach would have been a wash for the fire station, while green increases would have been 1 percent for the 1900 Building and 2.2 percent for the police precinct.

Building Change in Life Cycle Cost(Life Cycle Savings)/(Construction Cost)
1900 Building-$3,047,00016%
East Precinct-$516,00014%
Fire Station 17-$101,90013%

Source: "Green City Buildings: Applying the LEED Rating System"

Meanwhile, the study found that for all three buildings "significant direct economic benefits would have accrued to the city over each building's lifetime if they had been built to meet LEED. The savings ranged from 13% [for the fire station] to 16% [for the 1900 Building]." Improved worker productivity--with "very conservative estimates" of 1 to 2 percent--would account for the lion's share of these life-cycle benefits. Removing the productivity variable fromt the equation would still result in a net benefit over 25 years in reduced utility, maintenance and other "hard" costs.

Productivity increases can be difficult to measure, Nichols noted, especially in non-piecework environments. It's also hard to credit green buildings specifically if better computer systems or work stations also are factors. Still, given that labor costs dwarf energy bills in most buildings, "With minimal improvements in people's productivity, you really see huge savings."

Beyond productivity the study listed three "primary opportunities to reduce life cycle costs" through green building. First is energy efficiency. "That's where you get probably the biggest economic payback and also the largest environmental benefit," said Lee. Next comes water conservation measures--such as native vegetation plantings that eliminate irrigation needs--which can be put in place at little or no extra cost. Using salvaged materials can also cut initial and long-term costs.

The Portland study didn't include additional building design fees to meet LEED standards, although Lee said SERA has since estimated these would add roughly 0.5 percent to total construction costs. XENERGY and SERA also used city-oriented economic assumptions that would differ for a private developer, and in the case of discount rates, for example, would lower the present value of benefits associated with green building. But Lee indicated these factors wouldn't materially change the study's basic conclusions.

In addition to its findings on green building costs and benefits, the study recommended Portland "develop and implement a green building rating system starting with LEED, and modify it, as needed, to take into account conditions unique to this region and environment." Nichols said the city is considering establishing LEED standards for new municipal buildings, and also is moving ahead with its Green Building Initiative. "The GBI secured full funding from City Council in June 2000," according to its Web site. "With funding secured, the GBI is hiring and training staff, creating technical and promotion resources, and developing an innovation fund. The program will be unveiled in Fall 2000."

The study also recommended a "detailed study of potential productivity benefits from green buildings."--Mark Ohrenschall

More Information:

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MARKETPLACE

Efficiency, Renewables Welcome

Avista Utilities Seeks 300 MW of New Resources,
Including Energy Efficiency and Renewable Energy

Avista Utilities is welcoming energy efficiency and renewable energy proposals as it seeks 300 megawatts of new resources.

The Spokane-based investor-owned utility issued a request for proposals in August outlining its needs for additional energy supply, beginning in 2004 and perhaps earlier. Avista explicitly included efficiency Avista Logoand renewables in the solicitation, although the IOU did not set aside specific amounts within those categories. "We'll look for the best 300 megawatts we can," Avista's Jon Powell told Con.WEB. "We have to find a way of meeting that resource need." He noted efficiency proposals will essentially be judged against one another, separate from supply-side offerings. "We're confident we'll pick the right mix of resources across the two."

Avista has a short timetable for this RFP: proposals are due Sept. 18, and the utility plans to make final selections by Nov. 3.

"I'm pleased to see the RFP from Avista and hope that it receives an aggressive response from the energy efficiency business community," said Stan Price, executive director of the Northwest Energy Efficiency Council. Price believes Avista's solicitation helps illustrate that "conservation resources are far more valuable than they have ever been in this region. I think the cost and reliability problems we have experienced this summer [have] sent a wake-up call. Energy efficiency can be the best possible 'shock absorber' for the Northwest against a volatile commodity market. I suspect that Avista's RFP is the first of a number of other utility initiatives that will beef up their pursuit of conservation resources."

Avista Resource Needs

The utility's most recent integrated resource plan "identified a block of 300 megawatts we need in 2004 and beyond," according to Powell. Avista's sale of its 15-percent share of the 1,340-MW Centralia coal-fired plant accounts for part of this resource gap, he said, as do various power-supply contract expirations.

The IOU--which serves about 310,000 electric customers in eastern Washington and northern Idaho--seeks "both capacity and corresponding energy" in its RFP. "Resource availability in the year 2004 would fit Avista's requirements best," the solicitation notes. "However, Avista does have significant resource needs in advance of this time frame . . . The [RFP's] goal . . . will be to identify low cost and environmentally sound resource options that best satisfy Avista's resource needs." It pledges to "evaluate all proposals in the context of meeting least-cost objectives, which may take into account many factors, including but not limited to cost, risk, operating flexibility, diversity of supply, and any other relevant factors."

Energy Efficiency Proposals

Avista plans to go beyond its current demand-side offerings funded by a special charge on retail customers. "As the Company prepares to enter a period of potential energy deficiency, Avista is assessing the addition of energy efficiency activity, incremental to the current acquisition goal of 3 aMW per year," the RFP states.

The utility left its efficiency solicitation intentionally broad. "To a very large degree specificity is . . . the enemy of innovation," said Powell. "We're really looking for innovative bids."

Avista does, however, provide some guidelines. Proposals must come from an Avista retail electric customer or a contractor planning to work at a customer's site. Energy-saving measures must be installed in three years or less, and efficiencies gained must last at least five years.

Fuel-conversion projects, from electricity to natural gas, are eligible, although, "Bids may not include the substitution of alternative supplies of electricity or provide savings through the curtailment or cessation of end-uses. Electric energy savings must not result in significant reduction to the quality of end-use processes or products.

"Avista will view some measures more favorably than others in the selection process," the RFP continues. "Unfavorable reviews would result from questionable assurance of savings, lack of savings persistence, degradation of savings, or concentration of measures at a single or small number of host facilities."

Avista also sets a minimum annual savings of 0.25 aMW. Powell indicated bidders would likely find it easier to meet that threshold at a commercial or industrial facility, although large-scale residential programs would qualify. "There's a lot of off-the-shelf approaches to residential capacity, residential end-use control, that someone could dust off and put out there with a fair amount of credibility."

Although Powell declined to speculate on how much cost-effective efficiency Avista might ultimately select through the RFP, he thinks some bidders will offer capacity-related projects, such as proposals to save energy at particular times "corresponding to our highest-value" energy needs.

The RFP lists an avoided cost schedule based on Avista's expenses to build and operate a large combined-cycle natural gas-fired combustion turbine. It starts at 6 cents per kilowatt-hour in 2001, drops to 3.78 cents/KWh in 2002, then eventually climbs to 5.81 cents/KWh in 2020. Powell emphasized the avoided costs are illustrative, not intended to set price benchmarks for bids. "It gives [proposers] the information they need to come up with a coherent bid," he said. The RFP results should offer a better indication of avoided costs, according to the solicitation.

Efficiency proposals will be evaluated on price and non-price criteria, according to the RFP. "The pricing evaluation will consider measure persistence, timing and flexibility of capacity delivery, degradation of savings, program free-ridership and market transformation. Evaluation of non-price factors will include, but will not be limited to, the economic value to participating customers and the compatability of the program with Avista's overall energy efficiency portfolio."

Renewables, Supply-Side Proposals

Avista also welcomes renewable energy in its RFP, soliciting "competitive proven technology based proposals." The utility is open to power delivery from renewable resources, as well as potential ownership. Renewable bids will receive a 10-percent price credit for their environmental attributes.

The IOU also explicitly seeks proposals for various configurations of gas-fired combustion turbines.

Supply-side bids will be evaluated on power, financial/price and social/environmental characteristics, according to the RFP. Avista places "additional value" on supply-side attributes of firm delivery, price caps, curtailment capability and the ability to change deliveries to follow variable load obligations.--Mark Ohrenschall

More Information:

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RENEWABLES

Ashland Solar Pioneer Program

New Southern Oregon Solar Electric Project
Educates People, Generates Green Power

A new solar energy project in sunny southern Oregon promises to spread the message about converting sunlight into electricity--and to create green power as well.

Thirty kilowatts of solar photovoltaic capacity are operating on four sites in Ashland, in what is thought to be the Northwest's largest grid-connected solar
Photo
An Ashland solar installation
Photo courtesy of Dick Wanderscheid, city of Ashland
electric project. Officially dedicated July 28, the Ashland Solar Pioneer Program involves a host of partners, including hundreds of local residents and businesses voluntarily paying higher electric bills to support the solar venture. The 30-KW installations cost about $290,000, or nearly $10 a watt, according to Ashland project manager Dick Wanderscheid.

"This project is a model for other cities because it demonstrates, it educates and it allows the community to participate in clean, renewable energy," said Rachel Shimshak of Renewable Northwest Project. Shimshak also serves on the board of the Bonneville Environmental Foundation, one of the project participants. Others include RNP, the city of Ashland, Bonneville Power Administration, Avista Corp., the Oregon Office of Energy, Applied Power, consultants Tom Starrs and Doug Boleyn, the Oregon Shakespeare Festival and Southern Oregon University.

"The idea was to start getting this technology up so people would see it and learn about it," said Wanderscheid--and that's already happening. "A lot more people know about solar electricity than they did when we started this thing," a trend likely to continue given the high-visibility solar locations at the Shakespeare Festival and the Ashland Civic Center.

Convergence of Interests

Ashland's solar initiative reflects a convergence of many interests. Angus Duncan of Bonneville Environmental Foundation described the venture as "not just a community, but a regional project."

The Rogue River Valley city has a long history of aggressive energy conservation through its municipal electric utility, along with solar-access and net-metering rules. Ashland wanted to explore solar electric; a 1998 survey found that 68 percent of residents thought Ashland should develop solar power locally, Wanderscheid wrote last year in the Ashland Daily Tidings.

City officials talked with Duncan, who was then with Columbia/Pacific Institute for Energy and the Environment. He subsequently joined Bonneville Environmental Foundation as executive director, and passed on the idea for the solar project to Renewable Northwest Project, which hired consultant Starrs. "Our contribution was technical expertise and project shepherding," said Shimshak.

In July 1999, BEF announced it would provide Ashland up to $62,500 (on a 1:2 matching basis) for solar PV installations, as the foundation's first renewable energy grant. The Shakespeare Festival, Southern Oregon and the Ashland post office subsequently agreed to host systems, although the postal site was later omitted after its roof was deemed structurally insufficient to handle the added weight.

"We're getting involved in Ashland's solar project because we think we need to set an example," Shakespeare Festival executive director Paul Nicholson said in a recent Northwest Power Planning Council newsletter. "We want our solar project to be very visible, with information provided to help stimulate discussion. It may pay for itself in the long term, but we're not doing it for financial gain. We see it as an investment in the community."

In addition to the BEF grant and about $35,000 from the city, the Shakespeare Festival and Southern Oregon University contributed $15,000 apiece for their 5-KW systems. Each will receive 25 cents per kilowatt-hour for the power their systems generate, until their investments are fully recouped--an estimated eight to 10 years hence, according to Wanderscheid.

BPA, he said, will pay up to $100,000 for 20 years' output from 15 KW of the city's 20-KW PV installations. This solar electricity will be added to Bonneville's environmentally preferred power portfolio. Avista Corp.--whose Avista Utilities supplies natural gas in the area--will pay close to $100,000, receiving a like amount in a state tax credit.

And as of mid-August 255 Ashland citizens and businesses had pledged to pay an extra $4 per month over two years to help fund the solar project, which will generate nearly $26,000, according to Wanderscheid.

BEF's Duncan acknowledged
Photo
Solar in Ashland
Photo courtesy of Dick Wanderscheid, city of Ashland
solar electric is not cost-effective, at unsubsidized costs typically exceeding 25 cents per kilowatt-hour. But he noted PV does make economic sense beyond utility distribution lines, and "where people are willing to pay for them, in the same sense that people pay $150 for a pair of Air Jordan's where $25 tennis shoes would keep their feet out of the puddles. The argument in Ashland," according to Duncan, "is that folks are willing to pay for the solar energy if they value the environmental outcomes and the leadership position for their community . . . then by definition it's cost-effective in Ashland. I hope we start thinking about those values . . . not just what's the market price of the electronics."

"Obviously we believe and hope solar power will become more cost-effective," Ashland Mayor Cathy Shaw told the Daily Tidings. "Part of that happening is more people investing in solar systems to bring the price down."

Four PV Systems

The PV systems are situated atop four local buildings: the festival's administration building, the university's library, the police station (15 KW) and the nearby City Council chambers (5 KW). Each separately metered system includes ASE modules and Trace inverters, installed by Applied Power.

Based on solar resource data from nearby Medford, Duncan estimates that from spring through fall Ashland's systems should provide energy output similar to Boise, ID, and Burns, OR. Ashland's solar production, however, is expected to be substantially less than those locales in winter. At a projected capacity factor of around 20 percent, the 30-KW project could generate 52,000-plus kilowatt-hours annually--still considerably less than 1 percent of Ashland's total electric load.

"Our program is aimed at educating Ashland's citizens and visitors about how this technology works and that is why a strong educational component and display will be developed at each site," Wanderscheid wrote in the Daily Tidings.

An interactive kiosk in the city council chambers vestibule features real-time and cumulative solar energy output, a PV video, a kids' page and more, according to Wanderscheid. Other "not as fancy" kiosks will be established at the festival and the university library. The educational opportunities, meanwhile, extend to technicians: Shimshak reported that electricians who installed the PV systems liked the work and want to do more.

They may get the chance.

Duncan expects at least one more large-scale solar electric installation in Ashland, at a remodeled federal fish and wildlife forensics lab. And a planned second phase of the Ashland project will promote PV systems atop local roofs, although Wanderscheid said the details are undetermined. "As much as I love Bonneville and Angus and environmentally preferred power, there is some value to buying green electrons from our customers," he said at an April energy services roundtable in Newport, OR. "That money stays in the community."

Beyond Ashland, BEF has already awarded funding to Orcas Power & Light in Washington's San Juan Islands for another solar electric installation project. Other locales may follow. "We'll probably be looking for some other opportunities," said Duncan, "particularly out on the east side [of the Cascades]. There's less load but a lot more sun."--Mark Ohrenschall

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DISTRIBUTED ENERGY

Electric Revolution Continues

Distributed Energy Resources Seen as Solution for
Electric System Reliability Problems

Distributed energy resources can help bolster electric system reliability, according to numerous speakers at the Electric Revolution II conference in Portland.

This theme was particularly timely, as the early August conference took place in the midst of severe price volatility and supply constraints in Western electric markets. These market conditions have added some urgency to the development of distributed energy in its various supply- and demand-side forms. "The time is now; it's not in front of us," concluded Bonneville Power Administration deputy administrator Terry Esvelt at the conference's end.

Still, while distributed resources offer much promise, they also face policy, technical and even social challenges in becoming standard features of the energy future, conference speakers told the gathering.

Opportune Time

BPA administrator Judi Johansen opened the conference--a sequel Electric Revolution Conference Logoto a previous Electric Revolution conference in March 1999--and said it came at "a pretty opportune time." Numerous power curtailments in California and a "surprising energy shortage" in the Northwest prompted by plant outages, low runoff and high temperatures have underscored the importance of predictable electricity, Johansen said. "Reliability is an issue, a real issue, that is at the top of the agenda for a lot of people on the West Coast and across this country," she said, noting it has health/safety as well as economic dimensions.

Johansen and several other speakers said distributed energy--broadly defined as smaller-scale resources applied close to loads--can make a difference. "They really can provide a big boost in enhancing the reliability of the grid," said U.S. Department of Energy policy advisor Rich Glick.

Tom Karier of the Northwest Power Planning Council cited demand reductions and distributed generation as two potential solutions for reliability. Building large new generating plants "is probably overkill," he said, akin to "going to shovel your sidewalk using a backhoe." Still, Karier acknowledged "many important questions need to be answered." Among them: How much demand reduction is available, at needed times? How much distributed generation is realistic at current prices? How can we avoid creating air quality and other environmental problems with low-efficiency, polluting distributed resources?

Meanwhile, Frank Goodman of the Electric Power Research Institute outlined "formidable system interconnection issues" for distributed generation--both in electrical integration and communications/control infrastructure. Goodman's accompanying handout advocated an accelerated effort to develop national standards for interconnections, along with smart interconnection products and a testing and certification program. "Proper integration of distributed resources is important," he told the conference. "We can have a win-win situation" for utilities, distributed energy installers and customers. "Teamwork will be required to make this happen."

BPA's Vickie VanZandt described a "really hard" transition from the centralized energy system to the envisioned "Energy Web." Distributed energy resources are needed, she said, and so is increased attention to growing transmission constraints. She cited a Northwest Power Pool forecast that winter peak loads will increase 12 percent from 1998 to 2008, but transmission circuit miles will expand only 2 percent, and most of that will be low-voltage. "You can't invest in generation without making investments in transmission," she said. "We've used up most of the margin in the grid."

EPRI's Karl Stahlkopf also identified this problem, and said that economic incentives are lacking for transmission expansion. At the same time, high-tech industrial companies are demanding higher levels of electric service--from the 0.999-0.9999 percent reliability of the grid, to 0.999999 or 0.9999999 percent. "A combination of bulk power and distributed generation can provide the type of reliability we need in an increasingly digital-based society," he said.

Distributed Energy Forms, Attributes

Distributed energy comes in many forms. Fuel cells may be the most popularly recognized, but conference speakers described many others in widely varying stages of development and availability: microturbines, renewable energy resources such as wind, solar, geothermal, small hydro and biomass, superconductivity, mid-size cogeneration systems with thermal heat recovery, electrical energy storage through an electrochemical device, existing standby power plants, even propane. Demand-side mentions included load curtailments, advanced metering technologies and load management, and conservation more generally.

Karl Rabago of Rocky Mountain Institute sang the praises of distributed energy from this broad perspective. "The distributed energy resources revolution will not be televised. It's not a single flash event," but rather a "wide range" of activities "motivated by a desire for increased profitability and greater service," according to Rabago.

Distributed energy offers "huge practical and profitable potential," he added. "Our analysis at RMI reveals dozens of distinct accounting, planning, operational benefits." For example, conversion inefficiencies mean that a utility buys much more energy than it really needs. Applying distributed energy can gain compounded fuel savings "way upstream . . . That's an equation that suggests profitability for the distribution company." Renewable resources offer environmental solutions, while "advanced thinking in load management, the efficiency inherent in the information technology revolution, is poised to bear a second round of fruit . . .

"The 'soft path' offers a very real alternative to the central station model," Rabago concluded. "The challenge is how to integrate as many of these tools as possible to provide comprehensive solutions to demand for reliable electric services that are truly reliable in the broadest sense of the term."

Distributed energy represents a "back to the future phenomenon," according to Alan Richardson, executive director of the American Public Power Association, "as we come full circle from the earliest days of our industry. Early generating stations were small, close to the load, and intended to serve on-site or nearby customers. In many cases, waste heat was used for other purposes. They provided direct, not alternating, current." Richardson believes sufficient venture capital (which is available), a receptive markets (ditto), and structural/regulatory changes are needed "to complete our journey back to the future." He thinks reliability, local community choice and control, and reduced emissions are the "most compelling" attributes of distributed energy.

But Richardson also raised concerns about "practical problems"--including a likely need for continuing grid backup and worker safety issues with interconnections--and the prospect that fixed- and low-income residential customers won't be able to afford their own distributed resources, and will be tied to a potentially more costly electric grid with fewer and fewer customers.

Richardson concluded that distributed resources in a restructured electric industry present a "tremendously exciting opportunity for consumers and for public power . . . I think it is clear at this point that technological advances, missteps in state industry restructuring initiatives, capacity shortages, price spikes, reliability concerns, and a host of other issues are propelling this issue forward."

Energy Efficiency

The demand side of distributed energy had numerous advocates among conference speakers.

As the energy system moves from central station power to local generation, said consultant Steve Schiller, "We need to have the infrastructure to support that. Energy efficiency is one of the mechanisms we can use." There's plenty of cost-effective energy savings available--a point reiterated by Don Aitken of the Union of Concerned Scientists. "We're wasting it in frivolous ways," said Aitken, such as air-conditioned hotel rooms all day; in Europe, room keys put into the lock activate the cooling system. Despite improvements in American energy efficiency in the past 20 to 30 years, this country still uses twice as much energy to make a dollar as its global competitors, according to Aitken. "There's a huge amount of fat we can get out of our system."

Schiller noted the increasing importance of peak-demand reductions. John Hughes of the Electricity Consumers Resource Council made a similar point, saying more than 25 percent of total power costs for large industrials come in 50 peak-hours each year. "That's why it's essential to get the demand side into the market," said Hughes. "Traditional conservation and energy efficiency have a role in improving reliability at this time."

Utility, Government Perspectives

Some utilities have already embarked on distributed generation, including the Okanogan County Electric Cooperative in north-central Washington. "We've decided to become a complete energy store for our members, and that includes distributed resources," said co-op conservation and marketing manager Ellen Lamiman. "I believe the future imperative for clean, reliable energy requires local action now from utilities."

Okanogan has a solar electric system on its headquarters, and is installing solar-powered livestock watering to help move cattle away from waterways. It's a charter member of the Western S.U.N. Cooperative. A year ago the co-op began distributing propane to members, and even encourages propane for hot-water heating: "It goes a long way to relieving the 8 a.m. winter-peaking electric problem," Lamiman said. Okanogan also is "interested and ready for fuel cells to offer to our members."

Distributed generation resonates with Grays Harbor PUD general manager Rick Lovely, who said, from the audience, he is "distressed with the big push for centralized gas plants, locking into another fixed cost, gas, another centralized solution. I don't consider gas to be this big environmental panacea," and he fears it could lead to stranded costs. "I think it's a lot better for us to solve these problems at the local level, and not be stuck with ancillary transmission costs . . . associated with generation," as well as line losses.

Government and regulators also have roles in distributed generation.

Michal Moore of the California Energy Commission noted that prior to his state's restructuring legislation, "Renewables were heavily subsidized and protected, not open to friendly or intelligent competition." The Golden State set out to "stabilize and create a more competitive renewables market. This is the only program that has achieved its goals. We've arrived at a place where we have a measurable change in competition." Virtually all the customers who have switched from utility service to other energy providers are buying green power, he noted.

With $540 million in public-purposes funds, California has allocated $243 million for production incentives to existing renewables and $162 million in incentives to new renewables, the latter determined through an auction Moore termed a "riotous success." The state also features a customer credit account for renewables purchases, an emerging resources account to buy down capital costs for small systems, and a consumer education fund.

"I think you can look to California for leadership . . . [on] how the free market blends with a regulated market in a way that makes the market stronger and more responsive to consumers," he said.

From Oregon, which will restructure its electric industry beginning in 2001, Roger Hamilton of the Public Utility Commission outlined in a handout several regulatory goals relevant to distributed energy: efficient price signals, an open platform for buying and selling energy services and products, market power policed, mechanisms for public-benefits money, net metering and the elimination of "uneconomic and artificial" utility interconnection charges.

"This is the energy future that will put me and other regulators out of a job," he told the conference, although it won't happen for some time. "It is a dream that I think is pretty exciting, where the customer controls the energy destination," with neighborhood-scale grids and "the system really truly becomes a system."--Mark Ohrenschall

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CALIFORNIA

Efficient Solutions

California Public Utilities Commission Picks
Energy Efficiency Programs to Address Energy Shortages

The California Public Utilities Commission met its Aug. 21 deadline to select the "best, most creative, most effective" plans gleaned from its Summer Initiative directive on energy efficiency programs, designed to address the state's critical power shortages.

The Summer Initiative directed utilities and other parties to offer programs providing measurable demand and energy usage reductions beginning in summer 2000. Following suggestions by the California Energy Commission, programs focusing on energy needs of San Diego and the San Francisco Bay area were given priority on grounds those areas have been affected the most by energy shortages.

Other criteria for selection include focus on activities not otherwise funded; innovations demonstrated by program concepts; program delivery by a mix of entities; service to underserved and residential markets; and delivery of energy or demand savings using proven technologies.

Because fuel-shifting and cogeneration programs have not previously qualified as energy-efficiency projects, they were eliminated from consideration.

The initiative earmarks approximately $73 million in program funds for utilities. This amount will be derived from previously unspent funds, money reallocated from utility shareholder-incentive budgets and rollover funding from pre-1998 demand-side management programs. Since a portion of these carryover funds had been slated for natural gas efficiency programs, the CPUC initiative ruling acknowledges these funds will need to be recouped from other sources.

Proposals submitted under the Summer Initiative requested a total of more than $500 million, and projected demand-reduction impacts of approximately 1,800 MW.

The following Summer Initiative programs were approved:

New statewide programs:

Ongoing statewide programs:

Energy-Efficiency projects at specific sites:

The biggest funding shares will go to the LED replacement ($24 million), residential and small commercial standard offers ($11.8 million), the UC/CSU plan ($8 million), refrigerator recycling ($9.7 million) and pool-pump efficiency projects ($6 million).

Utilities are directed to use allocated funds between Sept. 1, 2000, and Dec. 31, 2001, and to track budgets and spending associated with the initiative separately from other energy-efficiency program expenditures--Lulu Weinzimer of California Energy Markets.

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ENERGY SERVICES

Comparing Energy Consumption

Energy Benchmarking Tool Coming Soon for
Commercial Customers of Puget Sound-Area Utilities

A Web-based program designed to help businesses understand their comparative energy consumption--and perhaps act to reduce it--will soon be launched by three Puget Sound-area utilities.

This benchmarking tool will allow commercial customers of Seattle City Light, Snohomish PUD and Tacoma Power to learn how their buildings use energy compared with similar businesses in the local area. The program, developed in collaboration with the Northwest Public Power Association and SBW Consulting Inc., is scheduled to be available by early fall.

Utility officials consider benchmarking a valuable service targeted at small- and medium-sized businesses, and they believe it will encourage many customers to explore ways to reduce energy bills. "We're planning on using this to market our commercial conservation programs," said Seattle's Laurel Andrews, particularly to medium-sized customers that haven't focused on energy-saving opportunities. "If their building is average [in efficiency] we can make it above average, and if it's below average we can do a lot of things." NWPPA's Jim Brands said the benchmarking tool "opens the door for energy analysis of a facility. The idea is they'll call the utility to find out how to cut things down. It's an entrée."

Andrews credited Tacoma Power with the benchmarking tool idea. The municipal utility serving Washington's third-largest city already offers a Web-based program called UtiliGraph, with energy cost and consumption information for customers, primarily commercial. "What they really want to know is some relative terms about how their buildings are operated in comparison with similar buildings," said Tacoma's Dalene Moore. Snohomish customers were similarly curious, according to the PUD's Lou Loos.

But such a service wasn't readily available, at least not in localized form specific to the western Washington climate zone. Tacoma, Seattle and Snohomish approached NWPPA "to act as the coordinating organization" in putting together a benchmarking program, according to Brands. The public power organization manages the contract with Bellevue, WA-based SBW Consulting, which has access to considerable Bonneville Power Administration data on regional commercial building characteristics. "The utilities felt that the credibility of the site was only going to be as good as the data that was behind it," Brands said.

How It Works

SBW assembled a database "that really comes out of bunch of work we did over 15 or 20 years for Bonneville on prototypes of commercial buildings," said SBW's Mike Baker. The firm ran DOE-2 computer simulations based on information from an end-use metering study, 4,000 commercial buildings audited by BPA in the 1980s, and other sources. Weather data came from the Seattle-Tacoma area.

The localized prototypes developed by SBW reflect average energy-using conditions for various building types.

Comparisons will be offered for eight different building categories: office, retail, school, hospital, warehouse, grocery, restaurant and hotel. "The system is set up to handle, within those eight types of buildings, buildings of any size," said Baker.

Customers visiting the benchmarking tool via their local utility Web site will first input their zip code; this service will be available only within the service territories of Seattle, Tacoma and Snohomish.

From there, customers will be asked for a building name, total floor area, percentage of floor area heated and cooled, natural gas use for space and/or water heating, construction date (before or after 1980), operating hours per day, and annual electricity and natural gas consumption. This process should take customers just a few minutes, unless they need to hunt down bills or other data. "The utilities really wanted to keep it as simple as possible, dealing with what would be the most important determinants of consumption, and just make it as accessible as possible to as broad an audience as possible," said Baker. A wide range of people--property managers, building owners, facilities managers, financial folks--are potential users of the benchmarking service.

Results will show in graphical form the total energy consumption and use per-square-foot relative to the norm, both for electricity and natural gas. "The goal is to give a rough comparison. There are always individual factors in a building you can't account for in this type of analysis," said Seattle's Andrews. "Then they can contact their utility for further information and services."

Tacoma plans to have its commercial field staff inform businesses about the benchmarking tool. "It gives them another item to talk to the customers about," said Moore. Potential energy savings are really unknown, she added. "We're just interested in having it be that additional feature of UtiliGraph." Tacoma will also, on its own, offer a residential benchmarking service.

Snohomish, meanwhile, conducted focus groups and found larger commercial customers were less interested in benchmarking services than smaller businesses, according to Loos. Seattle's Andrews noted that big companies typically have energy management capabilities, while manufacturing firms have such distinctive energy use patterns that benchmarking would have little value.

In addition to the energy consumption information and customer service benefits, benchmarking also expands the scope of utility Web services, according to Brands.

Although this particular benchmarking tool applies to Puget Sound, it could be adapted to other climate zones. Other utilities have expressed interest, Brands said. Once the service is operating in Puget Sound, NWPPA will offer benchmarking to other utilities for a cost-covering subscription fee. Adjustments for climate conditions east of the Cascades are expected to make the tool suitable for a large number of utilities.--Mark Ohrenschall

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PERSPECTIVES

Conservation Discussion

Roundtable Group Talks Over Conservation in
Emerging Decentralized Energy Markets

[Editor's note: A group of about 30 people gathered Aug. 4 at the Electric Revolution II conference in Portland to talk about the question: "How does energy efficiency/conservation fit into the new emerging decentralized energy market?" Following are chronological excerpts from that discussion.]

Fred Gordon of Pacific Energy Associates--and a board member of the Northwest Energy Efficiency Council--led off the discussion by suggesting peak demand can be lowered most quickly by focusing on areas where contractors are already working and efficient equipment is readily available. Efficiency measures can ease transmission and distribution system bottlenecks, and can act like a "shock absorber" for the grid. "Conservation is no slower than anything else [in energy resources], and some things it can do faster," he said.

However, Gordon believes some of the savings that can be gained most quickly (such as retrofits of T-8 lamps, electronic ballasts and compact fluorescents in large buildings) are likely to happen over the next decade regardless of programs, so it's important to popularize additional efficiency opportunitities to reduce peak in a sustained fashion.

A wires charge dedicated to conservation offers "a good way to turbocharge markets," according to Gordon, and also assures quality control for efficiency measures.

The recent surge in wholesale electricity prices will induce more conservation, but only in five or 10 years, he believes. Proper rate signals are vital, he said, although not on the San Diego model. Market-based retail rates skyrocketed in San Diego this summer and elected officials openly encouraged people to commit "civil disobedience" by not paying their full electric bills--not exactly a rational response, Gordon said. A decentralized energy market will foster synergies and sophisticated energy-saving products, but it must be stable to work.

Mat Northway, energy management services manager for the Eugene Water & Electric Board, said his utility sells power to customers at an average retail rate of 4.3 cents per kilowatt-hour--roughly midway between the cost of its Bonneville Power Administration supply and the market price of power. Conservation helps EWEB avoid high market prices for electricity, while allowing it to sell more into the market--at high prices (EWEB recently made $10 million selling power into California). An EWEB accountant recently asked Northway whether the 5 percent of utility revenues now devoted to conservation is all it can do. "Efficiency has become a cost avoidance or a revenue generator," he said.

"Energy prices are high and getting higher. Life is good," joked Bill Nesmith, conservation resources administrator for the Oregon Office of Energy. Many people have worked hard for many years on conservation, without good price signals, he noted. His office works to help people make wise energy choices.

Gordon raised a concern about BPA's separate power and transmission business lines, and the difficulty of pricing conservation high enough--in Conservation Augmentation--to reflect the value of energy savings to the transmission system. "That's an issue we as vendors are really worried about," he said.

BPA's Terry Esvelt agreed this is "a problem." Both the agency's power and transmission business lines have an interest in capacity. Esvelt described four primary decision-makers--generation system, transmission system, distribution utilities and end-use customers--and said conservation's "real value" comes when it meshes those interests.

After Gordon gave a heads up on upcoming federal standards for air conditioning (of "huge" significance nationally) and a new ASHRAE code for state adoption, consultant David Baylon of Ecotope dismissed the notion that all players in the energy market have sufficient information (and options) to take energy-saving actions. Market transformation is "part of the answer," Esvelt responded, because it ensures consumers have only energy-efficient choices. That applies to products, Baylon said. Gordon brought up a Northeast initiative to brand lighting design guidelines. "The next wave of energy efficiency will be making it more tangible," he said.

Moving on to energy codes, Nesmith described them as "very controversial" in Oregon, while Baylon believes codes are "limited to things people can look at," and that Oregon and Washington codes "have gone as far as they can go, because of the prescriptive aspect." Nesmith cited building commissioning as an example of an energy-saving activity that needs to be shown as sensible for the marketplace.

Janis Erickson of Sacramento Municipal Utility District brought up the Energy Star label as a long-term means to get manufacturers and retailers to support energy-efficient products--"people who can make the difference . . . promoting the right stuff."

Aggressive Conservation Utilities

Tacoma Power's Jake Fey cited SMUD and EWEB as "very aggressive" conservation-minded utilities.

Over the last 20 years, Northway said, EWEB has spent $60 million on incentives, including $40 million from BPA. That helps create jobs--Eugene-area weatherization contractors jumped in number from three to 105 in the 1980s--and circulate dollars into the community. Local residents support and demand conservation, and utility commissioners pay heed in election campaigns and in office. Erickson called EWEB's 5-percent spending on conservation "terrific" and "a testament." Renewable energy spending, Northway added, is over and above that level; EWEB has committed to increase its renewable energy resource portfolio by an amount equal to or greater than 1 percent of its entire load every year on average.

And EWEB doesn't just blindly spend money. In the early years of big BPA programs, he said, EWEB's costs barely rose above 1 cent per kilowatt-hour for saved energy; more recently, they've been in the low 2 cents/KWh range, below new generating resource costs and the utility's retail rate.

EWEB began pursuing conservation in earnest in the 1970s, after rejecting nuclear power and its ultimately false promise of energy too cheap to meter. This long history means many Eugenians have "personally experienced the benefits" of conservation, and know it's not "voodoo," said Northway.

One person in the group described conservation as a better way to use energy, but not a resource, and wondered where the region would really get the power it needs. "No one's saying [conservation] is going to power the grid; it's a management tool," responded Gordon. Erickson agreed, and added that power supplies are sufficient if used wisely.

Moment of Truth

Utility decision-makers need to hear the message that conservation works, believes Richard Jackson-Gistelli of Emerald PUD. "This is the moment to give that message," said Gordon, because in a few short years thousands of megawatts worth of gas-fired combustion turbines could be in place in the Northwest. And with such "gravity of money," conservation's window of opportunity could be shut--even within 18 months. "We are in a moment of truth," he said.

Chris Robertson described a "very pregnant opportunity right now" with the technological advances in high-quality metering, the Internet and fiber optics. He shared a thought from consultant Tom Foley that California's summer peak-demand problems could be solved if building temperatures were raised four degrees.

Snohomish PUD's Cal Shirley, calling himself one of the "graybeards of conservation," said 20 percent of people consider saving energy "God's work," while another 20 percent hate it and don't see the value. One PUD colleague commented that the utility commissioners "decided to waste money again" with conservation programs. "This 60 percent moves wherever the winds are prevailing at the time," said Shirley, and if this mass of ratepayers supports conservation, so will decision-makers.

That's the case at Emerald PUD, reported board member Doug Still. In Emerald's service territory 80 percent of the people are environmentally oriented, and they see conservation lessening the need for new power generation. "Our customers . . . understand the value of conservation," he said.--Mark Ohrenschall

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BRIEFS

Solar PV Panels Installed at Portland High School
Through PGE Solar for Schools Program

Solar photovoltaic panels were installed at Portland's Franklin High School in early August as part of Portland General Electric's new Solar for Schools program.

The program is described by the utility as "an innovative educational project to help students learn about renewable power and the potential of solar power." Under the Solar for Schools program, according to a PGE news release, the utility pays for the solar equipment and provides technical support, while participating high schools take responsibility for system installation and hookup, monitoring, and operations and maintenance.

To pay for the solar units, PGE collects monthly contributions from residential and business customers interested in supporting solar energy.

More Information:

Washington Firm to Help Develop
100-KW Solar PV System

Washington-based Applied Power has been chosen to help develop one of the largest solar photovoltaic systems in the country.

Applied Power will design, build and install a 100-kilowatt-capacity solar PV system at the Suitland Federal Center in Suitland, MD, according to an Applied Power news release. Pepco Energy Services, a subsidiary of Potomac Electric Power, will serve as general contractor and project manager. Both were chosen for the project by the federal General Services Administration.

The system, expected to be operational later this year, "will showcase how quickly and easily amorphous silicon technology can meet the energy needs of many different types of commercial and industrial facilities."

Avista Seeks Nominees by Sept. 29 for
BEST Environmental Awards

Applications are due Sept. 29 for Avista Utilities' Building an Environmentally Sustainable Tomorrow (BEST) Awards.

The Spokane-based investor-owned utility wants to recognize environmentally conscious businesses and organizations in the Spokane region, in the areas of energy efficiency, water conservation, pollution prevention/waste reduction and efficient transportation alternatives, as well as overall performance in those areas. Avista is offering the awards in partnership with a number of other local entities.

More Information:

Alliance, Fred Meyer to Promote
Resource-Efficient Clothes Washers

ENERGY STAR-qualified clothes washers will be promoted at Fred Meyer stores around the Northwest from Sept. 10 to Oct. 7.

This promotion--a partnership between the Northwest Energy Efficiency Alliance's ENERGY STAR Resource-Efficient Clothes Washers program and Fred Meyer, along with manufacturers--will display qualifying machines at 110 Fred Meyer stores in Washington, Oregon and Idaho. The washers will be awarded to participating consumers in mid-October.

More Information:

Grimiest Soccer Team Contest
Begins in September

The 2000 ENERGY STAR Grimiest Soccer Team Contest is coming to the Northwest beginning in September.

This event includes a photo contest for grimy youth soccer teams (photos are due Nov. 3) and eight youth soccer clinics around the region, featuring Tiffany Milbrett of the U.S. women's soccer team along with displays of ENERGY STAR appliances.

The contest, according to the Northwest Energy Efficiency Alliance, "is expected to build on the momentum of last year's event to generate a great deal of consumer recognition, placing the ENERGY STAR symbol in the minds of future purchasers."

More Information:

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