CWEB.057/Sept.29.2000
While gyrating energy markets have understandably captured widespread attention in recent months, another trend has quietly surfaced: wind energy is poised to become a significant contributor to the Northwest electric system.
And that's in real megawatts, not abstract potential or feel-good green energy tokenism.
To wit: SeaWest WindPower has announced a goal of developing 300 MW to 500 MW of capacity around the Northwest, starting with a 24.6-MW venture in north-central Oregon. FPL Energy has applied to build the Stateline Wind Project, which could add another 250 MW to 300 MW of wind capacity around the border of northeastern Oregon and southeastern Washington. The Wyoming Wind Energy Project, owned by PacifiCorp (the majority owner) and Eugene Water & Electric Board, has expanded considerably since opening in 1999 with 41.4-MW capacity. And in Montana, the mother lode of Northwest wind prospects, an inaugural 22-MW project is planned for construction next year on the Blackfeet Reservation (see related story).
On the buying side, Seattle City Light is seeking up to 100 average megawatts of renewables, while Avista Utilities is pursuing 300 aMW of new power supplies, with renewables welcome to apply. Bonneville Power Administration has sold green power (predominantly wind) to 11 utilities, according to a BPA July publication. Meanwhile, more than two million Northwest electric customers can buy retail green power from their utilities, according to a new Renewable Northwest Project report
(see related story).
With all these developments, it appears that installed Northwest wind-energy capacity should number in the many hundreds of megawatts, and perhaps exceed 1,000 MW, in coming years. That's a huge leap, although wind would still furnish only a small single-digit percentage of the total regional electric system capacity.
This anticipated regional wind expansion owes to many contributing factors: green power demand, wind-energy cost reductions and technology advances, rising electricity and natural gas prices, federal tax credits, assorted policy initiatives (such as public-purposes funding in Montana and Oregon, BPA's upcoming wholesale rate discount for conservation and renewables, and other state and federal programs), persistent renewables advocacy, lessons learned (especially in wind-project siting) and favorable meteorology.
Journalists love labels, and I yearn to call this the Golden Age of Northwest wind energy. But Jeff King of the Northwest Power Planning Council cautions that may be premature, given the thousands of megawatts of natural gas-fired power generation also in the works.
Nonetheless, this is truly an exciting time, with great opportunities, for wind energy in the Northwest.
Time Traveling
I remember a similar sentiment in the early 1990s, before electric industry restructuring came along and made higher-priced renewables a very tough sell.
"If you heard those numbers [of planned wind capacity] three years ago, you would've thought we were nuts," said renewable energy consultant Robert Kahn. "Now those numbers don't sound so outrageous, given the changes."
PacifiCorp's Barrett Stambler, who worked for the now-defunct Kenetech Windpower, agrees. People can now mention hundreds of megawatts of new wind power "without giggling under their breath. It is a far cry from when we started talking to people in the Northwest in the early 1990s."
Kahn harkened back to BPA's wind resource assessment beginning in the late 1970s. "A regional investment was made in establishing the quality of the wind resource in the region, and that has paid off in spades," he said, by giving wind developers access to solid and publicly available data.
He also credited Kenetech as a Northwest wind-energy pioneer, not in terms of building megawatts, but in "establishing very sound relationships with utilities . . . They almost single-handedly convinced mid-management at most utilities in the region--both public and private, especially private [investor-owned utilities]--that wind was credible."
These foundational steps led to the inaugural wind venture serving the region (Wyoming), and the first located in the Northwest (Vansycle Ridge in northeastern Oregon). These "showpieces," as Kahn called them, made a big impact. "It went from . . . a theoretical confirmation wind was credible to a tangible confirmation wind was credible. And then the green market started to happen."
Rachel Shimshak of Renewable Northwest Project also sees a convergence of circumstances, citing advocacy work, on-the-ground projects, a looming power shortage, rising market prices and BPA investments and green power marketing. "All of those things are just starting to come together," she said. "People are responding to their utilities' offerings these days. The personal demand is influencing the policies, which is in turn influencing the projects."
Green Power Demand
Customer demand is an intriguing aspect of the wind power surge. RNP's new report touts the fact retail green power is now available to more than two million Northwest residential electric customers--but also acknowledges that fewer than 2 percent of customers in the 18 surveyed utilities have actually bought green.
Is the green power market over-hyped, or just in its infancy? PacifiCorp's Stambler sees "surprisingly strong response from customers," since green power is a relatively new offering facing daunting marketing challenges. His utility's Blue Sky program has proven popular with public-sector entities such as BPA, Multnomah County and the city of Portland, reports Bill Edmonds, also of PacifiCorp. But it hasn't fared quite as well with residential, commercial and industrial customers--yet. "I think it's going to be a growing market, certainly, with environmental concerns and [energy] supply concerns in the news," said Edmonds.
SeaWest's Dave Roberts concurs. "We think the market up there is becoming more and more amenable or acceptable to wind power," he told Con.WEB in June. "Utilities are receiving pressure from customers to maintain a green status," he said, and wind "is really the least-cost alternative for renewable energy."
Wind developers in the Northwest do "smell a market," said the Power Council's King. "There's probably more being proposed than the markets will be able to sop up," he added.
I wonder about that, too, despite the numerous retail green power programs and the growing popularity of BPA's environmentally preferred wholesale power (in conjunction with the Bonneville Environmental Foundation). BPA aims to sell 1,000 aMW by 2010--a very ambitious goal that, if achieved, would account for 10 percent of total BPA sales. Perhaps wind developers also are eyeing out-of-region markets, policy boosts from the likes of renewables portfolio standards or climate change mitigation, more RFPs along the lines of Seattle and Avista, or other spurs to green energy.
Favored Wind
Lower costs (fueled by technology advances and operating experiences, according to RNP) are a big reason wind is far and away the favored new large-scale renewable energy source for the regional energy system.
The cost of wind energy can fall below 5 cents per kilowatt-hour, helped considerably by a 1.7 cents/KWh federal production tax credit. I've even heard prices quoted below 4 cents/KWh. This brings wind close to other new power generation sources. And if wholesale electricity and natural gas prices keep rising, fuel-free wind power and its predictable pricing look even better. Public-purposes funding can bring down costs, too.
Economies of scale help as well. "Big orders mean cheaper unit pricing, and it's almost that simple," said Kahn. "We may see, and probably will see, continued cost savings from a technology standpoint. For the near term, it will mostly be driven by the commitment by the market to the technology.
"I'm very optimistic," he added.
Wind energy also provides clean power--notwithstanding legitimate concerns over bird deaths and visual blight. And it diversifies the energy system, which Stambler believes is important. "Nuclear was the answer, then coal was the answer, now gas [is] the answer. The answer is that we need them all. Unfortunately, we only think about the alternatives when we have a price spike. My concern is that you need to seize the opportunity when it's there."
Wind developers have learned valuable siting lessons, avoiding places with lots of birds and local human opposition. Kahn said that explains the popularity of wind farms in the "wheat desert" of northeastern Oregon and southeastern Washington, with its marginal farmland bird habitat. Kahn also sees an emerging recognition of rural economic benefits from wind power; landowners may sacrifice a small fraction of their productive agricultural land, but they reap substantial lease payments. "A guy driving around the farm community with a new pickup is the best advertisement I know for opening up other properties for wind development." And local governments appreciate the tax revenues, he added.
Cautions and Caveats
"We've seen promises of this in the past, and then something has changed," said Stambler. "I've lived through it."
One significant uncertainty involves the federal production tax credit. It expires at the end of 2001--a well-known completion deadline for planned wind farms. Renewables advocates are cautiously optimistic the credit will be extended, but national politics do come into play. Stambler calls the federal tax incentive "crucial to continued, orderly development" of wind energy.
From an electric system perspective, wind faces at least two notable challenges. One is transmission. Since wind facilities are (and will be) generally located in rural areas distant from major load centers, transmission can be expensive. Stambler hopes for a "favorable approach" to renewables on the issue of "pancaked" rates for long-distance transmission. Transmission volume constraints also could be inhibiting, especially in windy Montana.
In addition, the inconsistency of wind complicates its integration into the grid. Hundreds of new megawatts would make it even more complicated. I think experience with operating wind farms should lessen this concern.
King, meanwhile, identifies a couple of worst-case scenarios for wind energy: massive bird deaths and/or high-profile equipment failures, in the extreme towers blowing down or turbine blades spinning off into wheat fields. Sobering thoughts, those, but far-fetched given the ever-expanding knowledge of bird impacts and mitigation strategies, and the advances in wind technology.
Then there are the unavoidable siting issues, from the aforementioned birds to the sight of wind turbines on locally prominent landscapes. Whenever our family drives from Seattle to visit my wife's parents in breezy Ellensburg, WA, I always point out the ridges around Ellensburg as an ideal spot for wind turbines. But I might be less enthusiastic if I lived there and regularly enjoyed the ridge views.
Siting, I think, is the ultimate limitation for large-scale wind power ever reaching its grandiose technical potential (Montana, for example, theoretically could supply 15 percent of U.S. electricity needs, according to RNP).
But a few hundred Northwest megawatts, located in places where they are welcome, is a very welcome addition to our region.--Mark Ohrenschall
The Blackfeet Tribal Business Council and SeaWest WindPower have signed a development agreement for a 22-megawatt-capacity wind power project on the Blackfeet Reservation in northwestern Montana.
This would be Montana's first large-scale wind-energy facility, and also reportedly the first big wind farm on tribal lands in the nation.
Despite its location remote from Northwest loads, Bonneville Power Administration is supportive of the project and is considering a power purchase. Montana Power plans to grant a $1.5 million production credit from its Universal System Benefits Charge fund, in return for a discount on 3 MW of the project's capacity, made available for its distribution customers.
Construction is scheduled to start in May 2001, and commercial operation is projected by fall 2001.
Years of Discussion
Years of discussion yielded the Sept. 6 announcement of the SeaWest/Blackfeet development agreement.
The deal will continue to be complicated, as it involves many entities. However, all parties seem committed to making the project work.
Montana Power's participation is critical, not only because energy from the project will have to be integrated through Glacier Electric Cooperative into the Montana Power grid. "We are optimistic about this very important project, and will do all we can to help make it a success," co-op general manager Bill Chapman said in a news release.
To take advantage of the federal wind energy production tax credit--now worth approximately 1.7 cents per kilowatt-hour--the developers needed a partner subject to federal taxes. "By using a production subsidy, versus a capital grant, or other buy-down, we're able to use the full extent of the production tax credit," said SeaWest project manager Dave Roberts. He declined to estimate the ultimate cost of power from the wind plant, but said it would come in under 5 cents/KWh "and possibly significantly below."
Montana Power selected the SeaWest venture from six proposals submitted in a competitive solicitation for wind-energy funding, according to the utility's Dave Ryan. The $1.5 million production credit would likely be spread equally over three years. Although he cautioned it is not absolutely certain the wind facility will actually be built, if its is, "It will be a very nice project, and I think will kick-start wind production in Montana in a big way." It could serve as a model for other tribes, he said, as many reservations have substantial wind resources.
A development agreement with BPA is still under negotiation, but BPA project manager Tom Osborne said everybody hopes the project will go forward. "We don't have the numbers yet, and we don't know the economics . . . But this is a project that's been contemplated for a long time, and we'd like to do an agreement with the tribes," Osborne said.
Tribal officials are pleased with the prospect of a wind farm on Blackfeet land, and its potential economic benefits such as employment, land-lease revenues and other gains. "This wind energy project will allow the Blackfeet Tribe to take advantage of one of our most plentiful natural resources on our Reservation," Earl Old Person, tribal business council chairman, said in a news release. "Gaining electricity from the winds here on the Reservation has been talked about for many years--we are gratified that this idea has finally become a reality."
The timeline calls for construction to begin in May 2001, with commercial operation targeted for October of the same year--shortly before the federal production tax credit is scheduled to expire. The construction schedule depends on the timing of spring thaws and mud conditions.
Windy Place
Located in northwestern Montana on the eastern slope of the Rocky Mountains, Blackfeet tribal lands boast winds that average 20 mph year-round. The gusts peak at the same time as the heaviest winter-heating loads. Estimated capacity factor for the wind farm is 37 percent, according to Ryan.
As the developer of the Foote Creek Rim wind projects in Wyoming, SeaWest has experience capturing the winds that descend from the high eastern Rockies. "The topographical features on the Blackfeet Reservation are similar to Foote Creek Rim--on the back side of the Rockies, catching tremendous winds, very cold and winter-peaking. The wind conditions are somewhat similar. We've worked with the turbine manufacturers on what we call an 'Arctic package' for the turbines. They're operational in very extreme conditions."--Pamela Russell and Mark Ohrenschall
More than two million Northwest residential electric customers can buy green power from their utilities, although only a tiny percentage have actually done so, according to a new report from Renewable Northwest Project. The report--which examines retail green power programs at 14 Northwest utilities, along with two utilities apiece in California and Colorado--concludes that marketing is fundamental in promoting green power.
"In 1995 and 1999, RNP gathered surveys of utility customers which demonstrated overwhelming support for the environment and renewables," says the August report prepared by Linda Irvine for RNP. "Yet, as this report shows, customers will not pay a premium for green power unless somebody sells them on the idea. To promote green power, utilities have to sell it, not just offer it, or present it, or encourage it. Utilities must market their product and brand themselves, clearly and incessantly . . . When consumers understand the benefits of choosing renewable power--cleaner air, infinite fuel supply, predictable long term costs that actually go down as demand increases--many more will exercise the powerful choice to support clean, green power."
Other findings in the report note the importance of utility commitment to developing new renewable resources, and the prevalence of selling green power in fixed-price blocks.
RNP also identified six strategies for successful green power programs: stable rates, local investments, new resources, shared vision, incentives, and partnering with community groups. The report highlights specific utility examples of each of those attributes.
Green Power Snapshot
"Powerful Choices: A Survey of Green Power Programs in the Pacific Northwest and Beyond" is intended as a "snapshot," to help "inform and encourage other utilities in the region as they undertake to offer their customers a green power choice."
The 14 Northwest utilities surveyed are diverse in size and geography. They are the city of Ashland (OR); Benton County PUD (WA); Central Electric Cooperative (OR): Clearwater Power (ID); Consumers Power (OR); Douglas Electric Cooperative (OR); Eugene Water & Electric Board (OR); Flathead Electric Cooperative (MT); Midstate Electric Cooperative (OR); Orcas Power and Light (WA); PacifiCorp (multiple states); Portland General Electric (OR); Tacoma Power (WA); and Umatilla Electric Cooperative (OR). Also included in the report are Colorado utilities Public Service Co. and Holy Cross Electric, along with the Los Angeles Department of Water and Power and Sacramento Municipal Utility District in California.
"Both urban and rural utilities are recognizing that customers care about the environmental consequences of their energy choices," said RNP director Rachel Shimshak in a news release.
While the report described each green power program as unique, it nonetheless found a number of patterns and similarities.
For example, 10 of the 18 utilities offer their customers blocks of green power, with the price for a 100 kilowatt-hour block ranging from $1.80 to $5. "The block package . . . is the most widely used, because it provides customers a predictable incremental cost, concretely tied to kWh," according to the report. Five utilities provide "pure contribution programs," in which customers give money to a utility fund to develop new renewables or buy green power. Four of the 18 utilities let customers designate the percentage of green power in their overall electric bill.
Green power participation by residential customers ranges from nearly nil to 4 percent, according to the report. The average for the 18 utilities is about 1.7 percent. "In every case," the report says, "participation is below the rate at which customers have said they will participate in surveys. This may be symptomatic of an immature market." Still, "Many programs with low participation rates are actually selling a significant amount of power." PGE sells more than 530,000 KWh of green power monthly in its relatively new program, on a participation rate of 0.4 percent.
The report found that utilities use a mix of green power sources: some are bought, others are owned, some are local while others are distant. Meanwhile, some utilities pledge to bring new renewables into being, while others rely on existing sources, or a combination of new and existing. "The seven most successful programs in terms of monthly green power sales are sponsored by utilities with a solid commitment to bringing new renewable resources on line," the report notes.
Marketing strategies also varied among the 18 utilities, with such techniques as bill-stuffers, utility newsletter articles, press releases, direct mail, mass-media advertising and news coverage, and partnerships with environmental and public-interest groups. Marketing budgets were similarly disparate. "Overall, whether a utility has spent three thousand dollars or three hundred thousand, there is no substitute for investing time and energy, as well as money, into promoting a green power program through a variety of strategies," according to the report.
Six Successful Strategies
"Powerful Choices" profiles all 18 utility green power programs, and highlights six that illustrate what RNP calls "strategies that we feel contribute to a successful program."
More Information:
 |
| Seattle public schools (shown here is Greenwood Elementary) were extensively retrofitted in a resource conservation project. Photo courtesy of Seattle Public Schools Web site. |
Seattle's public schools look the same outside, but inside they have undergone considerable changes.
An extensive retrofit conservation program in the city's public schools has led to big annual savings in electricity (17.1 million kilowatt-hours), natural gas (174,000 therms) and water and sewer (100 million gallons-plus), reducing the school district's yearly utility bills by about $1.3 million.
The project also has improved the indoor environment of schools, through, for example, better lighting. Meanwhile, Seattle students, teachers and custodial staff gained an education that promises ongoing resource efficiency along with current significant savings.
"We were very happy with the results," said Frank Griffin, mechanical coordinator for Seattle Public Schools. "To date, it's worked out very well for us."
Total project cost came to $7.2 million, he said, of which about half was recouped from utility financial incentives.
Washington's biggest school district had considerable help, as Seattle City Light, Seattle Public Utilities and Puget Sound Energy provided money as well as various services to the schools. Bonneville Power Administration furnished some of the City Light funding. "This approach to capturing conservation opportunities achieved success as a result of the involvement of multiple stakeholders," according to a paper written by representatives of the four entities. "By considering conservation opportunities from multiple utilities, the 'low hanging fruit' can be captured, which can help finance and encourage future conservation efforts."
A project summary by David Van Holde of City Light and Dave Broustis of the school district concluded: "Finally, and perhaps most importantly, continued resource conservation will enable the district to more effectively meet its primary mission of education by reducing costs, and improving the schoolroom teaching environment."
Project Background
Seattle Public Schools owns more than 100 buildings and facilities, including some more than a century old.
 |
| Seattle public schools (shown here is Arnor Heights Elementary) were extensively retrofitted in a resource conservation project. Photo courtesy of Seattle Public Schools Web site. |
Before the conservation initiative, SPS spent nearly $5 million annually for energy and water/sewer. "Our goal . . . was obviously reducing our utility costs," Griffin told Con.WEB. "We were also looking at improving our infrastructure," facing a "fairly large maintenance backlog" for lighting, plumbing and HVAC systems.
The district in 1996 joined the Green Schools resource conservation program, with three schools participating initially. "It went beyond and outside that scope fairly quickly," said Van Holde.
SPS and the three local utilities signed a memorandum of understanding to pursue resource conservation in the schools, with financial incentives from the electric, natural gas and water/sewer providers. A resource conservation manager, Broustis, was hired.
Fifteen schools were chosen for the first phase of retrofits, for lighting and energy management systems, according to the summary. With a second and more expansive phase, the project eventually encompassed lighting retrofits in 83 school facilities, toilet replacements and/or urinal retrofits in 81 facilities, and upgraded energy management systems in 25 facilities.
Conservation Measures
Lighting retrofits were the primary means of electric energy conservation in the schools. "The lighting conservation project replaced the majority of lighting at SPS facilities with energy-efficient T-8 fluorescent (T-8), compact fluorescent (CF), or or high intensity discharge (HID) fixtures," the summary reads. More than 65,000 lighting fixtures were replaced altogether. The original lighting consisted primarily of high-wattage incandescents (200-plus watts per bulb) in older buildings, and pendant fluorescents in buildings constructed since the 1960s. NORESCO, the district's lighting contractor, worked with school and utility officials and "audited all schools to determine the scope, costs and expected utility incentives estimated for each facility."
Although the lighting changes came during the school year, at night, "We had minimal complaints," according to Griffin. Seattle schools now benefit from appropriate lighting levels, the absence of buzzing and flickering from old fluorescent lamps, and less heat gain than with incandescents. The district also increasingly standardized its lighting fixtures.
Total cost of the lighting work came to $5.5 million, according to the summary, of which City Light paid $1.8 million in incentives. Estimated lighting energy savings are expected to exceed 15.5 million KWh annually (about 1.7 aMW).
Another electric-energy saving measure, although of lesser magnitude, was DDC (direct digital control) fan control systems in 25 schools, "allowing local control by custodians as well as supervisory monitoring, trending and override from the district's central offices when necessary," according to the summary. Fan operating reductions will save at least 900,000 KWh annually, at a project cost of $667,921, including $196,366 in incentive dollars. "It's more of an environmental comfort thing," said Griffin. "We were able to get control back of our valves and dampers and things of that nature."
On the water side, with $467,391 in funding from Seattle Public Utilities, 2,216 low-flow toilets were installed at 62 schools facilities and more than 500 urinals "received retrofits through newly installed flush valves or occupancy sensored tank controls," the project paper said. Water-cooled refrigeration cooling units also were replaced with air-cooled units. The district's combined annual water/sewer cost savings of more than $700,000 exceeds the bill savings from electric and natural-gas efficiencies combined ($660,000). Natural gas efficiencies "were achieved through EMCS controls retrofit-related boiler operating hour reductions and by boiler load reductions via steam valve controls," according to the paper.
Influencing Hearts and Minds
Beyond hardware, the Seattle schools resource conservation project sought to influence the hearts and minds, as well as practices, of the school community.
Although large organizations like to think they operate efficiently, Broustis--who served as SPS resource conservation manager from April 1997 through March 1999--knows otherwise. "People really need to . . . take a close look at the consumption and realize there are going to be opportunities everywhere."
Billing errors were uncovered through audits, which also found schools with excessive resource consumption, according to the project summary. "It either takes someone who has the knowledge to point things out, or someone dedicating some time to doing it," said Broustis. Staffers who pay bills may wonder about an exorbitant utility charge, he added, but may not take any corrective action.
Internal incentives included awards for custodians who achieved resource efficiencies, and a "tool incentive" program. "We were getting tools into the hands of custodians to better maintain the schools," said Broustis, and the tools were paid for with "money otherwise wasted on utilities--a win-win-win situation."
Working with facilities employees proved to be "the most effective thing in terms of behavioral savings," he said. Once they understood the high cost of leaks and continuously running pumps, for example, "They were a lot more likely to fix those problems."
The project also educated Seattle teachers and students on resource efficiency. A few schools formed "resource patrols" to check for water leaks, lights in empty rooms and other wasteful practices. Presentations included a metered demonstration of energy consumption of classroom lights, overhead projectors and other equipment. Resource conservation curriculum from the Alliance to Save Energy was made available to teachers, but, "It wasn't widely accepted and didn't get into a lot of hands," said Broustis. Still, manuals remain accessible as reference guides for interested teachers.
Among operations and maintenance improvements stemming from the conservation project were tuned-up boiler burners, energy management controls systems adjustments, and "comprehensive changes" in maintenance practices and procedures, according to the summary.
Altogether, the various behavioral/O&M measures saved the district nearly $850,000 in utility bills from 1997-1999, according to the project paper. The lion's share, $650,000, accrued in water.
Lessons Learned
Participants in the conservation project believe the collaboration among the utilities and school district was a vital element.
"What really makes it unique in my mind is the different utilities got together and tried to encompass the different resources," said Broustis.
It took a "major effort to make it happen," noted City Light's Van Holde. It helped to focus on the ultimate goal of reducing the schools' operating costs.
From the SPS perspective, Griffin described "a number of keys to being successful." One was the district's knowledge of its facilities and how it wanted to improve them. For example, SPS designated certain footcandle levels for classroom lighting, and required the contractor to meet them.
Financially, the district embarked on a different path by borrowing money for the conservation project, paying it back through utility savings. "This is not something we normally do," said Griffin, and district officials wanted assurances the debt would be reasonably repaid. What persuaded them? "The numbers. We kept on hammering at the numbers, that we could do this. Our CFO [chief financial officer] had a background in payback, and he said, 'We have to do this.'"
SPS top management supported the project, too. "At times we ran into problems, and Joseph [Olchefske, the superintendent] came in and said, 'Make this work.'"
The conclusion of this resource conservation effort--formally celebrated in June with a special "graduation" ceremony--doesn't spell the end of efficiency initiatives within the schools.
"Seattle Public Schools continues to emphasize the conservation of natural resources, and each of the utilities has continued to provide staff support to the district's efforts," according to the summary. "Future shared conservation efforts will include support for efficiency measures in new construction . . . retrofit projects, improved maintenance practices, and emphasis on educating staff and students about conservation."--Mark Ohrenschall
Bonneville Power Administration will be soliciting energy-saving proposals from its wholesale customers beginning in October to help the agency meet anticipated power needs beginning in fall 2001. Some doubt, however, exists about the level of utility participation.
Bonneville's Conservation Augmentation program aims to capture between 60 average megawatts and 90 aMW of energy savings from fiscal year 2002 through FY 2006, as Bonneville seeks an additional 1,500-plus aMW to fulfill anticipated higher wholesale demand.
BPA customers with signed subscription contracts will be able to submit ConAug proposals through March 30, 2001. They can propose customized conservation plans or more prescriptive "off-the-shelf" versions, or both. Bonneville has not formally set prices it will pay for energy savings through ConAug, although it has pledged to value savings beyond the next five-year rate period as long as customers retain BPA load.
And, in perhaps the most controversial feature, participating non-full-requirements customers will have to commit to reduce their BPA loads by the amount of their estimated ConAug savings. That's the "biggest problem" with the ConAug structure, according to Erin Boyd of the Public Power Council. "They're asking utilities to make this contractual commitment to decrement their lowest-cost resource, and it puts a lot of risk on the utilities," she said.
As for overall public-power interest in ConAug, Boyd said, "I haven't seen much enthusiasm among our membership."
A letter with an Invitation to Reduce Load through Conservation (IRLC) is scheduled to go out Oct. 17 to Bonneville subscription contract customers. "What we're really hoping for is to be given some good proposals and move quickly to the negotiation stage and enter into agreements," BPA's Tim Scanlon told Con.WEB in late August.
BPA characterizes these coming months as the first round of ConAug. If it doesn't work as Bonneville hopes, the agency will consider adjustments, Scanlon said. But he believes stakeholder discussions in recent months have helped shape a solid ConAug package. "I felt it really does reflect the recommendations we've been receiving . . . making the tone more positive and friendly and try to encourage the maximum level of participation, and streamline our process so we don't make this a very difficult and arduous time-consuming effort on the part of anyone participating."
ConAug Features
"During the past two decades," reads an Aug. 23 draft IRLC cover letter, "Northwest Utilities and BPA have set a national standard in energy efficiency excellence. BPA recognizes the value of conservation resources in volatile deregulated wholesale electricity markets. ConAug provides another opportunity for BPA and our Subscription Contract customers to demonstrate the Northwest commitment to promote cost effective conservation investments through new creative approaches, as well as 'tried-and-true' delivery mechanisms. Our collective experience has taught us that successful conservation efforts often require significant lead time before energy savings are realized. To maximize the value of the conservation investment, it is essential that we deliver as much conservation augmentation as early in the rate period as possible.
"Therefore," the letter continues, "we hope you share our sense of urgency and have multiple proposals to submit before March, 2001. BPA will strive to achieve a simple, straightforward and efficient process for working with customers and securing ConAug commitments."
BPA describes the customized ConAug option as "intended to allow for maximum customer creativity. Custom ConAug proposals allow the utility to specify the type and quantity of conservation measures, delivery mechanism(s), and cost and payment method." The so-called "off-the-shelf" option "allows the utility to propose a conservation funding request based on a pre-defined set of conservation measures, delivery mechanisms and payment methods similar to the prior Conservation Flex Agreements." This list of eligible measures will be very similar to the cost-reimbursement list under BPA's conservation/renewables wholesale rate discount, Scanlon said, although with a "much higher threshold for reliability and measurability."
For both options, Bonneville promises to "proceed with bilateral negotiations on all good faith proposals."
BPA has intentionally avoided setting a price range for ConAug proposals. Scanlon said the agency wants to "test the market, see what will be offered to us at various prices."
It also retained the load decrement provision, in which non-full-requirements utilities will have to commit to reduce their BPA loads by the amount of their estimated ConAug savings. Some stakeholders have considered this a huge disincentive, because Bonneville power is about the cheapest available. But, said Scanlon, "We must ensure that if we're making a Conservation Augmentation investment, we're reducing our need to purchase power on the open market." ConAug load reductions won't affect future net-requirement determinations for BPA customers, the agency has pledged.
The open market has shown extreme volatility in recent months, and ConAug projects could help reduce BPA's exposure to such price swings. "That's a factor in determining BPA's willingness to pay" for ConAug savings, said Scanlon, "but it's not the only factor."
Other ConAug draft evaluation criteria include cost, seasonality (conservation has more or less value depending on time of year), diurnal characteristics (time of day), location, lost opportunities, transmission and distribution system impacts, measure life and certainty of savings.
"We're going to evaluate each proposal on its merit," said Scanlon. Bonneville may pay varying prices for different types of ConAug savings, he indicated.
In draft guidelines, BPA promises to "consider all promising geographic areas and end-use sectors for ConAug activities based on the cost-benefit ratio until the ConAug acquisition goals are satisfied."
ConAug Reactions
It remains to be seen how BPA customers will collectively respond to ConAug.
"I haven't gotten a real good feel there will be a lot of people jumping," said PPC's Boyd. She thinks Bonneville "really wants to make this program work," and she also understands the agency's need for guaranteed load reductions, even though it creates a "big impediment" for utilities. "I'm not sure from Bonneville's standpoint there's a way around that," she said.
Stan Price, executive director of the Northwest Energy Efficiency Council, wrote in the NEEC summer newsletter that, "In both style and substance, the IRLC works to encourage a utility response to participate. Process aside, however, the depth of utility response will be determined by a combination of the utility leadership's commitment to conservation and the willingness of BPA to pay for conservation at close to wholesale market rates for electricity. Absent those necessities, ConAug will not come close to achieving the conservation targest BPA has set."
Price encouraged energy efficiency businesses to join with local utilities: "Demonstrating the availability of conservation resources in their service territory by bringing specific end use customer opportunities to the table can only enhance the willingness of the utilities to bid an aggressive conservation target under the IRLC."--Mark Ohrenschall
With a year remaining before public-purposes funding begins in Oregon, a prospective non-profit organization to administer most of the energy conservation/renewable energy money continues to take shape.
A draft "white paper" proposal for structuring such a non-profit entity has been crafted, circulated and commented upon--largely, although not entirely, favorably. The Oregon Public Utility Commission has already endorsed a process to form a public-purposes administrative agency, and is expected to soon formally consider the proposed structure.
"We're getting the final stages of the white paper to take to the commission," PUC staffer Lynn Kittilson told Con.WEB in late September.
Should the state regulatory body give the go-ahead, attention would turn to board membership, incorporation, staffing, strategic and policy matters, transition from utility funding, and other elements for the Oct. 1, 2001 start of Oregon's electric industry restructuring and public-purposes funding collection.
This is no small undertaking. The state's restructuring legislation, Senate Bill 1149, created a 3-percent charge for PacifiCorp and Portland General Electric customers to fund conservation and renewable energy initiatives for 10 years. Over that period, public-purposes funding will likely amount to several hundred million dollars.
This also represents a sea change in the way Oregon pursues clean energy--at least within investor-owned utility service territories. PUC commissioner Ron Eachus last October called it "an opportunity . . . to completely recast our approach to energy efficiency and renewable resources, not only on a financial basis, an assurance for it, but . . . to recast the programmatic development and targeting of those funds and the ways in which they were delivered."
Ken Canon of Industrial Customers of Northwest Utilities also sees importance in the 3-percent charge. "The determination of how to spend SB 1149 public purpose funds is a significant public policy decision for the state of Oregon," he wrote in comments on the draft white paper proposal.
Proposed Organizational Structure
Following the PUC's February assent to begin creating a non-profit public-purposes administrator, Kittilson put together a committee "to define the governance structure, direction and genesis of the new organization," according to the draft white paper. Committee members included Carol Brown of Portland General Electric; Jason Eisdorfer, Citizens' Utility Board; Margie Gardner, Northwest Energy Efficiency Alliance; Jeff Harris, Northwest Power Planning Council; Brian Hedman, PacifiCorp; Stan Price, Northwest Energy Efficiency Council; John Savage, Oregon Office of Energy; and Peter West, Renewable Northwest Project.
Deriving from the language of SB 1149, the committee defined the purpose of the non-profit: " . . . to support the development of new cost-effective local energy conservation, new market transformation energy conservation efforts, and new renewable energy resources for contributing electricity customers in Oregon." A smaller amount of other legislatively mandated public-purposes funding, including schools and low-income weatherization, will be handled separately.
The organization would be governed by a seven-member board of directors, initially appointed by the PUC and subsequently elected by the board. "The Board of Directors will be responsible for making all decisions affecting the direction and governance of the organization," according to the draft white paper, including strategic direction, policy decisions, budget approval and hiring an executive director. Advisory committees for conservation and renewables would "provide advice and resources to support the organization."
The PUC would authorize funding for the new non-profit, and also receive "timely and accurate information" on "programs and operations, including accounting for conservation and renewable resource funds separately."
The draft document offers prospective guidelines for the organization. Among them: funding for new renewable resources would offset all or some above-market costs; at least 80 percent of conservation funds would be spent within the service territory of the IOUs collecting the money, as legislatively required; individual energy-saving programs would be designed to be cost-effective, although pilot projects, educational programs and demonstrations could be pursued; most conservation dollars would be spent or committed in the year received; public-purposes funding would be competitively bid in most circumstances; and all types of customers would benefit from the spending.
This draft proposal won't be significantly revised before it's presented to the PUC, according to Kittilson. "In general the convening committee, when they read people's comments, basically felt like we were on track," she said.
Public Comments
Public comments on the draft white paper generally favored non-profit administration of most Oregon public-purposes funding.
Support came from Avista Utilities, Citizens' Utility Board, the Fair and Clean Energy Coalition, Renewable Northwest Project and Oregon State University Extension Energy Program. Several of these commenters characterized the proposal as a laudable start and emphasized a need to move quickly. "When the public purposes funds begin to flow 14 months from now," wrote CUB's Eisdorfer, "there must be in place an appropriate spending mechanism. It is important to make sure that the public input process allows for any and all comments and suggestions. However, overprocessing this new non-profit at this conceptual stage may mean delaying the creation of the body that ultimately will put the public purpose dollars to work."
A different perspective came from ICNU's Canon, who cited "serious concerns about the procedural and substantive issues raised by the White Paper." He questioned whether public-purposes funding should go through a single non-profit entity, and suggested the money be allocated through competitive bidding open to "[a]ny party that intends to offer conservation or develop renewable resources . . . including utilities, non-profit organizations and other entities. This would ensure that programs are diverse, efficient and cost-effective . . . It makes little sense to simply replace two monopolites (the utilities) with another monopoly (the non-profit organization suggested by the White Paper)." He advocated the PUC create a "formal public process to review and decide the critical organizational and operational elements of this [non-profit organization] option."
Pacific Northwest Generating Cooperative and PG&E Corp. (which owns a natural gas pipeline system and a gas-fired power plant in the Northwest), also called for a more extensive PUC process on the proposed non-profit entity.
Commenters also shared varied opinions on the proposed board and its membership, the PUC's role, and the possibility of the organization receiving funds from outside SB 1149 provisions.--Mark Ohrenschall
Hastily drafted and frequently revised in the waning days of the California legislative session, Assembly Bill 970, the Energy Security and Reliability Act of 2000, is a grab bag of emergency measures to deal with the imbalance of energy use and supply.
Signed into law by Gov. Gray Davis on September 6, the bill encourages faster siting of generation plants but also includes significant provisions to bolster energy efficiency in California--including a $50 million appropriation to the California Energy Commission.
While highly specific about some of the measures lawmakers want regulators to institute, the bill is ambiguous about implementation. In response, both the CEC and the California Public Utilities Commission have started proceedings to turn legislative language into cost-effective conservation measures.
Broad Sweep
The new law has a broad sweep, taking on diverse issues of generation siting and environmental impacts, renewable resources, cogeneration interconnection policies, transmission upgrades and demand-side management programs.
Although the bulk of appropriations--$50 million from the state's general fund--is directed to the CEC, it appears much of that money may be divvied up into grants and contracts with energy services companies, vendors or installers, and incentives to customers. Another $7.5 million will be shared among agencies for staff and administration of expedited power plant siting. The CEC will take another $5.2 million of that, mostly for adding more staff and work related to siting cases, but about $1 million will be devoted to customer education about efficiency options.
Revised Building Standards
The CEC interprets much of its AB 970 energy-efficiency mandate to fall within the context of revising Title 24 building standards, while the CPUC is addressing the law as part of proceedings to develop policies for 2001 DSM programs administered by utilities.
The law also directs the energy commission to update its electricity reports on energy consumption trends, as well as to adopt and implement updated cost-effective standards for residential and non-residential buildings "to ensure the maximum feasible reductions in wasteful, uneconomic, inefficient or unnecessary consumption of electricity."
CEC's Don Kazama said the new law significantly "accelerates and broadens" what had been foreseen as a limited Title 24 revision in 2002. "We were looking at a very small segment of non-residential standards, things like windows, walls and fans," he said.
The CEC held a Sept. 25 workshop to take comment on a wide range of suggestions for updating measures that can be implemented fairly quickly and do not require complicated calculations for documenting savings. The workshop will lead to draft language for Title 24 revisions, subject to public comment. The CEC hopes to adopt any changes by January for implementation in March 2001.
Optional Credits
California's new construction standards already rank among the toughest in the nation. Rather than create new and more costly mandatory provisions, Kazama said his agency is looking at "optional credit" measures to provide builders with more flexibility by trading one measure against another to optimize energy efficiency at lower costs.
An example of a new device that might squeeze more conservation in new housing is a thermal expansion valve for air-conditioning units. Kazama described it as a relatively cheap item that can be used with existing units to ensure the proper amount of refrigerant flows into coils. This might save 10 percent to 20 percent of a unit's energy consumption, he said. These savings are multiplied by the fact residential and commercial air conditioning accounts for 29 percent of California's peak demand.
Peak Demand Reductions
In another section of AB 970, the CEC in consultation with the CPUC is supposed to develop peak-demand reduction programs in three identified areas:
These programs may be open to bidding for installers and program evaluation, although details have not been developed.
The law also directs the CPUC to implement residential, commercial and industrial peak-reduction programs, but it is less specific in its terms than in its orders to the CEC, and there appears to be much overlapping responsibility.
Utility Program Accommodations
While the CPUC appears to be looking initially at how the law will affect existing energy efficiency programs administered by utilities, agency analyst Don Schultz said self-generation options should be treated as legitimate DSM because they reduce system energy and gas use year-round. Small-scale generation and renewables "can allow consumers to escape the failed grid," according to Schultz.
To help define how existing utility DSM programs can be revised to accommodate the law, CPUC administrative law judge Linda Bytof on Sept. 19 called for comments. Some of the programs identified in the law are already being funded through California's public-goods charge, Bytof noted. Among programs cited were expanded weatherization, HVAC and efficiency in new buildings.
Bytof gave parties until Sept. 26 to propose how measures identified in the law, or others, may be incorporated into the utilities' 2001 DSM programs without disrupting the planning process or the goal of implementing programs in January.
In a related ruling issued Sept. 14, Bytof told the California Measurement Advisory Council (CALMAC) to address AB 970's directive that the CPUC re-evaluate energy efficiency cost-effectiveness tests in light of increased wholesale prices for electricity and natural gas. CALMAC was ordered to produce a report by Oct. 2.--Arthur O'Donnell [California Energy Markets]
CH2M HILL has signed on as an essential partner to wind power development--that is, as a willing consumer.
The company in mid-September announced a three-year, $15,000 purchase from the Bonneville Environmental Foundation, which will use the money to develop new wind energy resources.
CH2M HILL is the foundnation's first corporate "Green Tag" customer, according to a BEF news release. "We salute CH2M HILL for being a pioneer in reducing its corporate environmental footprint by committing to renewable energy," said BEF board chair Mark Hatfield in a news release. "This is, at the same time, a daring and a prudent business decision."
CH2M HILL is also the first Northwest-based corporation to meet the Northwest Clean Energy Challenge, by agreeing to meet 5 percent-plus of its electricity load with green power. "This purchase represents real environmental leadership from CH2M Hill, a serious investment in renewable energy in the Northwest," said Paul Horton, co-director for Climate Solutions, an Olympia, WA-based organization coordinating the Energy Challenge campaign in collaboration with 13 other groups.
"Our support of renewable energy is part of a companywide environmental commitment and consistent with CH2M HILL's engineering contribution to renewable energy development worldwide, including the Vansycle Ridge wind project in eastern Oregon," said Dan Arvizu, the firm's group vice president for energy and industrial systems. "We are proud to be among those who have made an early commitment to these increasingly important energy alternatives."
The company's annual contribution to BEF will pay above-market costs of new wind energy, according to BEF. "The actual output is then sold as conventional power at market prices, while the contributor--CH2M HILL--earns credit for the environmental benefits."
CH2M HILL headquarters in Portland also will buy PacifiCorp's Blue Sky green-power product, according to a Climate Solutions news release.--Pamela Russell and Mark Ohrenschall
New federal standards to improve the energy efficiency of fluorescent lamp ballasts in commercial and industrial applications were announced Sept. 19 by U.S. Secretary of Energy Bill Richardson.
The adopted standards were based on an October 1999 agreement between the lighting industry and energy efficiency advocates (including the Oregon Office of Energy) that would gradually eliminate virtually all magnetic ballasts and T-12 lamps in favor of electronic ballasts and T-8 lamps, which are at least 30 percent to 40 percent more efficient. ( See Con.WEB, Nov. 30, 1999).
Energy savings from the new efficiency standards, which take effect in April 2005, should reach 18 quads by 2020, according to DOE. "The savings from the new fluorescent lamp standards will be enough to supply power to 13 million homes across the country for one full year," Richardson said in a DOE news release. "Lighting accounts for approximately 14 percent of all electricity consumed in the United States."
Two Northwest public entities have been awarded federal technology development research grants "for the advancement of clean energy technologies and the development of tools that could maximize the potential for these technologies in the future," according to a U.S. Department of Energy news release.
The University of Oregon will receive $265,676, and provide a 21-percent match, to develop more accurate techniques for evaluating solar-energy potential. "Current resource analyses for solar energy are not precise enough to account for variations in local weather patterns, nor are they easily fed into computer-based models," said DOE. "Oregon's approach would seek to overcome these limitations and help facilitate whole building designs and distributed power development."
The Idaho Department of Water Resources Energy Division will receive $468,525, and provide a 38.2-percent match. "Idaho is developing an on-site process for separating out the low value component of wheat straw, leaving it in the field where it helps to condition soil," according to DOE. "The remaining higher value parts of the wheat can then be further refined using a compost technique to yield feedstock which can be used to manufacture plastics which would typically be made from hydrocarbons."
Registration is open through Oct. 10 for the Sustainable Building Advisor Certificate Program.
The program, co-sponsored by Seattle City Light, Seattle Public Utilities and Seattle Central Community College, is described as a "nine-month professional training program, designed to enable graduates to advise employers or clients on strategies and tools for implementing sustainable building."
Classess will be held one Friday and Saturday each month through June, covering nine topics: sustainability overview, energy efficiency, integrated lighting design, green material selection, indoor environmental quality and health, water conservation and quality protection, operations and maintenance, sustainable job site operations, and transportation and land use.
For more information, visit the program Web site.
Washington Gov. Gary Locke on Sept. 21 honored nine businesses and two government facilities for preventing pollution and "using business practices that meet today's needs and protect natural resources for future generations," according to a news release from the governor's office.
Locke presented the eighth annual Governor's Awards for Achievement in Pollution Prevention, issued to businesses and government agencies that have found ways to generate less or no hazardous waste, and to conserve resources such as energy and water.
The winners of the 2000 awards: Aldercrest Auto Rebuild of Lynnwood; Boeing Aircraft and Missiles Group of Seattle; Fairchild Air Force Base in Spokane; GM Nameplate, Inc. from Seattle; Habitat - Spokane Builders Surplus Store in Spokane; In Harmony, based in Redmond; Klickitat PUD; RE Sources / The RE Store in Bellingham; SEH America, Inc. in Vancouver; Sleeping Lady in Leavenworth; and the McGregor Company of Colfax.
"The winners prove that businesses can improve processes, solve environmental problems and be viable in today's competitive market," said Locke.
The entries were judged on innovation and efforts to teach others in their industry or community about preventing pollution and using sustainable business practices.
The city of Seattle has honored 27 local entities for their energy conservation achievements.
Recognized at the Sept. 17 Seattle Seahawks-New Orleans Saints football game at Husky Stadium, the 27 "Power Players" represent what a Seattle City Light news release called "a cross section of City Light's business customers: corporate, small business, non-profit and government."
Among the honorees were Seattle Public Schools (see related story), the University of Washington, the Seattle Housing Authority and the Seahawks' First & Goal organization. A complete "roster" is available on the Web.
"These businesses have really stepped up to help us meet our conservation goals," said Marya Castillano, energy management services director for City Light. "At the same time they have saved money and, in many cases, improved productivity. They are great role models, and City Light would love to help other businesses follow in their footsteps."
OFFICES: Mail-P.O. Box 900928, Seattle, WA 98109-9228. EXPRESS: 117 West Mercer, Seattle, WA 98119.
TELEPHONE-(206) 285-4848. FAX-(206) 281-8035. E-MAIL-newsdata.com.
Con.WEB was created by the Energy NewsData Web team, including: Publisher-Cyrus Noë; Editor-Mark Ohrenschall;
Contributing Editors-Jude Noland; Cassandra Sweet
Contributing Writers-Jim DiPeso; Lynn Francisco; Kari Hanson; Garrett Hering; Amber Schwanke; Ben Tansey
Web Production-Michelle Noe
General Manager-Brooke Dickinson.
Please contact Mark Ohrenschall,
marko@newsdata.com,
with questions or comments on this site.
Copyright ©2004 Energy NewsData Corporation
Return to Contents