CWEB.060/December.21.2000
Energy conservation made big news around the Northwest in mid-December as cold weather and limited power supplies brought the region to the edge of a darkness beyond the seasonally long nights.
Governors of Washington, Oregon and Montana issued public pleas to conserve energy, while a number of utilities moved forward with demand exchange programs to pay customers for voluntary power curtailments. These and other immediate energy-saving measures apparently had some effect: the Northwest Power Pool reported a peak-hour reduction of more than 800 megawatts at the height of the cold snap.
This spotlight on conservation has spurred interest in greater and broader efforts to use energy more efficiently. Some efficiency professionals bristle at the popular portrayal of energy conservation as sacrifice--i.e., turning off holiday lights and shutting factories--but they also consider this a prime moment to advance the wise and productive use of electricity, on a sustained basis. The demand side is considered at least a partial answer to the power-crunch woes.
State legislatures, utilities, customers and organizations such as the Northwest Energy Efficiency Alliance are all anticipated to look anew at energy efficiency.
Govs Call for Conservation
The last time Northwest governors so publicly promoted conservation came in March when Gov. Gary Locke of Washington and Gov. John Kitzhaber of Oregon ceremonially endorsed the Alliance's five-year $100 million funding extension.
This time, the circumstances were much different. A joint Locke/Kitzhaber press release on Dec. 8 "called upon citizens and businesses in those states to begin conserving as much electricity and natural gas as possible immediately in anticipation of a deep cold spell expected to arrive on the West Coast on Monday." Locke noted, "Voluntary conservation today may mean we'll avoid disruptions when the cold weather arrives Monday." He especially cited peak morning and evening hours.
Washington's newly re-elected governor urged a 5- to 10-percent energy use reduction, recommending such measures as turning off lights in empty rooms, turning on Christmas lights only after 8 p.m., turning off unused computers, radios and televisions, turning down heaters and water-heater thermostats, using microwave ovens instead of stoves, running dishwashers at off-peak evening hours, and running one appliance at a time. He also directed state agencies "to take steps to curtail energy use," and noted the Capitol dome lights had been darkened.
Kitzhaber and Montana Gov. Marc Racicot also issued appeals. "Energy conservation is always a good idea, and I ask Oregonians to be careful with their electricity use all winter--but especially next week--because of tight supplies and the level two warning called by the Regional Energy Emergency Response Team," said Kitzhaber in a news release.
In explaining the emergency situation, the governors generally cited growing power demand coupled with supply limitations throughout the West, and particularly in California. The Golden State's energy crisis has included near-blackouts, federal intervention to assure adequate power, utility financial distress, and calls (including one from Southern California Edison's chief executive) to re-regulate the state's electric system.
"We want to get the message out that conservation is probably going to be the most important tool we have in the short term to ensuring that we've got a reliable, adequate power supply," Locke's energy policy advisor Dave Danner told Con.WEB.
Demand-Side Management--Not True Conservation
These public requests to use less energy should be considered demand-side management--not true conservation, believes conservation manager Tom Eckman of the Northwest Power Planning Council.
"I wish they'd quit calling turning the lights off conservation," he said. "They should describe what they're asking for as curtailment, and not confuse improved efficiency with not using it." A similar point came from Stan Price of the Northwest Energy Efficiency Council, who cited the public image of conservation as turning out holiday lights: "In an eerie repeat of Jimmy Carter's sweater, energy efficiency is once again being linked to sacrifice and doing without."
Both urged a longer-term push for the considerable values of efficiency, as did Mark Glyde of the Northwest Energy Coalition writing in the Energy Activist newsletter: "Voluntary reductions in power use are necessary, but should be viewed only as a stop gap measure on the way to restoration of the kind of energy-efficiency investments that allow customers to reduce their demand for electricity without turning their lights off. Conservation is about doing more with less--not doing without."
In the meantime, utilities were scrambling to keep the lights on in their service territories. One increasingly popular tool involves paying large customers to reduce their demand upon request. Programs to that effect have received regulatory approval for PacifiCorp, Portland General Electric, Avista Utilities and Puget Sound Energy; Bonneville Power Administration also offers a so-called demand exchange pilot.
"For the short run, I think these demand exchanges under the various names utilities are using are probably the quickest and most effective way to go for the winter," said Lee Sparling of the Oregon Public Utility Commission.
PacifiCorp's program, as one example, is available to its approximately 120 customers with loads of 4 MW or more, or on-site generation of 1 MW or more. The minimum curtailment commitment is 500 KW, on an hourly basis or longer. PacifiCorp will post its bid price between 9 a.m. and 1 p.m. one or two days before exchanges are requested. "We'll pay customers a bid price based on our judgment of the appropriate price signal to give customers, rather than tying it to the California market or an index," said Robin MacLaren, PacifiCorp vice president for major issues. He said six customers are in the process of signing up for the program and having baseline power usage determined, and the utility is already purchasing back power from one or two customers.
Although such demand exchanges are becoming more common, PacifiCorp still needs more direct experience, according to DSM policy manager Brian Hedman. "Our schedulers are a little uneasy about the concept," he told Con.WEB. "They'd much rather know [they have] some power supply source they've plugged in to fill the gap, than a promise from customers to turn the lights off."
Still, these demand exchanges and other energy-saving measures clearly had a direct influence on the regional electric system. The Northwest Power Pool surveyed utilities in its seven-state, two-province territory and discovered that utility and public conservation actions reduced total loads by 835 megawatt-hours from 5 p.m. to 6 p.m. on Dec. 12, according to system operations manager Don Badley. "I would say it was a success," he said of the requests for conservation. "I was pleased we were able to make that much of an impact." Regional temperatures from Dec. 11 through Dec. 13 were about 10-11 degrees below normal, although forecasts had called for even colder weather.
"We as utilities are having to think differently about loads and resources," Badley told Con.WEB. "Now . . . if you can drop load, that's just as good as adding generation to the system. It's a whole new mentality we're coming to grips with."
The Power Pool doesn't exactly know where the emergency energy savings originated, either geographically or by specific measures. News reports and the governors' pleas focused on simply using less electricity in homes and businesses. Reduced holiday lighting has been a highly visible target--although a Seattle City Light spokesman told The Seattle Times such usage accounts for less than 2 percent of total demand.
Now What?
Even energy conservation proponents acknowledge that demand-side activities alone won't solve the region's power-supply problems.
Eckman offered the "intuitively simple conclusion that, given how far demand has outstripped supply, it's, at least in the foreseeable future, unfathomable we'll be able to meet it all with efficiency improvements." BPA alone seeks about 3,000 aMW of additional resources, he noted; even in the peak years of utility conservation programs, annual regionwide energy savings were in the range of 150 aMW. The Council has a current rough estimate of some 2,400 aMW of cost-effective conservation available around the region over the next 20 years.
Still, the recent power woes have brought increasing prominence to the demand side. "It certainly lights the fires under people's desire to get more efficiency improvements in place. Anything we can do to get that reduces the demand on the system that has to be met by additional generation," said Eckman. "I think there needs to be a resurgence of efforts, and refocusing. Certainly it's clear from the price signals we're seeing, in both natural gas and electricity, that additional conservation is going to be cost-effective." And reducing peak loads, as for example by lighting improvements that reduce air-conditioning loads in commercial buildings, now has much greater value, he noted.
NEEC's Price called for a "reasoned and persistent commitment to regional spending on energy efficiency." He lauded Oregon's 10-year public-purposes funding from the state's electric industry restructuring, and urged "some similar mechanism" for the Northwest's largest state, Washington.
Legislatures, Utilitites, Customers
Locke's planned legislative package for the 2001 session pays heed to energy efficiency and renewables, said Danner, although he didn't specifically mention public-purposes funding. "We are going to focus on getting more energy efficiency in the public sector, focus on getting more diversity in utilities' energy portfolios, and focus on tax incentives for [smaller-scale] renewables." These ideas have received "fairly positive" responses from Democrats and Republicans in the closely divided state Legislature. "I think everybody understands there is a need for conservation and energy efficiency and more generation," said Danner. "But I also think they understand we've got to start diversifying our portfolio so we don't have all of our eggs in the natural gas or hydro basket; those are the power sources that are most constrained."
In Montana, energy promises to be one of the biggest issues for the upcoming legislative session, according to John Hines of the Power Council's Montana office. "I expect all aspects of the energy equation, supply and demand-side programs, will be closely looked at to optimize the energy future," he said. One likely topic: extension of the state's public-purposes funding.
The Alliance plans to look closely at ways to shave peak demand, within the context of its market transformation charter, according to PacifiCorp's Hedman, who also serves as the Alliance board chairman. "It's going to be a discussion at our strategic planning retreat in February," he said. "It's right on the front of the plate."
BPA, meanwhile, is moving ahead with its conservation/renewables wholesale rate discount and its Conservation Augmentation program. The discount should provide about $40 million annually, up from the previously forecast $30 million, noted acting energy efficiency vice president John Pyrch. It takes effect in October. ConAug, however, had only resulted in one proposal as of mid-December, although Pyrch anticipates more by early next year. Bonneville will adjust ConAug if necessary, as it is a key element in helping the agency meet its target of at least 166 aMW of energy savings from 2001 to 2006.
An expansion of BPA's energy efficiency initiatives in response to the larger power situation "is something we're considering," he told Con.WEB.
Pyrch made a pitch for more regional collaboration on conservation--although not a return to BPA's centralized programs. "What I'd like to do, from a broader perspective, is see if we can't have the region come together in a more comprehensive manner on dealing with conservation." The Alliance and its partnership of utilities, states, efficiency businesses and environmental groups is a model worth expanding, he believes. "I think there's a lot of synergies out there to make conservation work together. This piecemeal, ad hoc approach doesn't seem as productive as it could be."
Pyrch also advocated a "regional marketing effort" along the lines, potentially, of Energy Star. This could serve as a "real powerful tool" in advancing energy efficiency, he said.
In addition to prospective demand-side policies and programs stemming from the power-supply crunch, another outcome also could emerge. "We may have some residual effects of this," said the Power Pool's Badley. "Many people may have gotten into the habit of [saving energy]. My hope is that when we get into this again, and we're asking people to help us meet their demand, that we can get that kind of help. We don't want to get into a situation like California." --Mark Ohrenschall & Jude Noland
Nearly half of Puget Sound Energy's electric customers are now able to see detailed information about their electricity use--as well as the wholesale cost of that power at the times they are using it.
The Personal Energy Management pilot program is intended to show customers what it costs to provide them with electricity at different times of day, with the hope that access to this information will lead some to change their habits and thus lower peak demand on the investor-owned utility's system--reducing the amount of power PSE haas to buy on the market. Wholesale power prices now run about 40 percent higher during peak times, according to Puget. The program also carries a message that peak-time power creates more environmental effects.
"I think it's a preview of where conservation is going in the future," Puget spokesman Grant Ringel told Con.WEB. Many efficiencies are now incorporated into the likes of energy codes and appliance standards, he noted. "We really think the next generation of conservation will come in the form of technology, and specifically in technology that . . . empowers customers to take full control of their energy usage, and to really see the actual costs and environmental impacts of their energy consumption."
Puget on Dec. 1 began including energy use information in the monthly bills of 412,000 residential and business customers throughout the IOU's nine-county electric service territory. Interested customers can also gain immediate access to the information by calling a toll-free number or visiting the utility's Web site.
The four-month pilot program relies on Puget's wireless, two-way, automated meter-reading network and what the utility calls an "exclusive customer-information technology recently developed by ConneXt, a PSE subsidiary."
Personal Energy Management may be a precursor to a Puget regulatory filing to implement time-of-day pricing. Such pricing signals are "really the missing link for people who want to be savvy about their energy habits," said the Northwest Power Planning Council's Dick Watson in a Puget news release. "Only by knowing what electricity costs before it is used can people make informed decisions about how they want to consume power. This program is an important step in educating consumers on the link between their decisions about electricity use and the cost of power."
Energy Use Information
Personal Energy Management breaks down customer energy use and wholesale power costs into four daily time periods: 6 a.m. to 10 a.m. (expensive); 10 a.m. to 5 p.m. (economy); 5 p.m. to 9 p.m. (expensive); and 9 p.m. to 6 a.m. (a real bargain).
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| Courtesy of Puget Sound Energy |
The information sheet accompanying bills has a bar chart with a customer's kilowatt-hour usage in each of those time blocks over the past 30 days. It explains that customers pay fixed rates, but Puget's electricity costs vary. It suggests that future electric bills may reflect those variations, allowing customers to potentially save money and improve environmental quality by changing consumption patterns.
Residential customers are also shown typical household use: 35 percent in lights/other; 34 percent, water-heating; 9 percent apiece for clothes drying, freezer and refrigerator; and 4 percent for cooking. "Maybe you can wait to start your dishwasher until just before bedtime, for example," the information sheet suggests.
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| Typical household consumption. Courtesy of Puget Sound Energy |
Customers are encouraged to use their monthly bills to track changes in their consumption patterns. Interested customers can also gain immediate access to their real-time usage by calling a toll-free number (1-888-225-5773) or logging on to the IOU's Web site at http://www.pugetsoundenergy.com.
"We fundamentally believe that with this kind of information, people will look at how they can shift their demand," said Gary Swofford, PSE chief operating officer and vice president of energy delivery.
No Direct Customer Benefits . . . Yet
Since PSE's rates are fixed, customers won't actually see price reductions for shifting usage to off-peak times. Neither is the utility offering any specific financial incentives for reducing consumption through Personal Energy Management.
"We still have our low-income programs," Swofford told Con.WEB, "but we pretty much saturated the existing housing stock with our weatherization programs in the 1980s." Since then, with the implementation of tighter building codes in Washington state, new homes are already fairly energy-efficient.
Still, it's likely that, with more attention paid to power use, consumption will drop anyway--and bills will go down. "The fact that energy has been in the news as much as it has in the Pacific Northwest has heightened customer interest in the whole subject," said Ringel. "I think people recognize that this is part of the solution to the long-term energy challenge that we have on the West Coast."
And while the Personal Energy Management program is completely voluntary at this point, "If we get any measurable response to the information, that speaks well to what will happen when customers start receiving actual price signals," Swofford said.
Time-of-Day Rates?
Puget is considering asking the Washington Utilities and Transportation Commission to implement time-of-day rates, Swofford said, and the commission "indicated a strong interest in getting something [from PSE] early next year." But the IOU wants to get customer feedback first, he noted, before designing a proposed tariff.
The metering technology PSE is using can deliver energy-usage data from homes and businesses every 15 minutes, according to the utility's news release. These "talking" meters were developed by Schlumberger Resource Management Services, which also is furnishing a "secure, Internet-based energy-information tool" to match and bill real-time energy usage and wholesale market pricing.
This technology also can also be used to remotely control usage. In the Home Comfort pilot program PSE conducted last winter in 100 customer homes south of Seattle, the utility installed special Carrier thermometers that interfaced with the IOU's technology to allow PSE or the customer to remotely change thermostat and water-heater settings. While customers could override the utility's changes, Swofford said 95 percent of the time they either weren't aware the IOU had made adjustments or they didn't change anything. "Customer acceptance of the program was in fact extraordinarily high," Ringel said. "People really liked it."
While the thermostats used in that pilot were test models, "Our belief is you'll see the Honeywells and the Carriers" start to develop such equipment on a larger scale for both residential and small commercial markets, according to Swofford. "It will become a large part of their business."
Swofford also believes individual adjustments in usage patterns can have a big impact on peak demand--and, therefore, on both the need for new generation and the price of power. The Puget news release cited research by the Brattle Group indicating that the top 10 percent of customer peak-demand usage is responsible for 50 percent of the market's highest price, and real-time pricing could help reduce price spikes by up to 73 percent.
"That's where we see the real efficiency," Swofford said. "We are sensing that peak demand is driving the need for new generation. Install demand-response mechanisms so you don't have that need.
"We're excited because it's been talked about before," he added. "Now, we're demonstrating it."
--Mark Ohrenschall & Jude Noland
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Bonneville Power Administration has agreed to buy electricity from a planned geothermal energy plant in far northern California--although it is yet unclear whether the project will actually happen.
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If it does, this would be the first commercial-scale geothermal plant to directly serve the Pacific Northwest (PacifiCorp owns a 26.1-megawatt-capacity geothermal project in Utah).
BPA in early December announced it has reached an agreement with Calpine Corp. to buy up to 49.9 aMW from the Fourmile Hill geothermal project, located some 30 miles south of the Oregon-California border. Bonneville would pay a levelized cost of about 5.7 cents per kilowatt-hour over the 20-year contract.
The BPA-Calpine deal is considered a significant step in Fourmile Hill's development. It is conditional, however, on Calpine finding sufficient geothermal resources to make the project commercially viable. After encouraging findings in preliminary exploration, Calpine plans to drill two wells next summer. The project could be operating by 2004.
However, Fourmile Hill also faces opposition from some Native-Americans, environmental groups and nearby residents, who see it as an unwelcome intrusion on a relatively remote and natural setting, jeopardizing Native-American spiritual practices as well as local environmental qualities. One opposition group headlined a recent press release: "Geothermal Industrial Nightmare Threatens Medicine Lake."
Fourmile Hill has received approval from local, state and federal agencies, after extensive environmental reviews and with conditions for mitigation and monitoring of impacts. Yet one of those governmental approvals, from the federal Bureau of Land Management, remains under appeal. Future legal battles also are possible. "It just shows how difficult it is to permit renewable energy projects, particularly when federal issues [and] agencies are involved," said Calpine project manager Jack Pigott, noting that the nearly five-year permitting process could stretch another year or more.
While acknowledging these challenges, BPA and Calpine officials nevertheless express optimism Fourmile Hill will eventually produce renewable power for the Northwest.
Energy Issues
Fourmile Hill represents "a good thing for Bonneville," said Rachel Shimshak of Renewable Northwest Project. "It adds to their wind and solar renewable resources and diversifies their portfolio, responds to their renewable responsibilities and provides clean power for the future, which they need."
She called the BPA/Calpine agreement "a very significant milestone in the history of this project," providing the company with a guaranteed long-term power buyer--assuming adequate geothermal resources under the site.
Bonneville's George Darr declared the odds of Fourmile Hill going commercial "pretty darned good." An independent consultant examined available data and found "a very high likelihood of a geothermal reservoir capable of producing steam to fuel this power plant for the length of the contract. That gave us some comfort," he said.
As a renewable energy resource, geothermal brings a number of benefits. It produces consistent and reliable power, operating at capacity factors typically exceeding 90 percent. In addition, geothermal emits no nitrogen oxides or sulfur oxides, and "very low" levels of carbon dioxide, Pigott said. "It's a good type of generation from a global warming standpoint."
Fourmile Hill's levelized price to BPA of 5.7 cents/KWh reflects "a very good price for geothermal," said Shimshak. "This project will probably be a very economical resource over the long term," agreed Darr. It would benefit from a $20 million state production incentive awarded by the California Energy Commission, along with a 10-percent federal energy tax credit based on the project's capital cost, according to Pigott.
Bonneville has a number of interests in Fourmile Hill, deriving from its renewable energy responsibilities under the 1980 Pacific Northwest Electric Power Planning and Conservation Act and subsequent regional power plans. The federal power marketing agency wants direct experience with geothermal, according to Darr, and also geothermal in the greater Cascades region, which is thought to have "immense" potential for producing electricity from subterranean heated water. The Glass Mountain region encompassing Fourmile Hill is described by Pigott as possibly "the largest undeveloped geothermal resource in the lower 48 states." Regionwide, RNP reports the Northwest Power Planning Council has identified 11 specific areas with about 2,000 MW of developable geothermal power.
BPA also wants to expand its renewable energy supply, which now features wind energy, solar and low-impact hydro in its Environmentally Preferred Power (EPP) product available to wholesale customers. Bonneville plans to incorporate Fourmile Hill's energy into EPP, Darr said, while the actual electrons would flow into the local system of BPA customer Surprise Valley Electrification Corp. "It turns out to be a really good match between project output and loads we have in northern California," he said.
Project Impacts
As with any energy resource, Fourmile Hill would create physical impacts. The power facilities and associated wells and well fields would occupy about 50 acres, according to Pigott. A 24-mile transmission line rated at 230 kilovolts would connect the project to a substation near BPA's Malin-Warner transmission line. Some 27 miles of new access road would need to be built, according to BPA's official Record of Decision approving the power purchase and transmission agreements with Calpine.
Fourmile Hill is located in national forest land on the flank of a caldera, or volcano basin, containing Medicine Lake. The area was authorized for geothermal leasing by the BLM under the 1970 Geothermal Steam Act, which according to BPA's ROD "encouraged geothermal energy development as a means to diversify domestic energy supplies."
The region known as the Medicine Lake Highlands is described by Darr as a "typical multiple-use national forest." It hosts mining, recreation (including snowmobiling), a smattering of homes, commercial mushroom harvesting and limited logging.
Different Perspectives
Others, however, have different perspectives on the place.
The Native Coalition for Medicine Lake Highlands Defense said this: "The haunting visual beauty, water and air purity, plants, wildlife, trees, silence, and other qualities that make the area outstanding to many people--all this would be drastically affected by the impacts which include pollution, high noise levels, steam plumes, night lights, and by over eight square miles (for each project) of power plants, well fields, toxic sump pools, transmission lines, roads, parking lots, above-ground pipelines carrying 500-degree steam, and industrial blight." The group believes up to 550 MW of geothermal capacity are possible in the vicinity, although neither BPA nor Calpine state any current interest beyond Fourmile Hill, and a five-year moratorium on future geothermal development is stipulated in federal approvals. Articles from the California Wilderness Coalition, Klamath Forest Alliance and EarthFirst also have attacked proposed geothermal development in the Medicine Lake vicinity.
Some Native-Americans also object to the geothermal plans.
At a January public hearing before the Siskiyou County Air Pollution Control District board of directors, elders of the Pit River Tribe described Fourmile Hill's potential harm to their religious practices, training of medicine people, medicinal plants and overall culture. The EarthFirst article quoted a Pit River spiritual leader, Theodore Martinez, as saying underground geothermal energy "is tied to every one of these mountains around here, tied to Medicine Lake, the springs, the meadows, the plants, the animals. There are things we're talking about that aren't acknowledged as part of our culture. That energy that they want to take, that's a part of the spiritual power living there."
Yet some Native-Americans endorse Fourmile Hill. Two other local tribes, the Klamath and Shasta, have signed agreements with Calpine for protection of Native-American human remains and cultural items found during Fourmile Hill's construction and operation. (Separately, the company has committed to jobs and scholarships for tribal members.)
These agreements "do not just mitigate against potential adverse impacts from this development, they also secure long-term protection for traditional cultural uses of the land," wrote the Klamath tribal chairman, quoted in Bonneville's ROD. "As with any form of electrical generation, there are tradeoffs. However, we believe that with the mitigations proposed for this development the tradeoffs are acceptable. It is our position that this development is planned in a way that respects both our traditional culture and the surrounding forest."
Favorable Government Conclusions
Government agencies reviewing Fourmile Hill reached similar conclusions. The U.S. Forest Service and BLM both signed off in support, although the two agencies also turned down a nearby proposed geothermal venture known as Telephone Flat, inside the caldera. The local air quality district and BPA's Record of Decision also formally assent to Fourmile Hill.
BPA acting administrator Stephen Wright expressed "considerable empathy" toward the Pit River concerns in his Nov. 20 ROD, but noted, "I must base my decision . . . upon a weighing of the totality of the circumstances, and I have done so in this instance . . . this project will be important with respect to the vitality of geothermal power in the region. It will result in economic benefits to the people of Siskiyou County as well as employment opportunities for Native Americans in the areas. With the exception of Native American values, short-term noise and visual impacts during construction and operation, and the long-term visual impact to some locations from the transmission line and power plant steam plumes, impacts . . . will generally be less than significant or none." Wright noted BPA can end its contract if Calpine fails to meet all its mitigation plans and environmental requirements.
The appeal of BLM's approval by project opponents is now before the federal Interior Board of Land Appeals. This is the final remaining administrative process for Fourmile Hill, according to Randy Sharp of the Modoc National Forest. Calpine's Pigott is confident this appeal will be denied, as have other appeals.
After the IBLA's decision, Sharp noted, legal avenues could be pursued.--Mark Ohrenschall
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Idaho Power is seeking regulatory approval for Idaho's largest retail green power initiative.
The state's dominant utility has proposed an optional program in which customers could choose to pay any additional amount for green power. The payments would be applied toward the purchase of renewables through the Bonneville Environmental Foundation.
Idaho Power senior analyst Theresa Drake described the investor-owned utility's proposal as an "initial step" into retail green power. "These ideas were built to stimulate the demand for green in the marketplace, by allowing as many customers as possible to participate," she told Con.WEB. "We believe this is a smart move for a first step, allowing those people to participate without being burdened with a high cost."
The investor-owned utility has asked the Idaho Public Utilities Commission to approve the program effective Jan. 15, 2001. A 30-day comment period for the proposal is under way, PUC staffer Randy Lobb said in mid-December. PUC staff "generally liked the concept" when it was introduced earlier in the fall, he noted, although some questions remain on details of Idaho Power's plan.
Getting to Green Power
A recent Idaho Power customer survey helped inform the utility's proposed green power initiative. It found that 20 percent of residential customers had an interest in responding to such a program, according to Drake.
Another background source was a PacifiCorp green power proposal rejected by the IPUC earlier this year. Commissioners "felt the costs were too high and unjustified," according to Lobb. "Marketing costs were a huge part of what [participating] customers would be required to pay."
Idaho Power officials read the comments on PacifiCorp's initiative, and also solicited opinions from environmental groups Idaho Rivers United and Northwest Energy Coalition. "We . . . crafted this with the hopes of getting this approved," Drake said. "We tried to make it as flexible to customers as possible."
Under the proposal, Idaho Power customers (from any sector) could select how much extra they want to pay for green power, with no minimum or maximum. This fixed amount would show up itemized on monthly bills. In addition, "We're not asking a commitment for time," Drake said, calling that "another nice, flexible feature."
"Idaho Power's customers have indicated they value the electricity they are presently receiving," reads the utility's program application to the PUC. "In addition, Idaho Power customers include customer groups who do not respond favorably to increased energy costs. With those aspects in mind, Idaho Power has tailored the tariff to reach the most customers as possible. The flexibility of customers to designate their own level of participation will stimulate more customer response, rather than limiting the customers who would choose otherwise had the Program been tied to energy usage." This "broad range of opportunity for participation" is vital for program success, the utility believes.
BEF Role
Money collected through the program would be exclusively applied "to purchase green energy or cover the green energy price premium," according to the PUC filing, "with no customer amounts allocated to program overheads or marketing expenses." Green energy purchases wouldn't affect the IOU's power cost adjustment. Nor would customer non-payments of green power commitments cause service disconnections.
Idaho Power plans to buy green power from BEF in the form of "green tags." Under this arrangement, the utility effectively would pay for the environmental attributes of new renewables somewhere in the region, although the actual electrons could go anywhere. In this way, green tags help improve the overall environmental quality of regional electricity, noted BEF executive director Angus Duncan. They also stimulate green power demand.
"We believe they [BEF] have a tremendous amount of experience in the green area," said Drake. "We'd like to use their expertise in certifying green products . . . We're relying on them to seek out the regional green resources. Some of that, we hope, comes from Idaho at some point."
The utility wants to receive wind and/or solar-generated power, a priority identified in discussions with Idaho Rivers United and NWEC, according to the utility's proposal. However, BEF won't have such a product available until late 2001. In the meantime, Idaho Power would opt for a "blended" renewable product from Bonneville Power Administration's environmentally preferred power; it includes wind, solar and low-impact hydro resources.
As for marketing retail green power, Idaho Power plans to use bill stuffers and some advertising, according to Drake. It also would target environmental groups and their members. She specifically mentioned the Northwest Clean Energy Challenge as an initiative that "we're hoping will parallel with our tariff."
PUC staffers have a few questions about BEF's role, customer information provisions, participation requirements and other pending details of Idaho Power's proposal, according to Lobb. "I think most of them have some pretty simple, straightforward answers," he said. "I don't think we have really big problems." No public comments had been received as of Dec. 11, although the deadline was still weeks away. "We'll file our comments, along with anything else" that arrives, said Lobb.
This would be at least the second retail green power initiative in Idaho. A recent report from Renewable Northwest Project lists 14 utilities around the region with such offerings, including Lewiston, ID-based Clearwater Power Co..--Mark Ohrenschall & Jude Noland
Avista Utilities has chosen three demand-side management initiatives to supply it with about 13 average megawatts over the next three years, an amount that would exceed current savings from the utility's efficiency ventures.
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That demand-side number, however, is dwarfed by Avista's supply-side choice from its recent request for proposals: a planned 280-MW-capacity combined-cycle natural gas-fired combustion turbine in north-central Oregon called Coyote Springs 2.
These four resources were selected by Avista from its RFP issued in August for 300 MW of capacity and corresponding energy (see Con.WEB, Aug. 31, 2000).
"The acquisition of Coyote Springs 2 is a significant resource that allows us to be less reliant on a volatile electric wholesale market, especially during times of high energy demands," Avista Utilities president Scott Morris said in a news release. "Coyote Springs 2 and the demand-side management proposals provide us long-term, cost-effective resources to meet our growing customer needs in eastern Washington and northern Idaho."
Avista's three new DSM initiatives were chosen from among eight submitted through the RFP, according to utility spokeswoman Catherine Parochetti. Terms of the deals remain under negotiations, which the utility expects to complete by early 2001. Avista did not release any details on the chosen DSM proposals, other than to note the approximately 13 aMW they would save over a three-year period.
The investor-owned utility's current energy efficiency initiatives save about 2.8 aMW annually, Avista's Bruce Folsom told Con.WEB earlier this year. Funding comes from a DSM tariff rider that earmarks 1.5 percent of utility retail revenues in Washington and 1 percent in Idaho (about $4.5 million annually in total) for market transformation via the Northwest Energy Efficiency Alliance, low-income initiatives, traditional rebate and incentive offerings, and technical and financial consulting.
Avista's RFP specifically welcomed "incremental" energy efficiencies in seeking new resources for "a period of potential energy deficiency."
Under the utility's bidding guidelines, efficiency proposals had to produce at least 2.19 million kilowatt-hours in annual savings, be installed within three years and create energy savings for at least five years. Bidders had to propose projects at Avista retail electric customer sites, or be a customer themselves.
"We're trying to be as broad as possible" with the efficiency proposal guidelines, Avista's Jon Powell told Con.WEB in August. "To a very large degree, specificity is sort of the enemy of innovation. We're really looking for innovative bids."
In addition to the eight demand-side proposals, Avista received six renewable energy bids, including wind, according to Parochetti. She declined further comment on the renewables proposals, but noted, "We only announced our final [supply-side] choice. Some of the bids we did consider were very competitive . . . [Coyote Springs 2] was the best given the situation and the needs we are trying to meet."
Gas Plant
Coyote Springs 2 is planned near Boardman, OR, as a combined-cycle natural gas-fired plant with a 280-MW total capacity. The project is owned by Avista Corp. subsidiary Avista Power, which bought it in July from Enron North America and Portland General Electric. The utility plans to transfer ownership to Avista Utilities at cost, although the nature of that transition hasn't been determined, Parochetti said. Coyote Springs 2 will be a rate-based resource for the regulated utility, she noted. Plant construction is scheduled to begin in January, with completion planned by June 2002.
Avista selected Coyote Springs 2 for a number of reasons. One is cost-effectiveness, although details were not released. Another advantage is the project's fully licensed status, which "is advantageous since it reduces one more element of risk and allows us to move forward at a time when market prices are so volatile," said Parochetti. The area already has existing gas pipelines and electric transmission facilities. And the combined-cycle design allows for greater energy production.
"What's important about the entire project is it is a baseload resource for us," said Parochetti. "It is for our utility customers in eastern Washington and northern Idaho. The benefits are going directly to those customers. It's taking us out of that volatile market."
Coyote Springs 2 should provide about one-fourth of Avista's resource needs, she said, when it is scheduled to begin operating at about the time the utility's contracted stake in the Centralia coal-fired plant expires.--Mark Ohrenschall
Portland General Electric has created a new non-regulated consulting service for the burgeoning field of green building.
Green Building Services is "a new fee-for-service consulting group which is designed to work with architects, building owners and facility managers to facilitate the building of more environmentally and energy-efficient buildings," co-director Jerry Yudelson told Con.WEB.
The group is a "natural extension" of the investor-owned utility's Earth Smart program, said David Carboneau, PGE retail services vice president, in a news release. "It allows us to expand the range of services we provide and make our expertise available to customers in new markets."
Those services include green building project facilitation, management, education and training, feasibility studies, energy modeling, building commissioning, lighting, indoor air quality, life-cycle cost analysis and renewable energy. PGE especially offers assistance with the LEED rating system developed by the U.S. Green Building Council.
Green Building Services already has about a dozen projects under way, Yudelson said, ranging from a new Oregon high school and Multnomah County library, to a large West Virginia warehouse for a catalog retailer.
It is a profit-seeking enterprise, funded by PGE shareholders, with a broad objective. "Our goal is to really assist in the market transformation of the building industry toward better building," said Yudelson. "You have to get out and really promote this. People are very interested [in green building]. They don't know how to do it. A large part of what we're doing is education through our marketing."
Earth Smart, meanwhile, will continue as a PGE program. About 40 participating projects are in design or construction, according to the utility, and another 20-plus have been completed.
Green Building Demand
PGE's launch of Green Building Services reflects a growing interest in environmentally responsible construction in the utility's service area--and beyond.
"The market demand really has come from two different sources," said Yudelson. "One is customers asking for services in the green building area that we did not provide" through Earth Smart, which emphasizes energy efficiency. "Second, we were getting requests for Earth Smart-like services from outside our service territory, particularly areas of Portland served by PacifiCorp."
Those two circumstances converged with last spring's public launch of the LEED rating system, which PGE believes has set nationally recognized standards for green building.
Yudelson said he is unaware of a comparable service offered by a regulated utility, but he acknowledges competition from consultants: small firms specializing in green building as well as energy efficiency consultants expanding their practices. There are also architects "who want to offer this service for their own projects." Another potential class of competitors could be "very large engineering firms" with sufficient financial resources and client bases to branch into green building consulting.
But Yudelson considers another factor the greatest rival for Green Building Services: "inertia, the tendency of things just to keep going on. That's by far the biggest competitor.
"People are not leaping to embrace green building," he continued. "They have to be brought along through an educational process, seeing other examples in their categories. If they see three or four green high schools, they say, 'Hey, I want one of them for my school district.'" Green Building Services plans to spread the word through seminars, workshops, conferences and other gatherings; two recent such meetings, one each in Portland and Los Angeles, attracted 200 people altogether.
This educational aspect was lauded by Christine Ervin, head of the U.S. Green Building Council, at a Dec. 7 forum near Portland sponsored by the Oregon chapter of the Association of Professional Energy Managers. She called information about green building "the single most important thing" in promoting its practice. "You are going to be providing a lot of knowledge out there in the marketplace," she said of Green Building Services, calling it "the tip of the iceberg needed to make this successful." (Editor's note: Look for coverage of this forum in Con.WEB's January issue.)
Green Building Works
Green Building Services aims to show clients how green building works--and also that it does work. "We show people the potential benefits of this approach, how to handle all kinds of different buildings," said Yudelson.
PGE offers a wide range of consulting services for green building, with a particular bent on certification through the LEED system.
"We really promote an integrated design process," said Yudelson. "We get all the consultants involved early, looking for synergies." One example is extensive daylighting, which can reduce heat from lighting systems and thus reduce HVAC loads.
On the issue of cost, Yudelson said, "Fundamentally a good building, a much better building, can be designed at any budget."
Some green building items are virtually free, assuming they are incorporated from the start: for example, building orientation to foster passive solar, or landscape design to enhance on-site stormwater retention. Other measures, Yudelson said, might require "modest investments" for which alternative financing might be available, from sources such as Oregon's Business Energy Tax Credits or from equipment vendors. A third category he described as "more bold or exotic measures: eco-roofs, photovoltaic cells for energy production, fuel cells, microturbines--things that clearly cost more and they don't have a payback within five years, but that might be useful for other purposes." That could include PV as a learning opportunity at a school or museum.
PGE's Green Building Services plans to focus initially on commercial office and public-sector buildings, although it might expand into the likes of "big-box retail," Yudelson noted. The group expects to concentrate on opportunities around the West, although as a non-regulated entity it can work anywhere.
In addition to Yudelson, Green Building Services includes co-director Nathan Good, architectural design consultant Alan Scott and mechanical engineer John Karasaki. Staff expansions are planned, according to Yudelson.--Mark Ohrenschall
More Information:
[Editor's note: The following story originally appeared in the Nov. 17 issue (No. 593) of Energy NewsData's California Energy Markets newsletter.]
The California Energy Commission's newest member, Arthur Rosenfeld, a longtime advocate of energy efficiency, has not jumped on the peaking plant bandwagon. Demand-side management programs provide much more bang for the buck as far as meeting peak demand, he told California Energy Markets in a recent interview.
"The first response when you are short of a good is to think you need more of it," he said, sitting next to a small room-heater in his dimly lit office at the CEC. Providing people with the knowledge and incentives to alter their energy consumption patterns is easier, faster and more cost-effective than building a slew of new peaking units, he said.
Lowering lights and raising the temperature of air conditioners in office buildings and homes on hot days, for example, can cut peak demand by an estimated 30 percent, he said. High loads can be slashed by 50 percent when roofs are covered with white paint, or extensive tree-planting is promoted in urban settings.
However, getting the needed savings requires access to real-time metering, utility bills that reflect costs, and financial incentives for peak-shaving. According to a recent CEC analysis, lowering interior commercial lights can cut demand by 11 percent and boosting the air-conditioning thermostat by 2 to 4 degrees during afternoon heat waves can reduce demand by an additional 28 percent.
Supportive Findings
A recent demand-response workshop included results from a number of pilot projects that support Rosenfeld's findings. The October workshop--partly motivated by California Assembly Bill 970, which provides $10 million in grants for installation of demand-response systems--was held by the CEC and the California Public Utilities Commission.
Publicly owned and investor-owned utilities launched pilot projects last summer that resulted in noticeable savings, although the extent of energy reductions varied by outdoor temperature, day of the week, and type of building and air-conditioning system.
The Los Angeles Department of Water and Power carried out demonstration projects at two of its buildings last summer. At its 850,000-square-foot, 15-story headquarters, LADWP reset the thermostat, raising the temperature between noon and 6 p.m. by 2 degrees or more. In a 3,000-square-foot satellite building, a heat-pump thermostat was adjusted.
The project was estimated to reduce energy consumption by about 300 kilowatts, or 1 watt per square foot, said Don Cunningham, director of energy efficiency programs--an amount exceeding expectations. He also noted the changes brought almost no complaints from occupants.
LADWP plans to launch a demand-side reduction program for 300 commercial customers next summer. If the customers install remote-controlled devices to lower their thermostats on hot days they will receive an incentive, which would likely be the market cost of the amount of energy saved, Cunningham said.
The Sacramento Municipal Utility District slowly dimmed lights by 30 percent and raised the thermostat 4 degrees in one of its buildings this past summer. Average peak-demand reduction was estimated at 30 percent, said Harlon Coomes, senior demand-side specialist. SMUD workers in the building were later asked if the changed lighting or air-conditioning affected them, and no one reported any difference.
Coomes observed that hard-and-fast numbers on energy savings are hard to come by because of the many variables, and that pilot projects can face unexpected challenges. For example, when SMUD attempted to run its demand-side software in its main building, the computer system's fire wall blocked it.
SMUD is considering launching a number of demand-side programs for commercial and residential buildings next summer, including expanding its lighting and air-conditioning peak reduction to commercial buildings, and creating an Internet-based DSM program.
Pacific Gas & Electric carried out a voluntary curtailment project in which commercial customers received a rate discount in exchange for PG&E remotely raising their air-conditioning thermostats. Reduction requests were based on market energy costs. The program included a non-refundable sign-up fee of $600, and 55 customers participated. But only 24 customers curtailed their loads, and the maximum savings were between 45 megawatts and 50 MW--half the 100-MW target. The program lost steam when lower wholesale price caps were imposed, noted PG&E supervisor Marc Renson.
It is unlikely the utility will run another demand-response program next summer because the California Independent System Operator and Power Exchange are expected to launch price-responsive load-management programs, and PG&E does not want to duplicate those efforts, Renson said.
Additional workshops to compare and contrast load-reduction project results and strategies will likely be held next year--Elizabeth McCarthy, California Energy Markets
[Editor's note: This column originally appeared in the Dec. 11 issue (No. 959) of Energy NewsData's Clearing Up newsletter]
The future in these late days of 2000 continues to arrive relatively unannounced on its own schedule; even true believers are not much concerned with the fine points of a future tuned carefully to standards of greenness and sustainability. I believe with the believers that utility customers should be able to exercise a green power option, but I think that greenness at the moment is a small policy issue; meeting load is the main issue.
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Meeting load of course continues to work on both sides of the meter. Before pointing this column at more immediate issues, I believe we need to redouble efforts, as Ralph Cavanagh put it in a recent Los Angeles Times op-ed piece, to "get more work out of less electricity." I believe developing efficiency achievements are the hallmarks of an intelligent free market, but I don't think this means we will, or should, use less energy in the aggregate. But we should aim at continuing to use less energy per unit of domestic product.
My sense of the energy context as we approach 2001 (which son Nicholas insists is the true gateway to the millennium) demotes sustainability and emphasizes efficiency and certain environmental effects. I agree with Amory Lovins that we are not running out of fossil fuels. Even the doubling of energy demand by 2020 will not diminish reserves, despite the estimates that 90 percent of that demand increase will come from fossil sources. Fossil reserve estimates using technically advanced metrics are growing faster than ever--never mind the current skyrocketing gas prices.
Renewable resources such as biomass, wind, wave, solar and geothermal have a robust growth dynamic, but these are still estimated to remain very fractional--only 1 percent of the load mix by 2010. That's a 1996 estimate of the International Energy Agency, the Paris-based group that monitors energy developments in Western industrialized countries.
The alternative energy industry has not been as smashing a success as many of us would like it to be. The efficiency establishment itself would agree in large part. Its roots have not been nourished in the soil of transformation and risk-taking. If some demand-side management folks managed to take a wild fling at something with really important potential, and failed gloriously, there would be endless recriminations for years from second-guessing bureaucrats and regulators.
The World Energy Council, a non-governmental organization in London that promotes sustainable energy policies, estimates renewable resources could provide from 5 percent to 8 percent of world power needs by 2020, but only with additional spending on research and development. Additional softer money?
I am not convinced that we are going to caravan our way, supported by the soft money donkey of additional spending on research and development, into an energy-efficient New Jerusalem. Something like that is of course conventional wisdom. At the PNUCC annual meeting in November, Steve Gehl of the Electric Power Research Institute laid before those in attendance an "Electricity Technology Road Map," which led (guess where) straight to additional spending on research and development.
It's not helpful to belabor the point at length here, but the useful outputs of federal R&D are not what one might reasonably expect from an investment of $80 billion in nuclear and general energy efforts over 40 years. A 1991 study for the Brookings Institution by Linda Cohen of University of California-Irvine and Roger Noll of Stanford University ("The Technology Pork Barrel") concluded that, "The overriding lesson from the case studies is that the goal of economic efficiency--to cure market failures in privately sponsored commercial innovation--is so severely constrained by political forces that an effective, coherent national commercial R&D program has never been put in place."
Moreover, the really good R&D is destined for private funding. The former head of the Synfuels Corp., Eric Reichl, says in light of private funding of "high merit ideas," it happens "that government dollars will tend to flow to marginal ideas." Some of you will remember synfuels, I'm sure, which may not have been marginal in concept, but were terribly submarginal in execution.
The problem with soft money investments is that they are usually oriented toward institutions ahead of achievements and may lack corrective nervous systems. Moreover, if too much soft money is allocated to a project, actual project work easily gets lost in the ongoing institutional busy work associated with spending overhead money on things like all-day mission-statement retreats, evaluation scoping conferences and diversity training.
Demands on Demand
Now for the more immediate stuff. The current power situation in the West has created lots of things (try near-panic, for one), among them various demands on demand. Bonneville Power Administration officials appeared before the Northwest Power Planning Council recently and described BPA's strategy for resource augmentation. This addresses a 3,000-megawatt shortfall associated with meeting contractual commitments in the 2002-2006 period. Part of the principles of Bonneville's augmentation include maximized conservation (166 aMW) and renewables (150 aMW) for 2002-2006.
BPA is also casting about for interruptible customers in the very near term in the face of possible power emergencies. The Northwest Power Pool, PNUCC and the Power Council cooperated in putting together an Emergency Response Team to deal with possible winter problems, which for a time earlier this month included an Arctic blast forecast later modified.
Demand reduction as curtailment may be the only feasible short-term answer to power emergencies in the Northwest. The closing of Georgia-Pacific in Bellingham because of exorbitant power prices is not orderly curtailment. But something like curtailment plans are in order, because it is clear now that the answer in the West to the excesses of regulation (13 cents per kilowatt-hour residential rates in California) is not the excesses of deregulation (the Dec. 7 forward prices on Dec. 11 power were $3,000/MWh).
That, of course, is another column. If reliance on conservation is to work in meeting load, it has to be integrated (for example) with measures to meet new technical industry load. These high-load-factor facilities support backup generators for a virtual power plant and have big air-conditioning loads that can be cycled for peak-shaving. This kind of integration and control might help develop more market transformation possibilities.
A regional conservation rebirth should not be done on an ad hoc basis, but rather in a coordinated fashion, using the expertise of the Northwest Energy Efficiency Alliance. But all these clicked-off ideas need spelling out in still another column, so until then turn down the thermostat, wrap yourself in an energy-efficient blanket, and stay tuned and warmed.--Cyrus Noë
A number of Idaho organizations and individuals received energy efficiency awards at the annual Idaho Energy Conference Nov. 15-17 in Sun Valley.
Award-winners:
[Editor's note: Look for more coverage of the Idaho Energy Conference in Con.WEB's January issue.]
Applications for the ninth annual BEST Business Awards are open until Feb. 20, 2001.
The awards are issued annually to Portland-area businesses with notable accomplishments in energy efficiency, water conservation, waste reduction and efficient transportation.
BEST (Businesses for an Environmentally Sustainable Tomorrow) is a service of the city of Portland. The awards are co-sponsored by the Association for Portland Progress, the Environmental Federation of Oregon, The Business Journal and the U.S. Green Building Council.
For more information, call (503) 823-7222; to download an application from the Web, go to http://www.ci.portland.or.us/energy/best-app.html
Oregon State University is one of 26 universities chosen to receive U.S. Department of Energy funding to conduct energy efficiency assessments of manufacturing plants.
Each of the participating universities will receive more than $150,000 apiece to conduct about 25 assessments under the Industrial Assessment Centers program, the purpose of which is described in a DOE news release: ". . . to provide hands-on experience in energy waste and productivity management for engineering students and to provide no-cost industrial assessments to small and medium-sized manufacturers to stimulate improvements in energy waste and productivity management."
Corvallis-based OSU is the only Northwest school selected for the DOE funding award.
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