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Funding Support from the Northwest Energy Efficiency Alliance

CWEB.062/February.28.2001


1) Large Public-Power Utilities Push Conservation in Energy Crunch
2) BPA Seeks 1,000 MW of Wind Power Output
3) Eight-Member Board Appointed for Oregon Public-Purposes Agency
4) Alliance Board Approves $9.6 Million Worth of New, Continuing Ventures
5) Energy Efficiency, Renewable Energy Ventures Eligible for CO2 Offset Solicitation

Conservation in Demand

Working the Demand-Side

Large Public-Power Utilities Urge Conservation
Avoid Wholesale Power Costs, Reduce Customer Bills

[Editor's note: This is the second in a series of Con.WEB special reports on conservation in the midst of the energy crisis. The first report can be seen at http://www.newsdata.com/enernet/conweb/conwebspissue1.html]

Four of the Northwest's largest public-power utilities are scrambling to reduce electricity use on their systems.

Seattle City Light, Tacoma Power and Snohomish PUD have recently increased retail rates--ranging from 28 percent to 50 percent--because of soaring wholesale power prices on the Western markets. Eugene Water & Electric Board officials are mulling a proposed 15-percent rate increase.

All four publicly owned utilities are working the demand-side to help avoid expensive power purchases and reduce bills for their customers. Much of their emphasis focuses on immediate savings, although longer-term efficiencies also are promoted.

Seattle and Tacoma have established near-term goals of 10-percent energy savings on their systems. Both have already reached about half their goals, with considerable help from extensive public information campaigns--and, of course, their customers. The curtailment/conservation efforts have saved the utilities millions of dollars in power costs.

The two Puget Sound municipal utilities, along with Snohomish and EWEB, also have enhanced existing programs. Seattle, for example, offers a 20-percent incentive bonus for commercial conservation projects meeting certain deadlines this year. In other examples, Snohomish and EWEB are both continuing appliance rebate efforts and boosting low-income weatherization.

These large public-power utilities have launched or are examining a variety of new energy-saving initiatives, from compact fluorescent promotions to installations of thermostat setbacks in small businesses to demand-exchange programs with large customers.

Seattle City Light

Seattle's municipal utility and the city's elected officials have implored residents, businesses and government agencies to cut their electric use by 10 percent through March. A large-scale public information campaign has spread the word around the Emerald City. City Light planned to spend $420,000 on radio and television conservation spots through mid-February, according to spokesman Bob Royer. Business publication advertising featuring "conservation heroes" and Web-based energy efficiency tips are also part of the push.
Courtesy of Seattle City Light

"The purpose of the advertising we're doing right now is strategic in that we are trying to not purchase energy in the first quarter of 2001," Royer told Con.WEB in late January. "By far the biggest payout of anything we can do is not purchase electricity." City Light anticipates spending about $150 million on wholesale power from January through March--up fivefold from the first quarter of 2000. The utility has already raised retail rates an average of 28 percent as a result of higher power costs, and further increases are possible, superintendent Gary Zarker has said.

City Light offers energy-saving suggestions for all its customers. Residents, for example, are urged to turn down thermostats, seal air leakages, check furnace filters, reduce water-heating temperatures, use cold water to wash clothes and take other measures to reduce space- and water-heating, which Royer noted accounts for 60 percent of residential bills. Businesses can reduce HVAC operating hours, adjust building temperatures, turn off unneeded lighting and computers, and make sure energy-using systems are functioning well. The utility also encourages longer-term solutions such as upgraded lighting and HVAC systems. Industrial customers, meanwhile, are asked to schedule annual maintenance shutdowns before April.

City Light also has mailed coupons to residential customers good for two free compact fluorescent lamps and a faucet aerator, according to Royer. "Just mail it back to us," he reported, and the items will be delivered.

Conservation actions have apparently made a dent in Seattle's electric consumption. The utility projected consumption of 1.793 million megawatt-hours from Jan. 1 to Feb. 25; actual weather-adjusted consumption for that period was 1.723 million MWh, a savings of 70,272 MWh. City Light's daily load-reduction goal for February was 129 aMW; on Feb. 25, the total stood at 80 aMW, or 6.2 percent. "We're pleased with that," said Royer, and he expects more price-responsive conservation as customers open bills containing the 10-percent rate increase effective in January, followed by an 18-percent increase that takes effect in March.

City Light also is in the midst of expanding its conservation programs, building on the utility's legacy of saving nearly 89 (first-year) aMW from programs from 1977 through 1999. Zarker recently called conservation "still the best place to acquire new generation." The utility has committed to doubling its energy-saving acquisitions from 6 aMW annually to 12 aMW annually, Royer said.

City Light has already announced one significant program addition: a 10-percent incentive bonus for conservation retrofit contracts signed by medium or large commercial/industrial customers by July 31, and another 10-percent bonus for such projects completed and approved by City Light by Nov. 30. "City Light hopes that the 10 + 10 Incentive Bonus will further stimulate conservation activity in our service area and help customers mitigate the impacts of rising energy prices," said a utility fact sheet.

Tacoma Power

Tacoma's municipal utility has been financially hammered by the energy crisis. It has occasionally paid $2 million to $7 million per day for power, for which it recoups $450,000 in rates from customers, according to an open letter from superintendent Steve Klein. Tacoma slapped a 50-percent surcharge on customer bills in December, and also urged conservation, declaring that a 1-percent reduction in electric load can save the utility $100,000 a day in purchased power costs.

Tacomans have responded, cutting system energy consumption 5 percent in January, according to assistant energy services manager Todd Currier. "We definitely have not distributed hardware to have that kind of impact," he told Con.WEB. "Most of this is from people hearing and heeding the call to action." He expects even more energy savings in February, as the rate surcharge fully appears on customer bills and the conservation message sinks in deeper from media coverage and Tacoma Power informational offerings.

In addition to spreading the demand-side word through television, newspapers and even bus advertising, Tacoma Power officials have fanned out into the community to discuss conservation with civic organizations, residential gatherings and employee groups. Utility representatives often hand out "conservation kits" with such items as a compact fluorescent lamp, weatherstripping, plastic storm windows, outlet gaskets and temperature cards for checking thermostats. Some 70 presentations had been completed or arranged as of mid-February, and the total eventually could exceed 100, reaching several thousand Tacoma Power customers. "It's a noticeable hit, making that kind of contact," Currier said.

The utility also has mailed to residential customers a coupon for a free 16-watt compact fluorescent lamp, redeemable at local Home Depot stores. Approximately 12,000 coupons had come in as of mid-February, according to Currier, and Tacoma Power anticipates 10 percent or more of its 140,000 residential customers eventually will participate.

For commercial customers, the utility has bought and distributed about 700 VendingMiser occupancy sensors for vending machines in schools, institutions and businesses. Tacoma Power installs one at each participating facility and the customer puts in the rest. The utility projects 46-percent average energy savings for each VendingMiser, or about 1,500 kilowatt-hours a year--equal to the annual average total lighting load in a home, Currier noted. "It's a really nice measure. For 160 bucks, you can hardly go wrong saving that much energy." Tacoma Power also has contracted for the installation of about 100 single-zone setback thermostats for small businesses.

"All the measures that we're doing figured to pay back to us within 120 to 180 days or less," Currier said. "If we can't get a return that's that quick, we're spending money we really need for other things right now."

Looking to the future, Tacoma Power is assessing conservation potential in its service territory. Increased financial incentives for energy-saving measures are possible but not certain--rate increases do send strong price signals, Currier noted. The utility also expects to substantially participate in Bonneville Power Administration's conservation/renewables wholesale rate discount.

"The analogy I heard from [Tacoma Public Utilities director] Mark Crisson is that asking about the longer-term conservation program at this point is kind of like planning the remodel while the house is still on fire," said Currier. "He thinks we should stay focused on putting the fire out."

Snohomish PUD

The Northwest's largest PUD increased its retail rates an average of 35 percent to cover higher wholesale power costs, wrote general manager Paul Elias in a Jan. 3 letter to Washington Gov. Gary Locke. Elias advocated three strategies to deal with the energy crisis, including, "First, residential customers and businesses statewide should be encouraged to take their energy conservation efforts to new levels. We have already undertaken aggressive efforts in this direction."

Snohomish had previously committed to spending 3 percent of its total revenues on energy conservation, renewable energy and low-income initiatives by 2001. "We're on track to do that, based on our revenue requirements prior to the rate increase," said energy services product development manager Bob Nicholas.

Commercial and industrial customers have expressed "quite a bit of interest" in PUD conservation programs in the aftermath of the rate increase, he noted. Snohomish offers up to 70-percent financial incentives for cost-effective energy-efficient lighting, motors, HVAC systems and other measures.

The PUD also is developing a demand-exchange program in which large customers are paid for voluntary load curtailments at times of peak demand and high power prices, benefitting both the customer and the utility. Representatives of a dozen customers, including The Boeing Co. and local U.S. Navy facilities, attended a January meeting on the program, according to Nicholas.

Snohomish also wants to foster energy savings by small businesses, through the likes of audits, retrofit incentives, and cooling system tuneups. "We're on track to start that sometime in 2001," he said. Another commercial energy-saving initiative is the benchmarking Web site allowing customers to compare their energy use to similar businesses. Snohomish developed this in collaboration with Seattle, Tacoma, the Northwest Public Power Association and SBW Consulting (see Con.WEB, Aug. 31, 2000, for more details).

And, like Tacoma Power, Snohomish is bullish on the VendingMiser. The PUD contracted to deliver 1,200 of the devices to local schools, a project scheduled for completion by midyear.

On the residential side, Snohomish has offered a coupon good for $3 towards the purchase of new compact fluorescents. The PUD also recently announced rebate extensions for resource-efficient clothes washers ($75) and dishwashers ($35) bought by Dec. 31. Nicholas said the utility also is expanding its low-income program to fund energy-saving measures in individual units in several local housing authorities.

Residents of Snohomish County and Camano Island have inundated the PUD with energy queries, according to spokesman Mike Thorne. The utility's energy hotline had recorded a 75-percent increase in calls since the energy crisis began, regarding "anything that has to do with energy. But a lot of it, obviously, customers are reading the paper, they know what's going on," and they're asking: "What can I do to cut down consumption on my bill?" The PUD Web site also prominently offers conservation tips.

Snohomish also is making its own system more energy-efficient, through a conservation voltage reduction program at about 40 substations over the next three years. In 2001 the PUD plans to save in the range of 2 million to 3 million KWh from this effort, at a cost of about 1 cent/KWh, according to Nicholas.

Eugene Water & Electric Board

The municipal utility serving Oregon's second-largest city has an illustrious history in energy conservation. EWEB efficiency initiatives have shaved 10 percent off the utility's load over the past 20 years, according to energy management manager Mat Northway. The utility devotes about 5 percent of its gross revenues to energy conservation.

Given these accomplishments, gaining another 10 percent in programmatic savings this year is hard to imagine. So EWEB plans to "rely on more temporal actions: lower the thermostat, turn off lights and air conditioning, things like that," Northway told Con.WEB.

EWEB encouraged these types of measure in a recent bill stuffer, to fill the gap between engineered retrofits and freezing in the dark. "The stuff in the middle is wise use, common-sense things," he said.

As of late February, he reported, it appears EWEB's system load has dropped about 2 to 3 percent as a result of conservation actions by customers. At EWEB headquarters, meanwhile, energy consumption is down about 10 percent.

At the same time, the utility plans to nearly double its low-income weatherization funding this year, to about $900,000, which Northway noted will "directly address one of the biggest concerns" EWEB leadership has expressed about a proposed 15-percent average rate increase. That proposal, which could include tiered rates, has been deferred until at least March.

The utility also is expanding its appliance rebate program, looking to join a regional compact fluorescent rebate venture, and continuing its commercial and industrial programs, which Northway said have attracted more recent interest from customers.

For EWEB, conservation makes lots of sense--and cents. "We've made a preliminary comparison on what makes conservation so valuable," Northway said. "We can gain $1 million through a 1-percent rate increase. We can save $5 million through a 1-percent load decrease." Although the two aren't exactly comparable, conservation appears to provide roughly five times the benefit of raising rates. "Our aggressive conservation programs get us 1 [percent], maybe 2 percent of average load this year," said Northway, and even with that, he added, the utility number-counters tell him: "We need more."--Mark Ohrenschall

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RENEWABLE/GREEN POWER

Big Wind Blows

BPA Seeks 1,000 MW or More of
Output from New Wind-Energy Plants

Wind energy is positioned to become a significant contributor to the Northwest electric system, following Bonneville Power Administration's Feb. 22 announcement that it will seek 1,000 megawatts or more of output from new wind plants.

BPA's request for wind project proposals is part of the agency's search for about 3,000 average megawatts of additional power needed to serve wholesale loads from 2002 to 2006. This solicitation could produce more than 300 aMW.

The amount sought by Bonneville is immense in context: current wind-energy capacity directly serving the Northwest is less than 100 MW. Another 300 MW are planned for the Stateline Wind Project along the Oregon-Washington border (see Con.WEB, Jan. 30, 2001, for more details on Stateline).

This represents a "major breakthrough" for wind energy in the region and the nation, according to an American Wind Energy Association news release. AWEA called the RFP "a clear signal that the federal agency recognizes the potential of wind energy to provide near-term, stably-priced electricity supplies as California and the Northwest grapple with gyrating energy prices and power shortages." The trade group estimated the BPA solicitation could lead to $1 billion worth of new business for the wind industry. "What BPA is saying is that wind energy has arrived as a recognized source of bulk electricity supply," said AWEA executive director Randall Swisher.

Rachel Shimshak of Renewable Northwest Project said her organization is "particularly happy that Bonneville wants to meet a good portion of its [additional power] needs with wind," and she predicts the RFP will draw more wind developers to the region.

Still, it's not certain Bonneville will ultimately purchase output from 1,000 MW of new wind facilities. Projects must be competitive in cost with other generating resources, and undertake environmental reviews, permit approvals, siting arrangements with landowners, transmission interconnections and more. In particular, if a federal wind energy production tax credit expiring at year's end is not renewed, "the cost impact may be such that none of the proposed wind projects will be able to meet BPA's cost criteria," the RFP acknowledges.

In any event, BPA is in a hurry. Proposals are due April 6, and the agency wants commercial operations as soon as possible, and by the end of 2003 at the latest.

Why Big Wind

The low-cost hydropower produced by Northwest federal dams has become exceedingly popular--so much so that Bonneville finds itself with about a 3,000 aMW shortage of available energy resources to serve wholesale customers for the coming five-year rate period beginning in October.

Bonneville's wind RFP is designed to help fill this gap.

BPA officials selected wind after considering this question: "What resources could we bring on-line in large amounts and quickly with a small staff within Bonneville? After looking at the alternatives, wind was really the one that stood up," BPA's renewable resources program manager George Darr told Con.WEB.

Darr believes 1,000 MW is very realistic. "Based on inquiries from developers, we could easily get 1,000 megawatts of proposals" that meet BPA's criteria. "My phone's been ringing off the hook" recently with calls about prospective wind farms, he said, including 10 a week from farmers interested in harvesting the wind.

Shimshak called BPA's solicitation "a really important signal to the market to get even busier than it is today. I think it will provide for a good amount of competition, and hopefully that will keep the prices competitive." She is also aware of "quite a mad scramble for leases of land to do wind projects going on throughout the Northwest."

BPA Criteria

Darr emphasized that proposals must come from "experienced wind developers." He said Bonneville will be looking for prices "in the competitive range of 5 to 6 cents" per kilowatt-hour, incorporating energy costs as well as transmission and any other services required to integrate the wind power into BPA's system.

Darr thinks proposed projects are "most likely" to come from Oregon and Washington, although they could be located anywhere "in or near the Bonneville service territory." Developers must deliver power to BPA transmission facilities.

Bonneville will also study the effects of large amounts of intermittent wind power on system operations, such as generation control and scheduling. The results could influence how much wind power BPA purchases through the RFP, Darr noted.

"BPA seeks proposals from wind project developers capable of designing, constructing, financing, and operating a commercial-scale wind energy facility," according to an introduction to the 22-page RFP. "To receive serious consideration, proposals must incorporate state-of-the-art measures to minimize impacts to the environment and must be competitive on a life-cycle cost basis."

Each proposed power sale must be between 15 aMW and 50 aMW, although "sites that have potential for future expansion are strongly preferred." Cost must be "competitive . . . with the lowest cost resources currently available to BPA." And on timing, Bonneville wants to "achieve commercial operations as soon as possible, consistent with BPA's statutory obligations and minimizing impacts to the environment." Late 2003 is BPA's informal (although not absolute) deadline to begin receiving wind-generated electrons.

BPA staff and consultants will evalute proposals that meet basic criteria and are compatible with the agency's preferences. Additional points of assessment include proven capability of developers, site potential, technical feasibility, environmental and tribal considerations, and estimated life-cycle costs. Contract negotiations will follow with the best proposal(s).

Proposals are due to BPA by April 6. A bidders' conference is scheduled for March 7 at BPA headquarters in Portland.--Mark Ohrenschall

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PUBLIC PURPOSES

New Leaders

Eight-Member Board Appointed for
Oregon Public-Purposes Agency

An eight-member board of directors has been appointed for Oregon's new public-purposes adminstrative agency.

The Oregon Public Utility Commission on Feb. 6 approved the board members for the non-profit organization charged with administering most of the energy conservation and renewable energy funding established by the state's electric industry restructuring legislation. This as-yet-unnamed entity will over the next 10 years oversee an annual budget now estimated at $50 million--assuming Oregon's restructuring begins as scheduled in October--and will effectively replace ratepayer-funded conservation and renewables initiatives offered by the state's two big investor-owned utilities, PacifiCorp and Portland General Electric.

Newly appointed board member Jason Eisdorfer called this "an enormous opportunity" for conservation and renewables in Oregon. "I think it's a good group and I think the world is our oyster," said the energy program director for the Citizens' Utility Board of Oregon.

Joining him on the board will be Christine Ervin, president and chief executive of the U.S. Green Building Council; consultant Tom Foley; Suzanne Johanssen, a financial planner with American Express Financial; John Klosterman, vice president of manufacturing with Rejuvenation Inc.; Cheryl Perrin, executive director of Campaign for America; John Reynolds, retired architecture professor with the University of Oregon; and attorney Steve Schell of Black Helterline. OPUC staffer Lynn Kittilson will serve as a non-voting ex-officio board member.

"We have an excellent group to get this off the ground," said OPUC commissioner Ron Eachus in a news release. "There is lots of experience in non-profits and lots of experience and commitment to the goals of energy efficiency and fuel diversity. Energy efficiency and renewables are two resources we need more of in this period of high prices, and this will be a new way of investing in them that provides more stability, more funding and more possibilities."

Early Milestone

Establishing a board of directors is one of the first milestones for this landmark organization, which the OPUC approved in October (see Con.WEB, Oct. 31, 2000). This agency will administer 82 percent of the 3-percent public-purposes charge to be collected from PacifiCorp and PGE customers starting in October, with this portion earmarked for new conservation and market transformation initiatives and defraying above-market costs of new renewables.

The PUC estimates the organization will administer $50 million annually.

"I'm looking forward to seeing what we can do," said Foley. "This power system's in trouble, and I happen to think that spending some money on conservation and renewables at this point is a valuable thing . . . This is probably as good a way to do it as has been devised yet," since utilities have traditionally shown "some reluctance" to reduce the amount of electricity they sell. "I think one of the problems with the industry is the inefficient use of capital," he continued. "Part of that is driven by the peakiness of load. This board may be able to do something about that."

After the OPUC endorsed the non-profit organization in October, the commission staff gathered a board recruiting committee with representatives from utilities, governments, businesses, advocacy groups, and regional conservation and renewables organizations. They developed a list of "expectations" for board members, as outlined in a staff report from Kittilson. Among them: community respect; not necessarily conservation and renewables experience; no direct financial conflict of interest; non-profit experience; and no "overriding political or ideological agenda that compromises ability to be effective." Skills, knowledge, contacts, influence and demographic considerations highlighted the selection criteria.

"We've got really good people for the board, and the commission's very supportive of this process, so we're on track," Kittilson told Con.WEB. She said consultants Marc Smiley and Ed Sheets will assist the organization.

Kittilson and Eisdorfer both acknowledged considerable effort will be required to get the new organization substantially ready by October. The to-do list includes creating a name, incorporation, hiring an executive director, beginning strategic planning, arranging funding with the OPUC, and setting up advisory committees for conservation and renewables.

"We have to move quickly," said Eisdorfer, but at the same time, "We also have to be diligent and careful." The new board is scheduled to hold its inaugural meeting March 1 in Portland.--Mark Ohrenschall

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MARKET TRANSFORMATION

$9.6 Million Meeting

Alliance Board Approves Five New or
Continuing Market Transformation Ventures

Some $9.6 million worth of new or continued projects have been approved by the Northwest Energy Efficiency Alliance board of directors.

The Alliance board--meeting Feb. 2 at Skamania Lodge in the Columbia River Gorge--adopted two new market transformation ventures, one designed to promote a range of Energy Star residential products and another to improve the energy efficiency of making polysilicon used to grow crystals for semiconductor production. Additional funding for the Energy Star Residential Lighting program, mainly to support growing utility interest in energy-efficient lighting products, also won endorsement.

At the same time the Alliance board agreed to continue funding for two ongoing ventures, the Energy Ideas Clearinghouse information service and the Bac-Gen BioWise Wastewater Treatment Initiative aimed at reducing aeration energy in sewage plants.

With these decisions, the Alliance has allocated approximately one-third of its $100 million budget from 2000 through 2004.

Residential Products, Polysilicon Ventures

The biggest-budget venture considered at the Feb. 2 Alliance board meeting was the Energy Star Home Products program, approved by unanimous vote. Up to $4.5 million will be committed to promote a variety of Energy Star-qualifying household items, including clothes washers, dishwashers, refrigerators, room air conditioners, televisions, VCRs, DVD products, compact fluorescent lamps and fixtures, insulation, roof products, windows and residential dehumidifiers.

Under this broad initiative the Alliance will try to further connect with the increasingly recognized Energy Star label, at a time of growing interest in energy efficiency.

Specifically, the Alliance will engage in public relations in collaboration with the national Energy Star program, fund cooperative marketing efforts with retailers and manufacturers, expand coordination with Northwest utilities and provide more field services.

Sears has already approached the Alliance about establishing an Energy Star appliances line for prominent store displays, according to board member Darlene Nemnich. The Northwest could serve as a "rollout pilot" location for this concept, said Alliance project coordinator Marci Sanders.

A question arose on the extent of regional Energy Star advertising without this Alliance involvement. It would be hit-and-miss, responded Alliance planning/implementation director Susan Hermenet. "Any advertising for Energy Star is actually . . . helping us," said board member Syd France. "Our interest is to get on the bandwagon," which will help promote existing Alliance Energy Star ventures.

Another new Alliance initiative will target an entirely different sector (industrial) and product (polysilicon used to grow crystals for semiconductor production). The board unanimously approved up to $980,000 to help Advanced Silicon Materials and its partners explore a new process for producing polysilicon that could cut energy consumption by an estimated 25 percent, and save polysilicon customers 10 percent of energy use. The Alliance projects regionwide efficiencies of 31.4 average megawatts by 2010. Other benefits such as a higher-quality product and greater yields also are anticipated, but need verification.

This so-called dendritic process essentially promises an easier and less energy- and labor-intensive way to form the material put into large furnaces to make polysilicon, according to Nemnich. Alliance funding combined with $1.3 million from the industry will help ASiMI and its collaborators--including Siemens Solar and SEH--further test this process on existing production lines. The timing is right because the polysilicon and chip markets are in a lull and companies have "time and interest in doing these sorts of things" before production cranks up again, Nemnich noted.

Some Alliance board members expressed concern about the relatively narrow market involved. ASiMI is the only polysilicon producer in the region, according to Alliance project coordinator Blair Collins, and it has just four Northwest customers, at least two of which will participate in this venture. "We're working with the majority of the actors in the region," he said, in hopes of influencing their energy efficiency. Board member Ken Keating noted the difficulties of finding opportunities to transform industrial-sector markets, such as this. He also believes this project "increases our credibility in the bigger-picture microelectronics industry."

ASiMi's plant in Moses Lake, WA, will be the initial site of dendritic process testing. However, moving forward with implementation of the project will be subject to negotiations for co-funding and revenue-sharing required by the Alliance board as a condition of the approval motion, which passed unanimously.

New Lighting Money

With all the recent emphasis on energy conservation, the Alliance board decided to add $850,000 to the Energy Star Residential Lighting venture, primarily for more collaboration with local utilities in encouraging the sale of compact fluorescent lamps.

"We see this as a clear market transformation opportunity where we can leverage very significant utility investments, particularly right now," said Sanders. She called this "an opportunity to offer a . . . lot of coordination to achieve a more critical mass than [utilities] would on their own at a local level."

One prime example: an upcoming Energy Star lighting coupon campaign, in which the Alliance can coordinate with retailers and suppliers to ensure stores have enough of the right kind of lighting products available, and that the coupons are easily redeemable. "More utilities are wanting to use the [Alliance lighting] program to enhance their program, and therefore it enhances our program," she told the board.

Compact fluorescents are increasingly popular items. In the last six months of 2000, Sanders later reported, the Alliance tallied 294,000 CF lamps and 13,664 fixtures sold in specific promotions involving the Alliance and retailers. In the first quarter of 2001 alone, the Alliance projects sales exceeding 100,000 and possibly nearing 200,000.

"It appears to be a market already on the way to being transformed," said Alliance board chairman Brian Hedman. "In the current crisis, utilities and customers are turning to CFLs as a likely quick response," which might argue against more Alliance funding. Yet, he continued, this added money will help accelerate compact fluorescent market share--now estimated at about 2.5 percent regionwide--and will continue the Alliance's "leadership role in the market."

Energy Ideas Clearinghouse, Bac-Gen

Two other ongoing Alliance ventures received funding extensions in unanimous board votes.

The Energy Ideas Clearinghouse was approved for $1.8 million over three years. This will help the Clearinghouse--whose primary mission is to provide objective, timely and credible information to energy professionals in the commercial and industrial sectors--expand its services, according to Alliance project coordinator Amy Cortese.

EIC offers tiered services to its clients, starting with Web-based information for most queries and moving to a hotline and engineering and technical consulting for more involved energy matters. This approach is "really working," according to Cortese. She also cited a recent survey of utility, government and private-sector Clearinghouse clients, in which 70 percent of respondents said they can influence energy decisions, and one-third reported the EIC helped them save energy.

The Bac-Gen BioWise Wastewater Treatment Initiative will receive an additional $1.44 million from the Alliance for three years, to continue its work in expanding the use of a bacteria-based biological process that greatly reduces electricity needed for aeration in wastewater treatment lagoons.

Five small- to medium-sized Northwest wastewater plants using the Bac-Gen method have demonstrated kilowatt-hour savings ranging from 39 percent to 75 percent, according to Alliance project coordinator Andy Ekman. However, a number of market barriers remain, including a "very conservative market driven by compliance issues" for environmental regulations.

The Alliance's continued funding will help develop more Bac-Gen demonstration sites and finish case studies for the wastewater industry to digest. Business plan dissemination, market expansion and technology licensing are also on Bac-Gen's to-do list. "We think as you get rolling, with more sites, this market will really go," said Ekman, projecting 65 aMW of savings regionwide by 2010. The Alliance plays an important role as a credible third party in seeking to influence what Ekman called "a highly skeptical marketplace."

In other action, the Alliance board approved $250,000 for five years to monitor completed Alliance ventures.

The board also heard from Hermenet that the unsolicited proposals Web site has netted 15 submissions for prospective projects in the commercial, industrial and agricultural sectors, although none yet in residential. Only one proposal has been rejected, she reported, because it didn't save electricity.--Mark Ohrenschall

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MARKETPLACE

CO2 Reductions Wanted

Energy Efficiency, Renewable Energy Ventures
Eligible for CO2 Offset Solicitation

Energy efficiency and renewable energy projects that reduce carbon dioxide and other greenhouse gas emissions are eligible to apply for funding from the Oregon-based Climate Trust and Seattle City Light.

The two Northwest entities have issued a joint request for "carbon offset" project proposals in what they describe as "a major effort to fight global warming." The Trust--formerly known as Oregon Climate Trust--has at least $5.5 million available for an estimated three to 10 future projects that quantifiably reduce carbon dioxide emissions, while City Light is looking for one to four future projects that cut down on CO2 or other greenhouse gases.

Eligible project types include renewable energy, energy efficiency, supply-side energy (fuel-switching is an example) and CO2 sequestration involving forests. The Trust prefers Oregon projects, but will consider others. City Light favors initiatives in Seattle, greater Puget Sound and Washington state--in that order--but likewise is open to national or even international submissions.

Short-form proposals are due April 10 to the Climate Trust, which is administering the solicitation, although each entity will make its own final decisions. The entities hope to sign contracts with successful bidders by early 2002.

Solicitation Background

This is the second project solicitation from Climate Trust. The organization formed in 1997 after the Oregon Legislature required new power plants to meet CO2 emissions standards that include mitigation measures, and allowed compliance through payments to the Trust.

A 500-megawatt-capacity natural gas-fired combined-cycle cogeneration project near Klamath Falls, OR, contributed the initial $1 million to the Trust. With this funding, the Trust is contracting for five carbon-offset projects covering renewable energy, transportation efficiency and forest sequestration, according to a Trust news release.

This latest and much larger project solicitation offers carbon-offset funding from two eastern Oregon power plants under construction: Calpine Corp's 450-MW-capacity Hermiston Power Project and Avista Corp.'s 260-MW Coyote Springs Unit 2 plant. The Trust plans to offer at least $5.5 million from these two sources.

City Light, meanwhile, intends to entirely mitigate greenhouse gases associated with its purchase of 100 MW from the Klamath Falls project, as required by the Seattle City Council. The Northwest's largest publicly owned utility estimates it must offset 247,000 metric tons of "carbon equivalent" each year.

"Never before has a utility in the United States made such a clear commitment to fight global warming by declaring that it will compensate for all of the greenhouse gases it creates in meeting the electricity demands of its customers," according to City Light's Web site. "And this commitment is moving forward in the face of an unprecedented energy crisis."

This is the Trust's first joint venture, and more may be forthcoming, executive director Mike Burnett told Con.WEB. As part of its strategic plan, the Trust wants to share its expertise in CO2 offsets with power plant developers, government agencies, utilities, non-profit groups and others. Seattle represents "a first step" for the Trust in such partnering. "We think the monetary path mechanism Oregon has established makes a whole lot of sense," he said. "It's an emerging market you're dealing with. You can't just go to the Wall Street Journal and buy offsets. It takes expertise."

The Trust and Seattle may also share projects in some form, Burnett noted. They will also jointly scrutinize proposals, although, according to the solicitation, each organization "will make independent decisions regarding the selection of offsets for contracting."

Solicitation Summary

Proposals must meet four basic criteria, according to the solicitation, in that they "1) directly avoid, displace, or sequester carbon dioxide emissions [or those of other greenhouse gases for Seattle], 2) will be implemented in the future, 3) would not be likely to occur in the absence of project offset funding, and 4) can quantify the Carbon Dioxide Emissions Benefit." Quantification involves seven specific considerations.

"Examples of projects we might fund include wind, solar, biomass, energy efficiency in homes, businesses, and transportation, forest protection, and reforestation," Climate Trust chairwoman Diana Bodtker said in a news release.

The Trust will fund projects for between $250,000 and $2 million apiece. Seattle would fund a project up to City Light's entire amount of desired carbon offsets. Proposals are welcome from non-profit and for-profit corporations, governments, national laboratories, individuals and joint ventures--although projects must provide emissions benefits "over and above what is required by law."

In evaluating proposals that meet the basic qualifications, the Trust and City Light will look primarily to cost-effectiveness in gaining "reasonably assured, additional Carbon Dioxide Emissions Benefit[s]." As an example, the Trust reported contracting for projects from its initial solicitation with an average price of about $1.50 per metric ton of CO2. In the Northwest, Burnett said, that is "approximately equivalent" in energy terms to .05 cents per kilowatt-hour.

Other elements for consideration include reliability of the proposal's concept, as well as the proposer; diversity in project types; permanent reductions in greenhouse gas emissions; replication or expansion potential; other benefits such as environmental, health and socioeconomic advantages; and geographic location. Both the Trust and City Light expressly prefer local projects--Oregon for the Trust, Seattle/Puget Sound/Washington state, in that order, for the utility--but both will consider initiatives from elsewhere. International ventures will require a U.S. partner.

After the April 10 submission deadline for brief proposals, the two entities will select a group of about 35 projects--25 for the Trust and 10 Seattle--for more detailed proposals due by Aug. 17. Negotiating and alternate groups are scheduled for selection by early November, and contracts should be signed by Jan. 31, 2002.--Mark Ohrenschall

More Information:

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