CWEB.070/October.23.2001
Special Issue
"Conservation or Crisis: A Northwest Choice"
Regional Conservation Conference Stories Conservation-minded people from all over the Northwest and beyond gathered in Portland Sept. 24 through 26 for the "Conservation or Crisis: A Northwest Choice" conference hosted by Bonneville Power Administration and Northwest Public Power Association. The event (with 540 registered attendees) featured panel discussions, concurrent sessions, speeches and workshops, plus a trade show, the usual informal chatter and a dinner-show act that included juggling chain saws--perhaps a metaphor for the up-and-down cycles of Northwest energy conservation. Those cycles were a major topic of conference discussion, and there were many other stories told as well. Some of the stories (by no means all) are shared in the following Con.WEB special issue. |
Roller coaster.
Those were two very common words at the "Conservation or Crisis" conference. But instead of amusement parks, they referenced the Northwest's historical pattern of rising and falling energy conservation efforts--a pattern some believe may repeat itself as attention to the demand-side wanes along with wholesale power prices.
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A number of conference speakers addressed this roller coaster theme. Among them was Steve Wright, acting administrator of the Bonneville Power Administration, who advocated a regional strategy for sustained energy conservation across the region (see Con.WEB, Sept. 28, 2001 for details). Angus Duncan of Bonneville Environmental Foundation, Sara Patton of the Northwest Energy Coalition and Ralph Cavanagh of the Natural Resources Defense Council also suggested scrapping the roller coaster for a smoother conservation ride.
From a broader perspective, several other speakers touted energy efficiency (along with renewable energy and distributed generation) as a globally important means to tackle environmental and human ills. Exported clean energy technologies and knowledge could also reap economic benefits for the Northwest.
Roller Coaster Views
After Wright opened the conference with his pitch for an even-keel regional conservation strategy, BEF president Duncan offered some historical context and his own views on the roller coaster.
Energy consumption news in America is decidedly mixed over the past quarter-century, Duncan said. U.S. per-capita energy use is generally down or level. However, "The bad news is that there's a lot more per-capitas in the U.S. than there were 20 years ago." Meanwhile, today's average new refrigerator uses about half as many kilowatt-hours as a 1978 model--but that old-time fridge is likely to be guzzling kilowatt-hours in the garage while keeping beer cold. Homes and buildings are much more energy-efficient than in 1978--and they're also much larger.
"For our lifestyle, [Americans] use disproportionately large amounts of electricity," Duncan said. "Even for a highly developed and sophisticated nation, we use that inefficiently because we believe we can afford to."
Duncan said he has personally experienced at least two up-and-down energy conservation cycles in the Northwest. A former Northwest Power Planning Council member, Duncan recalled the Council's 1991 regional plan and its goal of 1,200 average megawatts of conservation by 2000 at an estimated cost of 2-2.5 cents/KWh. The actual total ended up at 700 aMW. "How many people would have been willing to pay 2.5 cents a kilowatt-hour for 500 megawatts" of power over the past 15 months, he wondered. "We should have taken it when we had the opportunity."
He offered a stock market analogy. "We need to, first, really balance our [energy] portfolio with 2,000 average megawatts of conservation bonds," referring to the low end of a recent Council estimate of regionally cost-effective conservation potential. "They're not very flashy, not a great upside. They're undervalued stocks right now, but they produce a very steady dividend year after year after year."
Curtailments are not a lasting solution, Duncan also said. He described last winter's exhortations to turn off energy (from thermostats to aluminum plants) as "an extremely short-term strategy that has little or no likelihood of delivering long-term persistent savings. Instead of asking people to turn down their thermostat, put in a setback thermostat." People should be empowered to make conservation choices without resorting to "dramatic behavioral change" while maintaining "an acceptable level of comfort and efficiency."
NWEC director Patton also pushed consistent energy-saving activities in the region. "We do need to get off the conservation roller coaster," she said. The Northwest has enjoyed successes, gaining some 1,500 aMW of savings since the late 1970s, yet even more than that amount awaits. A few utilities maintained conservation during the recent "lean years," she said, but the overall trend has been down. The "lost" savings of some 500 aMW "would have come in extremely handy for our pocketbooks, air and water, and salmon the last two years."
Utility integrated resource planning has not fared well lately, nor are BPA's conservation acquisition efforts "fully" working at the moment, Patton said. But she did list several "emerging ideas and institutions" that augur well for the future: public-purposes funding in Montana and soon in Oregon; the Northwest Energy Efficiency Alliance for market transformation; the Regional Technical Forum "to have some standards and good solid ways to evaluate our progress"; and BEF for renewable energy and fish and wildlife restoration.
In a question-and-answer session, Patton said competitively neutral public-purposes funding for Washington and Idaho as well as cutting the link between utility sales and revenues would help advance energy conservation in the region.
Duncan listed building codes, appliance standards, tax credits and investment incentives, all of which have made some inroads in the Northwest, but not consistently. He also expressed a "real concern" that the region will overbuild conventional power generation, renewable energy and conservation. "We'll all get a serious headache and wake up in the morning with a hangover and back off those investments again ... The easiest ones to displace will be the ones that get backed down first. That will probably be conservation."
NRDC's Cavanagh praised the demand-side reduction efforts in California this year (see related story), which lowered peak electricity demand by more than 5,000 MW at its zenith. "Virtually none of that conservation power plant involved purchased curtailment from industrial or irrigation customers, and virtually none represented substitution of diesel generation," he said. And it happened despite a relatively warm summer and amidst a still-growing economy.
Cavanagh recalled the prevailing wisdom when California set out to restructure its electricity industry in the mid-1990s: "All we have to do is turn the market loose ... We would go forward together into a happy world of lower cost and better reliability. Now it's 2001, and the genius of the marketplace has flunked out."
Utilities--"hometown distribution companies," in Cavanagh's words--are an "obvious alternative" for managing electricity rather than the free market or, in California's current case, the state government. They should ensure energy efficiency is a vital element of the portfolio.
Cavanagh lauded the Northwest's "critical regional infrastructure" on the demand-side, including the Alliance, the RTF and public-purposes funding in Oregon and Montana. Still, he said, "We have so much ground to make up," citing the Council's conservation potential numbers. He also echoed Patton in advocating splitting the historic link between utility revenues and energy sales.
Big Pictures
Former longtime BPA official Jack Robertson helped create the landmark Pacific Northwest Electric Power Planning and Conservation Act of 1980, which put conservation and power generation on equal footing. That concept was neither simple nor obvious at the time, he noted. But conservation has proven "by far the greatest energy investment" in the region over the past 15 years, saving nearly 2,000 aMW (including codes) on $1 billion of spending.
Robertson devoted most of his luncheon speech to looking ahead on a global scale.
He called electricity the "backbone of the modern age" and "the fundamental fuel of the future." Yet some two billion people worldwide lack this basic commodity, which bodes particularly ill since electricity use correlates to the "fundamental health" of societies.
Americans, meanwhile, need to reduce dependence on foreign energy sources "by generating and saving energy, not by fractions, but by factors of improvement."
Robertson sees considerable hope in distributed generation integrated with efficient energy use through advanced communications and other technologies. He spoke of "a radical new era transforming energy and society with technological breakthroughs we're just beginning to see born."
This promise can apply both here and abroad, in his view. Robertson visited a Nepalese village high in the Himalayas, where early one summer morning the only energy source consisted of fires burning in cans. There was no motor power to ease daily tasks, while children faced diseases. Robertson imagined a fuel cell in that community, bringing such benefits as artificial lighting and refrigeration to store medicines.
"It's not just good for the rest of the world," he said. "We will create huge leaps in productivity in the national and world economy," and potentially create thousands of new jobs in the Northwest as a "Silicon Valley" of this emerging Energy Web. But it will happen only through boldness, leadership and caring for a world beyond present lifetimes.
"I'm convinced there's an energy revolution under way. We're living at the front edge of a future that will startle the dreamers of the 20th century," Robertson said.
Blair Henry of the Northwest Council on Climate Change outlined bleak scenarios in this region from current projections of global warming: reduced snowpack and thus lower summer flows in the Columbia River system, drier summers, more forest fires east of the Cascades, worsening air quality, rising sea levels and greater flooding and mudslides. "Fossil fuels cause global warming," he said. "They're not the only source, but they're the biggest. If you handle fossils, you handle global warming."
Clean energy (notably for transportation and electricity) can make a difference. Henry said an annual investment of $5 billion to $10 billion would "solve global warming. Enough technology would be in place to undermine fossil fuels. That's how you win."
Allen Hammond of World Resources Institute outlined a vision of a globalizing and market-oriented economy combining with technological innovations to create worldwide prosperity. "There's a lot power in that vision," he said, but, "A number of things might undercut that." Those include ecosystem stresses, resource scarcities, widespread poverty, malnutrition and disease, massive illegal migration, global crime and economic inequities--"islands of prosperity surrounded by oceans of poverty and fear and anger."
Sustainable development needs to be accelerated, expanding goods and services while maintaining or even reducing the flow of raw materials. "We're partway there," he said. "We have to take the next step and shrink that pipe as a new model for the rest of the world." Hammond also mentioned the Northwest and its considerable renewable energy/energy efficiency expertise. "Maybe that should become a major export from this region, as well as the knowledge industries."
The future is up to us, Hammond said. "The choices we make matter enormously. We have the power to shape those choices like never before. We're the last generation with a chance to save some of the special places on Earth. And we're the first generation that has the technology and opportunity to really make that difference."
Futurist Glen Hiemstra also gave credence to the idea of creating a future, which in the energy world could encompass significant market share for clean energy, cost-effective solar power and fuel cells powering laptop computers, homes and automobiles. "The number one thing that can change our world is human imagination and cooperation," he said. "The future is not something that happens to us. The future is something that you do." --Mark Ohrenschall
Northwest investor-owned utilities are a diverse lot, including on their demand-sides.
The "Conservation or Crisis" conference featured presentations from representatives of five of the region's six major IOUs: Portland General Electric, Montana Power, PacifiCorp, Avista Utilities and Puget Sound Energy.
They revealed a variety of demand-side circumstances, approaches and funding structures, while sharing an attention to efficient electricity use by their millions of customers regionwide--as individual utilities and collectively through the Northwest Energy Efficiency Alliance.
Portland General Electric
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Oregon's largest IOU, Portland General Electric has offered conservation programs since the 1970's, according to efficiency services director Carol Brown. From 1991 through 2000 PGE acquired 109 average megawatts of savings (76 aMW from 6,300 projects in the commercial/industrial sectors) on spending of $129 million. The up-and-down annual savings totals reflect changes in cost-effectiveness levels, according to Brown
She identified PGE's prime motivational factors in persuading customers to pursue energy efficiency. For commercial customers, the key is selling efficiency on their terms--not necessarily just energy savings, but better operations and maintenance practices, improved productivity, enhanced product quality and the like. Industrial customers need customized packages and utility partnerships, while for residential customers, making it easy is the key.
PGE faces a number of efficiency challenges, including some customer hesitation for conservation investments, first-cost concerns and accurate price signals (Brown mentioned PGE's "significant" 41.5-percent average rate increase that took effect Oct. 1).
Among the top demand-side programs for Portland General are the Earth Advantage resource efficiency initiative for commercial new construction (42 projects since 1996, and 34 pending), building commissioning in existing commercial buildings (26 projects since 1998), industrial process improvements and residential compact fluorescent lamps (PGE recently announced its customers have bought more than 750,000 CFLs with discount coupons).
Brown said PGE's final energy-savings total for 2001 could approach 18 aMW.
However, the utility's programs as presently constituted will phase out, as the Energy Trust of Oregon will run public-purposes initiatives beginning in March 2002.
Montana Power
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Operating under integrated least-cost planning, Montana Power averaged 4.5 aMW of annual demand-side management savings from 1991 to 1998, on average annual spending of $5.8 million. Then came public-purposes funding in 1999 as Montana restructured its electric industry.
The universal system benefits charge (USBC) calls for 2.4 percent of 1995 electric revenues to be earmarked for various public purposes. Most of the money goes for energy conservation and market transformation; $5.6 million out of $8.6 million annually, according to Montana Power customer support manager Deb Young. Of that $5.6 million, $2.6 million is allocated to qualifying conservation by industrial customers, while the IOU implements nearly $3 million worth of ventures that save slightly more than 3 aMW annually.
A stakeholder advisory committee has helped Montana Power craft its USBC program portfolio, which includes residential weatherization, residential and small commercial energy audits, and commercial lighting rebates. The IOU is developing ventures targeted at comprehensive business and irrigation energy efficiencies. And it works with the Alliance on market transformation.
Still uncertain is conservation's role in the power supply for default customers served by Montana Power through 2007, according to Young.
"Overall, our goal with public purposes is to create customer benefit," she concluded. "Customers can't control the price of electricity or natural gas today or in the future. By working to better manage energy usage, we can help them have better control over their energy bills."
PacifiCorp
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PacifiCorp serves 1.5 million customers dispersed among disparate electric systems in Washington, Oregon, California, Wyoming, Utah and Idaho.
Since 1992 the far-flung utility has chalked up 150 aMW of long-term energy savings at a cost of more than $170 million, and plans to get another 150 aMW by 2010. PacifiCorp wants to pursue "an increasingly sustainable energy supply business," according to a slide presented by energy services director Jeff Bumgarner.
The IOU has expanded its DSM to encompass short-term curtailment and peak-load management "to better address real-time market situations," Bumgarner said.
An online energy exchange program in which customers voluntarily reduce demand for a posted price has attracted 350 commercial and industrial customers representing 400 aMW of load. Large industrial customers totalling 180 aMW have contractually agreed to reduce loads in peak periods, according to Bumgarner. An irrigation buy-back venture garnered 25-percent-plus participation from eligible customers in four states, and reduced peak load an estimated 85 MW. And nearly 20 percent of customers have reduced consumption 20 percent or more under the incentive-paying Customer Energy Challenge.
Among longer-term DSM initiatives, Bumgarner listed customer education and awareness as a vital element for PacifiCorp. This includes advertising and special promotions under a "do the bright thing" theme to inform customers about energy efficiency and how to accomplish it. A recent survey found that 77 percent of residential customers had taken conservation actions and 72 percent could identify peak-demand hours.
Compact fluorescent lamps have been lighting up, too; some 304,000 Oregon residential customers have collectively received more than 600,000 CFLs from the utility. Efficiency services for commercial and industrial customers such as those offered through the FinAnswer program are increasingly popular as well, Bumgarner said.
However, Bumgarner acknowledged such conservation obstacles as comparatively low power prices and competing demands for capital and time. "Within our own organization we're finding some of the same barriers to keeping conservation rolling and out of the roller coaster," he said.
In conclusion, "We're looking for a balanced demand-side resource strategy that includes all aspects, longer-term conservation as well as better management of our system," Bumgarner said.
Avista Utilities
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As with the other regional IOUs, Avista Utilities has a long history in DSM dating well back into its former days as Washington Water Power. The Spokane-based utility recorded cumulative energy savings of 82.6 aMW from 1978 through 2000; its biggest annual savings, in 1993 and 1994, were largely attributable to switching customers from electric space- and water-heating to natural gas, according to customer solutions director Teri Orr.
She noted Avista's "unique situation" of funding DSM initiatives through a special charge on customer bills. This so-called tariff rider now collects 1.95 percent of electric revenues in Washington and Idaho for efficiency ventures, or about $7 million annually. Annual savings goal is about 5 aMW.
Avista found itself in another "unique situation" earlier this year with record-low hydropower capacity--less than 60 percent of normal. "We could go to the market or push conservation or build temporary small generation," said Orr. "We chose to do all three."
On the demand side, the IOU in May initiated a buy-back venture in which customers receive 5 cents for every kilowatt-hour conserved beyond a 5-percent reduction from the same period last year. Avista has paid out or credited $8.6 million and recorded 6.2 aMW of savings, Orr reported.
"We have to make sure we have programs to complement customers in incenting them to save," she said. Among the most notable recent efforts are compact fluorescent lamps (some 640,000 accounted for from May 1 through Sept. 10, saving nearly 2 aMW), HVAC rooftop maintenance service and enhanced financial incentives.
Avista has also spread the energy-saving message to its customers, with apparent success; a June survey found 82 percent of customers knew about the buy-back and CFL programs, and 73 percent had undertaken specific conservation measures.
Puget Sound Energy
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Washington's largest investor-owned utility offers an array of energy efficiency services--now as in the past--although customer services vice president Penny Gullekson focused on Puget Sound Energy's Personal Energy Management program during a panel on price signals and metering.
Puget plans to use integrated technologies (including automated meter reading and a new customer access center) to link current customer energy use with real-time pricing. Among other effects, Gullekson said, this allows Puget to reinvent conservation and load-management programs.
PEM's overall goal is to "provide energy information, incentives and services that make it easy and convenient for customers to use energy wisely," according to a presentation slide.
In May, Puget instituted time-of-use rates for 300,000-plus customers to encourage load shifting, and a conservation credit program that offers 5 cents/KWh for every kilowatt-hour saved beyond a 10-percent reduction.
The time-of-use rates establish four different blocks for residential customers, with a 30-percent differential between the lowest and highest rates, Gullekson said. A survey of 800 participating customers found that 91 percent had subsequently changed their energy use, and 89 percent had shifted energy use. "Customer reaction is overwhelmingly positive," she said, and fewer than 1 percent had exercised an opt-out provision.
Asked about savings longevity given that most of the reported conservation actions were behavioral or curtailment, Gullekson said she believes the efficiencies are sustainable and will become more so as customer choices and incentives expand.
Overall, she reported, Puget customers have reduced monthly energy use 6 to 8 percent, and those on time-of-use rates have cut back 1.5-percent more than others.
"We are on the path to putting real market prices to customers," Gullekson concluded. "We are heading in that direction at a speed our customers can accept and [state regulators] can accept ... We'll add more and more choices, and people who really want to put a lot of effort into conserving will be highly rewarded." --Mark Ohrenschall
More Information:
Public-power utilities have many energy conservation tales to tell.
The "Conservation or Crisis" conference spotlighted demand-side initiatives at many publicly owned utilities around the Northwest. They range geographically from urban Puget Sound to rural Montana, and their stories delved into overviews, philosophies, issues, programs, advice and conservation during the energy crisis.
Presented here are stories gleaned from Snohomish County PUD, Emerald PUD, Kootenai Electric Cooperative, Tacoma Power, Seattle City Light, Chelan County PUD, Clark Public Utilities, Salem Electric, Mission Valley Power and Pacific County PUD.
Conservation Overviews:
Snohomish County PUD, Emerald PUD, Kootenai Electric Cooperative
Snohomish County PUD, Emerald PUD and Kootenai Electric Cooperative serve disparate territories in three different states, but they share a history and an ongoing dedication to energy conservation.
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Snohomish has captured nearly 60 average megawatts of energy savings since 1980, with the biggest years coming in the early 1980s and mid-1990s. PUD product development manager Bob Nicholas called conservation "a very important player in our resource strategy." The PUD board of commissioners has made a "strong commitment ... to fund conservation," deciding three years ago to increase the utility's spending to 3 percent of revenues.
Midway through this year, the utility bumped up its annual savings target from 3.5 aMW to 7.5 aMW. "We're on course to deliver that," said Nicholas. "There's been a lot of pent-up opportunity building up in the commercial and industrial sectors the last several years. They're really engaging themselves."
Among the factors influencing Snohomish conservation are local growth (as of six months ago the PUD recorded as many as 9,000 new customer connections annually); rising retail rates (8.4 cents per kilowatt-hour for residential as of Oct. 1); and the relatively low cost of acquiring energy savings (the PUD's portfolio average is 2.5 cents/KWh). Nicholas acknowledged uncertainty over The Boeing Co's recent announcement of up to 30,000 job cuts, which could lead to that many ripple-effect layoffs in Snohomish County. Conservation and cost-cutting will be in vogue, he noted, but at the same time spending money to achieve savings will be problematic.
Meanwhile, the PUD continues to face lost-revenue issues with conservation: "There's been no magic answer I've ever heard to this question," said Nicholas. Snohomish wants to pursue flexible and diverse energy-saving programs, while trying to balance many spending priorities. And it must contend with a human resource problem. "The conservation infrastructure is gone, especially insulation contractors--they're almost non-existent in our community. Maybe that'll flip around now."
Over the next five years, the PUD plans to seek 26 aMW of conservation at a cost of more than $45 million; this savings target reflects about half the projected load growth. Snohomish is working with the Northwest Power Planning Council on a definitive study of local conservation potential.
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Emerald PUD also has long pursued the demand side, ever since it began operating in 1983. Conservation placed first three separate times (1989, 1995 and 2000) as the favored energy source of the utility's Resource Advisory Committee. "You just can't beat a resource that is cost-effective, supremely or exquisitely environmental, and employs the local labor market, not to even mention customer service benefits," said communication and energy services manager Bob Mieger. "It really has been a label and a landmark for Emerald PUD."
The utility has consistently spent 3 to 4 percent of annual revenues on conservation, which Mieger said is "not an easy thing to do." Key ingredients include board support, long-term funding cycles and talented employees. "Conservation for the most part is an interaction with people's lives, where they live and where they work," said Mieger. "It's where making an impression begins and where the customer's perception and image of the utility starts, or is reinforced, or is improved on. That happens with good staff."
Rate impacts and lost revenues are notable issues for EPUD's conservation, Mieger said. So is the fact that energy savings don't displace utility generating sources (Emerald is a full-requirements customer of Bonneville Power Administration). Finding interested customers can also prove challenging at times. "They're unclear if the benefits are really there."
But Mieger champions the idea of value-based economics: conservation reduces bills for customers (if not rates) and helps businesses stay competitive. He said Emerald has found it "very effective" to provide zero- and low-interest loans for energy-saving measures. EPUD's top three energy-saving programs are long-term residential, industrial air, motors and process savings, and commercial/industrial lighting.
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Kootenai Electric Cooperative is fast-growing, like Snohomish, and now a full-requirements BPA customer, like Emerald. And its conservation history also dates to the early days and such initiatives as Weatherwise, Energy Smart Design, Super Good Cents and development of the Northwest Energy Code. "It's really been quite a ride," said marketing manager Larry Bryant. "It's really been a positive experience for us."
Kootenai began offering BPA programs in the early 1980s. "The utility didn't think philosophically about conservation, or what we were doing. We just did it," Bryant recalled. He also remembered the "fairly demoralizing" reminders from the KEC accounting department about lost revenues from saving energy.
But market research helped confirm the important role of demand-side initiatives for the member-owned utility. "We got a very clear message that our customers expected us to promote the efficient use of electricity through conservation programs," said Bryant. As a BPA customer, Kootenai also belives in supporting Bonneville energy-saving initiatives that benefit the entire region. "Conservation-related activities are part of our mission, our strategic plan and our business plan."
Broad organizational support and customer communications are two vital elements for successful utility conservation, Bryant said. All Kootenai employees receive some conservation training, he noted. And the utility keeps customers informed through monthly newsletters, bill stuffers, printed materials and community events.
Among Kootenai's conservation successes over the years are a "dramatic increase in heat pumps," Bryant said. "It used to be propane was the fuel of choice. With increased energy costs, consumers are waking up to the benefits of heat pumps." More local sales of Energy Star appliances, collaboration with developers to meet Super Good Cents standards, and assistance in ground-source heat pump installations for local schools are among other measures of progress.
Keep in mind the positives with conservation, Bryant advised. It provides customer service, supports regional energy-saving efforts, enhances the utility's standing in the community and preserves valuable resources. "It's the right thing to do," he concluded.
Conservation and the Energy Crisis:
Tacoma Power, Seattle City Light
Both these urban Puget Sound utilities have solid demand-side histories, although conference presentations focused on their conservation efforts during the energy crisis.
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Tacoma Power found itself "in the eye of the storm" last December, said energy services manager Jake Fey. With $140 million in surplus funds, "We thought we were in a pretty good spot." Well, not exactly.
Fey discussed Tacoma's three-pronged demand-side strategy to help weather the weather: generate public awareness, empower customers and foster long-term solutions.
The municipal utility established a goal of reducing energy consumption 20 percent, which it has nearly met a couple of months, according to Fey. Tacoma spread the conservation word through advertising (including on its own cable network), on buses and even in cinemas, as well as public events. "We never left an opportunity unsought to get publicity," he said.
To give residential customers specific opportunities to save energy, Tacoma held 185 "power parties," gave out 6,000 conservation kits and tallied nearly 58,000 compact fluorescents distributed through rebates and giveaways. For business and institutional customers, the utility arranged for 1,882 VendingMi$er installations, 309 single-zone thermostats and 154 energy audits.
Bottom line: "For a $1.2 million investment, our customers brought us back $59 million worth of reduced consumption," Fey reported. That's more than Tacoma Power received from any other single source, including a rate surcharge, borrowing money, diesel generators and cost-cutting measures.
"The public will respond," he concluded. "It's not only in their economic interest; our community focus with the conservation theme encouraged people to participate." However, he also noted that a depleted local conservation infrastructure prevented the utility from gaining more than $59 million in benefits.
Tacoma Power also adopted a more stringent energy code, and, looking ahead through integrated resource planning, intends to save 36 aMW over the next 10 years at a cost of $100 million.
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Up the Sound from Tacoma, Seattle City Light will celebrate its 25th anniversary in energy efficiency next March. Energy management services director Marya Castillano credited this sustained record primarily to "a very supportive community that cares about environmental stewardship" and elected officials who provide sufficient resources. Also "instrumental" for City Light conservation are trade allies, a variety of services for all customer sectors, financial incentives, targeted market segments and leveraging resources.
When the energy crisis erupted, "The primary reason Seattle City Light was able to quickly and effectively respond [on the demand side] was we had experienced staff and we had this operable infrastructure," said Castillano. "We were already moving to accelerated" conservation programs, she noted, essentially doubling annual targets to 12 aMW. Seattle City Council added "a significant amount" of new money for conservation (the annual budget rose from $18 million to $25 million).
Seattle wanted to lessen the impacts of higher rates, reduce the need for expensive power purchases and keep dollars flowing locally through local conservation investments.
City Light gave away compact fluorescent lamps and other energy-saving devices, conducted free energy audits for small businesses, offered energy efficiency workshops, provided free tune-up services to industrial and commercial customers, installed VendingMi$ers and offered incentive bonuses of up to 20 percent for qualifying commercial/industrial retrofit conservation projects completed this year.
Castillano said Seattle also embarked on a "major conservation curtailment awareness program" including advertising and a collaborative event at a Seattle Mariners game in July. Virtually all City Light programs are oversubscribed, she reported, and the utility is on pace for 12.5 aMW of savings this year, more than double the 5.7 aMW recorded in 2000. A new commercial energy code also has just been adopted for the city, and Seattle continues to work with the Northwest Energy Efficiency Alliance on market transformation.
"We are in it for the long haul," Castillano said. "We want to get long-term energy savings. The real emphasis continued to be installed measures investment versus behavioral changes stressed in the curtailment period ... As long as there is conservation to be had in our community, we're going to go after it." The annual 12 aMW goal should hold "for the foreseeable future," she concluded.
More Public-Power Stories:
Voluntary Curtailments, Partnership, Communications, Service
Chelan County PUD has found success with a voluntary load curtailment program, cutting winter peaks by 5 percent (12 MW) through the efforts of one-third of the utility's industrial customers. "It worked because meters were in place," said PUD energy services engineer Jim White.
He expressed some puzzlement about his utility's residential compact fluorescent coupon program. Eighty percent of customers had indicated they would participate, but only 500 coupons had been redeemed. "Our rates are very low," White said, indicating that price signals may be too weak to spur significant participation.
Chelan is intent on persuading customers to switch from electricity to natural gas for water heating, because it's more efficient. "That's heresy in some circles," he acknowledged, but conversion efficiencies for natural gas are 80 percent. "It's a premium fuel, electricity, to be burning it, in my opinion."
In an example of partnership, Clark Public Utilities and Clark County Department of Community Services have combined resources for home weatherizations rather than duplicating efforts in the same community. This increases cost-effectiveness, improves services, simplifies things for clients and allows for higher-quality measures, according to Tif Rock of DCS. "I truly think this is a triumph for the low-income citizens of Clark County," she said. CPU energy services manager Fred Tulp called this collaboration "a no-brainer ... It frees us up to go on to other programs."
Salem Electric's Jeff Lewis stressed the importance of keeping customers informed. "I can't say enough about communications," he said. "It's an old story, but it's true."
Utilities can serve their communities in many ways.
Mission Valley Power in Montana provided load data to a local Plum Creek Timber facility that helped lead the company to change operating hours and reduce daily demand 3 MW, saving $1,400 a month on utility bills, according to MVP general manager Ralph Goode.
Pacific County PUD conservation manager Jim Dolan said he has personally visited more than 3,000 homes, 200 businesses and all four industrial plants in the county. One time he helped an invalid elderly woman get her heat going; "that changed her lifestyle." Another time he assisted a fish-processing business increase production by 60,000 pounds daily, which didn't save energy but helped keep the local company and its jobs afloat.
"People are really attuned to energy" these days, he said, and that offers "a great opportunity" for utilities to play a helpful role in their communities. --Mark Ohrenschall
More Information:
Expanding the market for energy-efficient products can be accomplished--with concerted and collaborative efforts.
So say representatives of a manufacturer, retailer, utility and market transformation collaborative. Their views from different links in the market chain were shared in a panel discussion at the "Conservation or Crisis" conference.
Frigidaire's Wayne Dike told how his company developed, promoted and found Northwest sales success for resource-efficient clothes washers. Home Depot's Pat Chandler discussed her company's approach to saving energy and selling increasingly popular energy-efficient products. Eugene Water & Electric Board's Bob Lorenzen outlined his utility's work with local retailers to promote energy-efficient appliances. And panel moderator Margie Gardner listed some market-transforming stories from the Northwest Energy Efficiency Alliance which she serves as executive director.
Energy Efficiency in Business
"The idea of this panel is to explore how energy efficiency ties in with business practices," said Gardner, whose organization exists to enhance markets for efficiency. As examples, she listed substantial Northwest market-share gains for resource-efficient clothes washers (from 2-3 percent in 1997 to nearly 20 percent today) and Energy Star windows (from 15 percent to more than 66 percent). She also mentioned recent sales booms in compact fluorescent lamps.
Collaborations help foster such market changes--a notion reinforced by Dike, Northwest zone manager for Frigidaire (part of AB Electrolux).
His company embarked on a campaign to develop a resource-efficient clothes washer. "We knew it would be a challenge," Dike said. Frigidaire hadn't produced so-called tumble-action washers for years, prices were "much higher" than consumers were accustomed to, and the technology was unfamiliar to appliance dealers. "We needed to meet the challenge."
Electrolux experts in manufacturing, engineering and marketing were among those teaming to help create the new product. In the Northwest, utilities and retailers assembled for introductory meetings. "We look at it like a wheel," said Dike. "Each [spoke] must be in place to make sure we get a smooth ride ... We needed to make sure the dealers were with us on the product. We needed the salespeople on the floor. We needed manufacturing to consistently do their part [to produce] a trouble-free product that consumers wanted."
Rebates from the Alliance, utilities and Frigidaire combined to drop the retail price to competitive levels. Various promotional initiatives--such as displaying 150 16.9-ounce water bottles representing the water savings from each load--helped market the resource-efficient washers.
And with all these cooperative activities, tumble-action washers have become Frigidaire's most popular Northwest appliance, according to Dike.
He advocated "one single story" on energy-efficient appliances from manufacturers, governments and utilities--"and that's Energy Star." He concluded: "We're really in it together."
Also agreeing on the importance of collaboration was Home Depot's Pat Chandler, Northwest Division community affairs manager. Her company is the largest home-improvement retailer in the world. It's also rated tops in social responsibility, she said, and "there's no point better to approach that than energy."
When the energy crisis struck, Home Depot reduced its own power consumption and in January held conservation/efficiency workshops at its 180 stores throughout the West. Those educational efforts continue.
In selling energy-efficient products, Home Depot stores use standardized signage, aisle identification and bag stuffers, and prominently display certain items. The chain also has just released an energy catalog. And its Web site, advertising and public events also serve to promote energy-saving goods.
Chandler reported "truly, truly increased demand ... all of our sales are up in energy-efficient products." Compact fluorescent lamp sales are double over the same period a year ago, and in the Northwest they're eight times higher than the same period last year. Dimmers and thermostat sales are up 100 percent for the entire chain. Weatherization product sales, meanwhile, have risen three times companywide, and five times in the Northwest.
"Business can be profitable and be a strong and true environmental player," she concluded.
EWEB Appliance Program, Energy Star
EWEB began promoting energy-efficient appliances in 1994, seeking energy savings and an improved local market, said residential energy management section manager Bob Lorenzen.
Targeting clothes washers, dishwashers, refrigerators and (since 1999) room air conditioners, EWEB focuses on retailers. It offers rebate coupons, point-of-purchase materials and utility staff support for local merchants. "We make it easy for them to sell our appliances," said Lorenzen.
Before aligning with the national Energy Star program in 1999, EWEB found it challenging to identify eligible appliances. Now, said Lorenzen, "There's no more begging manufacturers for data and no more debates with retailers over what qualifies and what doesn't."
As of 1999, qualifying appliances had captured 50 percent of the local market for refrigerators, 25 percent for clothes washers, 20 percent for dishwashers and 4 percent for room air conditioners, for an overall average of 28 percent. Lorenzen called that "a fairly significant impact on the market."
Financial incentives "are key to program success," he said, as EWEB noticed rises and falls in customer participation rates directly linked to changing rebate levels. Lorenzen also noted the "critical" importance of retailers for program marketing.
Gary Curtis of D&R International gave a brief overview of the Energy Star program, which essentially provides a national brand for qualifying energy-efficient products. He described Energy Star as voluntary, simple, consistent, flexible and collaborative; it now numbers more than 1,600 manufacturing partners, 553 retail partners, 100 utility and state administrator partners, 2,000 residential builders and allies, and 4,400 commercial building partners and service providers.
Some early indicators of Energy Star's impact include sales increases of 16 percent in 2000, 600 million products purchased, $36 billion worth of annual energy savings and broad agreement among partners that Energy Star is useful in marketing energy-efficient products. --Mark Ohrenschall
Energy conservation as a team effort is exemplified in a western Washington project showcased at the "Conservation or Crisis" conference.
BFGoodrich Aerospace will save an estimated $450,000 in annual energy bills from air-flow reductions and lower temperatures at its aircraft maintenance facility in Everett. These efficiency gains will cost slightly more than $200,000--a simple payback of less than six months.
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"What I heard today were role, responsibility, communications, mutual benefit," said panel moderator Stan Price of the Northwest Energy Efficiency Council. "We have to think about these kinds of partnership, and utilize these networks, the ability to work together in partnerships, to find these kinds of savings.
"This is a really impressive one," he said, and there are "hundreds and hundreds" more available throughout the Northwest.
Help!
BFGoodrich Aerospace does aircraft maintenance work at its 1.2 million-square-foot Everett campus, which includes three hangars and other buildings, according to facility manager Laura Mork. Recent energy rate increases have "a huge impact on our bottom line," she said, even more so since Sept. 11 and its economic fallout.
"When the price impacts started to hit, I said, 'Help, help, who can help me?'" Since capital funding is tight in her company, "My ability to implement energy-saving projects is very limited," she said.
Enter Snohomish PUD and Holaday-Parks.
"Over the years, especially since deregulation, a lot of companies have approached the PUD on the topic of partnership of one form or another," said commercial/industrial energy service manager Steve Ottenbreit. "In the ensuing conversation, a couple of terms come up. One is resources and the other is relationships. I think both those aspects were in play with this project with Holaday-Parks and Goodrich."
Conservation Process
Holaday-Parks took the lead on investigating potential efficiencies for BFGoodrich Aerospace.
This is "an extremely detailed process to understand where to save energy and thus money," noted Holaday-Parks account executive Robert Stokes. "There are pretty stringent specs to meet, and also stringent environmental standards to adhere to. It's very challenging."
The process begins with a goal to reduce energy consumption, said Holaday-Parks senior project engineer Laura Smith. It proceeds to an initial facility assessment to identify potential savings areas, an energy audit, examination of results, applications for utility rebates, submittal to the client for review and, finally, project implementation and verification.
Examining the BFGoodrich campus, the project team noticed the huge amount of air circulating through a huge bay dedicated to aircraft painting--310,000 cubic feet per minute. They sensed opportunity. They also found a control system operating in three simplified modes, and temperature setpoints typically at 75 degrees.
A three-pronged strategy emerged: reduce ventilation rates, heating setpoints and the hours in which the system operates with 100-percent outside air.
The full air flow was found necessary only during aircraft painting, less than 5 percent of the year; sanding and stripping occupied most of the hours. That enabled a "dramatically" lower ventilation rate, Smith said. In addition, temperature setpoints could be lowered to 65 degrees nearly 55 percent of the annual hours. And, for 21 percent of the year, 50-percent outside air was determined sufficient.
To accomplish these strategies, Holaday-Parks and BFGoodrich agreed on variable-frequency drives for exhaust fans and staged operations for makeup air units that provide outside air, along with a new control system featuring more operating modes. Those are being implemented, Smith said, and savings verification is scheduled to begin in November.
Modeling results showed these changes will cut electricity consumption almost 50 percent, or 1.4 million kilowatt-hours annually, saving $82,000 on annual bills. Natural gas efficiencies are even greater: a 75-percent reduction, representing more than 400,000 therms per year in savings and $366,000 in lower costs.
Total dollar savings: $448,000. Total measure cost: slightly more than $200,000. Simple payback: approximately five to six months.
Ottenbreit called that "a very good payback," especially with the gas savings. "Laura [Mork] said, 'I don't have it in my budget'" to fund this project. "That's not uncommon, especially for industrial customers," he said. "There's a lot of internal competition for that funding." Snohomish chipped in about $146,000, leaving BFGoodrich to pay about $62,700.
An audience member asked: What BFGoodrich ventures reap more than a 200-percent annual rate of return? In other words, rephrased Price: Why didn't this project happen on its own?
"We have a limited amount of capital funding, and we're given it at the beginning of the year," said Mork. BFGoodrich "targets capital funding toward business-expanding activities. If you're doing something that brought in more business, it would be looked at differently." And the payback wouldn't show up until at least 2002. She acknowledged a six-month-payback project possibly could have earned internal funding, although perhaps expensed instead of capitalized.
Price called Mork a "champion at Goodrich" who found the means to pursue these energy savings. "It didn't have to go that way," he said. "This project happened anyway, and that I think is the important point." --Mark Ohrenschall
Energy conservation is a link in the food chain--although a relatively small link.
Northwest food processors and Northwest electric utilities serving irrigation loads practice and have an interest in energy efficiency, according to leaders of their respective trade groups. But it's only one among many issues facing their memberships.
Food-processing companies are becoming more engaged in energy and energy efficiency, according to president Dave Zepponi of Northwest Food Processors Association. They view resource conservation as vital to their economic futures, and believe they can cut energy use at their facilities by up to 5 percent, even as high as 20 percent. At the same time food processors also see a need for more energy supplies.
Northwest irrigation utilities have also undertaken energy conservation measures, notably scientific irrigation scheduling, according to executive director John Saven of Northwest Irrigation Utilities. Yet water shortages are a greater concern than energy woes for farmers, who also faces larger economic struggles.
Food Processors More Active in Energy
"We have not been players in the energy world," said Zepponi, whose organization represents 77 processor companies and 274 supplier members, including cold-storage firms. "We decided we had to in order to deal with the [energy] crunch that was before us."
NWFPA plans to become more active in energy policy arenas, he said, and is also working to keep its membership better informed about energy.
In a recent major effort, NWFPA helped put together a Northwest industrial energy conservation teleconference oriented to practical practices. "Our members were adamant about getting information to the people turning wrenches in the facilities," said Zepponi. He described the intent as "cross-fertilization to discuss ideas on how to move forward to protect their interests over this expected energy crunch in the summer months."
More than 200 people attended the June 13 teleconference at more than a dozen sites, and the event generated "a fabulous response," according to Zepponi.
NWFPA recently surveyed members to learn more about their views on energy and conservation. "Most of our facilities and food processors already have some sort of energy program in place ... for many years," said Zepponi. "It's just part of doing business for them." The energy crisis "really heightened the urgency" and spotlighted conservation as a way to trim costs.
"The economics of conservation are critical; the return on investment is extremely important," he reported. Most of his members prefer incentive programs that offer money at the beginning rather than the end of projects, to lower the initial hurdles.
Plant managers told NWFPA that conservation measures are "a critical component of a new design" for facilities, while efficiency retrofits pose a "unique challenge" in meeting acceptable cost-benefit ratios. "Most feel they can achieve up to 5-percent reduction in energy usage, and some as much as 20 percent," said Zepponi.
He cited a primary vegetable processor that had invested $2 million in energy conservation over the past six years. Natural gas use has dropped 19 percent, electricity consumption is down 14 percent and production levels have risen 8 percent. "He is the success story," said Zepponi.
NWFPA members believe conservation is "essential to the future of our companies. We need to focus on conservation as natural resources become limited, in the short term particularly," according to Zepponi. But, he concluded, conservation is hardly the sole answer. "Over the long run we need consistent, flexible energy supply with policies that provide certainty."
Irrigated Agriculture Struggles, Conserves
Energy also matters in the rural Northwest--but it's not the overriding concern.
"Irrigated agriculture is increasingly at-risk financially," said Saven. It faces big declines in crop prices owing to international competition, increasing production costs (fertilizer up 40 percent this past year) and grocery chain consolidations that squeeze the marketplace for small farms.
"Electric prices are a significant component of the ... cost of production," he continued, "but they're not the driving factors in some fundamental changes sweeping rural America. In rural America, the energy crunch is secondary to the water crunch."
Some NIU members have programs to conserve both water and energy. Saven highlighted scientific irrigation scheduling, which helps farmers determine how much water to apply to which crops, and when. Benton County PUD has saved 21,000 megawatt-hours of power through its SIS initiative and 13,000 acre-feet of water, while Umatilla Electric Cooperative has recorded SIS savings of 16,000 MWh and 24,000 acre-feet of water.
Yet these two utilities represent only about a quarter of Bonneville Power Administration's total irrigation power sales; potential regionwide savings through SIS amount to 287,000 MWh of electricity and 20 billion gallons of water, according to Saven. Although that's modest in relation to the region's overall power and water resources, "We need to embrace small solutions that make sense for everyone," he said.
Northwest irrigation utilities also joined BPA's voluntary irrigation curtailment program this past growing season, saving Bonneville 23 average megawatts. Still, said Saven, "This program was not a conservation effort but rather social re-engineering. We need to look for programs where agricultural production continues." BPA's new 46-percent wholesale rate increase and higher summer energy charges will definitely affect irrigated agriculture, he noted.
"We're going to see a new emphasis on conservation in rural communities," Saven concluded. "To the extent we can support measures that operate cost-effectively in low-density areas, at the end of the day some segments of the agricultural community will expand and prosper, due in part to expanded conservation programs. Some simply won't be able to make it." --Mark Ohrenschall
More Information:
Reduced power demand made a significant difference in California over the past year.
The Golden State's peak electric consumption dropped as much as 5,570 megawatts, while monthly peak reductions in the year's first eight months ranged from 6.2 percent to 14.1 percent.
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This experience demonstrates that conservation is the quickest and least expensive way to balance power demand and supply, and that citizens will save energy during emergencies. At the same time, successful demand-cutting requires many strategies and the overcoming of institutional barriers.
These figures and perspectives were shared at the "Conservation or Crisis" conference by Scott Matthews, deputy director for energy efficiency at the California Energy Commission.
He also believes his state's demand-lowering efforts will have some permanence.
Demand Reduction Activities
A dark summer of 2001 had been predicted for the Golden State, with hundreds of hours of blackouts foreseen and power deficits approaching 5,000 MW. Instead, the juice flowed all summer long.
Matthews didn't expressly credit the lack of blackouts to demand reductions, but he outlined several elements--updated efficiency standards, rebate/incentive programs, a public awareness campaign, business partnerships, the 20/20 rebate program, retail rate increases and media hype--that contributed to California's lower energy consumption.
As mandated by state legislation, California's building efficiency standards were upgraded in a four-month process (three years is the norm). That will reduced statewide demand 200 MW annually, and 2,000 MW over 10 years, according to Matthews.
Meanwhile, energy efficiency programs were expanded and refocused on shaving peak loads. These included initiatives by the state Public Utilities Commission and the CEC, targeting the likes of appliance rebates, commercial lighting retrofits, low-income weatherization, light-emitting diode traffic signals, demand-responsive buildings, agricultural pumping, public buildings, local government loans, real-time meters and more. These CPUC/CEC ventures have a 2,574 MW conservation goal and a $536 million price tag. Other programs listed by Matthews are planned for 4,480 MW in savings (and renewable energy production) at a cost of $451 million.
One vital aspect for California has been public awareness of energy conservation.
Matthews emphasized simple repetitive messages. In winter: turn off unneeded lights and equipment, use appliances at off-peak hours, unplug second refrigerators and set thermostats at 68 degrees; in summer: reduce air conditioning, use appliances off-peak, set thermostats at 78 degrees, participate in programs and buy Energy Star products). A $60 million paid media campaign in television, radio and print media (and at least six languages) reached 95 percent of all California adults an average of 25 times. Extensive news coverage of energy also "played an exceedingly important role" in promoting conservation, said Matthews, wryly noting that he became a "very minor celebrity" during the crisis.
State government agencies contributed as well. The Department of Motor Vehicles reached some 19 million people with energy conservation mailings, while the Franchise Tax Board sent messages to 97,000 businesses and the Department of Education communicated with every school superintendent. Meanwhile, state buildings lowered their overall energy demand 26 percent. "My building is dark and uncomfortable," said Matthews.
Businesses pitched in with their own energy-saving activities and promotions: McDonald's restaurants in the Golden State, for example, put conservation messages on four million place mats.
"We don't know yet what caused Californians to reduce the amount they did," said Matthews, but numbers reveal the significant energy savings. Monthly weather and economic growth-adjusted figures for peak-demand cuts ranged from 6.2 percent in January to 14.1 percent in June--the June figure amounts to 5,570 MW--while monthly electricity use went down each of the first eight months, ranging from 5.2 percent (July) to 12.4 percent (June).
Other indicators cited by Matthews: Home Depot's 265-percent increase in compact fluorescent lamp sales, Pacific Gas and Electric's nearly fivefold jump in refrigerator rebates, Sears sales of central air conditioners (nearly 73 percent were Energy Star models, compared with 17 percent previously), the popularity of the 20/20 rebate program (more than 30 percent of customers earned 20-percent rebates for 20-percent demand reductions), and the CEC's Web site hits skyrocketing from one million a month to seven million a month.
Lessons Learned
California's experience tells Matthews, "Conservation is still the fastest and cheapest way to fix a supply/demand imbalance." It also shows again that people will save energy voluntarily--if it's shown necessary and the messages are properly delivered.
A variety of energy-saving strategies are needed, Matthews added, and the most significant challenges are institutional. "Putting [conservation] stuff in is easy; we've been doing it for 25 years. The hard part is getting the institutions to work together."
Asked about the durability of the energy savings recorded in California, Matthews expressed optimism. "We're building in a lot of permanent infrastructure as a result of almost a billion dollars worth of conservation programs." The state's water conservation history during droughts shows that much of the effort is sustained, he said, although the actual lifetimes of the energy efficiency installations won't be known for many years. --Mark Ohrenschall
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