1) Washington State Energy Code Revisions Promise Significant Energy Savings
2) Montana Power Announces 150-MW Wind Power Purchase, But Dispute Arises
3) Cow Manure, Wave Power to Fuel Oregon, Washington Energy Ventures
4) Green Mountain Energy to Supply Renewables for Pacific Power, PGE Green Power
5) Idaho Power DSM Surcharge Deserves Consideration--But Not Right Now, IPUC Rules
6) Most Oregon Public-Purposes Funding Appears Initially Headed for Utilities
7) New Alliance Board Chair Larry Bryant Emphasizes Communications
8) Northwest Clean Energy Industry Could Blossom with Favorable Public Policies, Study Says
9) Energy-Efficient Mortgages Offered through Oregon Sustainability Solutions Alliance
The Washington State Energy Code has received an energy efficiency upgrade.
Recently approved new standards for residential and non-residential buildings promise huge energy savings, particularly natural gas use in homes: state energy officials estimate the new standards over 15 years will save the equivalent of nearly half of Washington's annual residential natural gas consumption. Electricity savings over that period are projected at 73 average megawatts.
Washington's residential energy code now rivals Oregon's for energy efficiency and simplicity, according to energy officials. The revisions also represent the most significant changes to the state's residential energy standards in a decade, and in seven years for the commercial code.
"It brings Washington state back into a once-held leadership position in relation to energy codes nationally," said vice-chair Stan Price of the Washington State Building Code Council, which approved the changes Nov. 9. These code revisions are scheduled to take effect in July.
Specifically, the code amendments will increase energy efficiency requirements for residential windows and insulation, while making it easier for builders to comply with the standards. Homes heated by electricity and natural gas (the predominant fuel for new residences) will be treated equally under the code. On the commercial side, the code changes will raise efficiency standards for mechanical equipment to the current ASHRAE national levels and will expand use of outside air for cooling buildings, particularly energy-intensive computer facilities.
Gov. Gary Locke had requested energy code revisions as a response to the energy crisis. In a news release, he described the changes as "a positive step for the environment and for consumers. Not only will it result in tremendous energy savings, but it will also reduce the operating costs of homes and businesses throughout Washington."
The residential code revisions were strongly opposed by Washington homebuilders, who argued they would increase the cost of new homes by as much as $1,500. Yet, analysis showed that home owners would reap a positive cash flow in energy savings from the very beginning.
The Code Road
Washington's energy code normally undergoes review every three years; the most recent changes were adopted by the Building Code Council in November 2000 and went into effect this past July.
In the midst of the energy crisis, Locke "asked the Council to revisit its energy code in the face of tightening energy supplies and higher prices," according to a Nov. 15 news release from the governor's office.
A technical advisory group drafted proposed changes to the residential and non-residential codes, which were subject to a rule-making process and public comments. On Nov. 9, the BCC passed the code amendments by an 11-1 vote.
Despite this lopsided vote, the code changes had provoked some controversy. In particular, Price said Washington homebuilders "vigorously opposed" the revised residential standards on the grounds they would raise the initial cost of new homes.
The Building Industry Association of Washington estimated the added expense at up to $1,500 per home. It criticized the technical advisory committee that recommended the changes as a "pro-regulation dominated group ... advocating some costly energy code amendments," according to a legislative report on the BIAW Web site.
The trade association offered this outlook: "Since adoption of the State Energy Code in 1990, energy technocrats, window manufacturers and environmentalists have pushed relentlessly for more restrictive energy conservation requirements. With low energy costs as the backdrop, BIAW for the past ten years has been able to defeat the most onerous amendments to the code, including lower window u-values. In fact, just last year BIAW succeeded in stopping a proposal to lower window u-values for gas heated homes.
"But now," the legislative report continued, "Governor Locke is himself requesting to the Council that the more restrictive changes be adopted. This push from Governor Locke, combined with the energy crunch that has given conservation efforts new momentum, makes it highly unlikely that the majority of the members of the Council will vote against increased energy code restrictions." Still, BIAW promised to "do everything in its power to stop, or at the very least modify, these costly proposals."
Code Change Benefits
While BIAW emphasized governmental restrictions and the higher cost of new homes, others viewed the proposed code changes as highly beneficial.
Tom Karier, a Washington member of the Northwest Power Planning Council, described energy efficiency as a vital way to help balance energy supply and demand. "One of our key tools for achieving affordable, reliable, energy service in Washington is securing cost-effective improvements in the state's energy code," he wrote to the BCC in September, noting the proposed changes involve proven and cost-effective techniques that will reap energy savings and benefit ratepayers.
"The residential amendments achieve electricity and natural gas savings, increase affordability in annual housing costs, simplify the code dramatically, and increase the flexibility that homeowners, builders, and architects have in designing and building homes to meet code," wrote energy policy official Tony Usibelli of the state's Office of Trade and Economic Development.
OTED projected residential natural gas savings of 29 trillion Btu over the next 15 years--equivalent to half the state's total annual residential natural gas use. Electricity savings will be less because about two-thirds of the state's new homes heat with natural gas, according to OTED, but power efficiencies will still amount to 641 million kilowatt-hours, or 73 aMW. That equals the combined annual electricity consumption of Ellensburg, Centralia and Elmhurst.
The state agency acknowledged new homes would cost more--anywhere from $431 to $1,507. But, OTED countered, " ... the annual savings due to the reduction in energy use results in positive cash flow to the home buyer every month they own their home. The measures will be fully paid for in 4.5 to 9.5 years."
Residential Energy Code Changes
These represent "the first substantive changes to the residential code since 1991," said Price, who represents the general public on the BCC. "The stringency of the residential code was certainly falling behind what one would consider to be ... the forefront of energy codes nationally."
The biggest shortcoming, according to Price, were the window efficiency requirements for homes heated with natural gas and heat pumps. These "very, very weak" standards effectively allowed builders to install standard windows and scrimp on insulation, under an option allowing tradeoffs for energy component performance.
With the revisions the basic window efficiency threshold drops from .65 U-value to .40 U-value. Builders also can put in as many windows as they want in single-family homes, as long as they meet the efficiency requirements. "This component ... addresses a desire for design flexibility expressed by architects and builders without compromising the energy efficiency of housing statewide," according to OTED. Oregon allows unlimited energy-efficient windows in single-family homes--and window area in new Beaver States homes is virtually identical to Washington.
Insulation requirements also were revised, with the overall net effect to "get both better windows and better walls," said Price.
Another major change is the nearly complete standardization of efficiency requirements for electrically heated homes and all others, principally natural gas.
Washington's residential standards now will be very similar to Oregon's, where the code's relative simplicity has led to a nearly 100-percent compliance rate, according to Jeff Harris of the Northwest Energy Efficiency Alliance, who has served on the Energy Code Technical Advisory Group.
"The [new Washington] code is basically fuel-blind. That simplifies the entire choice of materials and insulation for the industry. In Oregon, a lot of the contentious nature of discussion of energy codes has gone away. It's so simple it allows builders to focus on many other issues they have to deal with." In another simplification, the BCC cut the number of different code compliance paths from 16 to seven, according to Price.
The Washington code changes will save more natural gas than electricity, Harris said, but they will also improve the energy efficiency of heat-pump homes because of the tighter envelopes. This more efficient use of natural gas will benefit the regional energy system, which is increasingly reliant on natural gas-fired power generation, Karier noted.
Commercial Energy Code Changes
For commercial buildings the BCC adopted two major revisions.
First, it raised the efficiency requirements for mechanical equipment by adopting the levels in the current national standard: ASHRAE/IESNA Standard 90.1.1999. Washington previously required 90.1.1989 standards, Price said.
Building owners and occupants will benefit from the energy efficiency and human productivity improvements intended in the national standards, according to OTED.
This change also means distributors and manufacturers won't be able to unload into Washington their inventories of older, less-efficent mechanical equipment, Harris said.
In addition, the Council tightened exemptions for the use of economizers to cool buildings with outside air. "We wrote a much more specific set of requirements that makes the use of economizers more prevalent in design and particularly for high-density rooms like data centers," said Price. These exemptions date to 1994, Harris noted, and didn't envision the emergence of huge server farms and other large indoor computer facilities.
Prospective energy savings were unavailable for these commercial code changes, although both Price and Harris expected significant efficiency gains. The mechanical equipment requirements will add less than one-fourth of 1 percent to commercial building construction costs, according to the BCC.
Price called the commercial revisions "solid improvements, but they're improvements that clearly have already shown to be cost-effective in relation to the technology, and don't require any stretches in relation to engineering design principles or practice." --Mark Ohrenschall
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Montana Power has unveiled plans for the largest wind energy purchase in the Northwest's windiest state.
This milestone event, however, has been disputed by a losing bidder in the investor-owned utility's wind power solicitation.
Montana Power announced Dec. 4 it had signed a contract to buy the output from 150 megawatts of new wind capacity proposed by developer Montana Wind Harness at a minimum of three Montana sites. This contract is part of a planned power supply portfolio assembled by Montana Power to serve default customers starting in July, under the state's electric industry restructuring.
This would be the biggest collective wind venture in Montana, and would provide close to 10 percent of Montana Power's total default supply. It would also be one of the largest single wind energy purchases in the Northwest or beyond.
Peter West of Renewable Northwest Project called the announcement an "extraordinarily positive step. We applaud Montana Power for taking this strong, forward position. It ought to leapfrog wind in Montana right up to where it ought to be, on a level you can easily build onto in the future." He said RNP also wants to ensure the IOU follows through with its first big foray into wind power.
Montana Wind Harness was selected through a competitive bidding process that has created some controversy.
One of the losing bidders told Con.WEB his company offered a lower price than Montana Wind Harness--2.8 cents per kilowatt-hour compared with 3.1 cents/KWh. That difference would cost Montana Power more than $30 million over 25 years, said John Jaunich of Minnesota-based Northern Alternative Energy.
Montana Power, however, retorts that Northern Alternative Energy didn't make a firm offer at that price. "We did accept the lowest bid that was offered to us back in August, and that's what we used to complete the negotiations," said utility spokeswoman Claudia Rapkoch.
Northern Alternative Energy has officially intervened in the Montana Public Service Commission's consideration of Montana Power's default supply portfolio, including the proposed wind power purchase.
Montana Power Seeks Wind
Montana Power issued a request for wind energy purchases in June, seeking up to 150 MW of installed capacity, preferably in Montana and preferably in operation by July 2002. The IOU has sold the vast majority of its generating capacity, but is obligated to provide a default power supply to distribution customers until 2007 as part of the state's electric restructuring.
Fifteen companies offered 23 wind proposals with a total capacity of 1,650 MW, according to a July 2 utility news release. Montana Power winnowed the field to four finalists: SeaWest WindPower, Northern Alternative Energy, Distributed Generation Systems and Montana Wind Harness.
Montana Wind Harness' selection was made public in a Dec. 4 news release. "This power will provide some of the lowest-cost power in the default supply portfolio at $31.65/MWh with no escalation over 20 years," said Bill Pascoe, Montana Power's energy supply vice president.
This limited liability company plans to erect 115 wind turbines on at least three separate yet-to-be-determined Montana sites, Missoula businessman Jim Carkulis said in the release. He leads a group of local business people who comprise Montana Wind Harness, along with Massachusetts-based energy company Ameresco. Nordex USA--a subsidiary of European wind turbine manufacturer Nordex AG--is listed as the engineering procurement and construction contractor. (Montana Wind Harness officials could not be reached directly for comment.)
Construction is planned to start in 2002, and all the turbines should be spinning out electrons by 2003, according to the news release.
In addition, the contract with Montana Wind Harness specifies that a wind turbine assembly plant be built in Montana--employing 35 to 50 people--as well as an operations and maintenance center with 10 to 15 employees.
A Matter of Price
In choosing Montana Wind Harness, "The most important criterion was price," Rapkoch told Con.WEB. "The second was transmission access." Environmental considerations (including bird impacts), available wind resources and the developer's financial wherewithal were other key considerations for Montana Power.
The company's reported price of 3.16 cents/KWh over 20 years is "very competitive" with other proposals for the utility's default power supply, she said. Indeed, it reflects a "very, very good" price for wind energy, said RNP's West.
But it's not as low as Montana Power could have had, believes Jaunich of Northern Alternative Energy. His firm offered 2.8 cents/KWh after it learned from a vendor that it qualified for volume discount pricing. He said he informed Montana Power of this price verbally on Aug. 20, and in writing Nov. 16.
Rapkoch said Montana Power officials were told only that this new bid came in the range of 2.8 cents/KWh to 3 cents/KWh. "One of our representatives did contact the company for further information, and was not given any particulars, just a range. From our standpoint, that wasn't what we considered to be a very firm offer." It also came as negotiations were under way, she added.
The Minnesota firm sought to intervene in the PSC's consideration of the default supply portfolio because it wanted to know more about Montana Power's decision, Jaunich said. "By no means do we want to stop the sale. By no means do we want to hold up the energy process ... Explain to us a logical reason [for Montana Wind Harness' selection] and we'll leave." He said his firm is curious about the selection criteria, particularly the role of price. This is the first time his company has intervened in such a case in its 10 years, Jaunich said.
Montana Power formally objected to NAE's intervention, Rapkoch said, because the company "wanted access to sensitive data, which we'd rather not share with other suppliers, and also because we don't want to see this turned into an auction process at the Public Service Commission." She forecast a "difficult process" before the PSC, as this is Montana Power's first attempt to develop a default power supply. "Obviously we think we've put together a good portfolio."
Northern Alternative Energy can "discuss and debate the process just like any other intervenor," said Will Rosquist of the PSC staff. The commissioners want to avoid a scenario where companies beseech them to pick certain energy resources. "It's about the portfolio MPC put together, and whether that portfolio is prudent or not."
The commission could disallow certain resources as imprudent, he noted, depending on the case record. But he also said the PSC has no guidance from the restructuring legislation on how to judge the default power supply. It's unclear whether integrated resource planning guidelines would apply, or whether renewable wind power would have any explicit preference.
Montana Power has asked the PSC for an order in this case by March 31, according to Rosquist. "We would like to have something done by July 31, 2002. That's when MPC's current contracts for supply expire." --Mark Ohrenschall
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Cow manure and ocean waves will fuel separate new power-producing ventures in Oregon and Washington.
Portland General Electric is supporting construction of two projects on Oregon dairy farms that will convert manure into gases fueling an engine-generator. One will start producing 100 kilowatts before the end of December; the other could produce 4 megawatts by 2003. The utility stresses these are pilot projects and their continuation depends on good performance.
Meanwhile, the first ocean wave power project in the world is under development off Washington's Olympic Peninsula. The demonstration facility--a 1-MW project to be installed about a mile offshore near Neah Bay--will be built by Washington-based AquaEnergy Group. Clallam County PUD has agreed to buy the energy output.
Manure to Megawatts
Portland General wants to increase the amount of green power flowing into its grid. The investor-owned utility is turning to Oregon dairy farms, where vast amounts of an alternative energy source flow from cows.
PGE plans to invest more than $16 million in two bio-gas projects to turn cow manure into power. More such projects may follow, if these two pilot projects prove economic.
The latest project, located on the Cal-Gon farm near Salem, is nearly complete and should be producing up to 100 KW before Christmas. Cal-Gon owner Bernie Faber said his cows produce 24 tons of manure every day. He's thrilled to dispose of that waste by feeding it into a 28-foot digester built by PGE on his farm. The digester produces methane gas, which fires a generator that sends power into the utility's grid.
PGE has begun work on another, much larger project at the ThreeMile Canyon Farm near Boardman. That digester, which carries a price tag of $16 million, will handle waste from as many as 25,000 cows and produce up to 4 MW of power. It's scheduled for completion in 2003.
A PGE official declined to reveal the utility's spending on the Cal-Gon digester. "We're experimenting with different operating regimes," said Jeff Cole, who manages PGE's bio-gas program. "The price tag isn't really a good basis for determining the real cost of such a project."
PGE originally planned to buy the output at 5.5 cents per kilowatt-hour for its customers, but is now considering other options, said PGE's Joe Barra. In addition, the utility will take advantage of a 35-percent tax credit (spread over five years) offered by the Oregon Office of Energy for utility investments in alternative energy. PGE also will earn money from sales of the byproducts, including fertilizer and animal bedding.
While dairy farmers won't see additional revenue, they welcome the digesters, as they face stricter federal and state environmental regulations concerning waste disposal and soil contamination.
Still, the economic viability of the projects remains uncertain. Cole said that's why PGE is cautious about expanding the bio-gas program to other farms. "Until we have operated this for a while and know how the digesters perform, it's hard to make a firm commitment to ... a large program."
PGE will operate both projects for 15 years, according to Cole. "We want to get enough information to potentially develop regional projects. That means we must have a long-term commitment."
There are 31 operating digesters nationwide, including 15 on dairy farms (one in Oregon), according to the Environmental Protection Agency's AgSTAR program.
Neah Bay in farthest northwestern Washington is planned as the site of the first ocean wave power project in the world.
AquaEnergy, the Northwest Energy Innovation Center, Clallam County PUD and the Makah Nation have just signed a memorandum of agreement and are collaborating on the 1-MW demonstration facility. The project, estimated to cost $1.5 to $2 million, could be generating power by the end of 2002.
The project involves mooring four floating buoys in water about 200 feet deep. Each buoy supports an offshore wave energy converter, which includes a Pelton turbine and an acceleration tube that extends below the water surface. In the middle of the tube is a piston; as the buoy moves on the waves, the piston moves up and down, too, transferring water into the turbine. "The kinetic motion is converted to a pumping motion via a two-cycle hose pump," explained Alla Weinstein, president and chief executive officer of AquaEnergy Group of Mercer Island. "Each component in the system existed in its own life," and all are proven and familiar technologies. "The uniqueness is how they've been put together."
The generator for the Neah Bay project will probably be located on the ocean floor, she said, and connected via submarine cable to the onshore grid--in this case, Clallam County PUD's distribution system.
"We agreed to take the output for our local system," said Fred Mitchell, Clallam assistant general manager. He said the PUD outlined the range of prices it would pay to prove the concept--a target of 4.5 cents/KWh--and agreed to build the distribution system to interconnect the project to the grid.
The project is a good fit for the utility, Mitchell said. In a recent strategic planning session, Clallam PUD's board adopted a resource portfolio giving preference to renewables developed within the service territory.
The PUD learned of AquaEnergy's technology through Energy Northwest--or more specifically, the Northwest Energy Innovation Center, an organization formed last year by Energy Northwest, Bonneville Power Administration, Washington State University and Battelle Memorial Institute.
Energy Northwest's Dick Koenigs said AquaEnergy is the first company to sign an agreement with the Center, which was formed to identify technical innovations that merit specialized support and to assist innovators in bringing more cost-effective distributed generation and renewable energy options to market. The Center provides developers with "access to researchers, engineers, grant writers and facilities," Koenigs said. "We don't do basic R&D, but help them get past that last hurdle of development."
BPA, Energy Northwest, Battelle and WSU's Cooperative Extension Energy Program had all been helping the same companies, he said, but their efforts were not coordinated. "Going through one organization made more sense," said Koenings. BPA provided $450,000 for the first three years.
The Center will help AquaEnergy work through the licensing and permitting processes for the ocean wave project. "Permitting is the biggest question mark," Weinstein said. So far she has identified 15 agencies--state, federal, city and tribal--with some jurisdiction in the project. "We will try to get them all in one room and talk about how we can streamline the process," she said.
AquaEnergy will also seek project funding. Meanwhile, the company is one of four finalists to develop B.C. Hydro's planned ocean wave project off the west coast of Vancouver Island.
The Neah Bay project would take up an area about 260 feet by 130 feet and would be invisible from shore; the buoys "hide behind the waves," Weinstein said. While the area would be closed to commercial boat traffic, smaller sportfishing boats would be allowed nearby.
The buoys and the wave energy converters release "no pollutants or emissions of any sort," Weinstein said. "It's a simple process," agreed Koenigs. "There's also lots of energy in waves, and it's non-polluting."
The Makah Nation is interested in expanding this offshore power plant, for the jobs and energy potential as well as the possibility of using the project electricity to desalinate water. --Lynn Francisco and Jude Noland
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Portland General Electric and Pacific Power have chosen Texas-based Green Mountain Energy to supply renewable energy for their retail green power programs.
The separate agreements, announced in early December, are subject to the signing of final contracts. They culminate a request-for-proposals process by Oregon's two largest utilities. And they mark the first time Green Mountain has arranged to supply power to electric utilities.
Green Power Options
Under Oregon's electricity industry restructuring law, PGE and Pacific Power must offer renewable power options to residential and small business customers beginning March 1, 2002 (customers can still get traditional electric service at basic rates).
Both utilities will continue to make available their Clean Wind Power (PGE) and Blue Sky (Pacific Power) products, which allow customers to buy increments of wind power. The utilities will also add a 100-percent renewables option and a "habitat option" allowing purchasers of environmentally friendly energy to make donations to the Pacific Salmon Watershed Fund, which supports such projects as culvert removal and replacement and non-native species removal in several watersheds.
PGE spokesman Mark Fryburg said his utility recently lowered the price tag for its Clean Wind Power option, selling 100 kilowatt-hour blocks of power for $3.50 apiece. The Green Mountain 100-percent renewables option will sell at a premium of .08 cents/KWh, and the habitat option for .99 cents/KWh extra.
Portland General decided to purchase from Green Mountain Energy based on a combination of factors: price, the company's market experience and its proven ability to promote and sell green power were selling points.
"Research shows people who buy green power do it because it's their personal value," rather than because of monetary considerations, Fryburg said.
Both utilities plan to begin marketing campaigns in January.
Green Mountain spokeswoman Marci Grossman said the Oregon utility deals are "substantial" because "utility partnering" is a key part of her company's future business strategy. Green Mountain Energy has yet to finalize where the electricity for PGE and Pacific will be generated, but she said it will be 100-percent renewable--85-percent geothermal and 15-percent wind--and will most likely come from Western and Northwestern sources.
Green Mountain Energy bills itself as the nation's largest residential provider of less-polluting electricity, with about 500,000 customers in several states having selected the company.--Amber Schwanke
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A proposed customer surcharge to fund Idaho Power demand-side management programs deserves consideration--but not right now, in the wake of substantial rate increases, the Idaho Public Utilities Commission has ruled.
Idaho regulators plan to examine funding for a "comprehensive, long-term DSM program" for Idaho Power when the state's largest utility files for power cost adjustments next spring, according to a Nov. 21 IPUC ruling.
Although declaring its support for conservation, the three-member commission balked at the timing of the surcharge proposal. Idaho Power residential rates have risen a combined average of 31 percent the past seven months, the IPUC noted in its ruling. "Given the large rate increases authorized already this year, the Commission is reluctant to raise rates any further by implementing a tariff rider at this time--even to fund a worthy endeavor such as this."
For this winter's heating season the IPUC ordered the investor-owned utility to distribute energy-saving information to certain residential customers, expand its Home Energy Audit program, create a residential weatherization program and add funding to its existing Low Income Weatherization Assistance venture. Idaho Power also was directed to form an Energy Efficiency Advisory Group and to plan for implementing long-range demand-side ventures.
Idaho Power in July had proposed a tariff rider to generate about $2.6 million annually (about 0.5 percent of utility revenues) for conservation programs, which would nearly double its current spending for ongoing energy efficiency ventures. The IOU broached this idea along with 15 potential conservation options in response to a May IPUC directive to craft a comprehensive DSM program (see Con.WEB, Aug. 30, 2001).
Support for 'Prudent' Conservation
The IPUC's Nov. 21 ruling offered generalized support for utility conservation efforts "so long as those programs are prudent for ratepayers." Commissioners specifically cited a 1997 order authorizing Idaho Power funding for the Northwest Energy Efficiency Alliance as evidence of its role "to encourage and facilitate" demand-side initiatives. "The Commission did not then, and does not now, depart from its historical commitment to energy conservation."
But recent Idaho Power rate increases led the commissioners to delay consideration of conservation funding options until next spring's 2001-2002 PCA filing by Idaho Power.
"The commission is concerned that just because the [wholesale electricity] prices have gone back down that we now all of the sudden forsake conservation programs as if this [energy crisis] could never happen again," said PUC spokesman Gene Fadness. "It could happen again. We could have another dry year and we're back in the same boat." Many conservation programs were abandoned in the mid-1990s in anticipation of electric industry restructuring, he noted. "Deregulation has not come about, but a need for more conservation certainly has. This commission is hoping we get back on track" for conservation. "They want just as aggressive an approach as if the markets were still at their really high rates."
In its ruling, the IPUC said it "is very concerned about the ability of customers to manage their electric bills--particularly limited income residential customers who consume large amounts of electricity." It gave three specific directives.
Idaho Power must distribute packets of energy-saving information to residential customers who use more than 2,000 kilowatt-hours monthly or who qualify for low-income assistance. It must provide home energy audits upon customer request. And it must create an internal residential weatherization program while adding funding to the existing LIWA venture.
Those packets should be mailed in December and January, said Idaho Power's Darlene Nemnich. The utility's residential weatherization program, meanwhile, was being designed as of early December.
Funding for these ventures is authorized through Idaho Power's share of Bonneville Power Administration's conservation and renewables wholesale rate discount credit--worth about $43,000 per month--"plus any other available funding methods or sources ... The Commission will consider any reasonable expenditure beyond the amount provided by the BPA credit for recovery in the 2001-2002 PCA review next spring."
In addition, the IPUC directed Idaho Power to create an Energy Efficiency Advisory Group to "recommend new DSM measures, enhance existing DSM programs, prioritize implementation of appropriate programs and evaluate each program's effectiveness." This group is also charged with considering a time-of-use metering pilot program as well as installation of time-of-use meters in new subdivisions and (voluntarily) for existing customers.
Idaho Power will likely stay with its already filed comprehensive DSM program, for purposes of the IPUC's consideration next spring, Nemnich said. "We'll just have to wait and see what added suggestions the advisory group might have before there is a rider, if there is one." The utility typically files for a power cost adjustment in April and the PUC usually issues an order in May, she said.
Idaho PUC Staff Comments
Idaho PUC staff characterized Idaho Power's July filing as "a good next-step in encouraging its customers to use electricity efficiently."
The proposed surcharge mechanism and amount are "appropriate," said the written comments. "Staff believes that $2.6 million annually is sufficient to encourage some conservation efforts for two years. This amount will allow Idaho Power to demonstrate its conservation commitment. We believe the 0.5% rate increase is an amount that is tenable to most customers if information is provided to them showing how DSM programs can reduce future rates."
Staff also suggested Idaho Power and its proposed energy efficiency advisory group look into time-of-use metering and rate options, as well as helping low-income customers by distributing energy conservation kits to people applying for bill-paying assistance.
Idaho Power's DSM filing attracted 25 citizen comments as of Oct. 15, according to IPUC staff. Twenty of those comments "favored implementation of DSM programs," and nine citizens thought the proposed funding level should be raised from 1.5 percent to 3 percent of revenues over three years. Five citizens opposed the proposed 0.5-percent DSM surcharge. Wrote one: "I do not agree with donating money towards low income assistance programs to help alleviate someone else's burden of paying their own power bills."
Four other official comments were filed by organizations.
Industrial Customers of Idaho Power "generally supports" the utility's proposal, summarized IPUC staff. ICIP likes a surcharge to fund conservation, although it didn't offer an optimum level. The trade group believes industrial and commercial customer classes should get conservation funding equivalent to their contributions through rates. ICIP suggests Idaho Power's funding of the Northwest Energy Efficiency Alliance should focus on near-term energy savings rather than longer-term market transformation.
Micron Technology also thinks Idaho Power spends disproportionately on market transformation. "While Micron is not opposed to long-term market transformation, Micron believes that allocating 80 percent of [Idaho Power's] conservation resources to such transformation programs is not a prudent use of ratepayers' money. Because NEEA admits that it cannot identify any savings for over half of its projects, Idaho Power funding for NEEA should be immediately curtailed and redirected to Idaho Power to operate Idaho-based conservation efforts." In addition to advocating pursuit of immediate energy savings, Micron wants Idaho Power to improve its transmission system efficiency by replacing old components, which it said "may provide greater conservation than any demand-side programs industrial customers might implement."
The semiconductor company cited its "intensified" conservation efforts over the past year, including the identification of many efficiency opportunites. It supports self-directed conservation funding for industrials and the pay-as-you-go approach to recover utility conservation expenses.
Environmental and energy advocacy groups like the direction outlined in Idaho Power's DSM filing. Joint comments by Land and Water Fund of the Rockies on behalf of Idaho Rivers United, Idaho Rural Council, Northwest Energy Coalition and Mary McGown, and a separate Natural Resources Defense Council filing, both lauded the proposed DSM surcharge--but both thought it should be higher than Idaho Power suggested.
Idaho Rivers et al said the surcharge should be initially set at 1.5 percent of utility revenues, rising to 3 percent in three years. This would put Idaho Power in the range of most other Northwest investor-owned utilities, they said, and would "help ensure that all cost-effective DSM opportunities in Idaho Power's service territory are fully explored." Idaho Rivers et al called for an independent study of energy-saving opportunities (with cost-effectiveness based on total resource costs) and a detailed DSM plan from Idaho Power.
Both the Idaho Rivers group and NRDC asked the IPUC to examine ways to offer Idaho Power more fundamental incentives to pursue conservation, such as performance-based financial awards and separating energy sales from revenues. The latter, often known as decoupling, "refocuses utilities on making least-cost investments to deliver reliable energy services to customers even when such investments reduce throughput," said NRDC. "It removes both the incentive to increase electricity sales and the disincentive to run effective energy efficiency programs or invest in other activities that may reduce load." --Mark Ohrenschall
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Oregon's public-purposes funding for energy conservation and renewable energy officially begins in March, but its inception likely will be gradual.
A majority of initial funding from the Energy Trust of Oregon appears headed for utility programs and market transformation via the Northwest Energy Efficiency Alliance. The Trust board of directors has set aside at least $4 million for new non-utility Trust conservation programs from March through December 2002, as the non-profit organization launches its portion of the 10-year public-purposes funding established with Oregon's electric industry restructuring.
The Trust estimates its share of Oregon's 3-percent public-purposes funding will be nearly $32 million for next March-December--$24.4 million for conservation and $7.4 million for renewables. Of that amount, the fledgling organization expects to have about $20 million available for conservation inititiatives. Specific programs remain to be determined.
In addition to endorsing the $4 million minimum for new Trust programs next year, the Trust board on Nov. 28 approved some elements of an interim strategic plan. It establishes goals of 300 megawatts of cost-effective energy savings and renewables accounting for 15 percent of the state's energy resources, both by 2012. The board also signed a grant agreement with the Oregon Public Utility Commission that guides implementation of the legislative mandate for public-purposes funding.
Meanwhile, the Trust is looking for staff people (including directors for energy efficiency and renewable resources) as well as Portland office space.
Transition for The Trust
Oregon's electric industry restructuring and public-purposes funding originally were scheduled to start in October 2001, but the Legislature and Gov. John Kitzhaber postponed the launch date to March 1, 2002 (see Con.WEB, July 20, 2001). This gave the fledgling non-profit Energy Trust more time to prepare for administering its conservation/renewables lion's share of the total public-purposes funding--about 26 percent is earmarked for schools and low-income energy programs, separate from the Trust.
A major ongoing issue facing the Trust is moving away from conservation initiatives run by PacifiCorp and PGE, as smoothly as possible. "We don't want to see a large drop in marketing, we don't want to see a large drop in conservation. We need to move as consistently as we can," said board president Steve Schell.
PacifiCorp energy services director Jeff Bumgarner told the board he understood the Trust's interest in starting new ventures, but he also cautioned against rushing through the transition. "The bottom line is it's going to take some time ... I would be be comfortable if you looked a little longer" than the end of 2002.
It appears this transition will feature a substantial reliance on utility programs, at least in the early days. The board on Nov. 28 unanimously gave formal guidance to executive director Margie Harris to set aside at least $4 million for new, non-utility programs launched between March and December 2002. About $2 million is earmarked for springtime initiatives, and the other half for later in the year. Specific programs are yet to be determined.
The Trust will have less money available than originally anticipated. An earlier figure of $38 million was based on a full year's public-purposes collection; the actual 10-month period in 2002 reduces the total projected amount to about $31 million. And that number could be affected by the recession, utility rate changes, weather and other factors. Trust officials acknowledged a need to "manage this uncertainty," as Harris put it.
In addition to its near-term activities, the Trust is beginning work on a longer-range action plan to guide its work March 2002 through September 2003. "Utility programs are likely to be among the activities included in the 19-month plan, but they are likely to compete with other new and innovative program ideas that will be identified through research, requests for proposals and other outreach tools," according to the Trust's Web site. "The Trust expects to engage in extensive market assessments with utility users to define the programs that will best meet their needs and that have the greatest likelihood for success."
Interim Strategic Plan
The Trust board on Nov. 28 adopted some elements of an interim strategic plan, to provide some initial guidance while a more thorough plan is crafted.
This interim plan provides a mission statement that reads: "The Energy Trust changes how Oregonians consume and produce energy by investing in efficient technologies and renewable resources that save dollars and protect the environment."
The plan also sets goals and strategies.
In energy efficiency, the Trust will pursue cost-effective energy savings totalling 300 MW by 2012. Strategies include programs for all customer classes, innovative approaches, applications of state-of-the-art technologies and reduction of peak loads and power system costs.
The Trust wants diverse renewables to comprise 15 percent of the state's energy resources by 2012. Reducing costs, demonstrating distributed generation, promoting innovation and quality services, integrating renewables with sustainable building and attracting new private investment are the Trust's strategies.
PUC Grant Agreement, Trust Staff, Offices
The public-purposes agency also has a new grant agreement with the OPUC, which the Trust Web site describes as a "legal contract between the Trust and the PUC that defines the ongoing approach to fulfilling the mandate of [Oregon's electric industry restructuring legislation]. The agreement was crafted with the key intent of structuring ongoing communication and cooperation between the Trust and the PUC in managing the programs of the Trust."
Schell, a Portland attorney, called this "probably the key agreement of our corporate life."
Meanwhile, the Trust is hiring staff people to join new executive director Harris (see Con.WEB, Nov. 21, 2001). Among the five open positions are directors for energy efficiency and renewable resources (see the Trust Web site for more information).
Harris told the board Nov. 28 she expects the staff will likely total 10 to 16 people within the first 12 to 18 months of Trust operations. Many functions will be contracted outside the Trust.
Harris also said she is looking for Trust office space in downtown Portland. --Mark Ohrenschall
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As the new board chair of the Northwest Energy Efficiency Alliance, Larry Bryant wants to further spread the message about the role and value of the regional market transformation collaborative.
|Photo courtesy of Larry Bryant|
In particular, as only the second Alliance chair from east of the Cascade Mountains, Bryant would like east-side public-power utilities to understand more about the Alliance and how they can benefit from its activities. A prime example: the compact fluorescent lamp coupon program that has led to more than two million redeemed coupons, and nearly five million CFLs sold, across the Northwest.
"The efforts of the Alliance have moved us closer to our vision 'of a culture in which the efficient use of energy is a core value among consumers and businesses.' Our strength is our ability to work with a multitude of stakeholders across the region in making market transformation happen," said Bryant, the marketing manager for northern Idaho's Kootenai Electric Cooperative. "We can never do enough 'telling our story' communicating. The focus of that communication is real basic: get the message out on what the Alliance is doing, and why we do it."
Alliance in Fine Shape
Bryant served on the development committee that helped create the Alliance, and he was an original Alliance board member starting in 1996, in the public-power pod. He left the board in 1998 and returned in 2000. In October he was elected to a one-year term as chair of the now 28-member Alliance board, succeeding PacifiCorp's Brian Hedman.
As the Alliance enters its sixth year of existence, Bryant believes the collaborative is in fine shape. He describes it as a well-run agency, full of talented, experienced and dedicated people. "I'm pretty proud and excited to be able to be a part of that. It's fun to be a part of the successess of a great organization."
As the first east-of-the-Cascades board chair since Montana Power's Dave Houser (1996-97), Bryant sees an opportunity to expand Alliance collaborations among smaller public-power utilities in eastern Oregon and Washington, Idaho and Montana. His tenure as chair "may open some eyes or doors over here that previously haven't opened too far," he said.
Some east-side utility officials, he said, perceive the Alliance as an organization dominated by large utilities along the Interstate 5 corridor. This highway does connect most of the region's electricity use and its efficiency potential, and the Alliance needs to focus here, Bryant believes. At the same time, I-5 efficiencies bring regionwide benefits. And, he said, "There are things that can be done around the whole region even in the smallest of utilities. They have opportunities to participate." Market transformation opportunities exist throughout the region that the Alliance should pursue.
A prime example was Bonneville Power Administration's CFL coupon program, which the Alliance's Energy Star Residential Lighting program helped implement for local utilities and retailers around the Northwest. Bryant called this "a very, very successful program" that has led to more than two million redeemed coupons by year's end--and showed utilities how they can gain from joining forces with the Alliance. "Using that template, telling our story how well it can work, the resources we have available so they can be successful--we need to continue to do that."
Another example of an Alliance venture with great regionwide collaborative potential is the Bac-Gen BioWise Initiative project targeting small and medium-sized wastewater treatment plants. Bac-Gen and MagnaDrive (a high-efficiency motor technology) also represent emerging technologies the Alliance should continue fostering, Bryant believes.
"We need to optimize our links with the local delivery mechanisms throughout the region. This is accomplished by working directly with utilities to ensure the Alliance programs complement and fit well with their program efforts." Bryant also thinks it very important for utilities to "fully understand" Alliance ventures and how they can mesh with local efforts.
Within the Alliance, Bryant plans to emphasize collaborative solutions. He considers himself a uniter who can broker compromises. "One of my abilities is to sit back and look at all the different sides. Where things aren't unanimous in belief, I try to find common ground," he said.
One example was the evolution of the Alliance's Commercial Buildings Initiative. It was first presented to the board as a complete package--a potential $30 million venture--after considerable development by the Alliance staff and the board's portfolio development committee. However, Bryant said many board members were reluctant to endorse such a large package all at once. He helped craft a compromise funding plan under which the board in July adopted an initial CBI budget of up to $5.8 million along with a strategic plan, with the idea that more components would be funded later with board approval.
Bryant considers the CBI a primary Alliance focus for the coming year, along with the continuing design for a broad industrial-sector venture, in cooperation with industrial stakeholders.
As the new chair, Bryant oversees an expanded Alliance board of directors. It now numbers 28 people representing utilities, state governments, environmental advocates, energy efficiency businesses, consumers, the Energy Trust of Oregon and regulators (whose representatives are non-voting).
"We do have a larger board starting this year," said Bryant. "What I've always been amazed about is our ability to work together and collaborate solutions." He wants to help new board members get up to speed, and to "strengthen the role of the various committees and assist in the development of new standards of communication between the board committees and the other board members," since much of the board's deliberative process now takes place in these committees. --Mark Ohrenschall
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Clean energy is a $1.4-billion industry in Washington, Oregon and British Columbia. With supportive public policies it could expand nearly fourfold in 20 years and make the Northwest an international leader in this technology-based field, according to a new study.
"Poised for Profit: How Clean Energy Can Power the Next High-Tech Job Surge in the Northwest" focuses on market opportunities and policy strategies.
Fuel cells, advanced power systems and solar PV are identified as the most promising export-oriented economic forces for the Northwest, based on such factors as market status, regional conditions and potential synergies and leverage. Wind, energy efficiency and biomass also offer "very substantial economic development potential for the region," the report. But they all face a number of barriers as well.
Public policies supporting clean energy technology progress, commercialization and market development could enable the Northwest to create a $6.3-billion annual clean energy industry and generate an estimated 32,000 jobs over the next 20 years.
"We have some of the pieces in place. We really have a lot of the intellectual assets and institutional assets here," said Rhys Roth of Climate Solutions, which commissioned the report with regional utility, government and foundation partners. "It's just a matter of getting onto the same page and getting some funding that really targets clean energy."
The report highlights the Northwest's strong technology base, noting, "Most clean energy businesses are as technology-oriented as their predecessors in the electronics, software, telecommunications, and biotechnology industries."
Political and energy leaders praised the report. "No region is more experienced or better positioned to spearhead the development of robust renewable energy and energy efficiency industries," said BPA acting administrator Steve Wright.
"We're on the threshold of an energy efficiency revolution. If we're smart, as we've already proved in our high-tech industry, we'll stay a step ahead of the market and provide the clean-energy decade with the tools it needs," said Washington Gov. Gary Locke in a press release. He cited his support of retail green power legislation and sales-tax exemptions for wind, solar and fuel cells.
Building an Industry, Not Just Megawatts
"Poised for Profit" distinguishes between regional clean energy applications and expanding the regional clean energy industry. It describes the latter as "leadership in developing, manufacturing and distributing clean energy technologies and services, both locally and globally." The report mentions as an example the growth of installed Northwest wind power, but notes that much of the technology, development firms and investment capital are non-regional.
"While wind and other technologies such as energy efficiency may play a very important role in providing the Pacific Northwest with a sustainable energy supply and increased construction and service jobs, the focus of this analysis is to investigate prospects for the Pacific Northwest to develop global industry leadership in particular technologies or services," the report said.
The potential economic benefits are substantial, according to the report. It forecasts worldwide new investment in clean energy averaging $180 billion annually in the first 20 years of this century, mostly attributable to energy efficiency technologies and services.
Even without governmental backing, the Northwest clean energy industry is projected to grow from $1.4 billion annually today to $2.5 billion by 2021, while adding 12,000 new jobs. With supportive public policies, the report said, the region could gain a 3.5-percent market share of the global clean energy industry, which would create a $6.3-billion industry and 32,000 new jobs in Washington, Oregon and British Columbia. That $6.3 billion would equal roughly half the total annual receipts by farmers and ranchers for crops and livestock in Washington, Oregon and Idaho.
Opportunities: Fuel Cells, Power Systems, Solar PV
"Poised for Profit" finds the greatest Northwest economic potential in fuel cells, power systems technologies and solar PV.
It calls this trio "a formidable combination" for the Northwest, with current leadership (such as Ballard Power Systems, IdaTech, Siemens Solar, Xantrex and Schott Applied Power), growing industry clusters around these technologies, value-added prospects and "strong potential synergies" with each other, additional clean energy technologies and the region's larger high-tech sector.
These three technologies will be vital components of the shift from central-station power systems to distributed generation and the energy web concept, said Roth.
For fuel cells, the report concludes that the "potential market is large, the technology is at an ideal point in its development (i.e. just becoming commercial) and the Pacific Northwest has a dominant global player plus a number of strong supporting companies. Successful development of fuel cells would also draw skills and technology to the region that would benefit other clean energy producers."
Wind, biomass, small hydro and energy efficiency "will likely play a significant role" in meeting energy loads and creating jobs, the report said, but their potential to fuel a Northwest global powerhouse is more limited.
"The large global, North American and local markets ... for wind presents an opportunity for the NW to become experts in the installation and operation of wind. But this alone would not build a value-added local R&D or manufacturing industry in wind. To do so the Pacific Northwest would need to establish global dominance in the knowledge and manufacture of wind energy components, an industry that is relatively mature and is dominated by well-established competitors."
Energy efficiency is described in the report as environmentally vital and a potentially large market. "However, while the Pacific Northwest has a number of good companies, it would be difficult to leverage this diverse, service-based industry into a position of leadership beyond home ground."
"Poised for Profit" outlines several potential barriers for the regional clean energy industry, including difficulties in accessing transmission and distribution grids and energy markets, inequities in the support of different energy technologies, lack of financing, utility reluctance to adopt new technologies, and possible shortages of skilled workers.
The report also examines prospective geographic markets for the Northwest clean energy industry. Regional and North American markets "will likely account for the majority of business for some time," the report said, although international markets will become increasingly important. Western Europe (particularly Germany) offers the top overseas market, while India and Brazil also hold some promise.
Government helped nurture the regional high-tech industry through investments in education and research, tax incentives and even local amenities, according to the report. Government likewise can help stimulate the growth of the clean energy industry.
"Poised for Profit" outlines potential policy initiatives in three areas: technology development, commercialization and market development. These are patterned after high tech-related policies.
In technology development, policy options include more funding for university/laboratory energy technology research centers. Research and development tax incentives applicable to clean energy are another possibility.
Commercialization policies could mean creating a clearinghouse for clean energy businesses, developing clean energy business incubators and providing business training and other help for clean energy entrepreneurs.
And in the realm of market development, governments can offer incentives for renewables and efficiency, strengthen procurement and regulatory policies, require clean energy purchases by utilities, and expand market transformation activities.
The report provides specific examples of supportive policies, some already in practice in the Northwest and some that could be adapted within the region.
Roth said Locke has asked Martha Choe, director of the Washington State Office of Trade and Economic Development, to convene stakeholders to develop potential state government strategies for clean energy. This process could help the clean energy industry become more organized as a whole and thus become more influential in policy matters, he said. Climate Solutions also plans to talk with members of Congress about the study, to help them "understand the conclusions and so they can look for opportunities to be helpful." --Mark Ohrenschall
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Portland General Electric, home mortgage maven Fannie Mae, builders, lenders and state agencies have joined to form the Oregon Sustainability Solutions Alliance, which is offering an energy-efficient mortgage initiative.
Fannie Mae is sponsoring "Home Performance Power" for homes built under PGE's Earth Advantage program, which promotes the construction of resource-efficient housing. Earth Advantage homes are designed to be at least 15-percent more efficient than homes built to the state energy code; they also feature environmentally sound building practices and make use of recycled materials.
The mortgage program is part of the state's Sustainability Solutions Alliance, which Oregon Gov. John Kitzhaber recently unveiled at an Earth Advantage home in Salem. Kitzhaber said at a news conference that the state's housing and environmental groups must work together to alleviate rising housing and energy costs. He called the Alliance "a win-win approach that balances Oregon's housing and environmental needs, and helps to achieve stable communities, stronger economies and a healthier environment in Oregon."
Mortgaging Energy Efficiency
To aid home buyers in purchasing Earth Advantage homes, participating lenders will offer the "Home Performance Power" mortgages, which have low or no down payment requirements and require borrowers to contribute only 3 percent for closing costs, which may come from a variety of sources. Eligible borrowers can also add the dollar value of projected energy savings to their income, thus qualifying for a larger mortgage.
PGE spokeswoman Lisa Scholin told Con.WEB 28 builders have signed up for the program, and 1,791 homes have applied for certification. She said utility representatives direct potential home buyers to these registered builders, and then work with both the builder and the home owner throughout the building, testing and inspection process. The program's Web site lists Earth Advantage homes under construction around metropolitan Portland, Salem and Eugene.
A home may be certified under four categories: energy efficiency, healthier indoor air, resource efficiency and environmental responsibility. Builders earn points for incorporating specific features from one or more categories. A home must have at least 50 points for certification. Earth Advantage home prices range from "affordable"--Scholin cited one Portland development where prices start at $115,000--to "super-luxury" custom homes.
Three state agencies--Oregon's Office of Energy, Department of Housing and Community Services, and the Department of Consumer and Business Services' Building Codes Division--will provide $1 million in mortgages with a 5.95-percent interest rate for purchase of Earth Advantage homes. The state agencies will also support the Alliance in other ways, such as monitoring the benefits of energy and water efficiency in these homes, and working with PGE to explore streamlined and alternative energy codes and inspections. --Kari Hanson
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