A SERVICE OF ENERGY NEWSDATA

Con.WEB
Con.WEB website links Con.WEB Calendar of Events Con.WEB In Brief Back Issues & Subject Index Search Con.WEB

Funding Support from the Northwest Energy Efficiency Alliance

CWEB.073/Jan.31.2002


1) Northwest Wind Energy Grows Fourfold in 2001, But Momentum Slowing
2) Hundreds of New Northwest Megawatts Blowing in The Wind
3) Power Council Adopts Three-Year 300 aMW Regional Conservation Target
4) Conservation Monitor/Con.WEB Marks 10-Year Anniversary
5) Save a Watt Regional Marketing Campaign Delivers Conservation Messages
6) Northwest Utilities, Enviros Seek Solution to CFL Disposal Problem
7) Alliance Board Adopts 12-Percent Higher Operations Budget, Replenishes Market Research Funding
8) News Bytes: PacifiCorp, PGE, Tacoma, Seattle Conservation; Businesses; Holiday Lights; People; Awards; and More


RENEWABLE ENERGY/GREEN POWER

Boom Times for Wind

Northwest Wind Installations Grow Fourfold
in 2001, but Uncertainties Lie Ahead

Wind energy in the Pacific Northwest grew exponentially in 2001, but a variety of factors have slowed the wind's momentum entering the new year.
The Vansycle Ridge Wind Farm,
shown here in 1998, is now one of four
operating wind projects in the Northwest.
Photo by Mark Ohrenschall

Some 360 megawatts of new wind capacity were installed in the region or purchased by regional utilities in 2001. That effectively quadrupled Northwest wind power, and contributed to the record 1,694 MW of new wind-generating capacity completed last year in the United States. Another 73 MW of Northwest wind capacity are scheduled to start spinning in 2002, and other pending regional wind projects could add more than 1,400 MW.

Yet, wind now faces several uncertainties. First is the Dec. 31 expiration of a vital federal tax credit for wind energy production; although many observers predict this widely supported tax credit eventually will be renewed by Congress, its current absence slows the pace of wind-energy development. Falling wholesale power prices, meanwhile, pose cost-effectiveness questions for wind energy. Significant issues regarding transmission and wind's integration into the regional grid are still outstanding.

"There seems to be a little bit less optimism" than a year ago, said senior resource analyst Jeff King of the Northwest Power Planning Council. Good feelings peaked last February when Bonneville Power Administration announced its solicitation for energy output from up to 1,000 MW or more of new wind.

BPA is still actively considering the six remaining finalist projects from that solicitation, Bonneville renewables program manager George Darr told Con.WEB. But the federal power marketing agency is mulling the impacts of the absent tax credit, lower wholesale market prices and transmission/integration issues, along with its reduced need for new resources. "There definitely will be some delay" in moving ahead with these proposed wind projects, he said.

Renewable energy consultant Robert Kahn acknowledges some difficulties, but remains "generally bullish" on regional wind power. "We've got good companies operating here. There is some reason for hesitation, in some cases. And a lot of learning and a lot of progress," he said. "Is every project that we've heard about going to happen? Probably not. Is BPA going to expect tighter pro formas? Most definitely. Are PacifiCorp and other utilities willing buyers? It appears so."

Other positive signs include growing demand for retail green power, lessons learned and applied in wind-farm siting, and substantial local support in rural communities for the economic development potential.

2001: A Bountiful Year

By any standard, 2001 was a bountiful year for Northwest wind energy.

Three large-scale projects were completed, the biggest the 263-MW-capacity Stateline Clean Energy Center along the Oregon-Washington border. A fourth wind farm built in Wyoming will provide power to Portland-based PacifiCorp. These four total 360 MW of installed capacity; prior to 2001, the region claimed about 84 MW of wind capacity from the Vansycle Ridge wind farm and three projects at Foote Creek Rim in Wyoming.

With an additional 73 MW of new wind capacity under construction and more than 1,400 MW in various stages of active development, Northwest wind could exceed 1,900 MW of new capacity in the near future. (See related story for more details on specific Northwest wind projects.)

This gust of activity moves wind toward becoming a second-tier regional energy resource, behind hydropower, coal and natural gas, said King. He called the recent growth of wind "quite remarkable."

Still, natural gas remains the overwhelmingly favored fuel for new Northwest power projects, accounting for 88 percent of resources being developed, King recently told the Council's Power Committee. Installed regional wind megawatts amount to less than 1 percent of total power-generating capacity for the region (now about 48,000 MW). And wind produces power intermittently, with a typical capacity factor in the range of 30 percent to 40 percent.

Production Tax Credit Expires

The three new wind farms built in the Northwest--Stateline and the Condon and Klondike projects in north-central Oregon--all finished construction very late in 2001. That's no coincidence: Jan. 1 marked the end of a 1.7 cents per kilowatt-hour federal tax credit for wind energy production, good for 10 years.

This PTC, as it is known, is considered vital in making wind competitive in cost with other forms of energy generation; it enables wind power to reach levelized costs as low as about 3 cents/KWh. "It's a significant portion of the price," said general manager Allen Barkley of Northwestern Wind Power, which built the 24-MW Klondike wind farm. "I think the tax credit is critical to the future of wind development in the Northwest." The PTC and power sales prices determine financial backing (or not) for wind projects, he noted. "Nothing else really matters."

A two-year PTC extension had been considered in proposed economic stimulus legislation in Congress, according to the American Wind Energy Association. But that legislation failed, and so did the PTC--despite support from the Bush administration and many federal legislators, both Republicans and Democrats. "The good news is everybody wants it," said Kahn. "The bad news is it's not big enough for anybody to focus on exclusively."

Kahn and many others anticipate the PTC's eventual continuation by Congress, perhaps even retroactively to Jan. 1. "This is very typical of what happens in the wind energy industry in the United States. It's happened before," said Northwest development director Andrew Young of Zilkha Renewable Energy.

But this tax credit tango does have real consequences. "It really makes for a boom-bust industry," said Young. "This past year, 2001, was such a boom because there's these sunset dates."

Lingering uncertainty over this fundamental piece of the wind energy puzzle affects developers and manufacturers, as well as potential power purchasers such as utilities.

"It could really put this whole industry into a pretty rapid slowdown," said Darin Huseby, assistant vice president of business development for SeaWest WindPower, a major Northwest wind developer. Many development activities for projects planned over the next one to two years are likely to be delayed.

Even a two-year PTC extension would be "useless" to BPA, said Darr, because the federal agency's development cycle run to three years because of required environmental assessments. "It doesn't make any sense for us to embark on an expensive [environmental impact statement] process before we know if it's renewed," he said.

The lack of a PTC also reportedly could nix potential plans by a Danish manufacturer, Vestas Wind Systems, to build a plant in Portland creating up to 700 jobs, according to a recent story in The Oregonian newspaper.

Kahn thinks the PTC vacuum will most affect a smaller segment of the wind industry. "What's going to happen, what is happening, is that those with the committed business plan and the resources to back it, or the resources to risk it, will proceed as before. Those who are more faint of heart or shallow of pocket will take a pause and prioritize or otherwise watch their pennies. I would say that ... the majority of companies active in the industry will proceed and assume the risk."

Falling Wholesale Power Prices

When BPA issued its wind solicitation in late February 2001, Western spot market electricity prices ranged from 15 cents/KWh to 32 cents/KWh for peak times, and 10 cents/KWh to 21 cents/KWh for off-peak periods, according to Energy NewsData's Price Report.

As of late January 2002, prices ranged from 1.8 cents/KWh to 3 cents/KWh for peak power, and 1.5 cents/KWh to 2.3 cents/KWh at non-peak times.

These much lower prices have led energy purchasers to look anew at buying wind power at what are now above-market rates. "It could be a big factor," said BPA's Darr. "Power markets have gone down, and it's uncertain what the long-term forecast is going to be. It definitely affects the budgets we have available for these projects."

SeaWest's Huseby has noticed a changing mind-set among utility officials, who are "a lot less anxious to enter into [wind power] contracts right now because gas is cheap again." He responds to that thinking by pointing out that wind energy at a flat 4 cents/KWh over 20 years represents "a fantastic hedge against fuel-price volatility over the long term."

That argument resonates with the public-power members of the fledgling Last Mile Electric Cooperative, which is working on wind resource assessments for rural landowners and, potentially, wind projects of its own. "They're definitely still real enthusiastic" about wind, said manager Dave Warren. "Most people realize this price probably won't last this low or stay this low very long. With volatility in the gas market, I don't think anybody wants to put all their eggs in that basket. They see wind as a good hedge in the portfolio."

Still, said Barkley of Northwestern Wind Power, "Any contract has to have a starting point, and most starting points are based ... partially on current prices as well as forward prices." In a surplus power market, he said, wind remains competitive with gas-fired electrons but can't match low-cost hydro. He anticipates eventual market prices of 4 cents/KWh to 5 cents/KWh: "At that range, I think you'll see continued wind development."

Also in the marketplace realm, some observers, including Barkley and Kahn, think Enron's collapse will have some affect on the entire energy sector. Kahn called it "a little shadow" for wind power.

On the plus side for the wind market, the Council's King noted that Energy Northwest sold $70 million in bonds to finance its Nine Canyon Wind Project, and PacifiCorp Power Marketing bought the entire output of Stateline from developer FPL Energy. "That's what gave the financial security to allow financing of that project," he said.

Transmission/Integration Issues

Wind energy faces some particularly tricky issues in transmission and integration into the regional grid.

One is a general constraint on regional transmission availability, exacerbated for wind farms because of their generally remote locations. "Most new renewables opportunities are away from the main grid and can't economically interconnect with a 500 kV [kilovolt] line," unlike new combined-cycle combustion turbines, wrote Don Bain of Aeropower Services in a recent group e-mail correspondence.

Renewable Northwest Project director Rachel Shimshak responded that "a whole bunch of us are working with BPA and the other transmission owners on expanding the transmission system (with renewables in mind) and working WITH BPA on getting rid of generation imbalance charges for wind power. BPA has finally realized the barriers to wind presented by the current system, and they are moving to remove them." Bain described that as "positive progress," but reiterated his concern about transmission availability, fearing that "all new capacity is devoted to eradicting bottlenecks thereby enabling the region to quickly become swamped with new gas-fired resources while prime wind resources continue to go wanting for transmission capacity."

The generation imbalance charges referred to by Shimshak are a major issue for intermittent wind power. Essentially, these are penalties for power resources that deliver less than their scheduled output. BPA's imbalance penalty is a huge 10 cents for each kilowatt-hour below the threshold--far above the prices received for wind power. Such a penalty has never been assessed on a Northwest wind project, to Darr's knowledge, but its existence proved "a very difficult issue at the very end of contract negotiations" between BPA and developers of the Stateline and Condon wind ventures.

These imbalance charges are intended to prevent gaming of the system, said Barkley of Northwestern Wind Power, but they are "very onerous" for wind energy. "Currently the rules for the transmission system are oriented toward controllable resources. What you've got with wind is a non-controllable resource." Darr anticipates this "will ultimately be resolved so that the worst elements of the imbalance penalty will be removed."

Another big question is the cost of integrating sporadic wind-generated electrons into the grid. These expenses may run as high as 2.5 cents/KWh, BPA Power Business Line senior vice president Paul Norman said at an October conference. That number remains "in the range we have considered," said Darr. The agency is still studying the impacts of intermittent wind on the system and hopes to have preliminary results this spring, after collecting more data from operating wind farms.

Wind integration eventually should benefit from better wind forecasting, which is under development, and from using the hydro system essentially as a storage battery, although Darr called that "more of a long-term prospect."

Consultant Kahn is optimistic these transmission and integration concerns will be alleviated. "BPA has always been great at running its transmission system. I'm confident it has the sophistication to come up with a nuanced solution to integrate wind properly."

Upsides: Utility Interest, Green Power Demand, Fewer Bird Concerns, Local Support

Despite these challenges, a number of circumstances still bode well for Northwest wind energy.

One positive sign is continuing utility interest in wind energy, as shown by the likes of PacifiCorp, Seattle City Light, BPA and Eugene Water & Electric Board (see related story for specific project updates).

EWEB already owns about 20 percent of the 41.4-MW capacity Foote Creek Rim 1 project in Wyoming, and as of mid-January was negotiating with PacifiCorp Power Marketing for a 20 to 30 MW share of Stateline output. The municipal utility's board wants to meet load growth with energy conservation and new renewable energy, and so EWEB is working to "systematically" pursue new renewables, said energy resources project manager Jim Maloney. "We're still trying to find ways to move ahead with our renewable agenda in these times of tight budgets and low loads and lots of water," he said.

Another good omen for wind is the burgeoning growth of retail green power. All Washington utilities are now required to offer such programs to customers; Oregon's three largest utilities (EWEB, PacifiCorp and Portland General Electric) already do, as do some other utilities elsewhere in the state and in Idaho and Montana. Premiums for retail green power as well as green tags via the Bonneville Environmental Foundation help support development of new renewables, prominently wind.

Meanwhile, experience is proving especially valuable in siting wind farms. "On the environmental side, a lot has been learned in the last 12 months by the developers, and also quite importantly by the state regulators," said Kahn. He cited the case of the endangered Washington ground squirrel, whose discovery in the vicinity of Stateline led to shrinking the project's total size down from 300 MW--but it did not kill the venture, nor the squirrels.

The prospect of substantial bird deaths used to be an Achilles heel for wind energy, but extensive pre-construction avian studies now help avoid siting pitfalls, while technological advances including slower-revolving blades and tubular towers now make wind farms much safer for birds. "It isn't as big an issue as it was early on," said Barkley.

Wind energy also has become a potent engine of economic development for the rural Northwest, primarily because of land-leasing opportunities for farmers and ranchers (rural landowners typically earn between $1,500 and $2,000 per turbine in annual leasing income, according to a Climate Solutions report, while the vast majority of land remains available for agriculture) as well as property tax revenues for local governments. The Klondike wind project will pay an estimated $150,000 to $200,000 in annual property taxes to rural Sherman County, Barkley said. "Most all of the comments we've heard have been very supportive of the project. It's clearly got a huge economic benefit to the community."

In addition--unlike the dominant renewable resource in the region, hydropower--wind energy's development potential remains abundant. "It's kind of difficult to say whether the [wind] boom's going to continue," said King, but he added, "I don't think all the good sites are spoken for" in the region, especially in windy Montana. --Mark Ohrenschall

***Return to Contents


Wind Project Summary

Hundreds of New Northwest
Megawatts Blowing in The Wind

Northwest wind energy capacity is now measured by the hundreds of megawatts--and perhaps, in the near future, by the thousands.

Following is a brief summary of regional wind projects, categorized by: 1) completion in 2001 (360 MW); 2) coming soon/under construction (73.3 MW); and 3) pending (either in the permitting process or under active consideration). This latter category totals more than 1,400 MW of capacity.

If all these projects eventually go into operation they will total more than 1,900 MW of wind capacity, producing roughly 630 average megawatts of power a year--enough to serve more than half of Seattle City Light's annual average load, but only about 2.5 percent of the region's total load.

This summary was compiled with information from the Northwest Power Planning Council, Renewable Northwest Project and Con.WEB research.

Projects Completed in 2001

Projects Coming Soon/Under Construction

Projects Pending

--Mark Ohrenschall

More Information:

***Return to Contents


POLICY

Efficiency Power Plant

Power Council Adopts Three-Year
300 aMW Regional Conservation Target

Ready, aim, conserve.

A regional energy-saving target is in place: 300 average megawatts over the next three years.

So declares the Northwest Power Planning Council, which formally adopted this voluntary goal Jan. 16 in an effort to sustain energy-saving initiatives and infrastructure to help smooth some of the roughness anticipated ahead in power markets.

"The energy crisis of 2001 showed us how important it is to reduce our demand for power in the future," Council chairman Larry Cassidy of Washington said in a news release. Conservation cutbacks in the late 1990s taught a lesson: "The more we reduce our demand for power, the more we insulate ourselves from the impacts of energy shortages and high prices."

Although the Council has no enforcement authority over this conservation target, it expects utilities, public-purposes administrators and electric customers buying power on the open market to pitch in according to their respective shares of regional power load. The four-state agency will issue annual progress reports.

In adopting the goal, the Council followed recommendations from a staff paper issued last fall. "An Efficiency Power Plant in Three Years: An Interim Goal for the Northwest" identified about 100 aMW of efficiencies available in the region over the next three to four years at maximum levelized costs up to 4 cents per kilowatt-hour, and most of that below 3 cents/KWh. Nearly 60 percent of this cost-effective conservation potential lies in the commercial and industrial sectors, according to the Council. Pursuing this target "would contribute directly to making the economy of the Northwest more efficient and resistant to the risks of volatile power prices," said Cassidy.

Power Council member Tom Karier called the 300 aMW goal "a reasonable compromise. It provides a sufficient level to ... get enough conservation to save the whole region money in the long run." Council conservation manager Tom Eckman said he was "quite confident the utilities will jump right in on this. It's good for the customers, good for the region, good for the environment." He also noted the regional availablity of 500 aMW of commercial/industrial retrofit potential at costs less than 2 cents/KWh.

At least half of the estimated $250 million in total funding needed to get 300 aMW (at 4 cents/KWh and lower) is already committed by Bonneville Power Administration, the Northwest Energy Efficiency Alliance and the Energy Trust of Oregon, separate from plans by large investor-owned and public-power utilities, according to the "Efficiency Power Plant" paper.

Public comments on the conservation target were generally though not universally supportive. Issues raised at a Dec. 12 hearing included the target amount, timing and allocation, and how the goal will be achieved.

This is intended as an interim mark while the Council develops its next power/conservation plan and addresses longer-term issues of sustained energy efficiency.

Efficiency Power Plant Thinking

A Jan. 9 recommendation memo from Council power planning director Dick Watson and Eckman outlined the thinking behind the efficiency power plant concept.

They noted the conservation roller coaster pattern dictated by fluctuating power prices, and acknowledged the relative flexibility of demand-side resources. "However, it is not clear that the region's ability to ramp efficiency programs up and down is as flexible as electricity costs are volatile.

"To track recent swings in wholesale electricity prices utility and contractor programs and staff would need to expand and contract at impossible rates," they continued. "In addition, after several 'cycles' the message sent to the consumer about the need to invest in efficiency might begin to sound like Chicken Little. Finally, given the current regulatory structure in much of the region, the lag between wholesale and retail price changes will continue to frustrate price-induced conservation response.

"If the expectation is that power markets will exhibit a 'boom and bust' pattern in the future, as many think they will, it may be wiser to pursue conservation at a steady pace that can be justified by long-term cost-effectiveness," they wrote.

Watson and Eckman emphasized the voluntary nature of the 300 aMW goal. "The intent is not to have a rigorously enforced target for each entity or to dictate what conservation programs are undertaken or how they are delivered. The intent is rather to put a spotlight on the importance of continued attention to improving the efficiency with which we use electricity and establish an expectation that all will do their part.

"The Council recognizes that some utilities in the region are already planning for more than 'their share' of this goal and applauds them for their initiative. The Council also believes that there are some who have planned on doing less. The Council hopes that this will encourage them to reach farther."

Comments on Target

At a Dec. 12 public hearing in Portland, the conservation target drew support from representatives of the Northwest Energy Efficiency Council: "No interest group in the region has been more adversely affected by the stop-start cycle for energy efficiency than us," said executive director Stan Price; the Idaho Public Utilities Commission: "As an entity trying to gear back up, we're a poster child for what's wrong with the roller coaster," said policy strategist Bill Eastlake; Seattle City Light, Washington State Office of Trade and Economic Development's Energy Policy Group and Bonneville Power Administration.

BPA energy efficiency vice president Mike Weedall described the Council's interim target and a longer-range look through the power/conservation plan as "exactly the right way to go. Certainly Bonneville is ready to ... work with various organizations in the region. Our role is to provide a proportional response we know will be critical to achieving the goal." He called 300 aMW "an appropriate and achievable starting target."

Northwest Energy Coalition's Nancy Hirsh said her organization is "delighted in the Council's leadership," but the 300 aMW is too low, because it's based on old data from the mid-1990s and doesn't take into account more recent technological advances in energy efficiency. She also expressed "concerns with how this plan, this goal is going to be fully adopted," and encouraged the Council to work with regional entities on getting the negawatts.

Public-power representatives shared some reservations. Kevin O'Meara of the Public Power Council questioned the timing of the target, on the heels of substantial rate increases by BPA and utilities; this will lead to "a lot of price-induced conservation," and seeking a lot more could worsen already troubled economic conditions, he suggested. Tacoma Power's Kirvil Skinnarland said her utility supports the Council's direction with the target, but described the load-based allocation formula as "a little bit arbitrary" and potentially unfair to utilities such as Tacoma that have already done considerable conservation.

The most skepticism came from Industrial Customers of Northwest Utilities, represented by Jim Litchfield. ICNU has always backed "an aggressive conservation program," he said, but the 300 aMW goal is "out of context and premature" without a full power/conservation plan analysis. He also questioned whether utilities are "the appropriate mechanism for conservation" in more competitive energy markets. And he pointed out conservation's inherent flexibility: "Economic conditions do not always permit" sustained energy-saving efforts, he said. "A lot of businesses have lost very talented staff under the current economic conditions." ICNU elsewhere commented that the target level is too high and doesn't account for customer-initiated conservation, according to the Watson/Eckman memo. --Mark Ohrenschall

More Information:

***Return to Contents


PERSPECTIVES

A Decade of Publishing

Conservation Monitor/Con.WEB
Marks 10-Year Anniversary

Ten years ago this month, our company published the first issue of Conservation Monitor.

We're still at it, although we've made some changes along the way. Conservation Monitor begat Con.WEB in 1996. Our initial focus on Northwest energy conservation expanded to include renewable energy. And the energy industry is profoundly different now than in 1992, with huge implications for our subjects of coverage.

Yet, some things have remained constant. The president is still named Bush. Our publisher, Cyrus Noë, still fervently believes in the value of purveying information on Northwest conservation and renewables. The regional energy industry still provides financial support to help bring you this publication. Conservation and renewables still face many of the same challenges they did 10 years ago.

We continue to exist with the help of many people and institutions, from Cyrus and our colleagues here at Energy NewsData, to regional utilities, industries and the Northwest Energy Efficiency Alliance, and to all the people who share information for our reporting.

Fundamentally, though, Conservation Monitor/Con.WEB has lasted a decade for one simple reason: the Northwest cares about energy conservation and renewable energy. These are mainstream regional values--even though they sometimes seem to float closer to the shore than the deep waters.

Evolution of Conservation Monitor/Con.WEB

The January 1992 issue of Conservation Monitor, subtitled "Northwest Energy Resource Report," included an introductory column written by Cyrus, who explained: "This publication is sponsored by Pacific Northwest energy utilities and industries to tell the unfolding story of regional energy conservation in the 1990s and to report on results." He noted the Northwest Power Planning Council's 1,500 average megawatt conservation goal for the decade and the planned spending of $7 billion for regional conservation. (We fell short: the Council counts about 820 aMW of regional utility energy savings from 1990 through 2000.)

CM No. 1 featured stories offering a flavor of the times. Some headlines: "EWEB: Conservation Leadership with Citizen Participation"; "Puget Gets A Bonus for Meeting Its Conservation Targets"; "CARES Forming to Help Small Utilities Conserve"; "Conservation Reducing Aluminum Smelter Load." Our numbers guru, Steve Aos, discussed the region's declining electricity use per unit of economic activity. We also covered Bonneville Power Administration billing credits for conservation projects (meeting some resistance) and competitive bidding for new resources (17 conservation projects worth 57.8 aMW made the shortlist).

Fast forward to Con.WEB, Dec. 20, 2001: "Washington Energy Code Revisions Promise Significant Energy Savings"; "Montana Power Announces 150-MW Wind Power Purchase, But Dispute Arises"; "Idaho Power DSM Surcharge Deserves Consideration--But Not Right Now, IPUC Rules"; "Most Oregon Public-Purposes Funding Appears Initially Headed for Utilities"; "New Alliance Board Chair Larry Bryant Emphasizes Communications"; "Northwest Clean Energy Industry Could Blossom with Favorable Public Policies, Study Says."

These headlines 10 years apart illustrate some of the major themes of our coverage. One is the vital role of utilities in conservation, along with the influence of regulators (on investor-owned utilities) and localism (on public-power utilities). Also, policies make a big difference. So do the marketplace and private-sector firms.

The biggest overarching issue of the past decade clearly has been electric industry restructuring. In conservation and renewables, restructuring and its consequences (real and imagined) have contributed greatly to such key developments as the conservation roller coaster, the notion of conservation as an energy and customer service, the recent emergence of large-scale wind power and the great energy crisis of 2000-01. Restructuring also has influenced to varying degrees three of the most significant new institutions of the past 10 years: the Northwest Energy Efficiency Alliance, the Regional Technical Forum and the Energy Trust of Oregon.

Look for restructuring and its effects to continue to exert outsized influence in our fields. Other intriguing trends include the growth of green building, the rise of retail green power programs, response to climate change, the immense promise of distributed generation (both for renewable energy and end-use energy efficiency) and the translation of environmental consciousness into energy-related actions by individual consumers, businesses and industries.

Some Conclusions

After 10 years as an observer, I've come to some general conclusions about conservation and renewables.

Thanks

Although this writer bears responsibility for most of the editorial content in Con.WEB and much of it in Conservation Monitor, this publication is definitely a group effort.

It begins with our publisher, Cyrus, whose reputation within the regional energy industry is such that he is known just by his first name. This man is a staunch supporter of conservation as well as distributed generation, and his vision and tenacity have ensured our publication's viability.

We have also benefitted immeasurably over the years from many high-caliber writers and editors, including our original CM editor, Pamela Russell, now answering a higher calling as a Lutheran pastor in the Seattle area; Jude Noland, who has shared her wise counsel and stellar writing and editing abilities since the very early days; contributing editors including Ben Tansey, Angela Becker-Dippmann, Lynn Francisco and Cindy Simmons; CM numbers mavens Steve Aos and Glenn Blackmon; and Kathleen O'Brien, who wrote technology columns for CM.

A number of very capable and creative people have contributed to the production of Conservation Monitor and Con.WEB, including Karen Hatch, Whitney Dickinson, Mike Katayama, Lisa Wachter, Denise Lee and our current production/marketing maven, Shannon Addis. Our NewsData general manager, Brooke Dickinson, has guided our business operations over the years.

And we also owe thanks to people and institutions that have provided support, particularly the Northwest Energy Efficiency Alliance for Con.WEB, and for Conservation Monitor, BPA, regional utilities and industries, the Power Council, Ralph Cavanagh of the Natural Resources Defense Council and Eric Heitz of the Energy Foundation.

Thanks to one and all!

A Personal Note

One of the best parts of my job has been the opportunity to meet people from all around the Northwest. I've come to know and like and respect many folks active in conservation and renewables.

I've also been privileged with on-duty visits to much of the region, from the Oregon coast to the Montana Rockies, from the Olympic Peninsula to the high desert of interior Oregon, from the Idaho panhandle to the Snake River plain, from the Columbia plateau to the wheat country and mountains east of the Columbia River Gorge, all up and down the Interstate 5 corridor, from far southern Oregon to far northern Washington, and around the metropolises of Seattle, Portland, Spokane and Boise.

This is a truly magnificent place, the Pacific Northwest. And what we do, in energy conservation and renewable energy, helps keep it magnificent. I try to keep that in mind--and I hope others do, too, through all the challenges and successes that lie ahead. --Mark Ohrenschall

***Return to Contents


NEW PROGRAMS

Save a Watt

Regional Marketing Campaign
Delivers Conservation Messages

Energy conservation messages will be delivered on Northwest televisions throughout the next six months under a new $2.2-million regional marketing campaign.
Courtesy of Save a Watt.

Save a Watt is designed to promote conservation after the energy crisis, primarily with TV advertising and programming beginning Jan. 28 and extending through late July. The campaign is a joint venture of Bonneville Power Administration, a division of media conglomerate Belo and Seattle-based advertising agency Hydrogen. Other partners, such as utilities and retailers, could join as the campaign unfolds.

"A while ago we recognized in BPA that one of the very important initiatives that kept the lights on in the Northwest was the response of the public. We need to continue to build on that," BPA energy efficiency vice president Mike Weedall told a recent Northwest Energy Efficiency Council gathering. "We need to keep people aware that even though it appears the crisis is not as dire as it was a number of months ago, there's still much benefit and much importance to people to pursue energy conservation."

Save a Watt will address both the why and how of saving energy. "The goal of the campaign is to try to influence people's attitudes and behavior; behaviors would be purchasing and installing something energy-efficient," said BPA's Save a Watt program manager, Jennifer Eskil. Campaign officials hope to spur sales of Energy Star and other energy-efficient products, and to boost participation in local utility programs.

Recent market research indicates many consumers believe energy issues, including efficiency, are mainly the province of utilities. "What we're trying to instill in folks is that it's all of our responsibility," said executive director Pam Guinn of Belo Marketing Solutions. "People want to do the right thing. They need the information and education to know what they can do."

Save a Watt

BPA officials consider Save a Watt as one effort to help sustain energy conservation after the crisis. Weedall called it "an example of the commitment BPA is bringing to make sure we not go back to the old days of the roller coaster."

Bonneville issued a request for qualifications and chose Belo as its primary partner, said Eskil. The media conglomerate owns and/or operates 10 Northwest TV stations, in Seattle, Spokane, Portland, Boise and Twin Falls, ID. "They have a wonderful footprint with Bonneville's service territory," she said; 90 percent of regional households with TVs will be exposed to the Save a Watt campaign.

This also marks a new approach to marketing energy efficiency. "What's so intriguing about this campaign is that outside of Energy Star, energy conservation or energy efficiency never really used television as a medium to relay energy efficiency as a personal responsibility or an investment a consumer can make," she said, other than some advertising during the energy crisis.

BPA is putting up $800,000 and Belo is providing $1.2 million, while Hydrogen's contributions are valued at about $200,000, for $2.2 million over six months.

"We believe this is a significant issue to our viewers and the region," said Guinn. "We feel a citizenship cause here to help support." Belo has already enlisted Home Depot "in a small way" as a partner, and she thinks other collaborators may emerge after the campaign begins.

Bill Fritsch, president of Hydrogen, said his agency brought the concept for Save a Watt to Bonneville. "We've managed to touch on something that's really getting to the heart of what everybody wants to do, but individually don't have the resources to do," he said.

Northwest utility officials have shown interest in Save a Watt as a way to help their customers in the midst of rate increases and the struggling economy. "Save a Watt helps the consumer, if you can help educate the consumer to do energy-efficient behaviors, be it purchasing Energy Star appliances or something else," said Eskil. Utility representatives also appreciate the generic nature of the campaign, she added, although none had signed up as partners as of late January.

The Message and The Media

The expressed mission of Save a Watt is: "To motivate consumers to accept personal responsibility for energy efficiency and to adopt long-term electrical energy efficiency behaviors and purchase decisions."

Although the energy crisis has faded from public prominence, efficiency remains a priority as an economical energy resource with system reliability benefits, according to BPA presentation materials. Yet, "Most people are unaware of the consequences of the electricity choices they make every day and as a result don't always make the most efficient choice."

Recent market research suggests many people consider conservation and energy issues as utility problems and responsibilities. At the same time they are worried about rising power bills, but lack information and time to pursue energy-saving measures.

Save a Watt will try to capture people's attention with messages about why they should save energy, and how.

"A lot of messages will be 'why' messages, why conserve," said Guinn. "Another group will be 'how to save.'" For example, Evening Magazine host John Curley will give weekly energy-saving tips on his show. He brings "third-party credibility [that] makes it a step above regular commercial advertising," Guinn said.

In a Jan. 28 Northwest Cable News segment about the lingering effects of the energy crisis, a Save a Watt spot with Curley appeared three times during the 30-minute show. "Energy is something we need to think about every single day, especially in the Northwest where it affects our quality of life," he told viewers. After urging energy efficiency and briefly describing the campaign, he concluded: "So get involved today, because you have the power to save a watt."

Public-service announcements also are planned for Save a Watt.

Hydrogen has created advertising that will begin airing during the Winter Olympics in February. Fritsch described the approach as "lighthearted," featuring "watt characters" with human feelings that want to be used efficiently.

Save a Watt also features a Web site with additional resources. Guinn said the campaign hopes to capitalize on the wired proclivities of Northwesterners.

A Save a Watt print advertisement will go out in March in a direct-mail magazine to 500,000 homes in King, Pierce and Snohomish counties in western Washington.

Other Save a Watt elements are still to be determined, as is the campaign's future beyond July.

Although Save a Watt has no specific energy-saving goal, impacts will be measured in three specific ways. One is a telephone survey conducted before, during and after the six-month initiative. Another metric is retail sales, and a third is utility program participation. --Mark Ohrenschall

More Information:

***Return to Contents


LIGHTING

No Free Lunch

Northwest Utilities, Enviros Seek
Solution to CFL Disposal Problem

Pacific Northwest utilities and environmental groups are trying to solve a looming disposal problem from millions of compact fluorescent lamps installed in the region.
Courtesy of Lighting Universe

The bulbs contain small amounts of mercury, which could be harmful if the bulbs end up in landfills. But officials said the CFLs provide a net environmental gain since they use less energy than other lighting sources, thus reducing the amount of mercury released by coal-fired plants.

No Free Lunch

Compact fluorescent light bulbs are once again proving the adage there is no free lunch. In an effort to conserve power, utilities and other groups have fostered the distribution of millions of the energy-saving bulbs throughout the Northwest. But the popularity of the CFLs carries an environmental price tag.

The bulbs will not last forever. And when they burn out, they will most likely end up in landfills, broken and leaking mercury.

Each bulb contains only a tiny amount of mercury, but in the aggregate they could pose an environmental danger. Along with other fluorescent fixtures and computer monitors, the region faces a significant disposal problem if these products end up in landfills.

Seeking Solutions

Northwest utilities and environmental groups have joined with Bonneville Power Administration to seek solutions, including recycling of the mercury in these fixtures. BPA began working on the problem several months ago, according to market transformation coordinator Ken Keating.

"We're talking about more than 5 million CFLs sold in the Northwest, just in 2001 alone. When they burn out in four or five years, they'll show up in the waste stream. We can do better than that," said Keating.

Portland General Electric, PacifiCorp, the Eugene Water & Electric Board, Clark Public Utilities and the Northwest Energy Efficiency Alliance are working on the issue with Bonneville. The group has commissioned a $40,000 study by the Zero Waste Alliance, and hopes to get some answers by midsummer. "We're looking for solutions that will work regionwide," said PGE's Wayne Lei.

Those answers will probably focus more on creative ways to properly dispose of the bulbs rather than on recycling, because of the high cost of recycling. Randy Smith of Seattle-based Lighting Design Lab said it costs $20,000 to extract one pound of mercury from lighting products, but mercury sells for just $2 a pound. "In the United States, no more than 20 percent of fluorescent lamps are recycled," said Smith.

In addition, there is no currently affordable substitute for mercury, so the metal will continue to be used in CFLs and other fluorescent lighting.

Net Environmental Gain

Despite the disposal hazards, utility and environmental officials continue to champion CFLs. They said the bulbs provide a net environmental gain, since the energy they save--estimated at 43 average megawatts for five million bulbs--reduces the amount of mercury released into the air by coal-fired power plants. LDL's Smith cited statistics showing that "the number one source of human-generated mercury comes from coal-fired plants."

Mark Rhea of the Lighting Research Center in New York added that studies show that if a region's electricity load is more than 10-percent fossil fuel-powered, CFLs improve the mercury situation.

Smith believes the problem lies in enforcement of existing regulations on recycling and disposal of CFLs and other mercury-laden fixtures. "In Washington state, only four or five counties actively enforce the laws that are currently on the books," he said. "We need to increase recycling by businesses and we need to give homeowners options for recycling." --Lynn Francisco

More Information:

***Return to Contents


MARKET TRANSFORMATION

Money Matters

Alliance Board Adopts 12-Percent Higher Operations
Budget, Replenishes Market Research Funding

A 12-percent higher operations budget for 2002 and a replenished market research fund are in place for the Northwest Energy Efficiency Alliance.

These two items were approved Jan. 16 in Boise by the Alliance board of directors.

This year's $3.47 million operations budget is up from the $3.09 million budget for 2001, primarily because of a 15-percent salary increase for a slightly larger staff, according to Alliance officials. The higher budget generated some dissent from board members, passing on a 14-4 vote.

Meanwhile, the board unanimously approved a $1.5 million fund mostly earmarked for market research in the commercial and industrial sectors. This work is intended as an informational foundation for future Alliance ventures. Market research funding previously authorized by the board is nearly all spent.

2002 Operations Budget

The Alliance's new operations budget of $3,475,896 is people-driven: 71 percent is allocated for employee salaries and benefits. It represents a 12-percent increase from the 2001 spending blueprint of $3,097,307.

"The major contribution to the 12-percent increase is a 15-percent increase in salaries relative to a 15-percent increase in staff," Alliance board treasurer Syd France told his colleagues. He also noted salaries had not risen in 2001. Also, an average 9-percent increase in health-care costs is reflected in the new budget, said administration director Nisa Stroh.

This budget accounts for a total staff of 26 full-time equivalents, as authorized by the board, said executive director Margie Gardner. Two of those positions are now vacant. "This [budget] does not propose any new staff," she told the board. "If we get overwhelmed with new projects, we may come back to you. I don't anticipate that happening." Some new Alliance ventures are larger in scope than some projects that are ending, she said.

Board member Norm Beckert was concerned about the rising costs of Alliance operations, especially given the collaborative's "pretty steady" revenue of about $20 million a year. "I'm an advocate of zero-based budgets. In my opinion, this is not a zero-based budget; it continues to add ... and it's taking money away from projects that could be funded." He said the actual increase from 2001 is more than 12 percent, because the Alliance estimates its 2001 operations spending will come in about 8 percent under budget.

Although the spending plan ultimately garnered board approval on a 14-4 vote, board member Ken Keating called this "the most contested operational budget" yet for the Alliance, and said the concerns represent "good input" for future budget deliberations.

Market Research Funding

Board approval for market research funding--and a smaller amount for project development activities--came on a unanimous vote.

"Generally speaking, any research we do this year or next year is where we get the data to fuel projects three years from now," said board member Liz Klumpp. Energy efficiency market research has declined, said board member Charlie Grist, and the Alliance has a legitimate role in helping to identify "fruitful areas" for prospective future ventures.

The board in 1999 authorized $857,000 for market research focused on commercial and industrial opportunities, specifically pumps/fans/blowers, lighting, emerging industrial technologies and wastewater treatment, Keating told board members. That fund is now down to $30,000. "Not everything you do in R & D results in breakthroughs," he said. "Sometimes it tells you you don't need to go there. Other times, it tells you you need more research. The dollars we got to cover these things went into more projects than we originally thought."

Of the $1.5 million fund, $1.25 million is earmarked for market research in the following areas: an assessment of existing commercial buildings; industrial sector energy use and market segmentation assessment; industrial decision-maker survey and market barrier assessment; delivery channel analysis for commercial/industrial equipment; growing energy-intensive commercial/industrial market segments opportunities assessment; identifying consumer attitudes toward energy efficiency; and other research still to be identified.

Keating said the focus on commercial/industrial potential helps balance the Alliance's earlier emphasis on residential-sector initiatives, such as ventures targeting compact fluorescent lamps, resource-efficient washing machines, manufactured homes and duct systems.

The remaining $250,000 in this fund is set aside to support project development within the Alliance as well as the unsolicited proposals process, which is now generating about two proposals a week.

In other business, the board bid farewell to Nancy Hirsh of the Northwest Energy Coalition, an original Alliance board member who is turning over her seat to NWEC colleague Danielle Dixon. Board chair Larry Bryant thanked Hirsh for her valuable contributions over the years. "It's been quite the roller coaster from the beginning days to now," she told board members. "Maybe now the ride has flattened out. That's a very exciting thing to see, to watch the organization morph itself from a fledgling agency to one that is up and running and is very mature." --Mark Ohrenschall

***Return to Contents


NEWS BYTES

News Bytes

PacifiCorp, PGE, Tacoma, Seattle Conservation;
Businesses; Holiday Lights; People; Awards; and More

This month's News Bytes section includes conservation items from PacifiCorp, Portland General Electric, Tacoma Power and Seattle City Light; business happenings; energy-efficient holiday lights; people changing positions; awards; and more.

Utilities

Businesses

Renewable Energy

States

People

Awards

Miscellaneous

--Mark Ohrenschall and Jude Noland

***Return to Contents


To print Con.WEB, hit the printer icon at the top of your browser. To print Con.WEB in two-sided mode, press file, print, at the top of your browser, then be sure to select print odd-numbered pages in your printer properties, remove pages and reinsert into printer. Repeat steps to print, this time choosing even-numbered pages.

OFFICES: Mail-P.O. Box 900928, Seattle, WA 98109-9228. EXPRESS: 117 West Mercer, Seattle, WA 98119.
TELEPHONE-(206) 285-4848. FAX-(206) 281-8035. E-MAIL-newsdata.com.

Con.WEB was created by the Energy NewsData Web team, including: Publisher-Cyrus NoŽ; Editor-Mark Ohrenschall;
Contributing Editors-Jude Noland; Cassandra Sweet
Contributing Writers-Jim DiPeso; Lynn Francisco; Kari Hanson; Garrett Hering; Amber Schwanke; Ben Tansey
Web Production-Michelle Noe
General Manager-Brooke Dickinson.

Home

Please contact Mark Ohrenschall, marko@newsdata.com,
with questions or comments on this site
.
Copyright ©2004 Energy NewsData Corporation