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CWEB.074/Feb.27.2002


1) Study Advises BPA Examine Non-Wires Alternatives to New Transmission
2) High-Efficiency Seattle Commercial Energy Code Takes Effect after Collaborative Process
3) Emerald PUD Demonstration Fuel Cell Powers Utility Warehouse during Outage
4) BPA Microturbine Demonstration Takes Off in Willamette Valley
5) Many Programs, Resources Available for Industrial Energy Conservation

Oregon Public-Purposes Funding Debuts
Oregon's electric industry restructuring officially begins March 1, and with it comes public-purposes funding in the service territories of the state's two largest utilities, Portland General Electric and PacifiCorp. Three percent of electric revenues are earmarked for energy conservation, renewable energy and low-income energy services, most of it administered by the non-profit Energy Trust of Oregon--not the utilities, as historically done. In March, Con.WEB will feature coverage of this significant change in Oregon's approach to conservation and renewables, affecting hundreds of thousands of Oregonians and, eventually, hundreds of millions of dollars.

POLICY

Distributed Generation, Conservation Boon

Study Advises BPA Examine Non-Wires
Alternatives to New Transmission

A new study by respected energy industry consultants is recommending Bonneville Power Administration's Transmission Business Line consider "potentially lower cost and reliable alternatives" to expansion of the region's transmission system--including distributed generation and conservation.

The study also suggests BPA initiate a continuing long-term review of its transmission system, analyzing its transmission needs 10 years in the future. This annually updated plan would identify points of future congestion and suggest ways for managing that congestion. An important part of this planning, the study said, is a public process engaging regional stakeholders, with the goal of "sharing information that could lead to a more efficient region-wide system."

BPA is seeking regional reactions to this new approach for transmission.

Avoiding Building Wires

"Expansion of BPA Transmission Planning Capabilities" was conducted for Bonneville's TBL by San Francisco-based Energy and Environmental Economics, Inc., along with Portland consultant Tom Foley and Eric Hirst, an electric restructuring consultant based in Tennessee.

"There may be ways to avoid building wires by more strategic siting of plants, distributed generation, and load management, control and conservation," said Foley, a former Northwest Power Planning Council staffer.

The study also recommends BPA add two new elements to its "already comprehensive planning process."

One is a systemwide report describing the expected use of the agency's transmission facilities over the next 10 years. This report, which would be updated annually, would be used to "produce the information required for long-term transmission price signals and to educate BPA's transmission customers on the transmission costs and benefits of different actions that market participants might take that would affect the need for transmission expansion, such as building new generation in certain locations," the report summary reads.

The other involves adding a screening element to the TBL's planning process, to evaluate the costs of specific proposed transmission projects against the costs of alternatives, such as suitably located generation, load and demand-side management, and transmission pricing.

New Approach to Transmission Planning

BPA has historically taken a postage stamp approach to transmission pricing, said Brian Silverstein, TBL manager for network planning. Customers pay the same transmission rate regardless of where their generation is located--close or distant to load centers. As a result, "developers don't consider transmission costs" in deciding where to build new generating resources.

"We haven't taken transmission planning seriously in the past," said Ralph Cavanagh of the Natural Resources Defense Council. "It has been a very narrowly focused enterprise," he told Con.WEB. The study's vision is to open up this process. "I think this is terribly important," he said of the study. "It makes a crucial and original contribution to the whole debate over regional and national transmission planning."

U.S. energy secretary Spencer Abraham lauded what he called in a news release "BPA's effort to identify reliable alternatives, such as conservation and distributed generation, to alleviate the need to build new transmission lines."

The study emphasizes that development and implementation of the transmission plan should be a regional effort involving many interested and affected players. "Ultimately, these regional choices should be made in concert with other Northwest interests," the plan suggests. TBL should develop a draft long-term view of the transmission plan, which includes expected congestion points and the cost of delivering power to different points on its system, and conduct a scoping workshop to discuss this long-term view. Other parties' potential long-term reinforcement plans should also be made available and discussed at the workshop, the study recommends, and incorporated into the long-term view. Silverstein said several groups already conduct such studies, including the Western Systems Coordinating Council and the Northwest Power Pool.

The agency should then ask interested parties to analyze the results of the workshop "and be prepared to enter into detailed discussions of cost-effective and reliable nonwires actions that they could take individually or collectively," the study continues. At that point, a second workshop could be held for additional discussion of options "that can help alleviate the problems identified in TBL's initial long-term view."

At that point, TBL would have several options available, the study says. If there are no economic or reliable alternatives to new wires, the agency could go forward with construction. The agency could also issue requests for proposals for both wires and non-wires solutions that could be implemented at lower costs by others. It could also select "locational or time-sensitive" transmission pricing to defer construction of new transmission, or "discuss with and lobby its customer utilities and state regulators to implement retail pricing options that will decrease the need for transmission expansion."

Regional Transmission Organization Issues

In its last transmission rate case, Silverstein said, TBL looked at alternative models for time-sensitive and locational transmission pricing. But the consensus at the time was that these issues would be taken up within the forum of a Northwest regional transmission organization, which would be up and running before TBL's next rate case. But "our rates expire in 2003," Silverstein said, and it's doubtful an RTO will be in operation by then. "Punting the issue to the RTO didn't work out as we thought it would."

Many things in the energy world have changed since the last rate case. The TBL also probably did not expect the large number of transmission and generation interconnection requests it would be receiving; about 30,000 megawatts of generation are now under review. In addition, a "huge amount of transmission investments" is included in BPA's most recent infrastructure proposal, Silverstein said. "We want to make sure we do the right thing. We need to consider other alternatives. What are the industry's best practices?"

The study's suggestions are very consistent with the direction the Northwest RTO is going, according to Northwest Energy Coalition's Steve Weiss. "It is a framework for discussions to evaluate alternatives to transmission and for doing it sooner rather than later," he said. Under current transmission planning methods, Weiss said, such alternatives are typically considered last, as part of the environmental review process. The proposed method starts with all wires and non-wires options to be evaluated on an equal basis.

While the study recommends screening proposed transmission projects for non-wires alternatives, it recognizes that some projects are too far along or otherwise unsuited for such alternative consideration. These include congestion problems that need an immediate solution, projects required to interconnect generation and those needed for safety or to fulfill a contractual obligation or a negotiated settlement. Among those exempted from such review are the Kangley-Echo Lake 500-kilovolt line, the Bell-Coulee 500-KV line, the Hatwai-Lolo 230-KV line and other projects with decision dates before next January.

The study suggests BPA take two of its proposed projects through the screening process: the proposed Monroe-Echo Lake 500-KV line, which Silverstein said is an extension of the proposed Kangley-Echo Lake line; and the Shelton transformer and line addition--a project that would reinforce the transmission system on Washington's Olympic Peninsula. "These are suggestions from the consultants as being good candidates for the screening process," Silverstein said. "That doesn't mean we won't consider others."

BPA wants input from the region on the study, Silverstein emphasized. BPA has sent copies of the report, which was released Jan. 25, to utilities and stakeholder groups, with a request for comments by the end of February. "This is not an issue Bonneville can resolve on its own," Silverstein said. "We'd like to hear from people."

Silverstein is optimistic the report's recommendations can be implemented without too much additional regional process. "One of the challenges we face is we already have tons of processes" in the regional utility industry, he said. "We hope to incorporate the study's suggestions into existing processes and not create another one." --Jude Noland

More Information:

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ENERGY CODES

Code Leadership

High-Efficiency Seattle Commercial Energy
Code Takes Effect after Collaborative Process

Seattle's revised non-residential energy code exceeds national efficiency standards by nearly 20 percent.

This upgraded code, which takes effect Feb. 28, is part of Seattle's long-term conservation strategy, and is forecast to save roughly 1 average megawatt annually. It also continues Seattle's leadership in setting high-efficiency energy codes (the new code is estimated to exceed current practice in the city by 10 percent or less).

And it reflects a collaborative process between city officials and the people who develop, design, build, manage and operate commercial buildings. Initial concerns over such issues as cost, impacts on existing buildings, technical matters, incentives and the role of prescriptive approaches were hashed out or set for further review.

"I think it clearly indicates that there are substantial additional energy savings beyond [ASHRAE/IESNA Standard 90.1] and that it's possible to build a consensus to incorporate some additional savings into energy codes," said John Hogan of the city's Department of Design, Construction, and Land Use.

Seattle City Council member Heidi Wills thanked stakeholders in a note sent after the Council's unanimous September approval of the code changes. "It was your valuable time, energy and professional expertise that allowed us to create a new energy code that supports our city's economic and environmental goals while respecting the needs of the development community," she wrote. "I was pleased to see architects, developers, building managers, environmentalists, and city planners work together to help the Council produce high quality legislation." She called the revised code "a major component of the City's comprehensive energy strategy and it will yield significant energy savings for decades to come."

Toward a New Code

A February 2001 City Council resolution launched the process toward Seattle's revised code.

In addition to accelerating the city's green building program, the resolution called on DCLU and Seattle City Light to examine options to gain energy savings up to 20 percent greater than current ASHRAE/IESNA standards, as part of a code review. Hogan at the time described it as "an ambitious target," and said it would require more stringent standards for lighting, mechanical systems and building envelopes. "I don't think anything can be off-limits," he told Con.WEB.

City officials met frequently with stakeholders, including DCLU's Construction Codes Advisory Board, in crafting proposed code changes. Most of the initial recommendations reflected consensus opinions--but not all.

Summer Discontent

A July 12 public meeting on the proposed code revealed a fair amount of discontent among commercial building professionals, particularly on issues relating to cost, impacts on existing buildings, the role of incentives, and prescriptive approaches.

Doug Howe of Touchstone Corp. said the proposed code amendments could add $5 per square foot to new construction costs and $1 per square foot in rent, creating a "competitive disadvantage" for Seattle commercial buildings. The potential costs were between six and 48 times what City Light pays for energy savings in its commercial incentive programs, he said. Howe asked that code adoption be delayed pending a city study on cost-effectiveness.

David Ryan of Fisher Properties agreed with the idea of evaluating economic impacts. He outlined his company's Fisher Plaza development, for which about 15 energy conservation/renewable energy alternatives were evaluated--and only two, underfloor air-conditioning and an economizer system, were eventually adopted after meeting the company's criteria of 8-percent annual return on investment.

Another significant concern focused on renovations of existing structures, such as aged office buildings not designed for modern HVAC systems. "How can we find an avenue or mechanism that will allow alternative energy conservation methods in older buildings that may not meet the goals of the code but still accomplish a measure of energy conservation?" asked Rod Kauffman of the Building Owners and Managers Association of Seattle and King County. Hogan noted that only the specific portions of buildings being renovated are subject to energy code provisions.

A number of speakers also urged the city to take a more performance- and incentive-based and a less prescriptive tack, allowing more discretion for building professionals to use different technologies in meeting the energy standards.

Council members Wills and Richard Conlin were conciliatory in their closing remarks. "We want to do what is feasible, what's workable," said Wills. "We want Seattle to be a good place to do business, and to keep our rates reasonable for all of our [electric] customers. The people in this room make Seattle a vibrant and dynamic city to live in." Conlin pledged to "very seriously and thoughtfully" review the issues raised, while also noting that new buildings represent a huge opportunity to ensure energy savings over many decades. With new city buildings required to meet the 20-percent threshold above ASHRAE/IESNA 90.1, "We know, technically and aesthetically, it can be done," he said.

Gaining Support

Two months later, at a Sept. 13 public hearing before the Council's Energy and Environmental Policy Committee, further-revised energy code amendments were widely supported. Endorsements came from representatives of the Sierra Club, Port of Seattle, the Seattle chapter of the American Institute of Architects, energy consultant David Baylon--and some commercial building professionals who had expressed concerns in July.

"We've come a long way since the original code was drafted. It had some serious shortcomings," Touchstone's Howe told Council members, praising Wills and Conlin for "embracing the development community. Now I believe we've come up with an energy code we can all live with and be proud of." He specifically cited a new provision pledging a review of the existing RS-29 performance path to seek ways to better achieve design flexibility, encourage innovation and promote energy savings.

BOMA's Kauffman also backed the changed version, mentioning in particular draft language allowing consideration of practicality and economic feasibility for existing building renovations.

Don Wise of Unico Properties also said he appreciated that provision, as well as a pledged review of City Light commercial incentive programs to complement the new code and to encourage innovation. Those modifications led him to support the new code, although he also anticipated "continued dialogue" on energy code issues.

"It took a long time," said Scott Rushing of mechanical contractor Holaday-Parks, "but I think we have a good package."

The non-residential code revisions passed the City Council by a 9-0 vote on Sept. 17.

Code Changes

The revisions to Seattle's non-residential energy code affect building envelopes, mechanical systems and lighting (see DCLU Web site for a summary).

Among the most significant envelope changes are requirements for R-13 cavity insulation plus continuous R-3.8 insulation for metal-framed walls in non-electrically heated spaces, low-e coatings for windows under the prescriptive path, and increased insulation for semi-heated spaces.

For mechanical systems, the new code requires electronically commutated motors for fan-powered mixing boxes commonly used in Seattle non-residential buildings. This will save considerable amounts of fan energy, which a city document said "is as large or larger than the heating and cooling energy" for buildings. Also now in the code are revised efficiency requirements for mechanical equipment, and greater use of economizers employing outside air for cooling.

In lighting, the lighting power allowance is down to 1 watt per square foot (although small offices and medical offices stay the same) and 1.2 watts per square foot for schools. Automatic lighting shut-off systems are now mandatory for all buildings, designed primarily to save energy on nights and weekends. Daylighted zones also need automatic controls. Dimming ballasts are required under the prescriptive code option, while occupany sensors are a must in small offices, meeting and conference rooms, and classrooms.

National Leadership

Altogether, the new code is "somewhere between 15 and 20 percent" more efficient than the latest ASHRAE/IESNA national standards, according to Hogan. He believes Seattle's code is the most energy-efficient for non-residential buildings in Washington state.

"The Seattle code, as has been the case for the last 20 years, is another notch forward of the state code on the order of maybe 5 to 10 percent," said Jeff Harris of the Northwest Energy Efficiency Alliance, who has long been involved in energy code issues. "It makes some fairly significant advances in lighting power, equipment efficiency, some envelope requirements."

Seattle officials deserve "a lot of credit for moving aggressively forward with their code" in the midst of an energy crisis and in the face of some expressed opposition.

"Once again," he said, "Seattle is a leader in energy efficiency codes, certainly in the Northwest and probably in the country." --Mark Ohrenschall

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DISTRIBUTED GENERATION

Fuel Cell Works

Emerald PUD Demonstration Fuel Cell
Powers Utility Warehouse during Outage

A demonstration fuel cell turned into a real-life emergency power source for Emerald PUD during an early February outage.

The 3-kilowatt-capacity unit supplied electricity for lights, heat and a cable spooler in Emerald's warehouse for about 16 hours Feb. 7 and 8, in the aftermath of ferocious winds that knocked out power to 90 percent of the utility's customers outside Eugene, OR.

This type of backup service is touted as a promising application for fuel cells. And for Emerald, it worked as advertised.

"The best news is here was an opportunity and a need for its use," said Richard Jackson-Gistelli, Emerald's key accounts lead. "We turned it on and it ran, which is what you want these things to do. It proved to be reliable."

Emerald's 3-KW fuel cell--a methanol-powered proton exchange membrane system from Bend, OR-based IdaTech--is a beta unit in a demonstration venture by Bonneville Power Administration.

Although Jackson-Gistelli said fuel cell power remains expensive and not quite ready for entire buildings, Emerald officials nevertheless see promise ahead. "Emerald's always been interested in being ahead of the curve in terms of the future. We think distributed generation, albeit in a variety of different forms, is definitely going to be a part of tomorrow's utility. You can either embrace it or let it slide you by."

Warehouse Power

Emerald received this particular unit in October, sharing the cost with BPA and IdaTech. After contracting with a methanol supplier the consumer-owned utility began operating the fuel cell in a variety of residential load configurations. The refrigerator-sized fuel cell sits in the utility's warehouse, which is attached to Emerald's headquarters building.

Late in the afternoon of Feb. 7, the wind began blowing "fast and furious," recalled Jackson-Gistelli. "Within 30 seconds our building [power] went down," and as customer calls poured in from throughout EPUD territory, utility officials knew they had big problems. It turned out to be the most widespread, damaging outage in Emerald's nearly 20-year history.

"About 6 o'clock, someone came in and said we need power out in the warehouse," because all outlets were occupied on the emergency generator circuit, he said. An EPUD employee advised Jackson-Gistelli to put the fuel cell to use.

He punched a button on the unit, and after a 40-minute warm-up period for the fuel processor the fuel cell began delivering electrons. "As soon as it got started it was flawless," reported Jackson-Gistelli.

This new electricity powered a portable heater, a set of lights for the parts area, and a cable spooler that automatically unspools and cuts specified lengths of cable. The fuel cell operated until the warehouse power came back on around dawn. It used an estimated five to seven gallons of methanol from the 350-gallon tank.

Without this fuel cell, "We probably would have had to run downtown and buy 500 feet of extension cord and find a circuit that had enough capacity left on it," said Jackson-Gistelli. "Or use flashlights in the parts area, which wouldn't have been too efficient. In all reality, could we have made it without the fuel cell? Yes. But it made it really convenient" and helped utility employees work under near-normal conditions.

That's the idea, noted IdaTech marketing vice president Mark Fleiner in a news release. "This clearly demonstrates an early promise of fuel cells: clean, quiet, dependable back-up power without the disadvantages of traditional [generator sets]." He anticipates "intermittent demand applications," notably emergency and portable systems, to account for the first commercial uses of fuel cells. "We are increasingly dependent on electricity at work and home," he said. "In the future, when nature strikes and the power grid goes down, people will turn to their fuel cells."

Fuel Cell Potential

Emerald was one of the first 10 Northwest utilities/utility systems to participate in BPA's fuel cell demonstration venture, which was announced in May 1999 (see Con.WEB, May 28, 1999).

At an April 2000 conference in Newport, OR, EPUD's Bob Mieger outlined some of the potential benefits of fuel cells: reduced pollution and noise, increased power-generating efficiency, low maintenance and "ideal" distributed generation. He also acknowledged some siting issues that had arisen with Emerald's initial fuel cell unit, including "education" for local code officials and concerns about methanol spills in the enclosed warehouse.

Mieger said Emerald foresees numerous potential utility roles in fuel cells, including sales, leasing, maintenance, fuel delivery, supplementary power for EPUD's landfill-gas plant and backup electricity--the latter unexpectedly demonstrated during the wind-related outage.

"It still is somewhat expensive to operate," Jackson-Gistelli said of Emerald's current fuel cell. "Its costs are still very dependent on fuel costs, and methanol doubled or tripled in price last year." Waste-heat recovery also influences fuel cell economics, he noted.

Jackson-Gistelli thinks fuel cells are not quite ready to power entire buildings, but he senses real progress has occurred.

"I think we should be excited about the advancements and the improvements that have been made," he said. "I don't think the alpha unit would have been able to do what the beta unit did" in running overnight at the warehouse.

And this unplanned fuel cell application has likely influenced the thinking of some EPUD employees. "Having had this experience, I think it's made a lot more people go, 'Hey, maybe we're on to something.'" --Mark Ohrenschall

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Distributed Generation in Action

BPA Microturbine Demonstration
Takes Off in Willamette Valley

In a distributed generation field test, a new propane-powered microturbine is furnishing electricity for PNGC Power's landfill gas-to-energy project near Corvallis, OR.

The 60-kilowatt Capstone microturbine began operating Jan. 16 at the Coffin Butte Resource Project. "If the test is successful," said PNGC Power on its Web site, "using a propane-powered microturbine to generate electricity on this scale may prove to be a cost-effective, low-emission way for customers in remote locations to have high quality, reliable and environmentally preferred electricity."
Coffin Butte Landfill.
Photo courtesy of PNGC Power

Bonneville Power Administration owns the microturbine as a demonstration venture.

Coffin Butte operators, meanwhile, are finding kinks to work out with the unit, and they have many comments on the microturbine's manual.

Microturbine Demonstration

The 60-KW Capstone unit, mounted on a trailer with propane tanks, cost $69,000. It's part of a BPA demonstration project on distributed generation. In March, it will roll on to another interested BPA customer.

PNGC Power operates the 2.5-MW landfill gas-to-energy project. Kevin Watkins, vice president for engineering, said the microturbine is providing station service--the electricity the landfill-gas project needs to keep it running.

Watkins said the Capstone unit was meant to run on natural gas, but propane made more sense. "It's easier to bring in a propane tank than to hook up natural gas," he said. "We've got to keep the propane kind of warm so it will vaporize."

That revelation is just one of the lessons learned in the first weeks of the demonstration.

"We have all kinds of comments on the manual," Watkins laughed. "Our people who work there ... are not shy about offering opinions."

He said that is just what the project was meant to do: get the technology out in the field so people could gain experience using microturbines.

Watkins said the unit isn't much to look at--it's a big box housing what is essentially an aircraft engine.

He suggested that if the demonstration succeeds, microturbines might be considered for remote homes, such as those located deep in national forests. And on a larger scale, utilities that don't want the financial risks of building a big generating plant may consider using microturbines. "What this will do is give people options," Watkins said.

That's just what Mark Jackson wants. The BPA fuel cell development manager said microturbines are not used that much, but they have a niche as a backup power source or for improved power quality or reliability.

Jackson started the demonstration project to give BPA customers experience with the machines, so they will be comfortable using them if microturbines fit their needs. He lauded the flexibility of microturbines: "You can program the frequency, you can start really large engines with" them.

Jackson said BPA customers who want to try the microturbine should contact Todd Amundson at BPA: (503) 230-5491. --Cindy Simmons

More Information:

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INDUSTRIAL

Helping Hands

Many Programs, Resources Available for
Industrial Energy Conservation

[Editor's note: This is the fourth and final installment in a series of articles on industrial energy conservation. The previous three articles spotlighted Northwest industries' increasing attention to saving energy, the bottom-line focus of conservation in industrial plants and conservation stories from four Northwest industrial companies.]

Industrial companies need not go solo in pursuing energy conservation.

Many programs and resources are available to foster industrial energy conservation in the Northwest, offering financial help, technical assistance and other services.

"Obviously it costs money to install energy-efficient technologies in industrial facilities, and often there's intense competition for that corporate capital," Ken Canon of Industrial Customers of Northwest Utilities told an industrial conservation teleconference in June. "This is where the utility and other financial programs can make a big difference."

He urged industrial firms to consider the many benefits of energy efficiency--such as better productivity, higher-quality products and environmental improvements--and to plug into the resources that can help make it happen. "Most plants have energy conservation opportunities and there are programs available," he said. "Are your competitors taking advantage of these opportunities? If they are and you aren't, you run the risk of falling behind and we don't want you to fall behind."

Herewith, Con.WEB provides brief summaries of some industrial conservation programs and resources, from utilities, governments, non-profit organizations and private-sector firms.

Regional Resources

State Resources

Oregon industrial firms can access a number of energy conservation resources.

In Washington:

Some Other Resources

--Mark Ohrenschall
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