CWEB.078/June.28.2002
Puget Sound Energy conservation efforts will greatly increase in coming years, under a landmark rate-case settlement approved by stakeholders and state regulators in June.
Washington's largest utility will pursue at least 15 average megawatts of programmatic energy savings for the year beginning in September, on an estimated budget of $17 million to $21 million. Puget also has committed to gain at least 2.1 million therms of natural gas efficiencies during the period, with an estimated $2 million budget. Program details are under development.
This marks a conservation resurgence for the investor-owned utility that has acquired substantially more energy savings since 1978 than any other Northwest utility (except Bonneville Power Administration). But Puget programs have considerably diminished since the mid-1990s, dropping to a low of 0.5 aMW collectively saved in 1997, according to Northwest Power Planning Council figures. Only in 2001 (12.3 aMW) have Puget annual savings exceeded 7 aMW, since 1995.
Puget rates and regulation director George Pohndorf called the conservation plans "a very positive step forward. It reflects a move to collaboration by the company and the parties that's very important to have dealing with public-policy issues. It allows us to approximately double our efforts, and move forward with a reconstituted and reinvigorated advisory group process. I think this will really ultimately benefit our customers."
The conservation element of the new rate agreement also includes an updated assessment of energy-saving potential within Puget's service territory, to help set future savings targets; financial penalties for missing future savings goals; a continuing self-direction option for large customers; and some direction on Puget's use of Bonneville Power Administration conservation/renewables wholesale rate discount funding. There is no sunset date for the conservation plans.
The overall rate-case agreement also continues Puget's time-of-use pricing program with some changes, and establishes a new program with $8.9 million annually to help low-income customers pay electric and natural gas bills.
More broadly, the new pact calls for an overall 4.6-percent rate increase--replacing a temporary increase of 8.7 percent--and a power cost adjustment mechanism.
Puget 'Adrift' in Conservation
From 1978 to 2000, PSE conservation programs saved a reported total of 216 aMW, a sizable portion of the 1,580 aMW reported regional total and far more than any non-BPA utility, according to Council figures. But after peaking at 29.7 aMW in 1993, Puget savings plummeted to near nothing in 1997, although they have risen somewhat since, up to 12.3 aMW in the energy crisis year of 2001, according to Washington Utilities and Transportation Commission numbers.
"A year ago, when we started the rate case, the company was adrift on the conservation front," Pohndorf told Con.WEB. "Like other utilities, we were struggling with what conservation means in the current environment." Puget now faces a dwindling resource surplus owing to load growth and expiring contracts, he said; the utility will undertake an integrated resource planning process looking at supply and demand sides.
"Where the advisory group has really helped is to allow us to work with a number of folks who have very helpful perspectives on conservation, and really helped guide where we're going."
Parties to the conservation settlement agreement include WUTC staff, Public Counsel Section of the state Attorney General's Office, Industrial Customers of Northwest Utilities, Northwest Industrial Gas Users, Microsoft, Northwest Energy Coalition and Natural Resources Defense Council, and Multi-Service Center, Opportunity Council and Energy Project.
"We think overall this [rate-case] settlement is good for consumers and good for the environment," said NWEC's Danielle Dixon. "From the conservation side we are very pleased that [Puget] will be ramping up efforts to restore its investments in energy efficiency" after the 1990s cutbacks. "We think this just shows a really positive turnaround."
"Microsoft supports electric energy conservation and will continue to work with PSE and the collaborative group to develop cost-effective programs that benefit all ratepayers by decreasing the need for new generation resources," said Microsoft's Gerry Gurtler.
Conservation Level
A major issue in the settlement talks was Puget's conservation level. Ultimately the parties agreed on a minimum 15 aMW target for the year starting Sept. 1, and 20 aMW through the end of 2003. Estimated budget is $17 million to $21 million annually, and $22.6 million to $22.8 for the entire 16 months.
Dixon described these numbers as "a negotiated agreement" among differing points of view. "From our perspective, this is a target that will ramp up Puget's efforts" and "heads them in the right direction of what we believe the conservation resource potential is in their service territory."
Puget, meanwhile, "looked at that in terms of what was doable for the company, what were other utilities reasonably doing, what the potential is out there," said Pohndorf. "We realized we needed to study some issues further."
A filing due to the WUTC by Aug. 1 will detail upcoming Puget programs. Pohndorf said it would likely include both existing and new ventures, all with an eye on cost-effectiveness. Under the settlement Puget is obliged to consider programs involving small-scale commercial HVAC, new commercial construction, Energy Star transformers, new residential construction, compact fluorescent lamps and fixtures, and commercial/industrial retrofit and new construction.
By May 2003, Puget will complete what the settlement agreement called "a market assessment of its commercial, industrial, and residential sectors in order to update its conservation supply curves … The outcome of this analysis shall inform adjustments to the current 12-month savings targets after September 2003." Puget has not undertaken such an analysis since 1999, and that was based on data from the mid-1990s, said WUTC staffer Joelle Steward.
The savings goals and cost-effectiveness considerations will determine future budgets beginning in 2004, the agreement specifies.
ICNU's Ken Canon welcomed this "ground up kind of market research … Where are we on the conservation supply curve, and how do we best build programs to get energy conservation in a very cost-effective manner?" He called the 15 aMW target for the initial 12 months "fine to start with."
The conservation settlement contains no expiration date, although it calls for a review by October 2007.
Penalties, Self-Direction, BPA C/RD
The conservation settlement also includes financial penalties for Puget if the IOU fails to meet savings targets over two-year periods, beginning in 2004-2005. Puget would be docked $200,000 for meeting 90 percent to 99 percent of savings goals, $500,000 for achieving 75 percent to 89 percent, and $750,000 for falling below 75 percent. This money would fund "one or more cost-effective energy efficiency programs for PSE's customers through a third party vendor," the settlement reads.
"A lot of the parties had been frustrated in the past that the company, particularly in 1999, didn't meet [its] target," said Steward, adding Puget did achieve a cumulative three-year goal.
Puget slashed its funding and switched to a largely information-based conservation approach in the late 1990s, Dixon noted. "While we are very excited about Puget's new leadership and their focus on collaboration, I think there are still some lessons we have learned from the past. My sense is that the penalty mechanism has its basis in some of those lessons learned."
Pohndorf described this provision as a "guarantee of performance," and said Puget is "happy to give others the assurance" it will meet prescribed targets. Meeting commitments such as this is part of the utility's collaborative approach, he said.
Another element of the conservation settlement allows large customers (under Puget's Schedule 449) to self-direct their funding and/or participate in PSE programs up to their annual funding level, minus 17.5 percent for market transformation and administration. Self-direction has been used "very successfully" by this customer class the past three years, Canon said.
The conservation agreement also includes some direction for Puget with its approximately $3 million annual funding from BPA's conservation/renewables wholesale rate discount. This includes an $800,000 annual allotment for low-income efficiency programs, and a renewable energy program focusing on local installations, with an initial yearly budget of $250,000.
Low-Income Bill Assistance, Time-of-Use Pricing Programs
Separate from the conservation settlement, as part of the overall rate-case agreement, Puget will create a new program to help low-income customers pay their electricity and natural gas bills. It specifies an $8.9 million annual cap (67 percent allocated for electricity) with a maximum $750 per qualifying household per year. Administering agencies will also provide information on weatherization, conservation and other programs.
Puget has not previously offered a ratepayer-funded bill assistance program, according to WUTC's Steward. This will roughly double the number of Puget low-income customers receiving help in paying bills. About 16 percent of eligible customers get help through the federal Low Income Home Energy Assistance Program, she said, and this new venture will assist about 20 percent of eligible low-income customers.
"It certainly is a solid step in the right direction," said Dixon.
Puget also will continue its time-of-use pricing program for small customers, through September 2003. Some 300,000 residential and business customers now participate, according to a Puget news release. "With the settlement, the time-of-use rates offered by PSE's Personal Energy Management program will be an option for virtually all residential customers. Customers now paying flat rates will continue to do so unless they opt for time-of-use power pricing. Under the settlement, PSE will begin charging its time-of-use customers $1 per month to cover the variable, time-sensitive cost of metering their power usage," said the release.
Peak and off-peak rates will vary about 1 cent per kilowatt-hour, slightly less than the current maximum differential of about 1.5 cents/KWh.
The time-of-use program also will be evaluated in 2003 in a collaborative process examining cost-effectiveness and conservation impacts.--Mark Ohrenschall
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A generally bullish appraisal of Pacific Northwest wind power, with acknowledgement of some ongoing challenges, emerged from a panel of regional speakers and others at the Windpower 2002 conference in Portland June 2-5.
Positive signs for the Northwest include some 450 megawatts of installed wind capacity and many hundreds more megawatts in developmental stages, substantial utility demand, emerging green power markets, public support, abundant land for wind farms and Vestas Wind Systems' planned manufacturing plant in Portland. Speakers also cited wind as a viable and cost-effective large-scale energy resource--in a region with historically low power prices.
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| Windpower 2002 Conference & Exhibition Logo (Courtesy of American Wind Energy Association) |
Still, Northwest speakers noted wind still faces critical issues relating to transmission and integration into the power grid, which in turn affect costs. The Northwest also lacks a renewables development mandate, unlike Texas, whose booming wind market is driven by a renewables portfolio standard. And, said one speaker, regional investor-owned utilities have not embraced wind to the same extent as publicly owned utilities.
Among regional figures sharing their views at this American Wind Energy Association-sponsored conference were Oregon Gov. John Kitzhaber and top officials from Bonneville Power Administration, PacifiCorp Power Marketing, Energy Northwest, Bonneville Environmental Foundation and Renewable Northwest Project.
Kitzhaber announced he would pursue a state-level wind energy production tax credit should the federal tax credit disappear, while PPM's Terry Hudgens reported his company's intent to make wind the majority resource in a planned 3,000 MW power generation portfolio.
Kitzhaber Touts Oregon Wind
Kitzhaber welcomed conferees to Portland the morning of June 3, and touted Oregon's "sizable investment" in wind power, with the Stateline, Condon, Klondike and Vansycle Ridge projects as well as Vestas' planned Portland facility.
"Oregon has done more than just talk about and pay lip service to the importance of wind power," he said. "We're determined to join the ranks of world leadership in the promotion, development and sale of wind technology, together with the generation of wind electricity on the power grid." Wind provides "not only obvious environmental benefits, but also economic advantages," offering prosperity as well as livability to the region, nation and world, the governor said.
Kitzhaber also urged "a genuine commitment to renewable energy and conservation" in national energy policy, to lessen reliance on fossil fuels. He pledged to push Congress to continue the federal wind production tax credit, currrently extended through 2003.
And in Oregon, he said, "I will undertake a policy initiative for a state production tax credit to help offset losses if Congress ever fails to enact a PTC in the future." He also said the state is looking into "leveling the playing field" for pollution-emitting and non-pollution-emitting power sources.
As envisoned, a state-level wind production tax credit would essentially serve as a backup should the federal PTC discontinue. "The state of Oregon would like to provide more certainty for developers, property owners, and some of the vendors, suppliers and others who are concerned about the [federal] PTC," Kitzhaber economic policy director Pat Egan later told Con.WEB.
Oregon also provides pollution control tax credits for companies that produce energy with emissions, which Egan said could be extended to non-emitting energy resources such as wind and solar.
Both would require legislative action beyond the outgoing governor's term, he noted. Nevertheless, Egan views the legislative prospects "pretty positively. There's a growing coalition of rural folks and urban folks that see, especially wind energy production but also solar, as a sort of going concern, and that wind is particularly competitive."
Northwest Focus
"Focus on the Northwest: The People and Policies Responsible for Successful Wind Development" followed the opening session. As the title suggests, this panel spun a generally optimistic view of regional wind, although notable challenges were aired during the session and a subsequent press conference.
Panel chair Rachel Shimshak of Renewable Northwest Project called the region an "unlikely character" for wind, given low electric prices and no government requirement to develop renewables. Yet, she said, the Northwest has about 450 MW of operating wind capacity, another 75 MW under construction, an additional 1,000 MW in permitting processes and still another 1,000 MW "talked about among people and at cocktail parties." She mentioned persevering utilities and wind developers, supportive government policies (restructuring laws, carbon dioxide emission offsets, sales tax exemptions and net-metering) and growing demand for green power.
Bonneville Power Administration head Steve Wright listed five reasons for wind's Northwest surge: improved technology and lower costs; the "tremendous opportunity" to use hydro as a "battery" for intermittent wind; plenty of open land; a hedge against volatile power prices; and substantial public support for renewables.
"Wind now fits within the category of a sound business decision a utility can make," Wright said, caling wind "a legitimate part of the mix of new generation and resources out here." He thinks wind is at stage 3.5 on a 4-point scale from research/development to full commercialization. "Now we're into the final stage. How does the wind resource integrate into the operations of the electric power system? How does it work with hydro? How does it match load? These are critical questions that need to be answered to determine the real cost of wind," even though the busbar cost is "quite attractive."
Wright said BPA is undertaking three specific actions to help advance wind: addressing onerous energy imbalance payments (see related story); studying system operation impacts from the output of its roughly 200 MW of purchased wind capacity; and assessing wind's intermittent generation compared to other resources.
Bonneville continues to mull a half-dozen proposals remaining from its early 2001 solicitation for energy from 1,000 MW or more of new wind capacity. Wright indicated decisions would come later this year, based on BPA loads, the cost of other resources and wind's cost at the busbar and integrated into the system.
PPM Embraces Wind
Portland-based PacifiCorp Power Marketing, meanwhile, has embraced electrons from the wind; they are the "green diamonds of renewable generation," said chief executive officer Terry Hudgens. "We have planned for 3,000 megawatts of a total portfolio of all generation. The majority will be wind generation." PPM already markets output from the 263-MW-capacity Stateline Energy Center on the Oregon-Washington border, selling wind energy to BPA, Seattle City Light and Eugene Water & Electric Board.
PPM customers have shown a "strong response" to renewables, he said. Natural gas-fired power, meanwhile, is problematic--Hudgens cited an overcapacity of gas-fired generation, rising fuel costs, declining production rates and increasing price volatility. He said PPM wants to reverse the 90-percent-plus dominance of new natural gas-fired power, with renewables.
The Northwest is "well-positioned to lead in wind development," he said, with its political support, interest in sustainable development and existing and planned facilities. "Every major renewable player in the world is now looking at the Northwest as a significant place to do business. The existing infrastructure is strong, we're blessed with a large hydro system as a battery, and also blessed with a vast transmission system to move power around the entire Northwest."
PPM faces a major challenge, though, in reducing the price of delivered wind electricity. Wind costs about 3 cents per kilowatt-hour at the busbar, Hudgens said, and another 1 to nearly 2 cents/KWh for system integration. Wind also needs fair transmission access and rules, and reasonable capacity payments, he said.
Energy Northwest Goes beyond Nuclear
An emerging player in regional wind energy is Energy Northwest, the former Washington Public Power Supply System. The joint operating agency with the region's lone nuclear plant has nearly finished its 48-MW Nine Canyon Wind Project, and is pursuing another wind venture, in addition to a new solar facility (see related story).
Energy Northwest's renewables interest dates to the late 1990s, as the organization examined its future beyond nuclear energy, said chief executive officer Vic Parrish. Seeking more diverse energy sources and improved relations with environmentalists, ENW set a goal in 1999 of 100 MW of new renewables capacity within six years, including 35 MW of wind. That target has since risen to 300 MW of wind in the next 10 years, he said.
"We've had more interest from our [16 Washington public-power] members than we anticipated," said Parrish; Nine Canyon was originally considered for 25 MW.
He also acknowledged "one big hurdle"--securing non-BPA-backed financing for Nine Canyon, given the WPPSS legacy. "The financial community doesn't understand renewables very much. We found, spending time with them, we were able to allay their fears and be successful." ENW eventually issued about $70 million in bonds for Nine Canyon.
Two considerable unknowns facing Energy Northwest, he said, are the future of the Renewable Energy Production Incentive (the public-sector counterpart to the PTC) and the ultimate demand for renewables. "Our initial experience is there are people out there that want it, and we will strive to do it," Parrish said, listing ENW initiatives in wind as well as hydro, wave energy, fuel cells and biomass.
"I envision in the future Energy Northwest has a title--it's the carbonless energy family," he said.
Regional Green Power
Focusing on regional green power was president Angus Duncan of Bonneville Environmental Foundation. "The market for green power in the Pacific Northwest is a significant part of making up that delta between stage 3-1/2 and stage 4, to push us to where wind doesn't need the assistance of green power marketing anymore," he began.
Some 30 Northwest utilities of widely varying sizes now purchase BPA's Environmentally Preferred Power, buying a total of 110 aMW, according to Duncan. With its share of those and green tag revenues, BEF on its renewables side mainly has invested in new solar and small wind, and hopes to participate in a utility-scale wind venture with the Last Mile Electric Cooperative, he said.
He called green tags "an established product" used as the basis for retail green power programs around the Northwest.
"One of the big questions for us in the green power market is what's the ultimate market size," Duncan said. Some analyses predict it could reach 15 percent to 25 percent, but today's most successful programs have participation rates of about 4 percent. Duncan believes the market will grow as people become more familiar with renewables technologies that their green power monies support. "I'm a little nervous about the growth of supply in tags, pushing the price of green tags and green power down, and weakened market signals for new wind," he said. Another concern is marketing of existing renewables as green, instead of new renewables.
Duncan also noted a disconnect between long-term financing of wind projects and the monthly or yearly commitments for retail green power. "If you're going to finance a major capital-intensive project over 20 years, you need a reliable stream of payments over 20 years, or you need some intermediary vehicles, some creativity ... We just haven't figured that out yet."
Hudgens also sees a disconnect, between the largely unregulated wholesale power market and the still largely regulated retail power system. "We don't have a true price-based ... structure where the customer can realize all the benefits of the current wholesale renewables market."
The PPM leader also thinks Northwest public-power utilities, such as Seattle City Light and EWEB, are leading on renewables more than investor-owned utilities. "IOUs are still struggling with utility commissions and the raw economics of competing resources," he said.
In response to a question about mandates, green power markets and economics as drivers of wind, Hudgens addressed economics. "We now believe that at well-sited locations, at the right points of connectivity to the market, wind beats other energy forms to market. Couple that with any value flowing from green tags or green attributes, then you have a real winner."
Duncan said green power markets were the least important of those three circumstances, but all three are "absolutely essential. Ultimately renewables have to stand the test of economics in the marketplace without their fair share of subsidies and mandates," but those helping hands accelerate development toward the time when they won't be needed. "We are very nearly there, if not there, with wind in this region," he said.
Wind Reliability
Despite the popular impression of an unpredictable force of nature, wind patterns actually are knowable, according to a Seattle-based speaker at Windpower 2002.
Wind can be a much more reliable resource than hydropower over long periods of time, said Ken Westrick of 3TIER Environmental Forecast Group, which provides forecasting for Stateline and, soon, for Nine Canyon.
With wind energy, "You can go from ... full capacity to zero capacity back to full in eight or 10 hours; it can vary quite a bit. But it's predictable," he told Con.WEB in a later interview. "Wind is the result of physical processes. We can predict wind." 3TIER uses detailed weather prediction models along with site observations.
Over the last 22 years, Westrick said, water flowing into Ross Reservoir in northern Washington has varied from 2,800 cubic feet per second (as a five-month average) to more than 7,000 cfs. Wind varies much less over time, raising the possibility that it could supplement hydropower, particularly in low water years.
"This is a tremendous opportunity," he said. "The Northwest is very dependent on renewables right now, and wind actually fits it very well." However, he added, "There has to be some kind of plan to put wind in locations with offsetting characteristics to hydro capabilities," which vary around the region.--Mark Ohrenschall
The 263-megawatt-capacity Stateline Energy Center, which soon will be 300 MW and the largest wind power plant in the world, may ultimately be expanded to produce as much as 500 MW, said Terry Hudgens, chief executive officer of PacifiCorp Power Marketing.
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| Wind turbines at the Stateline Energy Center (Photo courtesy of FPL Energy) |
PPM purchases and markets all the power from Stateline--which is owned and operated by FPL Energy on the Oregon-Washington border near Walla Walla--and has already signed contracts to sell 300 MW of wind power from the plant, he said at the Windpower 2002 conference in Portland in early June.
The major obstacle to expanding the Stateline project is transmission constraints, he noted. The plant will likely be expanded if PPM can work out a transmission agreement with Bonneville Power Administration, he said.
George Darr, manager of the renewable resources program for BPA, which buys some Stateline power, said the region needs more transmission lines from the Stateline vicinity. About 90 MW of wind power is transmitted by BPA, and the rest goes through PacifiCorp lines, he said. "Some transmission upgrades are in the works," he said. "Some high-voltage lines are being built in connection with new gas-fired plants in the area."
Bonneville's ability to build new transmission lines depends to some degree on whether Congress agrees to increase BPA's borrowing authority, Darr said.
BPA Slows Efforts on Wind Power Solicitation
BPA has slowed its efforts to purchase energy from 1,000 MW of wind-generated power, but still hopes to eventually purchase that amount or more, according to Darr.
Darr said in a conference talk that when BPA first issued a solicitation for 1,000 MW or more of new wind resources--in February, 2001, during the region's energy crisis--wholesale power prices were high. But they have since dropped, undermining the economic viability of the projects offered by developers.
In addition, the cost of "firming and shaping" wind-generated electricity has been higher than expected, he said.
"We need to find a way to increase revenues to keep these projects going," he said.
Darr is working to reduce BPA's energy imbalance charge, which penalizes generators for failing to produce the promised energy. In addition, the cost of firming and shaping power needs to be lower, he said. Development costs could be cut, as well.
"Environmental impact statements are expensive," he said. Experience has shown that modern wind projects yield few environmental problems; "We can show that we don't need such a high level of environmental review," he said.
Also, BPA plans to use revenues from green power sales to help fund new wind power projects, he said.
California Exempts Wind from Some Energy Imbalance Charges
States across the country should follow California's example and exempt wind power producers from some of the provisions of energy imbalance charges, said speakers at Windpower 2002.
The energy imbalance charges, imposed in different forms nationwide, were designed in part to prevent generators from trying to increase prices by holding back generation. But they have indirectly penalized wind developers, who can't always predict exactly how much energy they will deliver, said Jim Caldwell, policy director for the American Wind Energy Association.
Imbalance penalties levied by transmission owners can represent up to 100 percent of a wind generator's revenues, he said.
The Federal Energy Regulatory Commission in March approved an AWEA-proposed tariff change in California designed to help increase the amount of new wind generation installed in California, said Yuri Makarov, an engineer with the California Independent System Operator.
Under that tariff, wind generators are allowed to calculate imbalances--both positive and negative--on a monthly basis, rather than daily or hourly. They then pay the generation imbalance charges monthly. If, on a monthly basis, a wind plant generates more energy than scheduled, that energy production will help offset the plant's failure to produce as much as promised, Caldwell explained.
The wind energy industry in California will install and pay for advanced wind forecasting programs that will help the industry better predict how much wind energy can be delivered at any given period in time, Caldwell said.
"Accurate forecasting is possible and wind generators should enter the California power market as competitive bidders," said Makarov. "We think intermittent resources can benefit by participating in the market."
The enormous concrete plant at the Hanford Nuclear Reservation's Site One makes quite an impression against the backdrop of the region's arid topography on a blue-sky day. Especially because, unlike the 1,150-megawatt Columbia Generating Station just a mile away, all is quiet at Energy Northwest's never-completed facility.
Well, almost.
Since mid-May, 242 metallic-blue BP Solar photovoltaic panels have silently harvested enough power for some six to eight homes on a concrete pad right in front of the ghostly nuclear plant. The symbolism is hard to miss, as solar is part of the long-term makeover of Energy Northwest, the former Washington Public Power Supply System, a joint operating agency of 16 Washington publicly owned utilities that operates the Northwest's only nuclear power facility.
"We want Energy Northwest to be known as an environmentally conscious utility," said Dick Koenigs, director of the Northwest Energy Innovation Center, Energy Northwest's incubator for renewable power.
In addition to the new solar plant--largest of its kind in the region--Energy Northwest also operates the 27-MW low-impact hydroelectric project at Packwood Lake and plans to bring on-line about 100 MW of wind power capacity by 2004.
White Bluffs Solar Station
The 39-kilowatt-capacity White Bluffs Solar Station may generate only a tiny amount of power, but it is the largest single-site grid-connected solar PV facility in the Northwest. Owner-operator Energy Northwest will sell the electricity to Bonneville Power Administration at 4 cents per kilowatt-hour, while Bonneville Environmental Foundation will sell green tags, according to the ENW Web site.
But at 20 to 25 cents/KWh, solar deployment is likely to remain limited in the near future, even if, as Koenigs points out, eastern Washington's harvestable sun is comparable to Florida's.
Regardless of whether BPA's system even notices the power contribution of White Bluffs, the station will serve a purpose. "It will be an educational tool," Koenigs said. Performance of the stationary panels--which provide about six hours of peak production in summer and two hours in winter--will be measured against performance of panels mounted on tracking devices to be installed at the same site in August.
Wind Promise
Although much sun shines in eastern Washington, wind still looks to be the most promising renewable resource in the diversification of Energy Northwest, as the seemingly constant construction of turbines just southeast of Kennewick can attest.
Eight Energy Northwest members are participants in the 48.1-MW Nine Canyon Wind Project, currently under construction and scheduled to go on-line in September. A $70 million bond issue, completed in November 2001, financed the project. Bonus Energy of Denmark manufactured the 37 1.3-MW turbines.
The utility also is moving ahead on its plan to add a second 50-MW wind farm to its growing capacity on the mid-Columbia. Energy Northwest already has approval from its board of directors and preliminary leases with wheat farmers in Zintel Canyon, and has installed meteorological towers to evaluate wind speed and direction for tower placement, said agency spokesman Gary Miller.
The Zintel Canyon project would increase Energy Northwest's total wind-power generating capacity to nearly 100 MW by January 2004. The next step for the agency would be signed power purchase contracts with those interested among its 16 member utilities, and other Northwest public-power utilities.
Energy Northwest hopes to have the purchase contracts inked by the time of Nine Canyon's dedication. It will then request bids from wind-turbine manufacturers and move toward floating its second tax-exempt bond issuance for a wind project.
Cow Power
In addition to sun and wind, Energy Northwest may soon tap into the region's abundance of potential cow power. Energy Northwest has applied for several grants to help finance a proposed 3- to 4-MW power plant that would run on methane gas from manure broken down in anaerobic digester tanks at dairies in either Twin Falls, Idaho or one of Washington state's two most densely bovine-populated counties--Whatcom and Yakima.
This would be the first commercial-size anaerobic digester in the state and one of the most productive manure-to-methane electricity projects in the country, Stan Davison, business development specialist at Energy Northwest, told Con.WEB. He said Energy Northwest needs a 25-percent cost-share grant to break ground. After that, the project could be at full power within nine months, he said.--Garrett Hering
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BPA will buy the entire energy output from the 24-megawatt-capacity Klondike wind project in north-central Oregon, under a deal signed June 5.
This 20-year agreement with Northwestern Wind Power, a subsidiary of Golden Northwest Aluminum, will provide Bonneville an average of 7.3 average megawatts a year at an average cost of slightly under 3.5 cents per kilowatt-hour the first five years, said BPA spokesman Ed Mosey. The price will stay at about 3.5 cents/KWh (adjusted for inflation) over the 20-year term.
As part of it load-reduction agreement with Golden Northwest last June, Bonneville pledged to "provide some credit support for up to 200 megawatts of wind resources GNA might develop," Mosey said. In addition, the Klondike power price is "slightly better" than any other BPA wind purchase to date. The federal agency's wind-energy purchase portfolio now totals about 210 MW capacity, including 90 MW from the Stateline Energy Center on the Oregon-Washington border.
Klondike occupies rolling wheat fields about eight miles east of Wasco. It was physically completed Dec. 31, according to general manager Allen Barkley of Northwestern Wind Power. Klondike-generated electrons go through Wasco Electric Cooperative lines and then to the BPA system.--Mark Ohrenschall
Ocean waves endlessly roll off the Pacific, carrying enormous amounts of stored energy.
Producing electricity from this endless resource is the focus of two demonstration ventures in the greater Pacific Northwest.
B.C. Hydro is collaborating with two wave energy companies on a project off Vancouver Island, as part of a green energy demonstration initiative. Another wave energy plant is planned on the other side of the United States-Canada border, off the Olympic Peninsula coast. Both could be operating within the next two years at up to 5 megawatts collective capacity--provided they can handle permitting, environmental and other issues in bringing this relatively new concept to fruition.
B.C. Hydro Seeks Green Energy
B.C. Hydro's venture stems from a 2001 study on potential green energy resources for Vancouver Island, which imports 80 percent of its power and may face electricity shortfalls by 2007. The provincial utility also is exploring a 260-MW gas-fired plant on the island, according to Joanne McKenna of B.C. Hydro's green and alternative energy division.
The study results led B.C. Hydro to announce in June 2001 a 20-MW green energy demonstration initiative for the island, selecting wind (10 MW), small hydro (6-8 MW) and ocean wave energy (3-4 MW) as the most promising near-term technologies.
A request for wave energy proposals generated 10 responses from companies around the world, which the utility shortlisted to four and eventually selected two, McKenna said. Energetech Australia and United Kingdom-based Ocean Power Delivery both have signed memorandums of understanding with B.C. Hydro for wave energy development. Utility officials think their technologies will work fine in the near future, while offering expansion capabilities at competitive prices, said B.C. Hydro's Neil Nielsen. These firms also have a record of collaborating with public-sector entities, he added.
Different Wave Energy Approaches
The two companies, though, take markedly different approaches to producing electricity from waves.
Ocean Power goes offshore with a floating device known as the Pelamis, described in a B.C. Hydro news release as a "semi-submerged, articulated machine that has several hinged joints each with a hydraulic pump inside. The relative motion of the sections, due to wave action, activates the pumps, which drive electric generators."
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| (Courtesy of Energetech Australia) |
OPD's Max Carcas told Con.WEB the Pelamis is designed for maximum power generation efficiency and survivability in "a fairly hostile environment" with a "very dense energy resource." A square meter of wave in western North America might contain 30 to 40 kilowatts of energy, he said, compared to 1 KW for wind and 100 watts for solar. The "long and slippery-shaped" Pelamis moors to the seabed, and can swing in different directions, he noted. It also includes off-the-shelf components already proven in the offshore oil and gas industry.
Energetech, meanwhile, sticks close to the shore. "Fundamentally it's a totally different concept," said Nielsen. "Max explained he wants to ride the waves. The Energetech captures the waves" through what is known as oscillating water column technology.
"In an OWC installation," B.C. Hydro background information elaborates, "waves enter a fixed structure (column) at one end. The water pressure forces air up the column and past a specially designed turbine, causing the turbine to spin; a generator connected to the turbine produces electricity. As the wave retreats, the air in the column is decompressed and drawn down past the turbine again." In the Energetech design, a parabolic wall concentrates the incoming waves to increase energy production.
Since February, AXYS Environmental Systems has monitored ocean waves for B.C. Hydro near Ucluelet, on Vancouver Island's west coast. McKenna said the utility also is awaiting results of sea trials elsewhere from the two companies, Energetech off Australia and Ocean Power Delivery off Scotland. B.C. Hydro plans for wave energy production to start by early 2004.
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| The Pelamis prototype (Photo courtesy of Ocean Power Delivery) |
In the meantime, the utility will tackle what McKenna called "site-specific barriers ... One of the big challenges for us is going to be getting it permitted, sited and permitted. No one's built wave [energy plants] in Canada, really in North America. We're basically going to be blazing a path to get these technologies approved." Federal, provincial and municipal governments all have some jurisdiction over the project, she noted.
A number of issues are likely to surface, ranging from the impacts on recreational fishing, boating and tourism to the visual effects of these unusual contraptions. To date, B.C. Hydro has yet to find any "showstoppers" among marine environment issues, according to Nielsen. He and McKenna also reported generally positive reactions from the local community around Ucluelet.
As for projected energy costs, B.C. Hydro estimates 10 cents per kilowatt-hour for this first venture. "We expect that will come down, with economies of scale and creating a market demand for the product," said McKenna. The utility is considering selling wave-generated electrons as retail green power for interested customers, she added.
Vancouver Island's overall wave energy potential is estimated at 225 MW capacity and 468 gigawatt-hours annual energy production by 2020, according to the 2001 green energy study. The study also acknowledged the intermittency of both wind and wave power: "Results indicated that the Vancouver Island green energy resources do not provide the necessary dependable capacity to meet the winter peak demand without some storage, back-up or firm supply option to support the green resources."
Washington Waves
Off the very northwest corner of Washington state, in Makah Bay, another wave energy demonstration venture is in the works. This proposed 1-MW offshore project is undertaken by a consortium including developer AquaEnergy Group and the Northwest Energy Innovation Center, comprised of Energy Northwest, Bonneville Power Administration, Pacific Northwest National Laboratory and Washington State University. The Makah Nation and Clallam County PUD also are participating.
The project would rely on buoys moored several miles from the shoreline, according to a news release. "The wave action moves the buoy up and down, which in turn creates a pumping action, producing pressurized seawater that then is directed into a turbine driving a conventional 1 megawatt electrical generator."
Permit applications are on file with close to 10 separate federal, state and tribal entities, AquaEnergy president/chief executive officer Alla Weinstein told Con.WEB. "I'm hoping by the end of the year all the permits will be in hand."
Meanwhile, she said the public-sector entities are seeking a $4 million congressional appropriation for the project, to fund construction, monitoring and ongoing research. (AquaEnergy separately is pursuing private capital.) "Without government investment in the pilot project, it is almost impossible to secure private equity or debt financing for a pilot installation," she said.
The company wants to install a monitoring buoy off Port Angeles by September, and complete the plant by early summer 2003.
"I believe we're doing all the right things," Weinstein said. "Whether we get it or not is still within the powers that be." She has found "very substantial and great local support" from the local community, including tribal members. The Makahs are "very active" in permitting, and have a long-term interest in power supply and desalination potential, she said.
The biggest issues revolve around environmental impacts, she said. AquaEnergy believes the project will be generally benign for the marine ecosystem, but without a working prototype the only evidence is analysis, not field data. "Our [congressional] appropriation would allow us to do front-end research and surveys to predict what the impacts would be to do the installation in different ways, and looking at alternative means of installing to minimize any potential impact."
Indeed, environmentalists have already expressed some worry about the project in the Olympic Coast National Marine Sanctuary. "The biggest concern from the conservation community is that the rush to establish the pilot project in the marine sanctuary will set a bad precedent and could open the door to expansion of the project without a full evaluation of the potential impact on fish and wildlife," wrote Corinne Hollister of the Northwest Energy Coalition in a recent issue of the coalition's Report newsletter.
AquaEnergy is working on a power purchase agreement with Clallam County PUD, Weinstein said. She estimated the plant would produce 1,500 megawatt-hours annually, representing an average 25-percent capacity factor; production would peak from November into March, coincident with the Northwest's winter-peaking power system.--Mark Ohrenschall
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Renewable energy from cow manure and energy management systems for restaurants are the latest ventures involving the Energy Trust of Oregon.
These were endorsed May 22 by the Trust's board of directors, as the organization's second renewable energy investment and first energy-saving effort in a commercial/industrial niche market, respectively.
Also on May 22, the Trust board approved an equity policy to guide conservation program funding and design. Among its principles are programs for all customer classes, and especially for customers underserved by previous conservation efforts.
Meanwhile, Oregon's public-purposes funding agency has welcomed a new energy efficiency director--former New York-based consultant Steven Lacey--and signed a contract with the Northwest Energy Efficiency Alliance to furnish up to $14 million through 2006 for market transformation activities.
Bio-Gas, Restaurant Projects
The Trust is one of several players in a proposed 4.1-megawatt-capacity bio-gas plant at a northeastern Oregon dairy farm, using cow manure as the base fuel. "Currently, the wastes are roughly processed into compost and liquid fertilizers," according to a Trust summary. "The farm now proposes to add an anaerobic digester facility designed to generate methane gas for recovery from the waste stream. The methane would be captured and combusted in reciprocating engines for electricity generation."
Portland General Electric would develop and operate this venture at Threemile Canyon Farms in Boardman, paying a "green premium" of 0.005 cents per kilowatt-hour for the power, according to the summary. The plant would produce an estimated 3.85 average megawatts annually (a 95-percent capacity factor) for 15 years beginning in 2004.
Beyond electricity, it would create environmental benefits by reducing net carbon-dioxide emissions by more than 24,000 tons annually, and lessening water runoff. "The Oregon Dairy Association is interested and supportive of this project as a demonstration of cost-effective strategies for dealing with the growing issues of animal wastes from modern dairies," the summary reads.
The Trust plans to fund about $1.5 million, through production incentive payments of 0.009 cents/KWh over five years. That represents about 16 percent of the above-market costs of this renewable energy, according to the summary. Oregon's Business Energy Tax Credit and Energy Loan Program are other anticipated financial sources, along with compost production for resale.
The Trust's funding is contingent on a power purchase agreement between PGE and Threemile, as well as Oregon Public Utility Commission review.
In energy efficiency, a restaurant program will be the Trust's first initiative with a specific commercial/industrial market.
"Many commercial establishments have no means of efficiently operating lighting, heating, air conditioning and refrigeration equipment, other than to rely on employees to manually switch equipment on/off before, during and after a typical work day. This is especially true in restaurants," according to a Trust program announcement.
This pilot venture will offer rebates for energy management systems, specifically targeting restaurants with annual loads of at least 250,000 KWh in PGE and Pacific Power service territories.. "This is a relatively new product, but has been field tested and evaluated at several Northwest sites," according to a Trust summary.
Contractors will receive $2,750 for each standard installation, and another $200 when economizer controls need replacement. This funding, combined with Oregon Business Energy Tax Credits, could cut in half the typical installation cost of $12,000 to $13,000. The Trust expects to provide 60 EMS rebates for a total cost of $212,000, and a levelized societal cost of 3.7 cents/KWh. Customer paybacks should drop in half with these incentives, from 5.2 years to 2.6 years, according to the summary. Total savings are projected at 0.2 aMW, based on 30,000 KWh annually per building. Installations under this pilot program are to be finished by year's end.
The Trust also will look into potential energy-saving opportunities for restaurant air-conditioning units, cooling and refrigeration equipment, and rooftop cooling units.
Equity Policy, EE Director, Alliance Contract
A new equity policy adopted May 22 by the Trust board outlines five principles for designing and funding energy-saving programs. It promotes efforts in all customer sectors, with a particular nod to "private utility electricity customers that have not had access to prior conservation programs and/or where penetration rates have been historically low." Improving program effectiveness and informing customers about costs and availability of conservation are other principles.
In other developments, the Trust has a new energy efficiency director. Steven Lacey comes to Oregon from New York-based ICF Consulting, where he managed a variety of energy efficiency programs. He previously worked for GreenMountain Energy Resources in Vermont. Joe Cade of Bonneville Power Administration had filled in as interim director.
The Trust and the Alliance, meanwhile, have concluded a contract under which the Trust will provide up to $14 million to the market transformation collaborative from March 1 of this year through Dec. 31, 2006. This arrangement essentially continues the funding formerly provided by PGE and PacifiCorp for its Oregon service territory.--Mark Ohrenschall
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The Future@Work exhibit in downtown Seattle is nothing like the fictional office in the Dilbert comic strip.
No cubicles encapsulate disgruntled wage clones. No sterile institutional furniture vacuums the life out of an interior space. And no tacky lighting douses worker bees with wan, uninspiring illumination.
Future@Work is a showcase of office design ideas sponsored by a consortium of more than 90 design, construction, consulting and commercial supply companies and organizations.
The exhibit helps businesses understand innovative lighting, communications technologies, furnishings and space planning concepts for creating flexible workplaces that enhance employee well-being and performance. The exhibit demonstrates strategies for integrating company goals, people's physio-psychological needs and environmental sustainability in a dynamic business environment that fosters creativity and adaptability.
Offices that integrate energy efficiency with space designs meeting human needs--adequate lighting with minimal glare, comfortable temperatures, fresh air--can deliver productivity benefits that can far exceed the energy savings.
Productivity
"The office environment is very important for people's productivity," said Amy Cortese, Future@Work project coordinator for the Northwest Energy Efficiency Alliance. The Alliance sponsors BetterBricks.com, a resource to help businesses apply Future@Work concepts that can pay off with lower absenteeism, reduced turnover and higher worker performance. According to BetterBricks, a 1-percent improvement in employee productivity can nearly equal a building's entire annual utility bill.
"The exhibit doesn't present single solutions but shows a range of possibilities and opens conversation about what businesses need," said Denise Fong, principal at architectural lighting consultant Candela. "We're trying to show how energy efficiency can be an effective component of lighting that costs the same or less but delivers better quality."
Sixty types of lighting technologies are demonstrated in the exhibit. "You'd never use them all, but it's to show what's possible," said Renate Schweiger of Callison Architecture.
"The big lesson that comes out of Future@Work is how important it is to demonstrate real-life examples of technology and design, and make things tangible. People can come in, kick the tires and see how they may work," Cortese said.
Lighting, Furnishings, Work Space
Future@Work demonstrates techniques in lighting, furnishing and arranging a work space that enable businesses to reconfigure office space cost-effectively as they grow and change. "You can use the same technology. You don't have to always purchase new equipment," Cortese said. "You see different scenarios and ways to use space."
The 3,000-square-foot exhibit, which opened in August at 1420 Fifth Ave., has been visited by representatives of many commercial and institutional sectors with widely varying work space requirements, including law firms, health-care organizations and financial institutions.
Future@Work consortium directors are Barclay Dean, a facility and space planning firm; Callison Architecture, which houses the exhibit; Sparling & Candela, an architectural lighting, engineering and technology consultant; Turner Construction; and Steelcase, a commercial and institutional furniture manufacturer. Other consortium members include the Alliance and Seattle-based Lighting Design Lab.
The exhibit avoids conventional office designs--rabbit warren cubicles separated from isolated meeting rooms. Through a "hub and spoke" approach, individual work spaces are near communal areas to foster collaboration and cross-fertilization of ideas. The "hub and spoke" design also enables visitors to see the venues most relevant to their needs without having to walk through the entire exhibit.
Throughout Future@Work, fluorescent lighting fixtures integrated with controls demonstrate the benefits of flexible illumination levels. Controls can adjust artificial lighting to complement changing daylight, minimize glare and set lighting levels for individual preferences. Shields direct lighting to task areas while blocking out extraneous light. Lighting loads are kept under 1 watt per square foot, the limit for offices under the city of Seattle's non-residential energy code.
Ubiquitous data ports and a wireless data system provide telecommunications access throughout the work space, accommodating varying work styles and spontaneous meetings. The exhibit demonstrates eight desktop solutions, including small and miniature personal computer packages, and three video conferencing concepts. Document management integrates scanning, faxing, e-mail, printing and copying into a networked system.
Technology Isn't Everything
One of Future@Work's core messages, however, is that technology by itself does not guarantee business success. For best results, exhibit materials point out, technology must be part of an integrated package meeting the unique needs of organizations and the people who work in them. "It is less important how fast the PC is and more important that the screen has no glare," says a fact sheet from Sparling.
The exhibit's balancing of technology with people-oriented design didn't click with one visitor. Schweiger recalled a visit from a movie scout looking for a "futuristic" office in which to shoot scenes for a science-fiction film. The Hollywood visitor was expecting to see a "Jetsons"-type setting dominated by whizbang gadgets. Instead, the scout saw homey work spaces supporting deeply rooted human needs traceable to ancient survival strategies. Future@Work "didn't meet their expectations," Schweiger said dryly.
Office, Meeting, Common Spaces
Future@Work is organized into office, meeting and common spaces to demonstrate design concepts for businesses at different stages of development.
Following are summaries of the spaces, from Future@Work materials and reporter observations:
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| Future@Work Layout(Courtesy of Future@Work |
The Hive compares two types of lighting fixtures--T-12 down-lights typically found in offices and T-5 fixtures with indirect lighting that brighten wall surfaces, which can make the work area appear more spacious, minimize glare and eliminate the "cave effect" of down-lights. Depending on application, the T-5s are 16 to 30 percent more efficient than the T12s, Cortese said. Fong said visitors sense a noticeable difference in quality between the T-12s and T-5s. "You feel the difference as much as see it," because better lighting engenders an emotional response that is difficult to articulate but tangible nevertheless, Fong said. The T-5s have a color rendition index rating of 85, compared to the less desirable 60 CRI rating of the T-12s.
Lower panels separating work stations improve distribution of daylight. On one side of the Hive, an aesthetically pleasing curtain effectively hides the sights and sounds of computer servers.
The East/West and Serenity spaces are small, 25 and 50 square feet, respectively. "This shows people that you don't need a lot of space to meet the needs of people from different cultures," Schweiger explained.
Sustainable Features
Lighting is not the only area where Future@Work demonstrates environmental sustainability concepts. Sixty percent of interior partitions are movable, enabling reconfiguration without tear-downs that generate solid waste. Carpet tiles contain 75 percent post-consumer recycled material. The tiles can be returned to the vendor for reclamation and reuse. Paints contain little or no volatile organic compounds that can degrade indoor air quality.--Jim DiPeso
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[Editor's note: The writer of this column, Kari Hanson, is executive editor of EnerNet Technology Exchange, Energy NewsData's developing news and information service on the dynamics of energy technology transformation, which is scheduled to launch later this summer. She is also a former editor of Energy NewsData's Clearing Up newsletter.]
At a recent, sparsely attended Northwest Public Power Association roundtable meeting on green power and distributed generation, participants were presented with the following hypothetical situation:
"A farm account [served by a public utility] with an existing 37.5 kVA single-phase service has contacted you regarding the installation of a 20 kW wind generator. Inspection of metering records indicates that the average load for the customer is 9.5 kW and the estimated annual load factor is 45%. The customer is located 8 miles from a substation and has no problems with voltage levels or power quality. The peak load is unknown but is estimated to be about 28 kW. Regional estimates indicate that the wind generator should produce an average of 2500 kWh per month."
Participants were then asked a series of questions about the costs and impacts if the farmer installs this DG resource.
This was the first such NWPPA meeting I had attended, so I didn't know quite what to expect. I was very surprised to find only about a half-dozen utility folks there. And the utilities they represented were uniformly small and rural. (I later showed the attendance list to another NewsData staffer, who noted these utilities are among the region's more progressive. I was heartened to hear that rural and progressive can indeed go hand in hand, but disturbed that the utilities serving most of the Northwest's population were not represented.)
The morning speaker at the roundtable--who presented the above scenario--was Florida-based public power consultant Bryan Singletary. My surprise at the lack of attendance turned to dismay as the morning progressed and I discovered that his presentation was extremely well-delivered and worthwhile. I was disappointed by the fact so few people were there to hear it, and also by what this lack of attendance might portend about the region's level of interest in its resource future.
So, following are what I consider Singletary's salient points. What most impressed me were his broad perspective and his common-sense, farsighted approach to DG and green power. While his remarks were obviously directed to public power, the underlying issues affect investor-owned utilities as well.
Green Power
Distributed Generation
Green Power, Energy Web Overviews
In the afternoon, Diane Zipper of Renewable Northwest Project gave an overview of green power programs the region's utilities are implementing. And Bonneville Power Administration's Terry Oliver discussed the agency's Energy Web vision, which involves integrating smaller supply-side, control and demand-side resources. Bonneville's pilot project with Celerity Energy and Sixth Dimension will help test the waters for that vision. It's clear from this and other initiatives that BPA is on the way to embracing a leadership role when it comes to new ways and means of meeting future energy demand.
I don't want to read too much into the relative lack of attendance at the roundtable. I know for a fact that many utilities in the region are working hard on these resource issues. But I couldn't help feeling that a recent conference I attended in California on DG and advanced power technologies might as well have been held on another planet. When the California crisis hit more than a year ago, I was not working in the energy industry. But I've been back for more than six months now, and I'm starting to get a feel for where both the Northwest and Southwest stand in the aftermath of that debacle. And I'm sensing a certain amount of complacency around here. I hope I'm proved wrong in the near future.--Kari Hanson
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