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Funding Support from the Northwest Energy Efficiency Alliance


1) NorthWestern Energy Cancels 150-MW Montana Wind-Power Purchase Contract
2) Idaho's First Large-Scale Wind Project Announced by Boise Company
3) BPA Exempts Wind Power from Energy Imbalance Charge
4) Seattle's First Residential Net-Metered PV System Hooks to City Grid with Relative Ease
5) Puget Conservation Strategy Features More Financial Incentives
6) Alliance Expands Commercial Building Efficiency Efforts
7) Energy-Saving Software Garners BPA C&RD Endorsement
8) New Lighting, Heating Systems Reap Big Energy Savings for Air Force Base
9) From The Molecule to The Monolith: Make Waste Equal Food, McDonough Says


Wind Socked

NorthWestern Energy Cancels 150-MW
Montana Wind Power Purchase Contract

NorthWestern Energy has cancelled a 150-megawatt wind-power purchase contract, after state regulators questioned how Montana's largest utility chose its prospective wind-energy supplier.

NorthWestern (formerly Montana Power) is still considering options for adding wind power to its system, spokeswoman Claudia Rapkoch told Con.WEB. "It may or may not look the same as the agreement that was cancelled," she said.

That agreement, with Montana Wind Harness, called for the investor-owned utility to buy power from 150 MW of wind-energy capacity planned at three Montana sites, at an announced price of 3.1 cents per kilowatt-hour over 20 years. NorthWestern chose MWH through a competitive solicitation as part of the utility's efforts to assemble a power supply portfolio for default customers.

But the selection, announced in December, quickly came under criticism from some other wind bidders, who claimed the utility didn't choose the lowest-price proposal and questioned Montana Wind Harness' qualifications (see Con.WEB, Dec. 20, 2001).

In late June, after a lengthy consideration of NorthWestern's proposed default power supply, the Montana Public Service Commission decided the utility had not sufficiently explained how it tapped Montana Wind Harness, and thus it could not conclude the choice was reasonable. Four other proposed power resources were turned down for rate-based cost recovery, although three accepted contracts will furnish some 80 percent of NorthWestern's default supply.

The PSC's order led to NorthWestern's contract cancellation decision in mid-July, Rapkoch confirmed. "We had to look at all of our options, not just for the wind project but for all of the [rejected projects], and came to the conclusion that at least the first step had to be cancelling those contracts" as provided for in so-called regulatory-out clauses.

Meanwhile, the proposed wind project--potentially the first large-scale wind venture in the Northwest's windiest state--remains under active development, said executive vice president Doug Barba of Ameresco, which owns 99 percent of Montana Wind Harness. Barba told Con.WEB he anticipates a NorthWestern rebid for wind-power supply. "We're working with the utility and we'll at the appropriate time be ready, willing and able to move forward with any bid," he said.

Now What?

With the abandonment of the Montana Wind Harness contract and four others--from a 240-MW natural gas-fired gas-fired plant, a 100-MW coal-fired plant, a 10-MW wood/coal venture and a 5-MW hydropower project--NorthWestern plans for now to rely on market purchases for the remaining 20 percent of its default supply portfolio.

" ... our customers will receive additional benefit from lower prices that the market currently has to offer while we continue to determine a workable approach to address the balance of the portfolio in future years, including new generation contracts in the default supply mix," said NorthWestern regulatory affairs vice president Pat Corcoran, in a news release.

In the wake of the PSC's ruling, Rapkoch said, "Our first order of business is to resolve our peaking requirements," which amount to about 1,110 MW on the coldest winter day.

"Our next order is to look at some of the things that came out of the commission order ... We are still looking at both wind and adding a DSM component," she said. A wind solicitation would be the likely route, she said, but as of mid-August, "It's probably a little too early to say."

PSC Order on DSM, Wind

The PSC, in its June 21 order, noted that a number of people and organizations thought NorthWestern gave short shrift to energy efficiency and DSM resources in its proposed default power supply portfolio.

While acknowledging Northwestern's "uncertainty" over DSM given the state's public-purposes funding via electric industry restructuring, the commission concluded, "Excluding an entire category of potential cost-effective resources does not comport with industry accepted practices in terms [of] overall portfolio development."

Commissioners directed NorthWestern "to consider demand- and supply-side resources on an equivalent basis in procuring resources to serve default loads and managing the total cost of providing default service." The PSC advised the utility to further analyze energy-saving potential in its service territory, and it indicated a willingness to explore DSM cost-recovery issues.

On the wind project, commissioners primarily faulted NorthWestern for insufficiently explaining how it selected Montana Wind Harness.

The PSC order said the utility "generally followed industry accepted procurement practices with respect to exploring wind power products and prices and collecting offers from various potential producers." The utility (then known as Montana Power) received 23 proposals from 15 companies from its June 2001 solicitation for power from 150 MW of wind capacity; it shortlisted four finalists before announcing Montana Wind Harness as the winner.

However, the PSC described as "scant" and "obscure" Northwestern's explanation of how the utility came to favor Montana Wind Harness. "NWE did not clearly articulate the tradeoffs between price, proejct size, site diversity, experience, transmission access and other key wind attributes, and did not document how senior management weighed the tradeoffs" in selecting Montana Wind Harness.

NorthWestern staffer Dave Ryan had recommended the utility select proposals from Navitas Energy and Distributed Generation Systems for 75 MW apiece, the PSC said. "NWE did not provide a reasoned explanation of why it pursued negotiations with only one bidder, particularly in light of Mr. Ryan's recommendation. Without such information, the Comission does not have a basis for concluding that NWE acted reasonably in selecting MWH for future procurements."

Wind Questions

In announcing Montana Wind Harness' selection in December, the utility emphasized the proposed fixed price of 3.1 cents/KWh over 20 years. "The most important criterion was price," Rapkoch told Con.WEB at the time. Transmission access, environmental issues, multiple locations and developer ability to finance and finish the project also played into the decision, she said.

But at least two unselected bidders--Northern Alternative Energy and SeaWest WindPower--subsequently raised questions about the choice. NAE president John Jaunich told Con.WEB his company had proposed a price of 2.8 cents/KWh, although Rapkoch said the utility didn't consider it a firm or formal offer. "We did accept the lowest bid that was offered to us back in August. That was what we used to complete the negotiations," she said.

NAE and SeaWest also criticized Montana Wind Harness for lack of wind experience; Rapkoch, in response, cited the involvement of Massachusetts-based Ameresco.

Barba responded to some of the issues in a May 23 opinion article in The Montana Standard newspaper. Ameresco owns 99 percent of Montana Wind Harness, he wrote, and his firm has developed more than 1,000 MW of new generation within the last decade. Its bid price of 3.1 cents/KWh would not escalate over 20 years, he wrote, unlike the escalated prices offered by other bidders.

"MWH has secured leases on a number of sites that will allow it to build the $150 million project," he wrote, adding that financing is under arrangement and equipment purchasing is in "final documentation." --Mark Ohrenschall and Cassandra Sweet

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Gem State Catches The Wind

Idaho's First Large-Scale Wind Project
Announced by Boise Company

Idaho's first large-scale wind energy project is in development.

Boise-based Windland unveiled plans in mid-July for a 200-megawatt-capacity wind farm on a ridge in south-central Idaho, in one of the state's windiest available locations.

Construction is scheduled to begin in 2004, following environmental reviews for the proposed site on U.S. Bureau of Land Management property. Power-purchase agreements and financing are among undetermined issues.

Still, Windland's recent announcement represents a milestone, according to Dick Larsen of the Idaho Department of Water Resources Energy Division. "It begins to legitimize the concept of wind energy in Idaho," he said. At least three other wind developers are scouting the state, he noted.

Idahoans apparently have greeted Windland's plans with broad support. "In our discussions with members of the [state] executive and legislative officials and various appointed officials, they've uniformly been excited about the prospect of developing a wind resource in this state," said Windland marketing and development director Michael Heckler.

Although a handful of local complaints have surfaced about potential noise and visual problems, "The people I circulate with see it as a good source of additional jobs and diversifying our economy away from agriculture and food processing," president Carl Hanson of the local Mini-Cassia Chamber of Commerce told Con.WEB.

Wind Plans

Windland--which has operated a Southern California wind farm since 1982 and moved its headquarters to Boise about a decade ago--calls the proposed 4,600-acre Cotterel Mountain site "among the finest in Idaho" for a wind farm.

Heckler described Cotterel Mountain as a narrow 15-mile-long north-south ridge, rising 2,000 feet to 3,000 feet above surrounding valleys that include the communities of Albion, to the west, and Malta on the east. The site lies southeast of Burley, near Interstate 84.

Windland envisions turbines primarily along the ridge, perpendicular to the best winds. Heckler wouldn't reveal specific wind data, but he said most of the turbines would rise amidst winds averaging in the range of Class 5 (excellent; 16.8 mph to 17.9 mph at 50 meters high) and Class 6 (outstanding; 17.9 mph to 19.7 mph). "We anticipate a winter-peaking resource," he said.

Transmission lines run nearby on BLM land, about three miles from a planned substation for the wind farm, Heckler said.

Livestock graze on this publicly owned site, which Heckler described as "pretty arid," marked by bitterbrush, rabbitbrush, sage and small juniper trees. No permanent streams flow in the area.

Proposed Idaho wind farm site. (Courtesy of Windland)

As for wildlife, Heckler said ferruginous hawks nest in the valley to the east, while deer are also found in the vicinity. "During the next year," said a company news release, "Windland will conduct environmental and other technical studies in preparation of siting evaluations and other reviews." The National Environmental Policy Act (NEPA) applies to the proposed project on federal lands. "Basically, we're paced by the duration of that environmental review," Heckler said when asked about the planned 2004 construction start, two years hence.

He predicted "visual resource management will be the primary environmental issue" for this venture, which also needs land-use approval from Cassia County for the transmission connection.

The Chamber's Hanson called Cotterel Mountain a "prominent feature," but added, "There are a lot of other prominent features" in south-central Idaho. "In the circles I travel in [the wind project] is supported and people are looking forward to having some more jobs in the area and some construction work going on."

The proposed wind farm would create several hundred construction jobs and about 20 permanent operation and maintenance positions, Heckler said. He also projected Cassia County (estimated 2001 population: 21,577) would reap an additional $1 million in annual property tax revenues.

"The business reps that we've spoken to in the area are extremely positive," Heckler said, especially considering the upcoming closure of a J.R. Simplot Co. potato processing plant in Heyburn, a major local employer. Reporter Laurie Gehring of the South Idaho Press newspaper described local reaction to the wind farm proposal as "pretty positive. People are really interested in watching how this goes."

Other Issues

In addition to siting, many other project issues remain to be addressed.

As for power-purchase arrangements, "We've had discussions with a number of potential customers," said Heckler. "Certainly there are utilities in southern Idaho like Idaho Power, and also a large area in this very region served by BPA."

Idaho Power's 2002 integrated resource plan suggests a "pilot wind generation project to more accurately define the costs and benefits of such a project," with possibilities for expansion. The investor-owned utility's IRP expresses little interest in wind as a seasonal energy and capacity resource, although it said a wind project could materialize with increased customer green power demand, regulatory or legislative action, or changes in the utility's resource needs. "There's possibilities we could invest in wind in the future, but we don't have any specific plans at this time to do so," said utility spokesman Russ Jones.

BPA renewable resources program manager George Darr said Bonneville has had "some discussion" with Windland, but the project is "not under active consideration" by the federal power marketing agency.

Project financing, meanwhile, awaits completion of the environmental review, Heckler said. He declined comment on prospective technologies; the company press release cited intentions to use "state-of-the-art, commercially proven European or U.S. wind turbines."

Another unknown is the fate of the federal wind energy production tax credit, which is currently scheduled to expire at the end of 2003, "I can't imagine a large-scale project anywhere in the county going forward without the PTC being extended," Heckler said. "I would believe it would stop every utility-scale wind development in the country.

Wind in Idaho

Windland is the first company to publicly announce plans for an Idaho wind farm, but others are putting up figurative fingers to the state's wind. IDWR's Larsen said enXco has more than a dozen agreements with southern Idaho landowners for wind-monitoring towers, and at least two other developers reportedly are exploring the state.

Idaho's most promising wind resources tend to be located in the south, which also features extensive transmission availability, according to Larson. "Because we've got so many mountains and ridges, there's a lot of sites with wind," he said.

Questions will arise about aesthetics and environmental impacts of wind farms, Larsen said, yet, "I think that in this case wind power already has a proven track record in other areas. That's ... one of the reasons the Windland project is so important. It begins to legitimize wind energy also in the eyes of the citizens.

"It's a great milestone for Idaho," he said. "It's not just the size. It's not just the economic development. It's the ability to show wind power is feasible in Idaho. That's worth its weight in gold alone."--Mark Ohrenschall

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Wind Barrier Toppled

BPA Exempts Wind Power from
Energy Imbalance Charge

Bonneville Power Administration has exempted wind power from its principal energy imbalance charge, toppling what some considered a major cost barrier and constraint to the growth of Northwest wind energy.

BPA's July decision, promoted by the federal power marketing agency but also backed by wind developers, sellers and supporters, will benefit all wind-energy plants in the Bonneville's control area, including those now selling output to BPA.

The exemption from the 10 cents per kilowatt-hour charge for delivering less than scheduled power is good for only one year, beginning in October. As a stopgap, BPA and wind developers have agreed to share imbalance charge costs. Wind advocates hope to expand the exemption in BPA's upcoming general transmission rate case.

Developers Sought Exemption

Wind-energy developers in BPA's 300,000-square-mile control area had sought an exemption from what they viewed as a debilitating transmission fee.

The Generation Imbalance Service (GIS) rate is charged to generators when their hourly amount of delivered energy falls outside an allowed deviation of plus or minus 1.5 percent of scheduled output, or 2 megawatts, whichever is larger. The fee is the greater of BPA's incremental cost of energy, plus 10 percent, or 10 cents/KWh, when the energy delivered in an hour is less than that scheduled.

Bonneville's decision to free wind power from the GIS rate was seen as a critical component to maintaining the accelerated pace of wind development in the Northwest, where some 360 MW of new wind capacity were installed or purchased by regional utilities in 2001.

"This penalty acts as one of the most significant deterrents to the development of wind in our region," said Ann Gravatt, senior policy associate at the Renewable Northwest Project.

Without the agency's recent decision, "Wind development in BPA's service territory would have ground to a halt," said Jim Caldwell, policy director for the American Wind Energy Association.

"A whole continent's transmission operators are watching this precedent closely," said Ralph Cavanagh of the Natural Resources Defense Council. "We look forward to an epidemic of sincere imitation."

Even U.S. Secretary of Energy Spencer Abraham weighed in, asserting that BPA's effort "will help ensure the continuous development of wind resources in the Pacific Northwest."

Much of the momentum to release wind from the GIS rate was driven by BPA's own appetite for renewable power. The agency is buying 64 aMW of wind output from six projects, said renewable resources program manager George Darr, and five more proposed wind farms are under active consideration.

Darr said integrating wind energy supplies into Bonneville's transmission system is easier and saves on control area costs. But, he said, the imbalance charge emerged as a sleeper issue as the agency negotiated recent wind deals. "It came up at the end of contract negotiations, and it was a difficult issue to get past," Darr said. "To developers it looks like a huge unknown liability." Ultimately, he said, BPA ended up signing agreements to share the imbalance costs with the developers and sellers of two recently completed wind deals.

'Unintended Burden'

The 10 cents/KWh penalty is meant to enhance reliability, encourage accurate scheduling and discourage gaming. But Stephen Oliver, a vice president in BPA's Power Business Line, said the penalty also acts as an "unintended burden" to the developers of intermittent resources like wind who, by definition, have less control over the dispatchability of their resources. "They can forecast the output but are subject to changes in that output due to forces over which they have no control," Oliver wrote in a letter to the head of BPA's Transmission Business Line.

Oliver cited a BPA analysis based on Northwest conditions in which variations in wind led to levels of generation outside the deviation band in more than 2,000 hours during one year (nearly 25 percent of total hours), even when wind condition estimates were made within two hours of dispatch.

In the agency's July 15 record of decision, BPA administrator Steve Wright addressed the financial impact of foregoing the imbalance charge. The Independent Power Coalition (Avista Energy, PPL Montana and TransAlta Energy Marketing) claimed BPA took in as much as $900,000 in GIS wind revenue during a four-month period in 2002. Wright said that estimate was misleading because it didn't include revenue BPA received for providing imbalance energy. But BPA reportedly collected $600,000 in GIS revenue during the first four months of 2002. Wright wrote, "While some revenue would be foregone ... TBL does not believe the lost revenue would be significant."

Wright also rejected arguments that the exemption discriminates against other intermittent resources, such as Klickitat County PUD's H.W. Hill Landfill Gas Power Plant in south-central Washington. He said wind farms are "uniquely situated" compared to other intermittent resources, and cited evidence that the PUD paid little in imbalance charges compared to wind plants in BPA's control area.

BPA's Oliver--in a letter sent to the head of BPA's TBL and also signed by representatives of AWEA, RNP, the Last Mile Electric Co-op, Eugene Water & Electric Board, PacifiCorp, SeaWest WindPower, Zilkha Renewable Energy, Cielo Wind Power, Northwestern Wind Power, Energy Northwest, the Oregon Office of Energy and the Bonneville Environmental Foundation--originally asked for elimination of the 10 cents/KWh imbalance penalty for all intermittent resources, unless the deviation is intentional. Oliver said wind developers also wanted to average imbalances over a month instead of hourly tracking, and sought elimination of the 10-percent adder to BPA's incremental cost for imbalances outside the deviation band.

Ultimately, the agency saw fit to eliminate only the 10 cents/KWh penalty for wind, retaining an underdelivery charge of BPA's incremental cost (plus 10 percent), to be based on an hourly energy pricing index.

The exemption is effective for only one year, starting Oct. 1, 2002. Chuck Meyer, vice president in BPA's TBL, said his department would consider the other measures the group recommended when it prepares for its 2004 general transmission rate case later this fall. --Ben Tansey

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Distributed Generation in Practice

Seattle's First Residential Net-Metered PV System
Hooks to City Grid with Relative Ease

Seattle's first residential net-metered solar electric system fits the usual profile of power from the sun--environmentally clean, energy-independent, surprisingly prolific in this cloudy clime, and quite expensive.

It also proved relatively straightforward hooking up with the city of Seattle and its municipal utility, reported the contractor.

"It's really not that difficult, I found out," said Jeremy Smithson of Puget Sound Solar, who in summer 2001 installed the 1.5-kilowatt-capacity photovoltaic system on the north Seattle home of Tom Allsopp.

"There are a few hoops you have to jump through," he continued, "but it's really nothing compared to putting a second story on a house." He said only a couple of government agencies are involved, the electrical work is fairly simple, the components are easy to install, and the information required for approval is readily accessible.

"It's a pretty simple process," Smithson concluded in a June 26 presentation to the Northwest EcoBuilding Guild's Central Puget Sound Chapter in Seattle.

Smaller Bills from Home-Generated Power

Allsopp told the same gathering his solar PV installation was added, at Smithson's suggestion, to a home remodeling project that included a new south-facing roof. After some initial aesthetic concerns--"I remembered the old systems were not so attractive"--he has come to appreciate the much smaller bills from Seattle City Light. (For the recent May-June billing period, Smithson said later, Allsopp's net power consumption totalled slightly more than 10 kilowatt-hours and his bill amounted to roughly $16, including $10 volunteered for low-income bill assistance and about $5 for the base service charge. "We're hoping his next bill will be negative.")

PV panels on Tom Allsopp's Seattle home. (Courtesy of Puget Sound Solar)

The 34 43-watt modules generate roughly 75 percent of Allsopp's total power needs, according to Smithson. Allsopp said his dwelling has a very modest electric load, as the single homeowner uses natural gas for hot water and heating, and by choice foregoes a television and microwave oven.

Allsopp expects to recoup the $8,200 total PV system cost in about 30 years, but he said economics were not his motivation. "I felt it was the right thing to do in the way of stewardship of resources. It's worked very well."

He also praised Seattle officials as "very supportive" for this first grid-connected residential PV system in the Northwest's largest city.

Allsopp owns Seattle's first customer-owned net-metered system, according to City Light's Jack Brautigam; a PV system at Seattle Center is city-owned. Five more publicly owned net-metered PV systems (three in schools, two in parks) are planned for installation within the city later this year, he said.

Interconnection, Net-Metering Processes

Smithson, a longtime home remodeler who said he entered the solar business after the unveiling of the Bush administration energy plan, outlined the interconnection and net-metering processes for Allsopp's system.

"First," he said, "I figured out the utility would want to know some stuff." He plotted the specific location of the solar array, power inverter and meter, for the benefit of utility and fire crews that might need to shut off power. He also created a detailed schematic drawing of the system's wiring, although only basic line drawings were required.

Smithson visited Seattle's Department of Design, Construction and Land Use downtown and paid $42 for an electrical permit to add a circuit to Allsopp's existing power system. (Seattle requires a building permit only if PV systems weigh 1,000 or more pounds, or if they are structurally complex, part of building additions/alterations valued at more than $4,000, or require stand-alone support structures valued at more than $4,000. PV systems also are exempt from Seattle land-use requirements if they meet height and yard setback criteria, according to a DCLU client assistance memo on solar systems in single-family residential zones.)

Rooftop PV panels on Tom Allsopp's home. (Courtesy of Puget Sound Solar)

Seattle PV system components must be certified by a "nationally recognized testing laboratory," such as Underwriters Laboratories. Allsopp's system includes BP Solar thin-film modules and a Xantrex inverter, acquired through Western SUN Cooperative. Smithson noted that owner's manuals typically include UL certification letters.

Among electrical issues, Smithson cited a National Electrical Code provision requiring a label on the main house panel indicating another power source on the premises.

Seattle interconnection standards for customer-owned, grid-connected systems of 25 KW or less capacity are spelled out in a one-page SCL document. Those standards include compliance with various NEC and Institute of Electrical and Electronics Engineers (IEEE) rules, particularly automatic disconnection provisions, along with safety and operating procedure criteria.

For net metering, Seattle provides another one-page form seeking information on the applicant, electric system, designer and installation contractor, and installation date. This is an appendix to a four-page interconnection and net metering agreement setting the terms of net metering (essentially at the retail rate), interruption or reduced deliveries, interconnection, maintenance and permits, City Light access to the customer's premises, and city indemnity for equipment or customer failures. (These documents are available on City Light's Web site at http://www.ci.seattle.wa.us/light/solar/.)

The city had some concerns when it first looked into net metering, said Brautigam. "But it's less of an issue technically than it was three years ago." Net metering is much more common now among utilities, the federal electrical code has been updated and city engineers have been brought into the process, he noted.

It takes about day to install a PV system, Smithson said, and another half-day to finish the wiring. Hosing down the panels is about the only regular maintenance needed, Allsopp said. --Mark Ohrenschall

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Demand-Side Resurgence

Puget Conservation Strategy Features
More Financial Incentives

Puget Sound Energy's expanded conservation strategy features higher financial incentives for commercial/industrial customers and new rebates for residential energy-saving measures.

Washington's largest utility expects to spend about $28.5 million on electricity and natural gas conservation programs over the next 16 months, and save nearly 20.2 average megawatts of power and 2.8 million therms of gas, under a plan approved Aug. 28 by the Washington Utilities and Transportation Commission.

That represents roughly a doubling of Puget's electric energy-saving aquisitions from its previous three-year plan, according to Puget business development director Jennifer Tada. This will increase the average residential electric customer bill 1 percent, through a revised conservation tariff rider that will boost PSE revenues nearly 2 percent, according to the WUTC.

Puget filed its new conservation agenda Aug. 1, as promised in a June rate-case settlement that included the resurgent demand-side component.

"In general, we wanted to make sure we were covering all customer segments, and also wanted to obviously target those areas that had the most opportunity for cost-efficient savings," said Tada.

The biggest single program in the plan focuses on commercial/industrial retrofits, which account for about 40 percent of the estimated electric spending and savings. Puget also provides a range of programs designed for large industrial customers, small businesses, public entities and households (including low income), along with initiatives in market transformation, research and energy education.

"I think it's definitely an improvement in the [program] mix," said WUTC staffer Joelle Steward. "They're really reaching all customer segments with this new portfolio." In particular, Puget residential customers will have access to more financial incentives for saving energy, not simply information as had been the focus, she noted.

Stakeholders praised Puget's conservation plans.

"The level of effort and financial commitment embodied in this plan re-establishes PSE as a major utility player in the conservation arena," said Stan Price of the Northwest Energy Efficiency Council. Danielle Dixon of the Northwest Energy Coalition called the filing "an important step forward for the utility in restoring its once nationally acclaimed investments in energy efficiency." And Liz Klumpp of the Washington Office of Trade and Economic Development said the plan "reflects a change in management" at Puget. "For the first time in six years--since the merger [with Washington Natural Gas]--PSE is committing to reinvigorate its conservation programs."

Adrift No More

The investor-owned utility, which serves much of the populous Puget Sound region outside Seattle, Tacoma and Snohomish County, has acquired substantially more energy savings than any other Northwest utility--a reported total of 216 aMW from 1978 to 2000, according to Northwest Power Planning Council figures. But Puget conservation numbers plunged in the late 1990s, dropping as low as 0.5 aMW saved in 1997, although rising somewhat since, to 12.3 aMW in the energy crisis year of 2001.

"A year ago, when we started the rate case, the company was adrift on the conservation front," Puget rates and regulation director George Pohndorf told Con.WEB in June. "Like other utilities, we were struggling with what conservation means in the current environment." He said Puget faces a dwindling resource surplus because of load growth and expiring contracts.

In the rate-case settlement--which called for an overall 4.6-percent increase along with a power cost adjustment mechanism--Puget pledged to pursue at least 15 aMW of programmatic electricity savings for the year beginning in September and at least 20 aMW through the end of 2003. Other conservation features included an updated assessment of energy-saving potential, financial penalties if Puget falls short of targets (starting in 2004-2005) and some direction for how the IOU spends an estimated $3 million in annual funding from Bonneville Power Administration's conservation/renewables wholesale rate discount.

The overall agreement called for a new program for low-income bill assistance and continuation of the time-of-use pricing program for small customers, through 2003. (See Con.WEB, June 28, 2002, for more information on the rate-case settlement.)

Conservation Programs

Puget's conservation program filing reflects a consensus from the utility's conservation advisory committee, according to the WUTC's Steward. "All parties will have their full support behind it," she said before the commission's approval.

Through this collaboration Puget devised a program mix featuring higher financial incentives for commercial/industrial efficiencies, and new rebates for residential energy-saving measures. "I think residential customers will see the most change," Steward said. "There's a lot more active work with the residential customers, more incentives directed toward them, not just information."

On the electric side, a slight majority of total funding is earmarked for commercial, industrial and public-sector customer programs--about $13.8 million out of $25 million altogether.

Commercial/industrial retrofits are the biggest single effort, with $10.6 million in funding and an estimated 8.1 aMW in savings through December 2003. Puget formerly limited financial incentives in this category to 50 percent of incremental cost, according to Tada, but the new initiative provides rebates of up to 70 percent for energy-saving projects with paybacks beyond eight years. This formula also applies for the commercial/industrial new construction program.

"The new incentive structure will encourage customers to look closer to more aggressive measure packages in their buildings," according to NEEC's July/August newsletter. "Of course, PSE incentives will still be bound by cost-effectiveness tests, but they will encourage more comprehensive projects at customer facilities."

NWEC's Dixon said she is "particularly excited about PSE pursuing a holistic approach to energy efficiency within commercial and industrial new construction, as well as providing incentives to move new construction at least 10 percent beyond the local energy code."

Other Puget initiatives for non-residential power users include industrial self-direction ($1.8 million in funding, 2.2 aMW in estimated savings), resource conservation manager ($146,667, 3 aMW), small business energy efficiency retrofits ($866,667, 0.3 aMW) and light-emitting diode traffic light installations for local and state governments ( $133,333, 0.2 aMW).

For residential electric customers, Puget will continue to furnish a range of efficiency-related information, such as free energy audits/analyses/reports, personal energy advisors, brochures and Web-based services.

In addition, Puget will help residential customers financially, through rebates for compact fluorescent lamps and fixtures ($2.3 million in funding, 2.5 aMW estimated savings) as well as incentives for high-efficiency natural gas water heaters and furnaces. "We are trying to bundle a lot of these things for the builders, to make it easier for them to take advantage," said Tada.

These and other natural gas initiatives are expected to cost $3.4 million over the 16-month period, and save 2.8 million therms.

The conservation plan also earmarks $2.8 million for Puget's ongoing participation in the Northwest Energy Efficiency Alliance, $1.6 million for residential low-income retrofits, slightly more than $1 million for energy education in local schools, and $400,000 for market research on conservation potential.

Puget also will undertake several pilot ventures. One earmarks $1.1 million to promote fuel-switching for space- and water-heating in selected locales. "The intent is to look at electrically constrained areas," said Tada. "What can we do to convert customers to gas and reduce strain on the electric system?" Other pilot initiatives will focus on residential duct systems and commercial/industrial gas boiler tuneups.

This conservation plan ends in 16 months, Tada noted, and a new least-cost planning effort will help inform its successor. "Out of that we expect to get new targets, look at new programs, add new ones, and refile before the end of 2003," she said. The rate-case settlement contained no expiration date for the conservation element, although it specified a review by October 2007. --Mark Ohrenschall

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Two New Ventures

Alliance Expands Commercial
Building Efficiency Efforts

The Northwest Energy Efficiency Alliance has expanded its efforts in the commercial building market.

Two new ventures, one focusing on the operating performance of existing buildings and the other on windows, were approved by the Alliance board at its July 22-23 meeting at Priest Lake in northern Idaho. About $4.1 million total were allocated for these programs, which fall under the Alliance's Commercial Buildings Initiative--the largest single venture undertaken by the regional market transformation collaborative.

Also approved at the board meeting was a new program to promote underground drip irrigation around the region, and added funding for existing ventures involving residential lighting, home products and manufactured housing, as the Alliance works on an overarching strategy for the residential market.

Meanwhile, the Alliance has unveiled its revamped BetterBricks Web site, which provides information to professionals on energy-efficient building practices, both in design and operation.

Building Performance Services, Windows

Commercial buildings use roughly one-fourth of Northwest electricity, according to the Alliance. Yet these buildings typically run at less than peak efficiency.

Building Performance Services aims to expand the market for services that improve building operations, such as better operations and maintenance, building system tuneups and commissioning. "There's no structure to the market right now for anyone trying to sell enhanced services for operations into the commercial [building] sector," said Alliance project development manager Jeff Harris. Replacing equipment is a viable enterprise, he noted, but much uncertainty exists in the marketplace about building performance services, such as what they provide and how much they're worth.

Through stakeholder discussions the Alliance found a number of barriers in this particular market, including shortages of clearly defined services, qualified service providers and ways to identify opportunities within buildings and capitalize on them.

Working with utilities, service firms and others, the Alliance plans to target both the supply and demand sides of this market. It wants to help develop a strong regional infrastructure of well-qualified building performance service providers, and demonstrate the value of such services.

"What we're trying to do with BPS is to create a market structure that breaks down the various pieces of improving the performance, and trying to put those in some logical sequence," said Harris. "If you're a building owner and you buy the argument about improving your building, you can clearly see a path to know what services you need to pay for, how much, and what [you're] going to get out of it."

That process begins with screening buildings, followed by specific scoping of opportunities, which can lead to enhanced operations and maintenance work, building tuneups, commissioning and/or capital improvements/equipment replacement projects. A quality assurance component also is included.

Building Performance Services involves three primary activities, according to the Alliance. One is developing a market infrastructure, such as technical tools, service definitions and guidelines, and education/training opportunities. A second element will test the Alliance's approach, for building owners/operators as well as service providers. Third, the Alliance and its partners (utilities and others) plan to conduct six to eight pilot programs around the region, each involving 20 to 30 buildings.

The Alliance board voted unanimously to provide $2.2 million for Building Performance Services (plus $250,000 for evaluation). Another $1.2 million is anticipated from utilities and $700,000 from project participants, for an overall total of $4.2 million. Estimated savings are 5.3 average megawatts.

Another commercial-sector venture unanimously approved by the Alliance board targets energy-efficient commercial windows, with $1.6 million in total funding, plus $1.5 million in anticipated private-sector investment. This endeavor came to the Alliance as an unsolicited proposal from West Wall Group.

This venture concentrates on the market for so-called punched openings windows, which are predominantly low efficiency and put together at building sites. Window manufacturers, according to the Alliance's market research, see energy-efficient factory-built windows as a potential selling point.

The Alliance plans to expand this market by developing product specifications, brand identities and supply-side marketing, and reaching out to utilities.

Estimated program savings are 4.6 aMW. If the program succeeds, Harris said, the benefits should exceed the costs, leading to an estimated levelized utility cost of minus 0.9 cents/KWh.

Agricultural, Residential Ventures

The Alliance board also approved a new agricultural-sector project and added money for three existing residential initiatives.

The agricultural venture centers on underground drip irrigation systems, a proven but little-used technology that promises energy savings of 20 percent or more from applying water more efficiently, and potentially even more from reduced pumping pressure. This approach to irrigating fields also can lead to higher crop yields, reduced runoff and labor savings, according to the Alliance.

To overcome a lack of confirmed success of underground drip irrigation around the region, this three-year pilot project will entail demonstration projects, spreading the word around farm country, and local partnerships. The goals are to show underground drip irrigation as an economical method of watering hay, while expanding awareness and increasing market share in the 2.2-million-acre target market that now uses certain types of pressurized irrigation systems.

The board allocated $254,000 for this project. Clearwater Supply of Othello, WA is the primary contractor, in partnership with state agricultural extension offices, manufacturers, distributors, water-related agencies and trade associations. Potential energy savings are 0.1 aMW through 2005, and 0.47 aMW by 2010.

On the residential side, the Alliance board approved a $1.8 million extension through 2003 for the Energy Star Residential Lighting program, and extended field services (also through 2003) at a cost of $645,137 to the Energy Star Home Products program.

The Alliance board also allocated $100,000 to continue the Super Good Cents Manufactured Housing project through the end of 2003.

These actions are near-term measures while the Alliance develops an overall strategy for the residential market. --Mark Ohrenschall

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Autopilot PC Savings

Energy-Saving Software Product
Garners BPA C&RD Endorsement

Shortly after its first major sale of 1,000 units to Mt. Hood Community College, an early pilot user, Portland-based EZConserve received an even bigger boost from Bonneville Power Administration in August.

EZConserve's flagship energy-saving software, the Surveyor Network Energy Manager, received a "deemed savings" designation from BPA's conservation and renewables wholesale rate discount, opening the door to credits and incentives for utilities whose customers use this product.

Surveyor is the first software program to join the ranks of compact fluorescent lamps, variable-speed motors and other efficiency technologies in the C&RD program.

Surveyor can command an entire network of personal computers to power down from an organization's central server, rather than rely on the energy-consciousness of individual users. After gathering baseline energy-use data from the client PCs, Surveyor manages use patterns and generates detailed reports on the subsequent savings.

Big Savings in Powering Down Computers

EZConserve executives are emphasizing a Lawrence Berkeley National Laboratory study that shows office equipment constitutes 7 percent of commercial and public office energy use, and from 25 percent to 45 percent of the power bills of banks, computer companies and other information-intensive businesses. As much as $1.6 billion and 24 million megawatt-hours of energy is wasted by businesses every year because 75 percent of computer users disable or fail to activate the energy-saving capabilities of their units, or they erroneously believe turning machines on and off can be damaging, according to the study.

In November 2001, EZ Conserve received a $750,000 matching grant from the Northwest Energy Efficiency Alliance to help market Surveyor. An independent evaluator, Quantec, is expected to soon release quantitative results from the first round of tests, but early estimates by trial users suggest the software at its current price--$12.50 per unit before Sept. 1 and $15 each thereafter--could pay for itself within six months to two years, depending on baseline habits, energy prices and the number of PCs at a given location.

The Regional Technical Forum, which evaluated Surveyor for the C&RD program, concluded that an average of 200 kilowatt-hours could be saved annually by each PC-monitor unit networked to Surveyor. That translates to 1 million KWh saved for an organization with 5,000 networked PCs--and hundreds of thousands of dollars a year in lower energy bills.

Some Marketing Resistance

Though pilot program participants reported positive results, Surveyor has encountered some resistance to the product based on its energy-conserving merits alone.

"What we find is that we have to let people know that there are other reasons to own this product," said Ken Anderson, the Alliance's Surveyor project manager. "We're smart enough now to know that we need to seek those things out and to emphasize" non-energy benefits. "It's part of understanding our customer."

Security Benefits

For EZConserve, that means touting the security benefits of turning PCs off when not in use--thereby restricting access to potentially sensitive information--as well as protecting against the spread of viruses. Surveyor users also have cited the availability of EZConserve customer service and technical support as an important benefit.

Surveyor's current version is compatible with all operating systems post-Windows 95, and a new version set for release in October will simplify user interfaces, allowing more real-time energy use reporting, consumption forecasting and "what if" scenarios, according to Michael Thelander, EZConserve's vice president of products and marketing. The new version will also include more asset management tools that can inventory PCs on the network and determine the mix of operating systems in use.

Thelander said EZConserve's target market is public and semipublic organizations. Discussions with some Fortune 500 companies have been productive, he said, but the company has found a barrier in the private sector attitude that investing to create new money is better than investing to save money.

In addition to Mt. Hood Community College, Portland's Metro regional government has also agreed to buy nearly 500 units, and EZConserve has proposals pending with some of its larger-scale pilot participants.

User Comments

Energy resources manager Patricia Easley of Oregon State University, a pilot Surveyor user, is hopeful the product can be implemented throughout much of the university. "It was amazing the number of departments that immediately got the concept, understood it, and said, 'Yes, we want to try this,'" she said. "I'm keenly aware that computer energy management is an area that we can totally and truly have an impact, a curtailment to reduce our energy expenditures."

Curt Nichols, senior energy manager in the city of Portland's Office of Sustainable Development, said the two dozen trial units at OSD are showing a payback of three to four years, but, "The people that work in this office tend to be quite aggressive about saving energy on their machines anyway. We think that is underrepresentative of the savings potential in the rest of the city."

The city of San Jose, CA--where electricity rates currently average 10.5 cents per KWh--was approached by EZConserve in January, and after determining that shutting their machines off and on daily would not damage the network infrastructure, launched a trail with seven machines. San Jose associate engineering technician Walter Lin calculated a payback of eight to 10 months, and the city is expanding its trial to 50 machines.

Portland Metro's information technology director David Biedermann also thinks the software will pay for itself in under a year. An informal poll in his office--someone walking around after hours counting PCs left on--showed a large percentage of computers still running. Even in that office's conservation-minded environment, Surveyor would have an impact, Biedermann said. "Its pretty much set it up, and let it go. We automatically save money every year." --Ben Gilbert

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Winning Project

New Lighting, Heating Systems Reap Big
Energy Savings for Washington Air Force Base

A partnership between Bonneville Power Administration and Fairchild Air Force Base in eastern Washington is turning a giant energy leak into $400,000, 3.5 million kilowatt-hours and 22,500 million British thermal units in projected annual energy savings.

The project--a response to a Clinton-era executive order for all federal agencies to reduce energy use at their facilities by 35 percent from 1985 levels by 2010--targets Fairchild's aircraft maintenance building that has four hangars along with offices and shops.

"This was a win-win-win project," said BPA's Rick Miller. "Fairchild is meeting its commitment to reduce energy usage under the executive order, and also saving taxpayer dollars, reducing their operating costs and improving the working environment for the maintenance crews.

"Secondly," he continued, "Bonneville enjoys a load reduction in our delivery of required power to Fairchild, which means that, as of recent time, it reduces our exposure to a volatile wholesale market." The third "win" Miller cited is that most of the contractors hail from the nearby Spokane area, which contributes to the local economy and keeps warranty maintenance of the new systems in proximity.

BPA, as Fairchild's direct power provider, fronted the $3.5 million for efficiency retrofits, to be repaid over the next 10 years through a service charge on Fairchild's bill.

Hangar Challenges

The hangar facility, which houses KC-135 refueling tankers, was a prime candidate for significant energy efficiency improvements. This 1940s-era structure was still using its original heating and lighting systems, and, said Miller, "The Air Force and the government could not afford to build this building today. It is a very sound building, with huge structural beams. It would be like trying to build a battleship the way the World War II battleships were built. This is kind of like an Air Force version of a battleship."

Hangar lighting before the retrofit. (Photo courtesy of Fairchild AFB)

It presented some daunting challenges, namely, how to efficiently heat and light nearly 500,000 square feet of floor space.

BPA realigned and weather-stripped the 40-foot-tall, 240-foot-wide hangar doors, an important but difficult step. Project leaders had to find the 60-year-old doors' original manufacturer, then trace the myriad companies through which the manufacturer changed hands, and finally locate the producer of the rubber strips between the doors' panels to replace the hardened, cracked strips. Automatic closure controls were also installed on vehicle access doors that previously relied on manual closing.

The biggest savings, though, derive from the heating system changeover.

In the old system steam was piped from a central plant to heater coils in the hangars, where heated air was blown through the room. "From the time the steam leaves the steam plant and reaches the building, we lose about 46 percent of the effective heat," said Miller.

That system has been replaced by 284 natural gas-fired infrared heaters mounted around the periphery and near the ceiling, with reflectors directing heat downward. This technology heats objects and people more than air, and creates a heat sink on the cement floor, contributing to less escaped air. Without blowers, the infrared heaters are much quieter and use less electricity, saving an estimated $243,000 per year.

Significant savings are also expected from the installation of 240 of 3M's patented Sterner Light Pipe System--40-foot polycarbonate tubes, each with light from a 1,000-watt metal halide bulb at one end diffused along computer-inscribed prisms that refract light evenly down the pipe. The facility previously used 286 400-watt to 1,000-watt pendant fixtures in each hangar. Installation of the lights has been completed in three of the hangars, for an estimated annual energy savings of 877,000 KWh.

Fairchild energy manager Bill Turner said he has fielded inquiries about the light pipes from several other bases, but the light pipe retrofits by themselves may not meet the required payback period of 10 years or less. Fairchild's lighting retrofit was feasible because the infrared heating system was so much more efficient than the steam system that it reduced the payback to less than four years.

More Efficiencies

The new light pipes. (Photo courtesy of Fairchild AFB)

Even this bundling of efficiency projects will lead to only a 2-percent to 3-percent reduction from 1985 energy consumption levels, according to Turner. Most of the increased efficiencies to meet the executive order requirements will need to come from replacing the base's central steam plant with a series of boilers to overcome distributed heating losses over miles of underground pipes. The aircraft maintenance building, he added, "is very large, but it's only one of many."

As part of the executive order, Fairchild is replacing quartz lights with metal halides on an exterior B-52 bomber pad, a retrofit costing $60,000 with expected annual energy and maintenance savings of $157,000. The base is also installing 63 energy-saving VendingMiser devices on vending machines.--Ben Gilbert

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Cradle to Cradle

From The Molecule to The Monolith:
Make Waste Equal Food, McDonough Says

If William McDonough's new book, "Cradle to Cradle: Remaking the Way We Make Things," feels funny to touch--almost stretchy, but not quite--it's because it's published on special plastic polymer pages that are infinitely recyclable. The compound retains its structural integrity through each generation it's reformed for reuse.

McDonough and co-author Michael Braungart envision a world where worn-out car parts are similarly reusable, excess textiles fertilize flower beds and creative chemical engineering substitutes safe substances for toxic ones at every level of every production process. This thinking has energy implications as well.

McDonough's oration on the book's tenets received a standing ovation July 31 from a capacity crowd at the University of Oregon's Erb Memorial Union Ballroom in Eugene, where he spoke as part of the Northwest Energy Education Institute's Energy Management Certification program speaker series.

'A New Design'

Architect McDonough and partner and design chemist Braungart are pursuing what McDonough calls "a new design," from the molecular to the societal level.

Western culture, through unsustainable waste and pollution, has become "strategically tragic" by default, he said. The answer: a design ethos for everything from clothing to buildings to cars to cities, in which "waste equals food," meaning inputs either nourish the landscape or nourish the next generation of inputs.

The implications for energy efficiency and building technologies can be seen in McDonough's work, in which he characteristically optimizes the local natural environment unique to each project, from solar income to indigenous plant species that filter wastewater to support adjacent wetlands that inspire the workers or residents of the building to feel, themselves, "indigenous"--a key concept in local communities adopting cradle-to-cradle practices.

The McDonough-designed environmental studies hall at Oberlin College in Ohio, for example, employs 3,700 square feet of solar panels expected to generate 75,000 kilowatt-hours annually; geothermal wells for heating and cooling; and an indoor and outdoor living machine (biologically based wastewater treatment) for quick water absorption and slow release.

The City Hall building in Chicago is capped with a vegetated roof, using from 4 to 16 inches of soil depth and 100 species of plants to lower summer air temperatures, reduce energy demand and temper storm water runoff.

Nike's European headquarters campus in the Netherlands uses ground-source heat pumps and building design and orientation to heat, cool and light the buildings. It captures and stores 3.9 million liters of storm water annually for irrigation and gray water needs.

Efficiency, Sustainability 'Less Bad'

McDonough spurns buzz words like "efficiency" and "sustainability," however, because they seek to be "less bad," using fewer deadly chemicals and more slowly depleting finite resources, as opposed to being actively good, or using only nourishing inputs and clean sources.

As the magnitude of consumption and waste rises faster than the ability of efficiency or sustainability to curtail it, he said, humans should begin to reinvent the species while resources are still available to pursue research and development, and not mere survival.

McDonough urged listeners to move from conceptualizing the built environment as a machine for living in, to an extension of the natural environment. In the utopian limit, companies would lease the use of superior products rather than sell consumables; customers, rather than throw away or recycle computers, desks, drapes, light fixtures, carpets and cars into inferior materials, would return them to the producer for upgrades as part of lease agreements.

McDonough said he never asks a client to adopt a technique that will cost more in the long run than traditional methods, and most will save money, such as a Ford manufacturing plant he designed in Brazil, where a living machine wetland using native species for wastewater purification saved the company millions in sewage fees and regulation compliance, without requiring impermeable concrete pipes to be laid through the rain forest. "Regulation is a signal of design failure," he said.

"The filters of the future will be in our heads rather than at the end of pipes," he told the Eugene audience. Current lists of efficient lighting products or safe building materials are often too heavily influenced by manufacturers, or focus on "less bad" practices like recyclables, he said. McDonough and Braungart's firm, MBDC, catalogues materials according to "intellectual filters" based on carcinogenic, toxic, pollution and waste potential. He often speaks in terms of design "assignments" as a way to think differently rather than operate by rote: look at the materials of a product, catalogue the chemicals used and filter out the bad ones while finding a way to make the same product.

McDonough, who lives in a house designed by Thomas Jefferson, believes that as an architect Jefferson was more a designer of ideas and legacies than a politician. Jefferson would perceive today's "strategically tragic" culture as a form of remote tyranny over future generations, and perhaps would design a new declaration of independence, McDonough said.

Acoordingly, the evaluation of design projects should be expanded from cost, performance and aesthetics to include ecological intelligence (life), justice for the people making and using the materials (liberty) and fun--the pleasure of working or living in the building or inhabiting the neighborhood (pursuit of happiness).

Under these conditions, McDonough posited, people won't have to pursue conservation as a matter of personal virtue; humans will celebrate population growth and revel in abundance. In other words, utopia.--Ben Gilbert

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