1. Northwest Power and Conservation Council The Role of Electric Energy Efficiency in Reducing PNW Carbon Emissions Tom Eckman Manager, Conservation Resources Northwest Power and Conservation Council Presented June 8, 2006 Global Warming in the Pacific Northwest:Consequences and Choices

2. Northwest Power and Conservation Council slide 2 What You’re About To Hear Energy Efficiency and the Current PNW Resource Mix Energy Efficiency and the Current PNW Resource Mix Regional Efficiency Goals Regional Efficiency Goals –5 th Northwest Power and Conservation Plan What’s Behind the Goals What’s Behind the Goals –Money, Risk and Carbon Benefits Could We Do More? Could We Do More?

3. Northwest Power and Conservation Council slide 3 PNW Energy Efficiency Achievements 1978 - 2004 Since 1978 Utility & BPA Programs, Energy Codes & Federal Efficiency Standards Have Produced Nearly 3000 aMW of Savings.

4. Northwest Power and Conservation Council slide 4 Cumulative 1978 - 2004 Efficiency Achievements by Source

5. Northwest Power and Conservation Council slide 5 Energy Efficiency Resources Significantly Reduced Projected PNW Electricity Sales

6. Northwest Power and Conservation Council slide 6 Energy Efficiency Met Nearly 40% of PNW Regional Firm Sales Growth Between 1980 - 2003

7. Northwest Power and Conservation Council slide 7 Utility Acquired Energy Efficiency Has Been A BARGAIN!

8. Northwest Power and Conservation Council slide 8 Regional Utility Conservation Acquisitions Have Also Helped Balance Loads & Resources Response to West Coast Energy Crisis Response to NW Recession Response to “Restructuring Discussions” Creating Mr. Toad’s Wild Ride for the PNW’s Energy Efficiency Industry

9. Northwest Power and Conservation Council slide 9 So What’s 3000 aMW? It’s enough electricity to serve the entire state of Idaho and all of Western Montana It’s enough electricity to serve the entire state of Idaho and all of Western Montana It’s enough electricity to meet nearly 60% of Oregon total electricity use It’s enough electricity to meet nearly 60% of Oregon total electricity use It saved the region’s consumers more than $1.25 billion in 2004 It saved the region’s consumers more than $1.25 billion in 2004 It lowered 2004 PNW carbon emissions by an estimated 13 million tons. It lowered 2004 PNW carbon emissions by an estimated 13 million tons.

10. Northwest Power and Conservation Council slide 10 IS THAT AS GOOD AS IT GETS IS THAT AS GOOD AS IT GETS? With All We’ve Accomplish You Might Ask Yourself You Might Ask Yourself

11. Northwest Power and Conservation Council Advertise with UsAdvertise with Us - Business Solutions - Services & Tools - Jobs, Press, & HelpBusiness SolutionsServices & ToolsJobs, Press, & Help Make Google Your Homepage! ©2003 Google - Searching 3,307,998,701 web pages WebImagesGroupsDirectoryNews PNW Energy Efficiency Potential

12. Northwest Power and Conservation Council slide 12 PNW Energy Efficiency Potential Economic Potential????

13. How Much Energy Efficiency Should Be Developed?

14. PNW Portfolio Planning – Scenario Analysis on Steroids Frequency Chart Dollars Mean = $689.000.011.022.032.043 0 10.75 21.5 32.25 43 ($3,509)($1,131)$1,247$3,625$6,003 1,000 Trials 1,000 Displayed Portfolio Analysis Model Efficient Frontier NPV System Cost

15. Northwest Power and Conservation Council slide 15 Plans Along the Efficient Frontier Permit Trade-Offs of Costs Against Risk Least Risk Least Cost

16. Northwest Power and Conservation Council slide 16 All Plans Along the “Efficient Frontier” Had Roughly Equivalent Amounts of Conservation = 2600 –2800 aMW* *Medium Load Forecast Loads & Market Prices

17. Northwest Power and Conservation Council slide 17 Timing Matters – Three Conservation Deployment Schedules Tested

18. Northwest Power and Conservation Council slide 18 Accelerating Conservation Development Reduces Cost & Risk

19. Northwest Power and Conservation Council slide 19 Accelerating Conservation Reduces Carbon Dioxide Emissions

20. Northwest Power and Conservation Council slide 20 Meeting 5 th Plan’s Conservation Targets Reduces Forecast PNW Power System CO2 Emissions in 2025 by Nearly 20%

21. 5 th Plan Relies on Conservation and Renewable Resources to Meet Load Growth * * Actual future conditions (gas prices, CO2 control, conservation accomplishments) will change resource development schedule and amounts

22. Northwest Power and Conservation Council slide 22 Near-Term Conservation Targets (2005-2009) = 700 aMW

23. Northwest Power and Conservation Council slide 23 Could We Do More? Would Higher Carbon Control Cost Assumptions Significantly Increase the Amount of Cost-Effective PNW Electricity Conservation Potential (and reduced carbon emissions)?

24. Northwest Power and Conservation Council slide 24 There’s Remaining Electric Energy Efficiency Potential 450 MWa Remaining Technically Achievable Potential < $100/MWh *Without “Certain” Carbon Control

25. Northwest Power and Conservation Council slide 25 The 5 th Plan Already Includes Expected Value of CO2 Control “Risk” Levelized Cost = ~ $3/ton

26. Northwest Power and Conservation Council slide 26 Northwest Resources “on the margin” 5 th Plan Resource Portfolio

27. Northwest Power and Conservation Council slide 27 Estimated Annual Average Marginal PNW Power System CO2 Emissions Factors

28. Northwest Power and Conservation Council slide 28 Impact of Higher Assumed CO2 “Control” Cost Assuming PNW CO2 Emissions Factor of Assuming PNW CO2 Emissions Factor of ~ 1 lb/kWh –A $10/ton CO2 change in emissions “control” cost increases forecasted market prices by approximately $4/MWh –A $40/ton CO2 change in emissions “control” cost increases forecasted market prices by approximately $16/MWh

29. Northwest Power and Conservation Council slide 29 Carbon Control Might Make 4% to 15% More Conservation “Cost-Effective” Additional 100 - 400 MWa Cost- Effective @ $10 - $40 Ton *Without “Certain” Carbon Control

30. Northwest Power and Conservation Council slide 30 Summary The 5 th Plan relies on “non-carbon” producing resources to meet 85-90% of anticipated load growth The 5 th Plan relies on “non-carbon” producing resources to meet 85-90% of anticipated load growth The Plan considered “carbon control” risk The Plan considered “carbon control” risk Higher and more certain carbon control costs assumptions could make 4-15% more conservation cost-effective Higher and more certain carbon control costs assumptions could make 4-15% more conservation cost-effective There are probably cheaper near-term options for carbon control than the PNW Power System There are probably cheaper near-term options for carbon control than the PNW Power System

31. Northwest Power and Conservation Council slide 31 PNW Energy Efficiency Resource Development 2000-2004