1. Northwest Power and Conservation CouncilProCost Version 2.2 RTF July 2007

2. Northwest Power and Conservation Council slide 2 ProCost Spread sheet tool Spread sheet tool Compare costs & benefits of conservation Compare costs & benefits of conservation –Equal footing with generation –Life cycle analysis –All costs and benefits –Multiple ‘sponsor’ points of view –85 output metrics –Generates supply curves

3. Northwest Power and Conservation Council slide 3 Uses Council Council –Used in Power Plan conservation assessment –Builds supply curves for conservation RTF RTF –Cost-effectiveness of programs & measures Utilities & ETO & others Utilities & ETO & others –Used as screening tool for programs –Used to develop conservation supply curves

4. Northwest Power and Conservation Council slide 4 Inputs Measure costs & savings Measure costs & savings When savings occur When savings occur Load factor of savings Load factor of savings Coincidence of savings with peak Coincidence of savings with peak Avoided costs Avoided costs Financial parameters of sponsors Financial parameters of sponsors Discount rate Discount rate Program parameters Program parameters

5. Northwest Power and Conservation Council slide 5 Outputs Life cycle costs & benefits Life cycle costs & benefits By measure By measure Measures combined into categories (programs) Measures combined into categories (programs) Four points of view Four points of view –Wholesale electric utility (BPA) –Retail electric utility –Natural gas utility –Total Resource Cost (TRC) –Customer (limited) Supply curves with shaped savings Supply curves with shaped savings

6. Northwest Power and Conservation Council slide 6 Methodology Time value of quantifiable cost & benefit streams Time value of quantifiable cost & benefit streams Use Present Value (PV) estimates Use Present Value (PV) estimates ProCostGas\ProCost Value Stream.xls ProCostGas\ProCost Value Stream.xls ProCostGas\ProCost Value Stream.xls ProCostGas\ProCost Value Stream.xls

7. Northwest Power and Conservation Council slide 7 Time-Based Value of Savings Consider when the savings occur Consider when the savings occur –Time of Day and Day of Week (4 time blocks) –Month (12 months) –Year (20 years of avoided costs) or more –Matrix of Savings & Prices: 4 by 12 by 20

8. Northwest Power and Conservation Council slide 8 Monthly Wholesale Prices at Mid-Columbia Draft 5 th Power Plan, Current Trends Baseline

9. Northwest Power and Conservation Council slide 9 Monthly Wholesale Prices at Mid-C in 2012 On-Peak and Off-Peak ($/MWh in Year 2000$)

10. Northwest Power and Conservation Council slide 10 Typical “On-Peak” Savings Profiles

11. Northwest Power and Conservation Council slide 11 Typical “Off-Peak” Savings Profiles

12. Northwest Power and Conservation Council slide 12 Timing-Based Value Shapeof Savings Shape of Savings Value of Wholesale Power Value of kWh Saved + = $

13. Northwest Power and Conservation Council slide 13 Value Depends on Shape of Savings Present Value of One kWh Energy Saved Assuming a 20-Year Measure Life

14. Northwest Power and Conservation Council slide 14 But … Longer-Lived Measures Have More Value Present Value of One kWh Saved For Life of Measure - Energy Value Only

15. Northwest Power and Conservation Council slide 15 ProCost Time-Segment Map

16. Northwest Power and Conservation Council slide 16 Plus … Other Values of Conservation Quantifiable Non-Energy Benefits Quantifiable Non-Energy Benefits –Water savings, maintenance labor Distribution system expansion deferral Distribution system expansion deferral –Poles, wires, transformers, substations Transmission system expansion deferral Transmission system expansion deferral –Bigger poles & wires Externalities: CO2 Externalities: CO2 Regional Act Credit of 10% to conservation Regional Act Credit of 10% to conservation Risk-mitigation value of conservation Risk-mitigation value of conservation

17. Northwest Power and Conservation Council slide 17 Present Value of One KWh Saved Considering All Benefits

18. Northwest Power and Conservation Council slide 18 What’s New in Version 2.2 1. Time-based value of savings for Natural Gas 2. Time-based value for CO2 (tons & $$) 3. More perspectives: sponsors & society 4. More output metrics 5. Supply curve report with shape of savings 6. More input parameter choices 7. Risk-mitigation value of conservation 8. Revised B/C ratios to handle negative B & C 9. Works for Natural Gas (unitized per therm) 10. Fixed some errors

19. Northwest Power and Conservation Council slide 19 Wholesale Electric Perspective Benefits Benefits –Electric Energy include transmission losses (kWh) –Transmission capacity deferral –Regional Act credit (10% OF first-two items) –Risk-mitigation credit Share of costs assigned by user Share of costs assigned by user –Capital –O&M –Period Replacement –Other non-energy –Program Admin

20. Northwest Power and Conservation Council slide 20 Retail Electric Perspective Benefits Benefits –Electric Energy including T&D losses –Transmission capacity deferral –Local Distribution capacity deferral –Regional Act credit (10% of first 3) –Electric Risk-mitigation credit Share of costs assigned by user Share of costs assigned by user –Capital, O&M, Period Replacement, Program Admin

21. Northwest Power and Conservation Council slide 21 Retail Gas Perspective Benefits Benefits –Gas Energy including T&D losses –Gas Transmission capacity deferral –Gas Local Distribution capacity deferral –Gas Risk-mitigation benefit Share of costs assigned by user Share of costs assigned by user –Capital, O&M, Period Replacement, Program Admin

22. Northwest Power and Conservation Council slide 22 TRC Perspective Benefits Benefits –Electric energy including T&D losses –Electric Transmission capacity deferral –Electric Local Distribution capacity deferral –Regional Act credit –Electric Risk-mitigation credit –Electric CO2 cost or benefit –Gas energy including T&D losses –Gas Transmission capacity deferral –Gas Local Distribution capacity deferral –Gas Risk-mitigation benefit –Gas CO2 cost or benefit –Other Non-energy benefit All costs regardless of who pays All costs regardless of who pays

23. Northwest Power and Conservation Council slide 23 Metrics Reported Savings Savings –KWh, kW, therms, therms/day From each perspective From each perspective –Present Value (PV) costs & benefits –Levelized costs (per kWh or therm saved) »Traditional »Net of T&D deferral benefits (for supply curve) –B/C ratios

24. Northwest Power and Conservation Council slide 24 Customer Perspective Benefits Benefits –None reported Costs (based on share assigned to customer) Costs (based on share assigned to customer) –Capital –O&M –Periodic Replacement

25. Northwest Power and Conservation Council slide 25 Status Testing Build 253 Testing Build 253 Still finding some bugs Still finding some bugs Looking for interested testers Looking for interested testers –Report Bugs, Recommend Improvements Download from Council drop box: Download from Council drop box: –http://www.nwcouncil.org/dropbox/ –Two files: »prodraft-253-alpha test.xls » MC_AND_LOADSHAPE_cg.XLS Schedule a workshop or web-demo Schedule a workshop or web-demo