2. Northwest Power and Conservation Council Conservation Resources in the (Draft) 5 th Northwest Power Plan Tom Eckman Manager, Conservation Resources Northwest Power and Conservation Council

3. Northwest Power and Conservation Council slide 2 What You’re About To Hear What We’ve Done What We’ve Done How much is left to do How much is left to do What does it cost What does it cost Where is it Where is it What’s it worth What’s it worth What it means to you - Utility “Targets” What it means to you - Utility “Targets”

4. Northwest Power and Conservation Council slide 3 20 Years of Progress – Bonneville and Utility Accomplishments Since 1980 the Region’s Utilities and Bonneville Acquired Over 1750 aMW of Savings

5. Northwest Power and Conservation Council slide 4 20 Years of Progress – State Energy Code Accomplishments Since 1980 State and Local Energy Codes Have Produced Over 440 aMW of Savings.

6. Northwest Power and Conservation Council slide 5 20 Years of Progress – Federal Energy Efficiency Standards Accomplishments Since 1980 Federal Appliance and Manufactured Housing Energy Efficiency Standards Have Produced Over 420 aMW of Savings.

7. Northwest Power and Conservation Council slide 6 PNW Savings from Codes and Efficiency Standards 1980-2002

8. Northwest Power and Conservation Council slide 7 20 Years of Progress – Total PNW Conservation Savings Since 1980 Utility & BPA Programs, Energy Codes & Federal Efficiency Standards Have Produced Over 2600 aMW of Savings.

9. Northwest Power and Conservation Council slide 8 So What’s 2600 aMW? It’s enough electricity to serve the entire state of Idaho It’s enough electricity to serve the entire state of Idaho In the year 2002 alone, it saved the region’s consumers $1.6 Billion in retail power purchases In the year 2002 alone, it saved the region’s consumers $1.6 Billion in retail power purchases

10. Northwest Power and Conservation Council slide 9 Conservation Now Supplies Over 10% of the Region’s Electricity Service Needs 20002001 PNW Electricity Sales 20,600 20,600 18,450 18,450 PNW Conservation 2,315 2,600 Total PNW Electricity Services 22,915 21,050 21,050 Share of Electricity Services Met by Conservation 10%12%

11. Northwest Power and Conservation Council slide 10 Conservation Was The Northwest’s Third Largest Source of Electricity Supply in 2000

12. Northwest Power and Conservation Council slide 11 Conservation Is Now The Second Largest Single Federal Power Firm Energy Resource Three Times The Amount of Energy Savings in Public Utility Service Territories from Conservation Programs, Codes and Standards Is Equivalent to Three Times the Annual Firm Energy Output of Bonneville Dam

13. Northwest Power and Conservation Council slide 12 Conservation Met Approximately 1/4 of the Regional Load Growth Between 1980 - 2002

14. Northwest Power and Conservation Council slide 13 Conservation Significantly Reduced Projected PNW Electricity Sales

15. Northwest Power and Conservation Council slide 14 Annual Conservation Savings Compared to Difference Between 1983 Medium-High Forecast and Actual Sales

16. Northwest Power and Conservation Council slide 15 Regional Conservation Acquisitions Have Also Helped Balance Loads & Resources ( Creating Mr. Toad’s Wild Ride for the Energy Efficiency Service Industry) Response to West Coast Energy Crisis Response to NW Recession Response to “Restructuring Discussions”

17. Northwest Power and Conservation Council slide 16 What’s Left to Do How Big is the Region’s Conservation Resource? Cost effective & achievable potential Cost effective & achievable potential = 2800 aMW by 2025 = 2800 aMW by 2025 Remaining Potential Equivalent to Regional Accomplishments 1980 - 2001 Remaining Potential Equivalent to Regional Accomplishments 1980 - 2001 Could meet half of the region’s annual load growth under “medium” forecast Could meet half of the region’s annual load growth under “medium” forecast

18. Northwest Power and Conservation Council slide 17 Cost-Effective and Achievable Conservation Could Meet Over 10% of PNW Loads in 2025 (Medium Forecast)

19. Cost and Achievable Potential by Sector and End Use

20. Northwest Power and Conservation Council slide 19 Where Did All This Potential Come From? New technology and/or lower cost of existing technologies New technology and/or lower cost of existing technologies –High performance T8 lighting, control optimization, compact fluorescent lighting New applications New applications –Sewage treatment, LED traffic signals New end uses evaluated New end uses evaluated –Network PC control –AC/DC power converters –Commercial refrigerators, freezers, ice-makers

21. Northwest Power and Conservation Council slide 20 Combined With Higher Forecast of Future Market Prices!!!

22. Northwest Power and Conservation Council slide 21 Adjustments Since Last Plan Reflect new codes & standards Reflect new codes & standards Reflect conservation achieved Reflect conservation achieved Incorporate new base line data Incorporate new base line data –Commercial Building Stock Assessment –Penetration of existing programs (E-Star) –Census data, utility data, economic data Higher Avoided Costs Higher Avoided Costs New Technology New Technology

23. Northwest Power and Conservation Council slide 22 Total Residential Sector Cost- Effective & Realistically Achievable Potential = 1275 aMW

24. Northwest Power and Conservation Council slide 23 Residential Sector Achievable Resource Potential by Major End Use

25. Northwest Power and Conservation Council slide 24 Residential Sector Realistically Achievable Potential for Appliances

26. Northwest Power and Conservation Council slide 25 Residential Sector Realistically Achievable Potential for Water Heating

27. Northwest Power and Conservation Council slide 26 Residential Sector Realistically Achievable Potential for Space Conditioning

28. Northwest Power and Conservation Council slide 27 Total Commercial Sector Realistically Achievable Potential = 1105 aMW (Medium Forecast – 2025 )

29. Northwest Power and Conservation Council slide 28 Total Commercial Sector Realistically Achievable Potential by Major End Use

30. Northwest Power and Conservation Council slide 29 Commercial Sector Realistically Achievable Potential for “Non-Buildings” (Medium Forecast - 2025) = 420 aMW

31. Northwest Power and Conservation Council slide 30 Commercial Sector Realistically Achievable Potential for Buildings = 685 aMW (Medium Forecast - 2025)

32. Northwest Power and Conservation Council slide 31 Industrial Sector Conservation Potential Estimate of 5% of 2025 forecast loads Estimate of 5% of 2025 forecast loads 350 aMW at 1.7 cents per kWh 350 aMW at 1.7 cents per kWh Process controls, drive systems, lighting, refrigeration Process controls, drive systems, lighting, refrigeration Significant uncertainty around estimate due to ongoing changes in region’s industrial mix Significant uncertainty around estimate due to ongoing changes in region’s industrial mix

33. Northwest Power and Conservation Council slide 32 Irrigated Agriculture Sector Realistically Achievable Potential = 80 aMW

34. Northwest Power and Conservation Council slide 33 How Much Should We Do? Derivation of Regional Conservation Targets Used Portfolio Model to identify “least risk” and “least cost” level of conservation development Used Portfolio Model to identify “least risk” and “least cost” level of conservation development –Separate annual targets for “lost opportunity” and “non-lost opportunity” resources –Model “worked up conservation supply curve” –Increased quantities came at increased costs, but reduce system risks

35. Northwest Power and Conservation Council slide 34 Regional Conservation Supply Curve

36. Northwest Power and Conservation Council slide 35 Conservation Development Levels Analyzed

37. Northwest Power and Conservation Council slide 36 Average Cost of Conservation by Level of Development

38. Northwest Power and Conservation Council slide 37 System Cost vs. Risk for Alternative Levels of Conservation Development 150 MWa/yr 110 MWa/yr 145 MWa/yr 130 MWa/yr 155 MWa/yr 160 MWa/yr

39. Northwest Power and Conservation Council slide 38 Changes in System Cost and Risk for Alternative Annual Conservation Targets

40. Northwest Power and Conservation Council slide 39 WECC Carbon Dioxide Emissions Reductions for Alternative Conservation Targets

41. Northwest Power and Conservation Council slide 40 Annual Conservation Development for Least Risk and Least Cost Plans Preliminary

42. Northwest Power and Conservation Council slide 41 Preliminary Annual Target in the Range of 130-150 MWa Compared to “business-as-usual” case of 50 MWa/year, stabilizing conservation deployment at 150 MWa/year would: Compared to “business-as-usual” case of 50 MWa/year, stabilizing conservation deployment at 150 MWa/year would: –Reduce NPV system cost by ~5% –Reduce regional “risk” by nearly ~10% –Reduce WECC carbon dioxide emissions by nearly 80 million tons over the next 20-years

43. Northwest Power and Conservation Council slide 42 Residential Sector Preliminary Annual Acquisitions Targets 2005 to 2010 = 75 aMW Annual Total Resource Cost = $75 Million Annual Total Resource Cost = $155 Million

44. Northwest Power and Conservation Council slide 43 Commercial Sector Preliminary Annual Acquisitions Targets 2005 – 2010 = 55 aMW Annual Total Resource Cost = $70 million Annual Total Resource Cost = $50 million

45. Northwest Power and Conservation Council slide 44 Industrial Sector Preliminary Annual Acquisitions Targets 2005 – 2010 = 15 aMW Annual Total Resource Cost = $20 million

46. Northwest Power and Conservation Council slide 45 Irrigated Agriculture Sector Preliminary Annual Acquisitions Targets 2005 – 2010 = 5 aMW Annual Total Resource Cost = $10 million

47. Northwest Power and Conservation Council slide 46 Regional Conservation Resource Preliminary Annual Acquisition Targets 2005 – 2010 = 150 aMW

48. Northwest Power and Conservation Council slide 47 Total Resource Acquisition Cost = $380 million

49. Northwest Power and Conservation Council slide 48 To Meet Council’s Draft Plan Targets Regional Conservation Investments Will Have to Increase Significantly or Be More Efficient Regional Utility Conservation Acquisition Expenditures

50. Northwest Power and Conservation Council slide 49 Is 150 MWa/yr “Doable”? It’s half the region’s load growth! It’s half the region’s load growth! –But it’s only about 1/3 more than we achieved from 2000 – 2002 –We did it before – now we have 20 years experience and infrastructure (e.g.,Alliance, federal standards, utility staff and programs) There’s not that much out there! There’s not that much out there! –Half is lost-opportunities which haven’t happened yet –Nearly two-thirds is new stuff –Getting it all means PNW must be 10% more efficient in 20 years It will raise rates too much! It will raise rates too much! –About 2/3 (or more) of cost of meeting target is already in rates –Additional cost ~$50 - $75 million/yr = less than 1% of regional utility revenue requirements

51. Northwest Power and Conservation Council slide 50 It’s Not Your Father’s Oldsmobile Largest Measures Are Still Untapped Residential CFLs (19% of year 2025 potential) Residential CFLs (19% of year 2025 potential) High-Performance Commercial Lighting (13%) High-Performance Commercial Lighting (13%) Residential Heat Pump Water Heaters (7% ) Residential Heat Pump Water Heaters (7% ) AC/DC Power Converters (5%) AC/DC Power Converters (5%) Residential Clothes Washers (5%) Residential Clothes Washers (5%) Sewage & Water Treatment (3%) Sewage & Water Treatment (3%) Fix Roof Top Economizers (3%) Fix Roof Top Economizers (3%) Commercial Refrigerators, Freezers, Ice (2%) Commercial Refrigerators, Freezers, Ice (2%) Network PC Control (2%) Network PC Control (2%) Low-Pressure Distribution (2%) Low-Pressure Distribution (2%)

52. Northwest Power and Conservation Council slide 51 Plan Conservation Action Items -1 Focus on “Lost Opportunity” Conservation Focus on “Lost Opportunity” Conservation –Half the 150 MWa annual target –New initiatives are needed at all levels Establish Mechanism for Regional Coordination and Program Administration Establish Mechanism for Regional Coordination and Program Administration –Reduce cost and improve performance –Current coordination is ad hoc –Bonneville no longer positioned to serve as regional “administrator”

53. Northwest Power and Conservation Council slide 52 Plan Conservation Action Items -2 Aggressive Utility Action Is Needed to Achieve Targets Aggressive Utility Action Is Needed to Achieve Targets –Consumer actions are unlikely to capture all regionally cost- effective conservation savings Utility programs should be efficient, but meet target Utility programs should be efficient, but meet target –Rate impacts of conservation always an issue –Potential conflict between capturing “lost opportunities” and meeting “first cost” goals

54. Northwest Power and Conservation Council slide 53 Plan Conservation Action Items -3 A Mix of Mechanisms Will Be Needed A Mix of Mechanisms Will Be Needed –Local acquisition programs must be expanded »Target represents 50% increase over 2002 accomplishments –Double budget for regional market transformation »New initiatives »Expanded initiatives »Regional investments in “infrastructure” needed

55. Northwest Power and Conservation Council slide 54 Summary It's big – Around 2800 aMW It's big – Around 2800 aMW It’s cheap ~ 2.4 cents/kWh It’s cheap ~ 2.4 cents/kWh It's new “stuff” and improved “old stuff” It's new “stuff” and improved “old stuff” It's half lost opportunity It's half lost opportunity It’s nearly all capital It’s nearly all capital It’s going to require more money at a time when utilities are faced with the bad politics of rate increases – but it’s “doable” It’s going to require more money at a time when utilities are faced with the bad politics of rate increases – but it’s “doable” Both regional cost and risk increase if we fail Both regional cost and risk increase if we fail