Northwest Power and Conservation Council Slide 1 The Role of Efficiency In Meeting PNW Energy Needs Tom Eckman Manager, Conservation Resources Northwest Power and Conservation Council Energy Codes 2009 July 28, 2009

Northwest Power and Conservation Council Slide 2 slide 2 Today’s Topics Energy Efficiency’s Role in the PNW Power System Energy Efficiency’s Role in the PNW Power System –Historical Impacts –Projected Impacts of Future Energy Efficiency and Renewable Resource Development Can and Should More Be Done? Can and Should More Be Done? – The “Almost” Draft 6 th Northwest Power & Conservation Plan’s Assessment of the Remaining Energy Efficiency Potential and Regional Conservation Targets

The Evolution of Energy Policy April 18, 1977 – Conservation means a cold dark house President Carter announces we are engaged in the moral equivalent of war (MEOW) December 5, Conservation declared a resource equivalent to generation President Carter signs Northwest Power and Conservation Act October 11, 2002 President Carter Awarded Nobel Peace Prize

Northwest Power and Conservation Council Slide 4 slide 4 Northwest Power and Conservation Planning Act of 1980 (PL96-501) Authorized States of ID, OR, MT and WA to form an “interstate compact” (aka, “The Council”) Authorized States of ID, OR, MT and WA to form an “interstate compact” (aka, “The Council”) Directed the Council to develop 20-year load forecast and resource plan (“The Plan”) and update it every 5 – years Directed the Council to develop 20-year load forecast and resource plan (“The Plan”) and update it every 5 – years –“The Plan” shall call for the development of the least cost mix of resources –“The Plan” shall consider conservation (energy efficiency) its highest priority resource equivalent to generation with a 10% cost advantage over power generating resources Mandated public involvement in Council’s planning process. Mandated public involvement in Council’s planning process.

Northwest Power and Conservation Council Slide 5 slide 5 How Has It Worked?

Northwest Power and Conservation Council Slide 6 slide 6 Utility Reaction to Council’s First Plan Was “Mixed”

Three Decades of Utility Conservation Acquisitions (aka “Mr. Toad’s Wild Ride”* for the PNW’s Energy Efficiency Industry) See:

Northwest Power and Conservation Council Slide 8 slide 8 Nevertheless Since the Late 70’s Since 1978 Utility & BPA Programs, Energy Codes & Federal Efficiency Standards Have Produced Almost 3600 aMW of Savings. We’ve Accomplished “Mass Quantities”

Northwest Power and Conservation Council Slide 9 slide 9 So What’s 3600 aMW? It’s enough electricity to serve more than the entire state of Idaho and all of Western Montana It’s enough electricity to serve more than the entire state of Idaho and all of Western Montana It saved the region’s consumers nearly than $1.6 billion in 2007 It saved the region’s consumers nearly than $1.6 billion in 2007 It lowered 2007 PNW carbon emissions by an estimated 14.1 million tons. It lowered 2007 PNW carbon emissions by an estimated 14.1 million tons.

Northwest Power and Conservation Council Slide 10 slide 10 Since 1980 Energy Efficiency Resources More Than Half of Regional Load Growth

Northwest Power and Conservation Council Slide 11 slide 11 Utility Acquired Energy Efficiency Has Been A BARGAIN!

Energy Efficiency Is The Region’s Third Largest Resource We’ve Saved The Equivalent to Almost Two Grand Coulee Dams

Northwest Power and Conservation Council Slide 13 slide 13 5th Plan Relied on Conservation and Renewable Resources to Meet Nearly All Load Growth *Actual future conditions (gas prices, CO2 control, conservation accomplishments) will change resource development schedule and amounts. *Actual future conditions (gas prices, CO2 control, conservation accomplishments) will change resource development schedule and amounts.

Northwest Power and Conservation Council Slide 14 slide 14 The Region Has Exceeded the 5 th Plan’s Targets Every Year

Northwest Power and Conservation Council Slide 15 slide 15 Why Worry?

Northwest Power and Conservation Council Slide 16 slide 16 Existing Power System Resources Are Dominated by Non-CO 2 Emitting Resources

Northwest Power and Conservation Council Slide 17 slide 17 Total PNW Power System Carbon Emissions Have Grown Significantly Since 1990 ~ 15 Coal Plants ~23 Coal Plants Existing Coal Plants Produce 85% of Total PNW Power System CO 2 and Provide 20% of the Region’s Power

Northwest Power and Conservation Council Slide 18 slide 18 How Will This Impact the Power System’s Carbon Footprint?

Northwest Power and Conservation Council Slide 19 slide 19 Even If We Meet All Load Growth With Energy Efficiency and Renewable Resources CO 2 Emissions from Existing Fossil Fueled Plants Remain Unchanged

Northwest Power and Conservation Council Slide 20 slide 20 Meeting the 5 th Plan’s Conservation Goals AND State Renewable Portfolio Standards Will Not Meet WCI CO 2 Emissions Targets WCI Goal

OK, So What’s The Answer?

Northwest Power and Conservation Council Slide 22 slide 22 Avoided Costs Are Now Forecast to Be Significantly Higher

Northwest Power and Conservation Council Slide 23 slide 23 Energy Efficiency is Still the Cheapest Option Assumptions : Efficiency Cost = Average Cost of All Conservation in Draft 6 th Power Plan Under $100 MWh Transmission cost & losses to point of LSE wholesale delivery 2020 service - no federal investment or production tax credits Baseload operation (CC - 85%CF, Nuclear 87.5% CF, SCPC 85%) Medium NG and coal price forecast (6 th Plan draft) 6 th Plan draft mean value CO2 cost (escalating, $8 in 2012 to $47 in 2029).

Northwest Power and Conservation Council Slide 24 slide 24 So What’s Next?

Northwest Power and Conservation Council Slide 25 slide 25 There’s Still “Mass Quantities” To Do 6th Plan Technically Achievable Conservation Potential by Sector

Northwest Power and Conservation Council Slide 26 slide 26 Residential Sector Conservation Potential

Northwest Power and Conservation Council Slide 27 slide 27 Where Are the Savings? Commercial Sector

Northwest Power and Conservation Council Slide 28 slide 28 Draft 6 th Plan Calls for A Doubling of Annual Energy Efficiency Savings the Over Next Decade

Northwest Power and Conservation Council Slide 29 slide 29 Draft 6 th Plan Goal: Meet 85% of Load Growth with Conservation

Draft 6 th Plan Resource Portfolio* *Expected Value Build Out. Actual build out schedule depends on future conditions

Northwest Power and Conservation Council Slide 31 slide 31 Resource Options and Build-Out Maximum Optioned Percent of Futures Built Geothermal 170 MW 80% Combined- Cycle Gas Turbine 756 MW 30% Simple-Cycle Gas Turbine 162 MW 20%

Northwest Power and Conservation Council Slide 32 slide 32 Impact on Regional “Revenue Requirement”

Northwest Power and Conservation Council Slide 33 slide 33 Estimated Cumulative Impact on Regional “Revenue Requirement” to Achieve Proposed Conservation Targets

Northwest Power and Conservation Council Slide 34 slide 34 Draft 6 th Plan PNW Power System Carbon Emissions Drop Below 1990 Levels by 2020

Take This With You! The PNW Can Meet Nearly All of Load Growth Over the Next 20 Years With Energy Efficiency at an Average Cost of Less Than $40 MWH The PNW Can Meet Nearly All of Load Growth Over the Next 20 Years With Energy Efficiency at an Average Cost of Less Than $40 MWH This Will Require Sustained and A Much Larger (2x-3x) Investment In Cost-Effective Energy Efficiency This Will Require Sustained and A Much Larger (2x-3x) Investment In Cost-Effective Energy Efficiency Over the first five-years it will reduce regional revenue requirements by 1% - 1.5% as a result of fewer power market purchases Over the first five-years it will reduce regional revenue requirements by 1% - 1.5% as a result of fewer power market purchases Accomplishing the “Almost” Draft 6 th Plan’s Conservation Goals Will “Stretch” the Columbia River Accomplishing the “Almost” Draft 6 th Plan’s Conservation Goals Will “Stretch” the Columbia River »In five years we’ll build the equivalent of another Chief Joseph dam, »In 12 years, we’ll build the equivalent of Chief Joseph, plus Grand Coulee dams »In 20 years, we will have added the equivalent of 50% to the “output” of all hydroelectric resources in the PNW

Northwest Power and Conservation Council Slide 36 slide 36 Conservation – Cheap, But Worth It? Any Questions?

Northwest Power and Conservation Council Slide 37 slide 37 Reduced Conservation Lowers Rate But Increases Consumers’ Bills

Northwest Power and Conservation Council Slide 38 slide 38 Where Are the Savings? Space Conditioning

Northwest Power and Conservation Council Slide 39 slide 39 Where Are The Savings? Water Heating, Lighting and Appliances

Northwest Power and Conservation Council Slide 40 slide 40 Where Are the Savings? Space Conditioning in New Construction

Northwest Power and Conservation Council Slide 41 slide 41 Where Are the Savings? Consumer Electronics

Where Are the Savings? Commercial Sector Interior Lighting

Northwest Power and Conservation Council Slide 43 slide 43 Where Are the Savings? Commercial Sector Exterior Lighting

Northwest Power and Conservation Council Slide 44 slide 44 Conservation Significantly Reduced Load Growth

Northwest Power and Conservation Council Slide 45 slide 45 slide 4 Model Conservation Standards – Decision Criteria The Act requires that the MCS be set at levels that: The Act requires that the MCS be set at levels that: – achieve all regionally cost-effective power savings (i.e., cost less than new generation ); and, – that are economically feasible for consumers, taking into account financial assistance that may be made available through Bonneville

Northwest Power and Conservation Council Slide 46 slide 46 Zone 1: Life Cycle Cost Minimum & Regional Cost-Effective Thermal Shell Packages Component Regionally Cost- Effective Minimum Life Cycle Cost Wall –Above Grade R21 Advanced Framing Wall –Below Grade R19R19 Attic R38 STD VaultR30R30 FloorR30R30 Window Class 25 DoorR5R5 Slab R10 Full Under Slab Wall – Ext. Below grade R10R10 Infiltration Air Sealing w/HRV Current Practice

Northwest Power and Conservation Council Slide 47 slide 47 Single Family – Zone 1 Energy Use

Northwest Power and Conservation Council Slide 48 slide 48 Zone 2: Life Cycle Cost Minimum & Regional Cost-Effective Thermal Shell Packages Component Regionally Cost- Effective Minimum Life Cycle Cost Wall –Above Grade R21 Advanced Framing Wall –Below Grade R19R19 Attic R49 Advanced R38 STD VaultR30R30 FloorR30R30 Window Class 25 DoorR5R5 Slab R10 Full Under Slab Wall – Ext. Below grade R10R10 Infiltration Air Sealing w/HRV Current Practice

Northwest Power and Conservation Council Slide 49 slide 49 Single Family – Zone 2 Energy Use

Northwest Power and Conservation Council Slide 50 slide 50 Zone 3: Life Cycle Cost Minimum & Regional Cost-Effective Thermal Shell Packages Component Regionally Cost- Effective Minimum Life Cycle Cost Wall –Above Grade R21 Advanced Framing Wall –Below Grade R19R19 Attic R49 Advanced R38 STD VaultR30R30 FloorR30R30 Window Class 25 DoorR5R5 Slab R10 Full Under Slab Wall – Ext. Below grade R10R10 Infiltration Air Sealing w/HRV Current Practice

Northwest Power and Conservation Council Slide 51 slide 51 Single Family – Zone 3 Energy Use