Sixth Power Plan Setting Conservation Targets and Implementation Strategies Jill Steiner, Snohomish Public Utility District Northwest Power and Conservation Council Conservation Resource Advisory Committee June 19, 2009

Conservation Philosophy Public power utilities are committed to acquiring all cost-effective energy efficiency for the benefit of the region and our customers Increasing marginal costs (Tier 2 pricing) and State requirements (e.g., I-937) provide strong incentive to pursue energy efficiency Many utilities are increasing internal savings targets and expanding delivery capabilities Driven by resource preference and anticipation of higher targets Gaining better understanding of the Council supply curves part of that process

Target Concerns Total economic potential, screening at $60/MWh for discretionary resources and $100/MWh, falls short of the recommended 5 year target Historical achievements may not be fully indicative of our short-term ability to deliver a different and complex mix of measures There is uncertainty around technical availability, performance, market acceptance and effective program approach and deployment for some of the measures in the supply curves In addition to aggressive acquisition over the next five years, the region needs to prepare for sustained savings over the 20-year planning horizon

Target Assessment Targets need to be aggressive, but achievable Targets provide a minimum threshold for performance Utilities and others have demonstrated willingness to exceed targets when conservation resources are available Three methods used to assess achievability of targets Measure-by-measure ramp rate review Uncertainty analysis Margin of error

Measure-by-Measure Review *Based on avoided cost screen of $60/MWh for discretionary resources and $100/MWh for lost opportunities. 5

Review by Sector *Based on avoided cost screen of $60/MWh for discretionary resources and $100/MWh for lost opportunities.

Residential Ramp Rates

Residential Measure WG Changes

Ramp Rate Comparison - HPWH

Commercial Ramp Rates

Commercial Measure WG Changes

Commercial Ramp Rate Comparison

Industrial and Agriculture Ramp Rates

Industrial/Ag Measure WG Changes

Industrial/Ag Ramp Rate Comparison

Five Year Ramp Rate Comparison 1163 aMW 1004 aMW

Uncertainty Analysis Create a range of outcomes based on different “realization rates” for measures with partial or low technical, market or program “readiness” Realization Rate

Uncertainty Analysis No impacts from low or partially ready measures is not a likely outcome Little evidence to assign probabilities to the other outcomes Average across the non-zero probabilities is 992 aMW

Margin of Error Adjustment Despite best efforts, 100% success across all measures is not likely Modify target to allow some room for error, risk tolerance E.g., set minimum target at 80% of identified potential

Example of Margin of Error Approach 1242 aMW 992 aMW

Effect of Increased Avoided Costs

Addressing Uncertainty Create a regional research agenda that includes: Objectives Priorities Funding commitments Establish milestones for: Monitoring progress Making decisions

Top Twenty Measures – 5 Years

Top Twenty Measures – 10 Years

Other Issues Current reporting makes it hard to link accomplishments and identified potential How will we address adaptive management over the action plan horizon? New measures New information about existing measures Market changes

Next Steps Build consensus around the appropriate target Establish implementation plans to pursue all identified potential (no measures fall off the table) Launch a coordinated research planning effort (and execute) Enhance regional reporting capability and consistency 26

Let’s get to work!!!