1. Northwest Power and Power and Conservation ConservationCouncil Extending the PNW’s Legacy Progress to Date & Some Thoughts About Future Opportunities and Challenges Tom Eckman Northwest Power and Conservation Council Efficiency Connections Northwest 2012 October 18, 2012

2. Northwest Power and Power and Conservation ConservationCouncil slide 2 What Happened After Lewis and Clark Left?

3. The “New Deal” Federal Government authorized the development hydroelectric projects on the Columbia and Snake Rivers Federal Government authorized the development hydroelectric projects on the Columbia and Snake Rivers Bonneville Power Administration established to market federal power to the region’s public and private utilities Bonneville Power Administration established to market federal power to the region’s public and private utilities slide 3

4. Northwest Power and Power and Conservation ConservationCouncil slide 4 The “New Deal’s” Legacy Salmon Take A Big Hit! A Big Hit!

5. Northwest Power and Power and Conservation ConservationCouncil PNW Hydropower Development 1890 - 1979

6. Northwest Power and Power and Conservation ConservationCouncil slide 6 Regional Electricity Use 1950 - 1979 Annual Growth Rate = 6.2% Elvis Inducted Into US Army Beatle’s Disband

7. Northwest Power and Power and Conservation ConservationCouncil PNW Retail Electric Rates 1938 - 1979 slide 7 Retail Electric Rates Begin to Increase in Response to Thermal Plant Costs

8. Northwest Power and Power and Conservation ConservationCouncil slide 8 Utility Forecasts Underestimated Consumer Response to “Price Effects” Utility Load Forecast Significantly Underestimate Consumer Response to Increase Retail Prices (Loads are 2500 MWa Lower Than Forecast Just 10 Years Prior) Utility Load Forecast Significantly Underestimate Consumer Response to Increase Retail Prices (Loads are 2500 MWa Lower Than Forecast Just 10 Years Prior)

9. Northwest Power and Power and Conservation ConservationCouncil slide 9 The First Assault on the Hydro Legacy: Thermal Plant Termination Cost Dramatically Increase Wholesale Rates BPA Rates Increase 416% over 5 years

10. Northwest Power and Power and Conservation ConservationCouncil PNW Retail Electric Rates 1938 - 1985 slide 10 Retail Electric Rates REALLY Increase in Response to Thermal Plant Costs Retail Electric Rates REALLY Increase in Response to Thermal Plant Costs

11. Northwest Power and Power and Conservation ConservationCouncil slide 11 Regional Response to the Assault on the PNW’s Hydro Legacy Terminate or mothball 9 nuclear and 5 coal plants at a cost to the region’s consumers of more than $7 billion.Terminate or mothball 9 nuclear and 5 coal plants at a cost to the region’s consumers of more than $7 billion. Motivate the region’s politicians, utilities, larger industries and public interest groups to accept the “deals” embodied in the Northwest Power Planning and Conservation Act of 1980Motivate the region’s politicians, utilities, larger industries and public interest groups to accept the “deals” embodied in the Northwest Power Planning and Conservation Act of 1980

12. Northwest Power and Power and Conservation ConservationCouncil slide 12 Major Elements of the Northwest Power and Conservation Act of 1980 Authorized States to form CouncilAuthorized States to form Council Directed Council to develop 20-year load forecast and resource plan (“The Plan”)Directed Council to develop 20-year load forecast and resource plan (“The Plan”) Bonneville is given authority to acquire resources consistent with the Council’s PlanBonneville is given authority to acquire resources consistent with the Council’s Plan Plan is to provide for the development of the least cost mix of resourcesPlan is to provide for the development of the least cost mix of resources Conservation is defined as resource equivalent to generation and given a 10% cost advantageConservation is defined as resource equivalent to generation and given a 10% cost advantage Mandated public involvement in planning process.Mandated public involvement in planning process.

13. Northwest Power and Power and Conservation ConservationCouncil slide 13 Council’s First Regional Plan’s Conservation’s Goals 4,790 MWa 660 MWa

14. slide 14 Utility Reaction to Council’s First Plan Was “Mixed”

15. Northwest Power and Power and Conservation ConservationCouncil In Fact, It Took A Decade Before Regional Utility Conservation “Ramped Up” Even Near “Pre-Act” Levels

16. Northwest Power and Power and Conservation ConservationCouncil Council’s Third Plan Acquire 1500 MW in 10 years

17. Northwest Power and Power and Conservation ConservationCouncil After A Strong Start Electric Industry “Restructuring” Lead to Reduced Utility Efficiency Acquisitions Annual conservation acquisitions were cut in half!

18. Northwest Power and Power and Conservation ConservationCouncil slide 18 Northwest Utility Conservation Achievements Failed to Meet Council 3 rd and 4 th Plan’s Targets

19. Northwest Power and Power and Conservation ConservationCouncil slide 19 And Then Things Changed...

20. Northwest Power and Power and Conservation ConservationCouncil slide 20 Northwest Utilities Responded to New Market Conditions with Record Setting Conservation Achievements

21. Northwest Power and Power and Conservation ConservationCouncil The Second Assault on the PNW Hydro Legacy slide 21 Retail Electric Rates Increase in Response to Over-Exposure to Short-Term Market

22. Northwest Power and Power and Conservation ConservationCouncil slide 22 So Now Are The Council’s Plans Being Followed?

23. Northwest Power and Power and Conservation ConservationCouncil slide 23 6 th Plan Called for A Doubling of Annual Energy Efficiency Savings Over Next Decade

24. Northwest Power and Power and Conservation ConservationCouncil Results: So Far, So Good

25. Northwest Power and Power and Conservation ConservationCouncil 2011 Regional Accomplishments Exceeded Council Plan Target by 26%

26. Northwest Power and Power and Conservation ConservationCouncil Accomplishments Have Exceeded Plan Targets Every Year Since 2005

27. Northwest Power and Power and Conservation ConservationCouncil 2001 - 2011: Longest Sustained Period of PNW Utility Energy Efficiency Acquisitions in 30 Years

28. Northwest Power and Power and Conservation ConservationCouncil Commercial and Industrial Savings Continued to Grow the Most

29. 2011 Total Utility/SBC Investments in Energy Efficiency in Exceeded $408 million (2006$) U.S. utility investment in efficiency in 2011 was just over $5.23 billion (2006$). Northwest investments represent about 8% of the total, but just under 5% of the U.S. population.

30. Northwest Power and Power and Conservation ConservationCouncil slide 30 NEEA Continues to Contribute Significant Savings

31. Northwest Power and Power and Conservation ConservationCouncil slide 31 Average Utility Cost of Conservation, While Increasing Remains Low

32. Projections for 2012 – 2014 Savings by RCP Reporting Utilities* Excludes savings from NEEA, BPA direct acquisitions and utilities not filing RCP Reports. *Excludes savings from NEEA, BPA direct acquisitions and utilities not filing RCP Reports.

33. Northwest Power and Power and Conservation ConservationCouncil NEEA Savings Projections

34. slide 34 6 th Plan’s Target of 1200 MWa Is Within Reach If 2012-2014 Savings Average 225 MWa/yr* * This is roughly 85% of the Plan’s Annual Targets for 2012 -2014

35. Northwest Power and Power and Conservation ConservationCouncil slide 35 Have We Preserved the Legacy: The 30 year the “Score Card”

36. Northwest Power and Power and Conservation ConservationCouncil slide 36 Over Three Decades We Made Significant (If Uneven) Progress Response to West Coast Energy Crisis Response to PNW Recession Response to “Restructuring Discussions” Short Term Memory Loss? (Giving the Region’s EE Industry Mr. Toad’s Wild Ride!)

37. Northwest Power and Power and Conservation ConservationCouncil slide 37 Since 1978 Utility & BPA Programs, Energy Codes & Federal Efficiency Standards Have Produced Over 5000 MWa of Savings

38. Northwest Power and Power and Conservation ConservationCouncil slide 38 So What’s 5000 MWa? It’s enough electricity to serve the nearly entire state of Oregon It’s enough electricity to serve the nearly entire state of Oregon It saved the region’s consumers nearly $3.1 billion in 2011 It saved the region’s consumers nearly $3.1 billion in 2011 It lowered 2011 PNW carbon emissions by an estimated 19.8 million MTE. It lowered 2011 PNW carbon emissions by an estimated 19.8 million MTE.

39. 39 Energy Efficiency is Now the Region’s Third-Largest Resource Based on Estimate of 2010 Actual Resource Dispatch/Contribution

40. Northwest Power and Power and Conservation ConservationCouncil PNW Electricity Use Per Dollar Gross Domestic Product (GDP) Has Declined Substantially Faster Than the National Average

41. Northwest Power and Power and Conservation ConservationCouncil Efficiency Has Met Over 50% of PNW Load Growth Since 1980

42. Northwest Power and Power and Conservation ConservationCouncil slide 42 Energy Efficiency Savings from 1978 – 2011 Exceed the Annual Firm Energy Output of the Five Largest Hydro Projects in the Region

43. Northwest Power and Power and Conservation ConservationCouncil The Task Ahead 43

44. Northwest Power and Power and Conservation ConservationCouncil Can We Cost-Effectively Meet Most or All Load Growth? Caveat: Approximate impact only, since PNW Actual Loads are not weather adjusted Caveat: Approximate impact only, since PNW Actual Loads are not weather adjusted. Actual Loads Load Met with Efficiency

45. Northwest Power and Power and Conservation ConservationCouncil Regional Savings Equaled Just Under 1.4% of Regional Electricity Sales in 2011 Almost Three Times the National Average

46. Northwest Power and Power and Conservation ConservationCouncil 40% of the Region’s Utilities Reported 2011 Efficiency Savings Equivalent to At Least 1% of Their Retail Sales 40%

47. slide 47 Average Cost of Utility Acquired Savings Continues to Be Lower and Less Volatile Than Wholesale Market Electricity Prices

48. Will Reduced Avoided Cost Limit Cost-Effective Potential?

49. Over 4000 MWa of Achievable Potential* Exists at Cost Below <$40 MWH Levelized Cost of CCCT @ PNW Max. CF & $2/MBTU Gas Levelized Cost of CCCT @ PNW Avg. CF & $2/MBTU Gas *Lost-Opportunity Potential is Cumulative Amount Available Potential by 2030

50. Will We Be Able to Sustain Regional Energy Efficiency Investments?

51. While We Invest 2 ½ Times the National Average (As A Share of Total Revenues) It’s Less Than 4% of the Total

52. Northwest Power and Power and Conservation ConservationCouncil Will NEEA’s Market Transformation Initiatives Achieve Projected Market Adoption? slide 52 NEEA Ductless Heat Pump Contractor Training

53. Northwest Power and Power and Conservation ConservationCouncil Can We Continue to Secure Savings Through Enhanced Building Codes – Power Act Requires Council Plan’s to set forth: – Model Conservation Standards First Plan’s MCS (1983) were equivalent to 2006 IECC First Plan’s MCS (1983) were equivalent to 2006 IECC Achieved 40% improvement in building code for new residential construction by 1992 Achieved 40% improvement in building code for new residential construction by 1992 Accomplished through a strategic combination of utility funded research & demonstration (600 homes), a new construction program (Super Good Cents) and energy code support Accomplished through a strategic combination of utility funded research & demonstration (600 homes), a new construction program (Super Good Cents) and energy code support Northwest Energy Star & NEEA’s Code support activities continue this tradition Northwest Energy Star & NEEA’s Code support activities continue this tradition slide 53

54. Efficiency Standards Have a Transformative Effects Sales Weighted Relative Use of Appliances 1980 - 2008 54 New Standards

55. Can Utility Programs Transform to Respond to Forthcoming Changes in Federal Appliance and Equipment Standards

56. Northwest Power and Power and Conservation ConservationCouncil How Do We Ensure That Efficiency’s Benefits Outweigh the Risks? slide 56 BenefitsBenefits RisksRisks

57. Northwest Power and Power and Conservation ConservationCouncil Will We Adequately Fund: Will We Adequately Fund: – Evaluation, Measurement and Verification Activities – Customer and Market Characteristics Surveys – End Use Load Shape Research slide 57

58. Northwest Power and Power and Conservation ConservationCouncil What’s The Prize?

59. Northwest Power and Power and Conservation ConservationCouncil It Took 50 Years to Develop the PNW Hydro-System Energy Efficiency Can Extend That Legacy

60. Efficiency Extends a PNW Legacy by “Stretching the River” Over 50 years, we will have added energy efficiency resources equivalent of the “output” of all hydroelectric resources in the PNW... and reduced the power systems carbon- footprint 15% below 1990 levels without further harming fisheries or native peoples

61. Northwest Power and Power and Conservation ConservationCouncil slide 61 Our Job To Make The Inefficient Use of Electricity...To Make The Inefficient Use of Electricity... – Immoral – Illegal – Unprofitable

62. So What Will It Be? 62 Failure. OR

63. Northwest Power and Power and Conservation ConservationCouncil slide 63 Conservation – Cheap, But Worth It? Any Questions?