1. Northwest Power and Conservation Council The Northwest Energy Efficiency Market 2007 NAESCO Northwest Regional Meeting June 15, 2007 Tom Eckman Northwest Power and Conservation Council Better? Worse? About the Same?

2. Northwest Power and Conservation Council Advanced Search Preferences Language Tools Advertise with UsAdvertise with Us - Business Solutions - Services & Tools - Jobs, Press, & HelpBusiness SolutionsServices & ToolsJobs, Press, & Help Make Google Your Homepage! ©2003 Google - Searching 3,307,998,701 web pages WebImagesGroupsDirectoryNews PNW Conservation Targets

3. 5 th Plan Relies on Conservation and Renewable Resources to Meet Load Growth * * Actual future conditions (gas prices, CO2 control, conservation accomplishments) will change resource development schedule and amounts

4. Northwest Power and Conservation Council slide 4 The 5 th Plan Calls for 700 aMW of Savings From 2005 - 2009

5. Northwest Power and Conservation Council Advanced Search Preferences Language Tools Advertise with UsAdvertise with Us - Business Solutions - Services & Tools - Jobs, Press, & HelpBusiness SolutionsServices & ToolsJobs, Press, & Help Make Google Your Homepage! ©2003 Google - Searching 3,307,998,701 web pages WebImagesGroupsDirectoryNews Major Sources of Savings

6. Northwest Power and Conservation Council slide 6 Where Are The Cost-Effective Savings?

7. Northwest Power and Conservation Council slide 7 What Are the “Big” Measures?

8. Northwest Power and Conservation Council slide 8 We Think All Returns Have Been Counted 62 Utilities 88% of Regional Load Are We Meeting The Plan’s Targets?

9. Northwest Power and Conservation Council slide 9 Utility & SBC Administrator Program Savings (Net of NEEA)

10. Northwest Power and Conservation Council slide 10 NEEA Savings

11. Northwest Power and Conservation Council slide 11 Total Savings (Not Including Codes, Standards and Market Effects)

12. Northwest Power and Conservation Council slide 12 We Met the 2005 Target! (and we’ll probably meet the 2006 target)

13. BPA and Utilities Are Investing About $170 Million/yr in Energy Efficiency* *Equivalent to 1.75% of Regional Retail Revenues

14. Northwest Power and Conservation Council slide 14 We’re Meeting The 5 th Plan Targets At Lower Than Anticipated Cost (to utilities) 2005 Cost Range

15. Northwest Power and Conservation Council slide 15 The Road Ahead – Is This The Renaissance?

16. The Road Ahead – A Brighter Future @ Lower Wattage Over 14 million CFLs sold in 2006 Over 14 million CFLs sold in 2006 –PNW has 16% of all US installs w/4% of the population BPA has several new regional initiatives underway BPA has several new regional initiatives underway State & Federal standards for 17 appliances State & Federal standards for 17 appliances –Help hit targets beginning 2008 Commercial & Industrial program participation is up Commercial & Industrial program participation is up

17. The Road Ahead – Utilities Appear to Be “Ramping Up” Increasing its 2008 conservation goal by 40% Developing a “green utility” strategy Increasing its 2008 efficiency goal by 20% Expanding efficiency target “company wide” Doubling its annual efficiency budget in 2008 Funding extended through 2025 IOUs permitted to increase ETO energy efficiency funding over and above the 3% public purpose minimum Requires Washington utilities with more that 25,000 customers to Requires Washington utilities with more that 25,000 customers to set 10-year conservation acquisition targets to achieve all cost-effective savings

18. Other Factors

19. Northwest Power and Conservation Council slide 19 Utility Acquired Energy Efficiency Remains A %*&?! BARGAIN!

20. Northwest Power and Conservation Council slide 20 Natural Gas Prices Are Still High

21. Northwest Power and Conservation Council slide 21 And Are Forecast to Remain So

22. Northwest Power and Conservation Council slide 22 New Generating Resource Costs Are Higher

23. Northwest Power and Conservation Council slide 23 Will Higher “Carbon Cost” Matter? Both Amount & Value of CO2 avoided depends on when it is avoided Both Amount & Value of CO2 avoided depends on when it is avoided Hence, the “carbon control” value of energy savings should incorporate their time-based value (as it does for electricity savings) Hence, the “carbon control” value of energy savings should incorporate their time-based value (as it does for electricity savings) –Shape of Savings (kWh daily & seasonally) –Physical production (pounds per kWh daily and seasonally)

24. Northwest Power and Conservation Council slide 24 Northwest Resources “on the margin” 5 th Plan Resource Portfolio

25. Northwest Power and Conservation Council slide 25 Marginal Carbon Savings by Load Shape Segment 1: 0800 – 1800 M-F Segment 2: 0400 - 0800/1800-2200 M-F; 0400 – 2200 S&S Segment 3: 2200 - 0400 M-F Segment 4: 2200 - 0400 S&S

26. Northwest Power and Conservation Council slide 26 Impact of Alternative CO2 Control Costs on Marginal Value of Conservation Savings

27. Northwest Power and Conservation Council slide 27 Impact of Higher Assumed CO2 “Control” Cost Assuming PNW CO2 Emissions Factor of Assuming PNW CO2 Emissions Factor of ~ 1 lb/kWh –A $10/ton CO2 change in emissions “control” cost increases forecasted market prices by approximately $4/MWh –A $40/ton CO2 change in emissions “control” cost increases forecasted market prices by approximately $16/MWh

28. Northwest Power and Conservation Council slide 28 Carbon Control Might Make 4% to 15% More Conservation “Cost-Effective” Additional 100 - 400 MWa Cost- Effective @ $10 - $40 Ton *Without “Certain” Carbon Control

29. Northwest Power and Conservation Council slide 29 BETTER! WORSE? ABOUT THE SAME? Summary

30. Northwest Power and Conservation Council slide 30 Questions

31. Northwest Power and Conservation Council slide 31 Thank you verry, verry much! Thank you very much.