2. Northwest Power and Conservation Council Slide 1 The 6 th Northwest Power and Conservation Plan It’s About Carbon Tom Eckman Manager, Conservation Resources Northwest Power and Conservation Council Presented at Bonneville Power Administration SECURING OUR ENERGY FUTURE UTILITY ENERGY EFFICIENCY SUMMIT March 18, 2009

3. Northwest Power and Conservation Council Slide 2 slide 2 Before I Start The Northwest’s Energy Efficiency Labor Force Has Expanded Rapidly The Northwest’s Energy Efficiency Labor Force Has Expanded Rapidly Bonneville’s regional meetings revealed a need for more background on the PNW Energy Efficiency Network Bonneville’s regional meetings revealed a need for more background on the PNW Energy Efficiency Network Because.. Because... It’s Not Easy Being Green.

4. How A Kilowatt-Hour is Saved: The Northwest Energy Efficiency Implementation Web Bonneville Power Administration Public Utilities Investor Owned Utilities Northwest Power and Conservation Council State Regulatory Commissions Northwest Energy Efficiency Alliance Energy Trust ofOregon Regional Technical Forum End Use Consumers Markets, Codes & Standards = Policy Recommendations = Technical Recommendations = Program Funding = Conservation Programs = Market Transformation Programs/Projects The “Plan” = Policy = Rate Revenues

5. Northwest Power and Conservation Council Slide 4 slide 4 To Understand the Present, You Need to Know Our Past Why Is It So *&%# Complicated?

6. Northwest Power and Conservation Council Slide 5 slide 5 What Happened After Lewis and Clark Left?

7. Northwest Power and Conservation Council Slide 6 slide 6 The First Three “Eras” of Power Planning in the PNW “New Deal” Mysticism (1930-1950) “New Deal” Mysticism (1930-1950) –Politicians plan using “chicken entrails and crystal balls” legislate what’s needed and when Engineering Determinism (1950- 1970) Engineering Determinism (1950- 1970) –Engineers, using graph paper and rulers schedule the next power plants Economic Determinism (1970 to April 27, 1983) Economic Determinism (1970 to April 27, 1983) –Economist, using price elasticity slow the engineer’s construction schedules

8. Northwest Power and Conservation Council Slide 7 slide 7 Actions Taken in Response to “Engineering and Economic Determinist’s” Forecasts Utilities planned and/or started construction on 28 coal and nuclear power plants to be completed over a 20-year period. Utilities planned and/or started construction on 28 coal and nuclear power plants to be completed over a 20-year period. Native American tribes sued the state and federal government over loss of salmon Native American tribes sued the state and federal government over loss of salmon Environmental groups sued Bonneville Power Administration over plans to turn the Columbia River into “Wave World” Environmental groups sued Bonneville Power Administration over plans to turn the Columbia River into “Wave World”

9. Northwest Power and Conservation Council Slide 8 slide 8 Impact of Actions Taken in Response to “Engineering and Economic Determinist’s Forecasts and Plans 416% Rate Increase over 5 years

10. Northwest Power and Conservation Council Slide 9 slide 9 Reaction to Impact of Actions Taken in Response to “Engineering and Economic Determinist’s Forecasts and Plans 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. Motivated the region’s politicians, utilities, larger industries and public interest groups to accept the “deals” embodied in the Northwest Power and Conservation Planning Act of 1980 Motivated the region’s politicians, utilities, larger industries and public interest groups to accept the “deals” embodied in the Northwest Power and Conservation Planning Act of 1980

11. 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, 1980 - Conservation declared a resource equivalent to generation President Carter signs Northwest Power and Conservation Act President Carter Awarded Nobel Peace Prize

12. Northwest Power and Conservation Council Slide 11 slide 11 The Fourth Era - 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.

13. Northwest Power and Conservation Council Slide 12 slide 12 Who Are Those Guys? Eight Council Members Eight Council Members Two From Each PNW State Two From Each PNW State Appointed by Governors Appointed by Governors Cabinet Level Positions in State Government Cabinet Level Positions in State Government

14. Northwest Power and Conservation Council Slide 13 slide 13 How Has It Worked?

15. Northwest Power and Conservation Council Slide 14 slide 14 Utility Reaction to Council’s First Plan Was “Mixed”

16. Over the Last Three Decades Regional Utility Conservation Acquisitions Resulted in “Mr. Toad’s Wild Ride”* for the PNW’s Energy Efficiency Industry See: http://en.wikipedia.org/wiki/Mr._Toad's_Wild_Ride

17. Northwest Power and Conservation Council Slide 16 slide 16 Nevertheless – We’ve Accomplished “Mass Quantities” Since 1978 Utility & BPA Programs, Energy Codes & Federal Efficiency Standards Have Produced Almost 3600 aMW of Savings.

18. Northwest Power and Conservation Council Slide 17 slide 17 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.

19. Northwest Power and Conservation Council Slide 18 slide 18 Since 1980 Energy Efficiency Resources Met About Half of PNW Load Growth

20. Northwest Power and Conservation Council Slide 19 slide 19 Energy Efficiency Is The Region’s Third Largest Resource

21. Northwest Power and Conservation Council Slide 20 slide 20 Utility Acquired Energy Efficiency Has Been A BARGAIN!

22. Northwest Power and Conservation Council Slide 21 slide 21 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.

23. Northwest Power and Conservation Council Slide 22 slide 22 Meeting 5 th Plan’s Conservation Targets Reduces Forecast PNW Power System CO 2 Emissions in 2024 by Nearly 20%

24. Northwest Power and Conservation Council Slide 23 slide 23 The Region Is Exceeding the 5 th Plan’s Targets With Utility Funded Programs Alone!

25. Northwest Power and Conservation Council Slide 24 slide 24 When Overall Market Changes Are Considered, The Region Set An All Time Savings Record in 2007

26. Northwest Power and Conservation Council Slide 25 slide 25 Why Worry?

27. Northwest Power and Conservation Council Slide 26 slide 26 Existing Power System Resources Are Dominated by Non-CO 2 Emitting Resources

28. Northwest Power and Conservation Council Slide 27 slide 27 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

29. Northwest Power and Conservation Council Slide 28 slide 28 The PNW Now Plans To Meet Nearly All Future Load Growth With Conservation and Renewable Resources

30. Northwest Power and Conservation Council Slide 29 slide 29 How Will This Impact the Power System’s Carbon Footprint?

31. Northwest Power and Conservation Council Slide 30 slide 30 Even If We Meet All Load Growth With Energy Efficiency and Renewable Resources CO 2 Emissions from Existing Fossil Fueled Plants Remain Unchanged

32. Northwest Power and Conservation Council Slide 31 slide 31 Meeting the 5 th Plan’s Conservation Goals AND State Renewable Portfolio Standards Will Not Meet WCI CO 2 Emissions Targets WCI Goal

33. OK, So What’s The Answer?

34. Northwest Power and Conservation Council Slide 33 slide 33 5 th Plan Identified Nearly 4,600 MWa of “Technically Available” Conservation Potential

35. Northwest Power and Conservation Council Slide 34 slide 34 Adjustments to 5 th Plan’s Conservation Resource Potential Reductions in Available Potential Reductions in Available Potential –Program Accomplishments –Changes in Law »Federal Standards for general service lighting »State Building Codes –Changes in Markets »Improved “Current Practice” due to Energy Star, LEED, Programs, Market Transformation »Other Changes to Federal Standards (10 adopted, 21 under revision, and 12 with effective dates by 2014) –Changes in Forecast »Less new commercial floor area »Lower industrial forecast

36. Northwest Power and Conservation Council Slide 35 slide 35 Adjustments to 5 th Plan’s Conservation Resource Potential Increases in Available Potential Increases in Available Potential –Changes in Scope »Distribution System Efficiency Improvements »Consumer electronics (TV’s, set top boxes) »Irrigation Water Management and Dairy Farm –Changes in Data and Technology »Detailed Industrial Sector Potential »New Measures (e.g. ductless heat pumps, solid state lighting, 2 gpm Showerheads)

37. Northwest Power and Conservation Council Slide 36 slide 36 Avoided Costs Are Forecast to Be Significantly Higher

38. Northwest Power and Conservation Council Slide 37 slide 37 Energy Efficiency is Still the Cheapest Option Assumptions : Efficiency Cost = Average Cost of All Conservation Targeted in 5 th Power Plan Transmission cost & losses to point of LSE wholesale delivery No federal investment or production tax credits Baseload operation (CC - 85%CF, Nuclear 87.5% CF, SCPC 85%, Wind 32% CF) Medium NG and coal price forecast (Proposed 6 th Plan) Bingaman/Specter safety valve CO2 cost

39. Draft 6 th “Technically Achievable” Conservation Potential 5 th Plan Estimate of Achievable of Achievable Potential Potential 5 th Plan Target Target Draft 6 th Plan Avoided Cost Range

40. Northwest Power and Conservation Council Slide 39 slide 39

41. Northwest Power and Conservation Council Slide 40 slide 40 Spring 2009 Your Comments and Questions Welcomed 1

42. Northwest Power and Conservation Council Slide 41 slide 41 Where Is It? Technically Achievable by Sector

43. Residential Water Heating, Lighting, Appliance & Consumer Electronics Technically Achievable Potential

44. Northwest Power and Conservation Council Slide 43 slide 43 Residential Space Conditioning Technically Achievable Potential

45. Commercial Sector Technically Achievable Potential - Retrofits

46. Commercial Sector Technically Achievable Potential – Lost Opportunity Potential – Lost Opportunity

47. Northwest Power and Conservation Council Slide 46 slide 46 Industrial Energy Savings Potential High-Efficiency Equipment High-Efficiency Equipment –Cross-industry systems (pumping or lighting) –Industry-specific (refiner plates in mechanical pulping) Systems Improvement Systems Improvement –Optimization, demand management, sizing People People –Operational & Business Practices

48. Northwest Power and Conservation Council Slide 47 slide 47 Industrial Sector Technically Achievable Potential

49. Northwest Power and Conservation Council Slide 48 slide 48

50. Northwest Power and Conservation Council Slide 49 slide 49 Utility Distribution System Technically Achievable Potential

51. Northwest Power and Conservation Council Slide 50 slide 50 Utility Distribution System Efficiency What’s Covered System Optimization System Optimization Line Drop Compensation Line Drop Compensation End of Line Voltage Feedback End of Line Voltage Feedback Home Voltage Regulation Home Voltage Regulation

52. Northwest Power and Conservation Council Slide 51 slide 51 Agriculture Sector Conservation Potential

53. Northwest Power and Conservation Council Slide 52 slide 52 Dairy Milk Production Conservation Potential “On farm” dairy milk production is the largest single use of electricity in agriculture sector after irrigation “On farm” dairy milk production is the largest single use of electricity in agriculture sector after irrigation New Measure for 6 th Plan New Measure for 6 th Plan –Current conservation programs are targeting savings from dairies, but no regional estimate of savings potential Average dairy uses 800 – 1200 kWh/cow-yr There are approximately 885,000 milking cows in PNW

54. Northwest Power and Conservation Council Slide 53 slide 53 Take This With You Meeting ALL Regional Load Growth With Conservation AND Renewable Resources Will Not Meet WCI CO 2 Emissions Targets Meeting ALL Regional Load Growth With Conservation AND Renewable Resources Will Not Meet WCI CO 2 Emissions Targets Technically Achievable Conservation Potential Could Reduce Projected 2030 Loads By 4000 – 6000 MWa Technically Achievable Conservation Potential Could Reduce Projected 2030 Loads By 4000 – 6000 MWa –At the low end this would mean sustaining the current pace of regional conservation development It Will Require A Much Larger (2x-3x) Investment In Cost-Effective Energy Efficiency and New Technology To Reduce Our Carbon Footprint To 1990 Levels It Will Require A Much Larger (2x-3x) Investment In Cost-Effective Energy Efficiency and New Technology To Reduce Our Carbon Footprint To 1990 Levels