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Northwest Power and ConservationCouncil
Draft Plan Proposed Regional Draft Plan Proposed Regional Conservation TargetsConservation Targets
for 2010 - 2014for 2010 - 2014
Power Committee June 10, 2009Power Committee June 10, 2009
Updated for CRAC June 19, 2009Updated for CRAC June 19, 2009
slide 2
Northwest Power and ConservationCouncil
Why We Ask Council for Why We Ask Council for Guidance on TargetsGuidance on Targets
Near term conservation targets Near term conservation targets determine medium term action plan on determine medium term action plan on other generating resourcesother generating resources
If significantly lower or higher targets If significantly lower or higher targets are desired, portfolio model may need are desired, portfolio model may need to be re-run to evaluate impact on other to be re-run to evaluate impact on other resources optionsresources options
slide 3
Northwest Power and ConservationCouncil
Proposed Targets 2010-2014Proposed Targets 2010-20141200 MWa Cumulative 1200 MWa Cumulative
0
50
100
150
200
250
300
2010 2011 2012 2013 2014
Year
Annual S
avi
ngs
(Ave
rage M
egaw
att
s)
Lost-OpportunityDiscretionary
slide 4
Northwest Power and ConservationCouncil
Alternative TargetsAlternative Targets Staff received comment from some Conservation Resources Staff received comment from some Conservation Resources
Advisory Committee members that approximately 20 percent Advisory Committee members that approximately 20 percent lower target should be setlower target should be set
– This lower target would not include any of the “new” This lower target would not include any of the “new” measures in the conservation assessmentmeasures in the conservation assessment
– Action Plan would include recommendation for minimum Action Plan would include recommendation for minimum regional investment in deployment of these “new resources” regional investment in deployment of these “new resources” – but not savings targets– but not savings targets
Staff also was encouraged to evaluate higher conservation Staff also was encouraged to evaluate higher conservation “ramp rate” constraints“ramp rate” constraints
– Portfolio Model results showed some additional cost and risk Portfolio Model results showed some additional cost and risk reductionreduction
– State (and maybe National) Climate action goals require State (and maybe National) Climate action goals require aggressive efficiency programsaggressive efficiency programs
slide 5
Northwest Power and ConservationCouncil
Alternatives to Proposed Targets Alternatives to Proposed Targets – Discretionary Conservation– Discretionary Conservation
0
50
100
150
200
250
2010 2011 2012 2013 2014Year
An
nu
al
Savin
gs
(Avera
ge M
eag
aw
att
s)
Alternative 1 - 20 % SlowerProposedAlternative 2 - 20 % Faster
slide 6
Northwest Power and ConservationCouncil
Alternatives to Proposed Targets Alternatives to Proposed Targets – Lost Opportunity Conservation– Lost Opportunity Conservation
0
20
40
60
80
100
120
140
160
2010 2011 2012 2013 2014Year
An
nu
al
Savin
gs
(Avera
ge M
eag
aw
att
s)
Alternative 1 - 20% SlowerProposedAlternative 2 - 20% Faster
slide 7
Northwest Power and ConservationCouncil
Cumulative Savings 2010 - 2014Cumulative Savings 2010 - 2014
0
200
400
600
800
1000
1200
1400
1600
Alternative 1 -Slower
Proposed Alternative 2 -Faster
Cum
ula
tive
Savi
ngs
(Ave
rage M
egaw
att
s)
Lost-OpporunityDiscretionary
slide 8
Northwest Power and ConservationCouncil
The “Big Picture”The “Big Picture” Through 2007 the region acquired 3600 aMW of conservation Through 2007 the region acquired 3600 aMW of conservation
savingssavings– This is equivalent to meeting all of the electricity needs of This is equivalent to meeting all of the electricity needs of
Idaho and Western Montana in 2008Idaho and Western Montana in 2008 Acquiring 1200 aMW of conservation savings by 2014Acquiring 1200 aMW of conservation savings by 2014
– Could meet 50% regional load growth*Could meet 50% regional load growth*– Is equivalent to adding the critical water output of three Is equivalent to adding the critical water output of three
Bonneville DamsBonneville Dams Acquiring the ~5800 aMW of conservation savings by 2029Acquiring the ~5800 aMW of conservation savings by 2029
– Could meet 85% of regionally load growth*Could meet 85% of regionally load growth*» This would keep most public utilities out of “Tier 2” for the This would keep most public utilities out of “Tier 2” for the
next 20 yearsnext 20 years– Is equivalent to the critical water output of the seven largest Is equivalent to the critical water output of the seven largest
hydroelectric projects in the PNW or meeting all of the 2008 hydroelectric projects in the PNW or meeting all of the 2008 electricity needs of the state of Oregonelectricity needs of the state of Oregon
*Under medium load growth the region is forecast to grow by approximately 2350 aMW by 2014 and 6900 aMW over the next 20 years without any additional conservation.
slide 9
Northwest Power and ConservationCouncil
CFL CountdownCFL Countdown
Issue: Issue: – Estimate recent regional savings NOT Estimate recent regional savings NOT
including CFLs addressed by EISAincluding CFLs addressed by EISA Why: Why:
– Recent savings is heavy with CFLsRecent savings is heavy with CFLs– Proposed targets do not include EISA CFLsProposed targets do not include EISA CFLs– What is current non-CFL savings?What is current non-CFL savings?– How big a gap between current non-CFL How big a gap between current non-CFL
savings and proposed non-CFL targetssavings and proposed non-CFL targets
slide 10
Northwest Power and ConservationCouncil
CFL CountdownCFL Countdown
First Estimate non-CFL savings: First Estimate non-CFL savings: – 155 MWa in 2008155 MWa in 2008
Updated Estimate: Updated Estimate: – 140 MWa in 2008140 MWa in 2008
Difference: Difference: – About 15 MWa of reported regional savings were from About 15 MWa of reported regional savings were from
CFLs that replaced burned-out CFLsCFLs that replaced burned-out CFLs– So total estimated savings were too highSo total estimated savings were too high– Differences in BPA/Utility & NEEA reporting Differences in BPA/Utility & NEEA reporting
slide 11
Northwest Power and ConservationCouncil
Updated Analysis in MWaUpdated Analysis in MWa20072007 20082008
Utility-Reported Non-NEEA Savings Utility-Reported Non-NEEA Savings 140140 141141Utility-Reported CFL Savings via local rebatesUtility-Reported CFL Savings via local rebates 2323 3030Non-CFL, Non-NEEA Utility-Reported SavingsNon-CFL, Non-NEEA Utility-Reported Savings 117117 111111
Add Back NEEA Non-CFL SavingsAdd Back NEEA Non-CFL SavingsNet Market Effects & Baseline Corrected for ReplacementsNet Market Effects & Baseline Corrected for Replacements
2828 3030
Total Estimated Non-CFL SavingsTotal Estimated Non-CFL Savings 145145 141141
Savings estimates include line losses & 5th Plan Baseline Adjustment
slide 12
Northwest Power and ConservationCouncil
Historical Regional CFL SavingsHistorical Regional CFL Savings
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
An
nu
al S
avin
gs
(aM
W)
Net Market EffectsBaselineLocal Utility
Source: NEEA Data and Projections
slide 13
Northwest Power and ConservationCouncil
Historical & Projected Regional Historical & Projected Regional CFL SavingsCFL Savings
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
An
nu
al S
avin
gs
(aM
W)
Net Market EffectsBaselineLocal Utility
Historical
Forecast
Source: NEEA Data and Projections
slide 14
Northwest Power and ConservationCouncil
Alternatives to Cope withAlternatives to Cope with“CFL Detox”“CFL Detox”
Adopt staff proposal of 1200 aMW target for 2010 Adopt staff proposal of 1200 aMW target for 2010 – 2014 period– 2014 period
Alt 1 – Adopt 1200 aMW target, but add savings Alt 1 – Adopt 1200 aMW target, but add savings from CFLs covered by federal standards to from CFLs covered by federal standards to conservation potential in 2010-2011 (~20 to ~25 conservation potential in 2010-2011 (~20 to ~25 aMW/yr)aMW/yr)
Alt 2 – Same as Alt 2, but reduce 2010 – 2012 Alt 2 – Same as Alt 2, but reduce 2010 – 2012 targets by 20 - 25 aMW/yr and move these savings targets by 20 - 25 aMW/yr and move these savings to 2013 – 2014to 2013 – 2014
Alt 3 – Other SuggestionsAlt 3 – Other Suggestions
slide 15
Northwest Power and ConservationCouncil
slide 16
Northwest Power and ConservationCouncil
Why These TargetsWhy These Targets
Fastest “Realistically Achievable” Acquisition Fastest “Realistically Achievable” Acquisition ScheduleSchedule– All portfolio sensitivity analysis supports these (or All portfolio sensitivity analysis supports these (or
higher) targetshigher) targets– Historical achievements (200 aMW in 2007, ~220 Historical achievements (200 aMW in 2007, ~220
aMW in 2008), equal to or above than near term aMW in 2008), equal to or above than near term targetstargets
– Proposed ramp rates based on “grounds up” Proposed ramp rates based on “grounds up” measure-by-measure estimate of achievable measure-by-measure estimate of achievable savings savings
– Region is better positioned today to achieve Region is better positioned today to achieve conservation than it has been at any point since conservation than it has been at any point since the Act was pastthe Act was past
slide 17
Northwest Power and ConservationCouncil
Base Case Least-Risk Plan Base Case Least-Risk Plan Conservation “Build Out” ScheduleConservation “Build Out” Schedule
From Regional Portfolio ModelFrom Regional Portfolio Model
0
50
100
150
200
250
300
350
400
2010 2015 2020 2025Year
An
nu
al A
cqu
istio
ns
(aM
W)
Lost-OpportunityDiscretionary
Proposed TargetProposed Target
slide 18
Northwest Power and ConservationCouncil
Portfolio Analysis Supports Accelerated Portfolio Analysis Supports Accelerated Conservation AcquisitionConservation Acquisition
Least-risk plans:Least-risk plans:– Model builds discretionary conservation at maximum pace for first 2400 Model builds discretionary conservation at maximum pace for first 2400
MWa in all sensitivity casesMWa in all sensitivity cases
– High premium for Lost-Opportunity in all sensitivity casesHigh premium for Lost-Opportunity in all sensitivity cases» $50/MWh premium over market (up to $120/MWh)$50/MWh premium over market (up to $120/MWh)» $40/MWh premium for high-pace discretionary sensitivity$40/MWh premium for high-pace discretionary sensitivity
150000
155000
160000
165000
170000
175000
180000
100000 105000 110000 115000 120000
Cost (NPV $2006 M)
Risk
(NPV
$20
06 M
)
L8112
L8112 frontier
Hi Cons Frontier
Low Cons Frontier
Slower-paced Slower-paced sensitivity case sensitivity case shows large cost shows large cost & risk penalty& risk penalty
Faster-paced Faster-paced sensitivity case sensitivity case shows smaller cost shows smaller cost & risk reduction& risk reduction
Are These Targets “Doable”?Are These Targets “Doable”?Rationale Based on Past AchievementsRationale Based on Past Achievements
Recent Utility Program Performance Equals Near Recent Utility Program Performance Equals Near Term TargetsTerm Targets
Prior Utility Program “Ramp Rates” Support Prior Utility Program “Ramp Rates” Support Proposed PaceProposed Pace
Recent Changes in State Codes & Federal Standards Recent Changes in State Codes & Federal Standards Support Medium Term PaceSupport Medium Term Pace
Market Driven Changes Show Increasing “Non-Market Driven Changes Show Increasing “Non-Programmatic” Improvements in Efficiency (based on Programmatic” Improvements in Efficiency (based on survey of building characteristics)survey of building characteristics)– (e.g., the “Walmart Effect”)(e.g., the “Walmart Effect”)
The Region Is Well Ahead of the 5The Region Is Well Ahead of the 5thth Plan’s TargetsPlan’s Targets
020406080
100120140160180200220240
2005
Tar
get
2005
Actua
l
2006
Tar
get
2006
Actua
l
2007
Tar
get
2007
Actua
l
2008
Tar
get
2008
Pre
liminar
y
An
nu
al
Savin
gs
(aM
W)
5th Plan Target
NEEA Non-Programatic MarketEffects
NEEA Programs (Utility, SBC andBonneville Funded)
Bonneville Funded Conservation(Carry Over)
Bonneville Funded Conservation
Utility & SBC Funded Conservation
slide 21
Northwest Power and ConservationCouncil
Share of Savings by Funding SourceShare of Savings by Funding Source
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2005
2006
2007
Annual S
avi
ngs
(aM
W)
Non-Programatic MarketEffects
NEEA Programs (Utility,SBC and BonnevilleFunded)
Bonneville FundedConservation (Carry Over)
Bonneville FundedConservation
Utility & SBC FundedConservation
slide 22
Northwest Power and ConservationCouncil
Contribution of CFLs to Regional Contribution of CFLs to Regional Conservation SavingsConservation Savings
0
50
100
150
200
250
2005 2006 2007 2008
Year
Tota
l R
egio
nal S
avin
gs
(aM
W) Utility - CFL
NEEA - CFL
CFL Baseline(Non-Programmatic)
Non-CFL
slide 23
Northwest Power and ConservationCouncil
Utility Conservation Acquisitions Are Stable At Utility Conservation Acquisitions Are Stable At Record Levels Record Levels
(“Mr. Toad’s Wild Ride”* May Have Finally Ended)(“Mr. Toad’s Wild Ride”* May Have Finally Ended)
0
50
100
150
200
250
197819
7919
8019
8119
8219
8319
8419
8519
8619
8719
8819
8919
9019
9119
9219
9319
9419
9519
9619
9719
9819
9920
0020
0120
0220
0320
0420
0520
0620
07
2008
prelim
Conse
rvati
on A
cquis
itio
ns
(aM
W)
See: http://en.wikipedia.org/wiki/Mr._Toad's_Wild_Ride
Are These Targets “Doable”?Are These Targets “Doable”?Rationale Based on Forecast “Achievability”Rationale Based on Forecast “Achievability”
Proposed targets based on program “ramp rates” built up Proposed targets based on program “ramp rates” built up from measure-by-measure analysisfrom measure-by-measure analysis
““Ramp Rate” Estimates Based On Ramp Rate” Estimates Based On – Measure Characteristics Measure Characteristics
» (e.g., new measures slower than measures in existing programs)(e.g., new measures slower than measures in existing programs)– Implementation Strategies Implementation Strategies
» (e.g. market transformation near-term ramps slower than “house-(e.g. market transformation near-term ramps slower than “house-by-house” deployment)by-house” deployment)
– Size & Cost Size & Cost » (e.g., lower cost measures deployed faster than higher cost (e.g., lower cost measures deployed faster than higher cost
measures) measures) – Physical Availability of Equipment Physical Availability of Equipment
» (e.g., deployment of heat pump water heaters low for first five (e.g., deployment of heat pump water heaters low for first five years because product is just entering market)years because product is just entering market)
– Training & Education RequirementsTraining & Education Requirements» (e.g., savings based on “improved practices” deployed slower (e.g., savings based on “improved practices” deployed slower
than “widget-to-widget” change outs)than “widget-to-widget” change outs)
Forecast AchievabilityForecast AchievabilityMMeasure-by-Measure Cumulative Sum of Ramp-Ups = 1270 aMWeasure-by-Measure Cumulative Sum of Ramp-Ups = 1270 aMW
(~1270 MWa: 370 aMW LO + 900 aMW NLO) (~1270 MWa: 370 aMW LO + 900 aMW NLO)
0
50
100
150
200
250
300
350
2010 2011 2012 2013 2014
Annual I
ncr
em
enta
l Savi
ngs
(aM
W)
Lost-Opp New Initiatives
Retrofit New Initiatives
Lost-Opp Existing Initiatives
Retrofit Existing Initiatives
Maximum Annual Rates from Conservation Supply Curves: Retrofit at <$70/MWh and Lost-Opportunity at <$120/MWH
Forecast Achievability for Forecast Achievability for New InitiativesNew InitiativesMeasure-by-Measure Cumulative Sum of Ramp-Ups = Measure-by-Measure Cumulative Sum of Ramp-Ups = ~340 aMW~340 aMW
(130 aMW LO + 210 aMW NLO)(130 aMW LO + 210 aMW NLO)
0
50
100
150
200
250
300
350
2010 2011 2012 2013 2014
Ann
ual I
ncre
men
tal S
avin
gs (
aMW
)
Commercial Outdoor Light
Residential HPWH
Consumer Electronincs
Commercial IT Server Rooms
Dairy
Distribution Efficiency
Industrial System Optimization
Residential Ductless HeatPump
Maximum Annual Rates from Conservation Supply Curves: Retrofit at <$70/MWh and Lost-Opportunity at <$120/MWH
slide 27
Northwest Power and ConservationCouncil
Estimated Impact onEstimated Impact on “Regional Revenue Requirements” “Regional Revenue Requirements”
Assumptions:Assumptions:– 2008 Regional Retail Electricity Sales 2008 Regional Retail Electricity Sales
Revenue = $11.4 billionRevenue = $11.4 billion– 2008 Conservation Investments in Retail 2008 Conservation Investments in Retail
Sales Revenue = ~ $300 million (2.6%)Sales Revenue = ~ $300 million (2.6%)– Utility Share of New Conservation Cost = Utility Share of New Conservation Cost =
65%65%» Lost-Opportunity Resources = $3.0 Lost-Opportunity Resources = $3.0
million/aMWmillion/aMW» Discretionary Resources = $2.6 million/aMWDiscretionary Resources = $2.6 million/aMW
slide 28
Northwest Power and ConservationCouncil
Impact on Regional Impact on Regional “Revenue Requirement”“Revenue Requirement”
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
2010 2011 2012 2013 2014
Regio
nal R
eve
nue R
equir
em
ent
(Bill
ion 2
006$)
Requirment w/Proposed Draft Plan "Target"Baseline Revenue Requirement (2008 Expenditure Level)
slide 29
Northwest Power and ConservationCouncil
Estimated Cumulative Impact on Regional Estimated Cumulative Impact on Regional “Revenue Requirement” to Achieve “Revenue Requirement” to Achieve
Proposed Conservation TargetsProposed Conservation Targets
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
2010 2011 2012 2013 2014
Year
Cum
mula
tive
Change
slide 30
Northwest Power and ConservationCouncil
Comparison of 2010 “Targets” with Utility Comparison of 2010 “Targets” with Utility Projected Savings for 2008 and 2009Projected Savings for 2008 and 2009
0
5
10
15
20
25
30
35
40
45
ETO
PSE
IPC
Snoh.
PUD
Seattl
e
Avista
Pacifi
Corp
(ID/W
A)
Clark
PUD
EWEB
Taco
ma
Bento
n PU
D
Annual
Savin
gs (
aM
W)
2010 "Targets" Based on Share of Load Allocation
2008 Preliminary
2009 "Plans"
slide 31
Northwest Power and ConservationCouncil
0
10
20
30
40
50
60
70
80
90
mil
lio
n d
oll
ars
2008 Expenditures
2009 Budget
Preliminary Estimates of Preliminary Estimates of Expenditures & BudgetsExpenditures & Budgets
slide 32
Northwest Power and ConservationCouncil
Top Reasons Top Reasons Why We Have Never Been Better Why We Have Never Been Better
Positioned to Hit TargetsPositioned to Hit Targets
12) Sum of measure ramp rates 12) Sum of measure ramp rates >1200 MWa>1200 MWa
11) 2008 actual is higher than 11) 2008 actual is higher than 2010 proposed start2010 proposed start
10) ~140 MWa/YR of non-CFL 10) ~140 MWa/YR of non-CFL in 2008 w/o new measures in 2008 w/o new measures
9) New measures & initiatives 9) New measures & initiatives could add >100MWa/YRcould add >100MWa/YR
8) Magnitude & acceleration of 8) Magnitude & acceleration of historic ramp up periods historic ramp up periods exceeds 6P ramp upexceeds 6P ramp up
7) Exceed 5P targets by ~40%7) Exceed 5P targets by ~40%6) Large 2008-09 budget ramp up 6) Large 2008-09 budget ramp up 5) Proposed NEEA budget doubles 5) Proposed NEEA budget doubles 4) Poised for codes & standards4) Poised for codes & standards3) Tiered Rates3) Tiered Rates2) Some large utilities & ETO 2) Some large utilities & ETO
already have plans to exceed already have plans to exceed their “share” of targets their “share” of targets
1) It matters more than ever1) It matters more than ever
slide 33
Northwest Power and ConservationCouncil
HPWH Ramp RateHPWH Ramp Rate
Looked for comparable consumer product on Looked for comparable consumer product on which to base market growthwhich to base market growth
So What - So What - – Has a higher efficiency, but cost 2-3 moreHas a higher efficiency, but cost 2-3 more– Was used in Europe and Asia, but “unknown” to US Was used in Europe and Asia, but “unknown” to US
consumers and contractorsconsumers and contractors– Has special installation (i.e., venting) requirementsHas special installation (i.e., venting) requirements– Had a limited distribution networkHad a limited distribution network– Had to overcome prior less than “positive” consumer Had to overcome prior less than “positive” consumer
experience with earlier versions of the technologyexperience with earlier versions of the technology Answer - Instantaneous gas-fired water heatersAnswer - Instantaneous gas-fired water heaters
slide 34
Northwest Power and ConservationCouncil
National Instantaneous Gas-National Instantaneous Gas-Fired Water Heater SalesFired Water Heater Sales
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
2004 2005 2006 2007
Annual S
ale
s (m
illio
ns)
slide 35
Northwest Power and ConservationCouncil
HPWH Ramp Rate vs. Instantaneous HPWH Ramp Rate vs. Instantaneous Gas-Fired Water Heater Market GrowthGas-Fired Water Heater Market Growth
0
5,000
10,000
15,000
20,000
25,000
Year 1 Year 2 Year 3 Year 4 Year 5
PN
W A
nnual S
ale
s
Implied PNW salesbased on nationalinstantaneous gas-fired water heatermarket growth(units/year)
Draft Supply CurveHPWH RampAssumptions(units/year)
slide 36
Northwest Power and ConservationCouncil
What Technology Could This Be?What Technology Could This Be?
Plan DatePlan Date Incremental Incremental Cost/Unit Cost/Unit (nominal$)(nominal$)
20-year Savings Included 20-year Savings Included in Planin Plan
19831983 $860$860 180 aMW180 aMW
19861986 $1490$1490 Not Cost-EffectiveNot Cost-Effective
19891989 $1630$1630 Not Cost-EffectiveNot Cost-Effective
19911991 $1175$1175 Not Cost-EffectiveNot Cost-Effective
19951995 $910$910 Not Cost-EffectiveNot Cost-Effective
20042004 $1295$1295 200 aMW200 aMW
slide 37
Northwest Power and ConservationCouncil
What Technology Could This Be?What Technology Could This Be?
Plan DatePlan Date Incremental Incremental Cost/House Cost/House (nominal$)(nominal$)
20-year Savings Included 20-year Savings Included in Planin Plan
19831983 $50$50 105 aMW105 aMW
19861986 No EstimateNo Estimate No EstimateNo Estimate
19891989 No EstimateNo Estimate No EstimateNo Estimate
19911991 $36$36 24 aMW24 aMW
19951995 $30$30 44 aMW44 aMW
20042004 $90$90 630 aMW630 aMW