Tuesday, July 11, 2006

 

Oregon finds that capacity from energy conservation costs half of generation

(Instructive side note:  The NW Power and Conservation Council used to be called the NW Power Planning Council. http://www.nwcouncil.org/library/releases/2003/0716.htm)

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“Energy efficiency is the most cost-effective resource — half the cost of new generation," she said. “There’s more to be acquired if it were the wish of the Oregon Legislature for us to go after it.”

http://www.nwcurrent.com/policy/3021196.html
Fifth Power Plan: Energy Trust of Oregon
by Linda Anderson - 6.26.06

The Fifth Power Plan, released by the Northwest Power and Conservation Council in December 2004, calls for the acquisition of 700 average megawatts of conservation in the region between 2005 and 2009. Following is nwcurrent’s latest installment in a series examining how the region’s utilities are addressing the council’s recommendations. This month, we turn to Energy Trust of Oregon, which is legislatively charged with investing in cost-effective conservation and renewable energy resources in the service territories of PacifiCorp and Portland General Electric.

Energy Trust of Oregon says demand for conservation in 2005 outpaced its funds, requiring the agency to initiate a reservation program for its most popular conservation programs.

“It’s not an open question — the Energy Trust is a success,” said Tom Ekman, manager of conservation resources with the Northwest Power and Conservation Council in Portland. “Everyone has been exceedingly pleased with their performance.”

Energy Trust was created by legislation in 1999 to invest in cost-effective conservation and renewable energy in the service territories of Oregon’s investor-owned electric utilities, PacifiCorp and Portland General Electric. Customers of the two utilities pay a monthly 3 percent public purpose charge to fund the nonprofit. The agency also administers gas efficiency programs for NW Natural, whose Oregon residential and commercial customers pay a 1.5 percent surcharge on monthly bills to fund the programs.

In 2005, Energy Trust of Oregon saved more than 39 average megawatts (aMW) of electricity at a levelized cost of 1.3 cents per kilowatt-hour (kWh). In 2004 it reported saving almost 24 aMW.

The Northwest Power and Conservation Council pegged the Trust’s share of its 2009 conservation target at 30 aMW of savings per year. However, the Energy Trust’s board of directors actually sets the agency’s goals in line with performance targets set by the Oregon Public Utility Commission.

Margie Harris, Energy Trust's executive director, said the organization will do its part to reach the council's target. “We’re always seeking the best and most cost-effective ways to meet those targets," she said.

The Energy Trust board has set a goal to save 300 aMW of electricity and 19 million therms of gas efficiency by 2012. Since its inception, it has captured about 96 aMW, or 32 percent of the goal.

The board also wants to meet 10 percent of Oregon's generation needs with renewable energy by 2012. Gov. Ted Kulongoski recently proposed a renewable portfolio standard requiring 25 percent of the state’s energy be generated by renewable resources by 2025.

To date, Energy Trust has financially supported almost 15 aMW of renewable energy, which is only about 10 percent of its 2012 target of 150 aMW. Harris said the Trust's efforts were hampered in 2005 by the unavailability of wind turbines and the earlier expiration of the federal production tax credit.

The industrial sector accounted for 20 aMW of the 2005 energy saved, most resulting from efficiency measures installed at the Blue Heron Paper Co. in Oregon City, Ore. [see
"Efficiency takes flight at Blue Heron mill,"nwcurrent, Feb. 7, 2005]. Because of efficiency upgrades, the paper mill is estimated to save more than 100 million kWh annually.

Compact fluorescent bulbs and commercial lighting delivered the most savings in the single-family residential sector and commercial sector, respectively.

“Lighting is the entry point in commercial,” Harris explained. “We’ve worked with big chains so we’re able to gain a lot of momentum and attention to the type of savings that can be replicated. It’s simple to diagnose what the opportunity is and create new opportunities for other savings.”

Harris said the agency needs to continue to move conservation to the next level in Oregon and continually respond to the marketplace — even if that means pulling back from funding certain measures.

“We pay only what we need to pay to acquire the savings,” she said. “It’s not cost-effective to pay for just windows in multi-family dwellings. We’ll pay for them in concert with other measures, or refer projects to [the Business Energy Tax Credit] offered by the state.”

Harris hesitated to say whether a public purpose charge is the best way to deliver conservation, but she did say it is highly effective.

“It’s working here,” she said. “There are about 25 other states with similar programs, but no two are exactly alike. Every state has its own history, climate and operating environment.”

Dave Kvamme, PacifiCorp spokesman in Portland, said the Energy Trust of Oregon is performing as intended.

“Their programs are in many ways comparable to the programs offered elsewhere in Pacific Power and Utah Power areas,” he said. “We are not pursuing this kind of legislation in other states, and if such new laws were proposed, we would comment and offer support with our customers’ well-being in mind.”

Ekman, however, said Energy Trust of Oregon is “definitely ahead of the game” when compared to other states.

But one obvious limitation of Oregon’s legislation is the exemption of public utilities, which serve about 20 percent of the state.

Ekman said it’s premature to say whether all states should implement a public purpose charge. The Northwest Power and Conservation Council plans to review the benefits of public benefit charges in other regions of the country.

“There’s a good and tarnished side of the coin,” he said. “Not every customer gets served equally as a consequence of the legislation. But when the legislature looked to steal money for other funding, they couldn’t.”

Harris said the Energy Trust could easily acquire more cost-effective energy efficiency on behalf of ratepayers if the organization had more money.

“Energy efficiency is the most cost-effective resource — half the cost of new generation," she said. “There’s more to be acquired if it were the wish of the Oregon Legislature for us to go after it.”


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