Northwest Power and Conservation Council Draft Plan Proposed Regional Conservation Targets for 2010...

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


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


Proposed Targets 2010-2014Proposed Targets 2010-20141200 MWa Cumulative 1200 MWa Cumulative

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2010 2011 2012 2013 2014

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Annual S

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Lost-OpportunityDiscretionary


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


Alternatives to Proposed Targets Alternatives to Proposed Targets – Discretionary Conservation– Discretionary Conservation

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2010 2011 2012 2013 2014Year

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Alternative 1 - 20 % SlowerProposedAlternative 2 - 20 % Faster


Alternatives to Proposed Targets Alternatives to Proposed Targets – Lost Opportunity Conservation– Lost Opportunity Conservation

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160

2010 2011 2012 2013 2014Year

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Alternative 1 - 20% SlowerProposedAlternative 2 - 20% Faster


Cumulative Savings 2010 - 2014Cumulative Savings 2010 - 2014

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Alternative 1 -Slower

Proposed Alternative 2 -Faster

Cum

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Lost-OpporunityDiscretionary


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.


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


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


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


Historical Regional CFL SavingsHistorical Regional CFL Savings

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70%

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90%

100%

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

An

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Net Market EffectsBaselineLocal Utility

Source: NEEA Data and Projections


Historical & Projected Regional Historical & Projected Regional CFL SavingsCFL Savings

0%

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100%

1997

1998

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Net Market EffectsBaselineLocal Utility

Historical

Forecast

Source: NEEA Data and Projections


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


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


Base Case Least-Risk Plan Base Case Least-Risk Plan Conservation “Build Out” ScheduleConservation “Build Out” Schedule

From Regional Portfolio ModelFrom Regional Portfolio Model

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2010 2015 2020 2025Year

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Lost-OpportunityDiscretionary

Proposed TargetProposed Target


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

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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


Share of Savings by Funding SourceShare of Savings by Funding Source

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Non-Programatic MarketEffects

NEEA Programs (Utility,SBC and BonnevilleFunded)

Bonneville FundedConservation (Carry Over)

Bonneville FundedConservation

Utility & SBC FundedConservation


Contribution of CFLs to Regional Contribution of CFLs to Regional Conservation SavingsConservation Savings

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2005 2006 2007 2008

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NEEA - CFL

CFL Baseline(Non-Programmatic)

Non-CFL


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)

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197819

7919

8019

8119

8219

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8419

8519

8619

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9019

9119

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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)

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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)

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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


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


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

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Requirment w/Proposed Draft Plan "Target"Baseline Revenue Requirement (2008 Expenditure Level)


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%

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2010 2011 2012 2013 2014

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Comparison of 2010 “Targets” with Utility Comparison of 2010 “Targets” with Utility Projected Savings for 2008 and 2009Projected Savings for 2008 and 2009

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EWEB

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2010 "Targets" Based on Share of Load Allocation

2008 Preliminary

2009 "Plans"


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Preliminary Estimates of Preliminary Estimates of Expenditures & BudgetsExpenditures & Budgets


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


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


National Instantaneous Gas-National Instantaneous Gas-Fired Water Heater SalesFired Water Heater Sales

0.00

0.05

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0.20

0.25

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0.35

2004 2005 2006 2007

Annual S

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HPWH Ramp Rate vs. Instantaneous HPWH Ramp Rate vs. Instantaneous Gas-Fired Water Heater Market GrowthGas-Fired Water Heater Market Growth

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Implied PNW salesbased on nationalinstantaneous gas-fired water heatermarket growth(units/year)

Draft Supply CurveHPWH RampAssumptions(units/year)


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




20042004 $1295$1295 200 aMW200 aMW


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

Northwest Power and Conservation Council Draft Plan Proposed Regional Conservation Targets for 2010...

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