851 S.W. Sixth Avenue, Suite 1100 Steve Crow 503-222-5161 Portland, Oregon 97204-1348 Executive Director 800-452-5161 www.nwcouncil.org Fax: 503-820-2370

Bruce A. Measure Chair

Montana

Dick Wallace Vice-Chair Washington

Rhonda Whiting Montana

W. Bill Booth

Idaho

James A. Yost Idaho

Tom Karier Washington

Melinda S. Eden

Oregon

Joan M. Dukes Oregon

September 9, 2010

MEMORANDUM TO: Council Members FROM: Tom Eckman and Charles Grist SUBJECT: 2009 Regional Conservation Achievements Each year the Regional Technical Forum (RTF) conducts an assessment of regional conservation achievements. The RTF’s 2009 assessment found that programs operated by Bonneville, the region’s public and private utilities, the Energy Trust of Oregon and the Northwest Energy Efficiency Alliance (NEEA) acquired 217 average megawatts of saving. Savings in 2009 were slightly lower than the 235 average megawatts achieved the previous year. However, between 2005 and 2009 the region has captured 938 average megawatts of savings. This five-year total is more than 30% above the Council’s 5th Plan’s five-year conservation target of 700 average megawatts. The energy saved by 2009 is similar to the amount of energy produced in a year by the Columbia Generating Station nuclear power plant. Figure 1 shows the cumulative savings achieved in the region and the 5th Plan conservation target.

851 S.W. Sixth Avenue, Suite 1100 Steve Crow 503-222-5161 Portland, Oregon 97204-1348 Executive Director 800-452-5161 www.nwcouncil.org Fax: 503-820-2370

Figure 2 compares the 5th Plan’s annual conservation targets with the actual regional achievements by sector. The region accomplished nearly double

the 5th Plan’s savings target for the residential sector and met or exceeded the plan’s targets in all but the Agriculture/Irrigation sector. Staff estimates that just over 40% (205 MWa) of the savings in the residential sector came from the highly-successful regional programs to increase the use compact fluorescent lamps (CFLs). While CFLs did produce a significant portion of the residential sector savings it is important to note that the region would still have accomplished the 5th Plan’s target for the residential sector without securing any savings from CFLs. These savings came at a very low cost to the utility system compared to new power costs and even compared to wholesale market prices. The levelized cost of the energy efficiency savings to the region’s utility system was about $15 per MWh. The low cost of conservation was partly a result of the rapid acquisition of CFL bulbs and other relatively low-cost measures. In 2009, utility expenditures per annual average megawatt saved have increased compared to earlier years. For comparison purposes, the levelized cost of power from new wind generating facilities, like the recently completed Biglow Canyon, are in the range of about $100 per MWh. The conservation is also low cost when compared to average annual wholesale power prices during the 2005-2009 period which ranged $30 to $60 per MWh. Over the five-year period, the savings to the electric utility system was about $1 billion if it is valued at wholesale power prices. Regional utility system expenditures on conservation were $292 million in 2009, up about $70 million over 2008. Total utility system expenditures on conservation for the 2005-2009 period were about $1 billion. Staff will develop additional detail on the energy efficiency accomplishments for presentation at the September meeting in Bend.

Regional Conservation ProgressRegional Conservation Progress Review of Regional Savings from g g

2005 ‐ 2009

September 21, 2010September 21, 2010

Reported Savings from Utility, Bonneville, epo ted Sa gs o Ut ty, o e e,NEEA and Energy Trust of Oregon

• Data From RTF Survey, Bonneville & NEEA Reports– Adjustments for

• Line losses• Line losses• Duplication• Non‐reporting utilities• 5th Power Plan “baselines”5 Power Plan  baselines

• Total Regional Savings Are Larger– Today’s Report Does not yet include:

• Savings from Building Codes & Federal Standards enacted after 5th Plan• Savings from Building Codes & Federal Standards enacted after 5th Plan was adopted

• Non‐Programmatic Savings (Consumers who adopted efficiency measures, but did not participate in utility, BPA or ETO programs)

• Plan’s Targets Include Savings From These Mechanisms

2

Regional Savings Far Exceeded 5th

Plan’s 2009 Target

219

250

5th Plan Target

150

200

5th Plan Target

Actual Savings

150150

50

100

0

50

2009

3

5th Plan’s Savings Targets Were Exceeded in Every Year

238250

300Actual Savings

5th Plan Target

203219

200

Wa

135147

130 135 140 145 150

100

150

Annual M

W

50

100

0

2005 2006 2007 2008 2009

4

We We VanquishedVanquished the 5the 5thth Plan’s Five Year Plan’s Five Year Conservation TargetConservation Target

1000 942

800

900

1000

Actual Savings Target

723

600

700

800

gs (MWa)

485

400

500

ative Saving

135

282

200

300

Cumula

0

100

2005 2006 2007 2008 2009

5

Savings Met or Exceeded 5th Plans’ Targets in All Sectors But Agriculture

600

491500

2005‐2009 Regional Target

2005‐2009 Regional Actual

400

(MWa)

225250252

300

al Savings 

175 173

100

200

Annua

5025

0

100

Ag/Irrigation/Other Commercial Industrial Residential

6

Residential Success Due to CFLs

160Residential Savings 2005‐2009

Residential Success Due to CFLs

120

140

160

Residential CFL

Residential Other

80

100

120

Wa

Target ‐ Residential 

40

60

80

M

0

20

2005 2006 2007 2008 2009

Market Transformation Savings from CFL Tapering OffMarket Transformation Savings from CFL Tapering Off

7

But Residential Sector Targets Were Met Without CFL Savings

600

500

Residential CFL Savings

Residential ‐ Non CFL Savings

205400

(MWa)

300

al Savings 

250286

100

200

Annua

0

100

2005‐2009 Regional Target 2005‐2009 Regional Actual

8

Both IOUs & POUs Exceeded TargetsAll Sectors 2005‐2009

Both IOUs & POUs Exceeded Targets

500

600

400

500

561300

MWa

382319

379

100

200

0

100

IOU Target IOU Actual POU Target POU Actual

9

IOUs Exceeding in All SectorsPOUs Exceeding in Res & Commercial

POU Industrial Expansion Launched 2010

IOU System by Sector POU System by Sector

269

200

250

300

(MWa) 2005‐2009 IOU Target

2005‐2009 IOU Actual222

200

250

300

2005‐2009 POU Target

2005‐2009 POU Actual

136

82

139152

122

100

150

200

ual Savings (

89 9311199

100

150

200

ings (MWa)

24 18

0

50Annu

267

51

0

50

Annual Sav

10

Average Utility Cost of All Efficiency Acquired Is Still Very Low Cost

$13/MWh*$13/MWh  

90

100

60

70

80

006$)

Market Prices at Mid‐C ($/MWh)

Levelized Cost if EE ($/MWh)

40

50

60

MWh (20

10

20

30$/

0

2005 2006 2007 2008 2009

* Levelized Cost of 2005‐2009 Efficiency @ 13‐year measure life, Utility Cost Only  11

2005‐2009 Efficiency Savings941 MWa

Energy savingsEnergy savings equivalent to the 

l fannual output of a large nuclear power plant

Columbia Generating Station near Richland, WA

12

2005‐2009 Efficiency Spending = $1 BillionSimilar to the cost of a large wind farm,

but produces five times the annual output

Biglow Canyon Wind Farm New Nuclear PlantBiglow Canyon Wind Farm• 217 turbines over 5 years• Cost about $1 billion• 150 MWa annual energy output

New Nuclear Plant

• Cost about $5.5 billion

• 900 MWa annual energy output• 150 MWa annual energy output• Completed September 2010• Levelized cost about $100/MWh

gy p

• Levelized cost about $100/MWh

• Not Available 2005‐2009

13

Projected Lifecycle Regional Power Cost Savings from

2005‐09 Conservation Accomplishments2005 09 Conservation Accomplishments

$2.9 Billion*$2.9 Billion*$2.9 Billion$2.9 Billion

*Present Value of 2005 2009 Conservation Savings Compared to SupplyingPresent Value of 2005‐2009 Conservation Savings Compared to SupplyingRegion with Equivalent Amount of Power from Wholesale Market PurchasesOver the Life of the Conservation Measures

14

Basis of the Estimated Regional Power Cost Savings from 2005‐09 Conservation

C ti C t A l Utilit R t d E dit• Conservation Cost = Annual Utility Reported Expenditures for Conservation 2005 – 2009 (all cost assumed to be expensed, i.e. recovered in rates during the same year as 

)savings were achieved)• Power Cost Savings:

Savings begin year following “installation”– Savings begin year following  installation  – 2005 – 2009 = Valued at actual average annual wholesale 

market prices at Mid‐C trading HUB2010 2022 V l d 6th Pl ’ di l– 2010 – 2022 = Valued at average 6th Plan’s medium annual wholesale market price forecast.

• Life of Conservation Savings = 13 yearsg y– Assumed shorter than average measure life of all measures in 

5th Plan (14 years) due to proportion of CFL savings

15

How Power Cost Savings Were EstimatedgExample ‐2005 Program Savings and Cost

800U ili C f 2005 EE S i

600

700

Utility Cost of 2005 EE Savings

Savings from 2018

Savings from 2017Cost of 2005 S i F ll

400

500

06$

Savings from 2016

Savings from 2015

Savings from 2014

Savings Fully Recovered by Avoided Market Purchases by 2008

200

300

Million 200

Savings from 2013

Savings from 2012

Savings from 2011

y

0

100

g

Savings from 2010

Savings from 2009

Savings from 2008

‐200

‐100

Savings from 2008

Savings from 2007

Savings from 2006

Cumulative Net Savings

16

2005‐09 Conservation’s Impact on Regional Power System Revenue Requirements

$5 000

$6,000 

006$)

Cost of Energy Efficiency in Revenue Requirements (2006$)

Cost of Power Equilvalent to 2005 ‐ 2009 Savings @ Mid‐C Wholesale Prices

$4,000 

$5,000 

t (m

illion 20

$3,000 

Requirement

Present Value Savings $2 9 Billi

$2,000 

al Revenue R = $2.9 Billion

$‐

$1,000 

Annua

$

2005 2009 2013 2017 2021

17

Why are 2009 Savings Lower Than 2008?Why are 2009 Savings Lower Than 2008?

250

200

250Market Transformation …Utility Program Savings

150

gs (Mwa)

100

nual Saving

50

Ann

0

2005 2006 2007 2008 2009

18

Three Years of Remarkable Residential Success2007‐2009

Total Regional Savings by Sector by Year

140

160

Total Regional Savings by Sector by Year 

120

140

Target ‐ Irrigated Agriculture

Actual ‐ Irrigated Agriculture

80

100

MWa

Actual  Irrigated Agriculture

Target ‐ Commercial

Actual ‐ Commercial

Target ‐ Industrial

40

60Target ‐ Industrial

Actual ‐ Industrial

Target ‐ Residential 

Actual Residential

0

20

Actual ‐ Residential 

02005 2006 2007 2008 2009

19

Utility Expenditures Are IncreasingCFLs Kept First‐Year Cost Low 2007‐2008

300

350

Annual Savings (MWa)

A l EE E di (2006$Milli )

250

Annual EE Expenditures (2006$Million)

150

200

100

0

50

2005 2006 2007 2008 2009

20

To The Region’s Utilities, Bonneville, Energy Trust of Oregon & NEEA

21