Energy Trust of Oregon, Inc.Resource Assessment

Carbon Allocation Task Force April 27, 2006

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Energy Efficiency Resource Assessment

Purpose: To quantify the projected amount and cost of gas and electric efficiency resources within the territory Energy Trust serves between now and 2017.

• Update 2003 study with significant amount of new information available (surveys, studies, program data).

• Results will be used to help establish policies and target programs for Energy Trust efficiency resource acquisition.

• NW Natural contracted separately for low-income residents and Washington territory.

• Cascade Natural Gas contracted separately to include their territory.

Resource Assessment - Scope

• Estimated technical and achievable savings potential and total measure cost– “Technical” includes all savings available from possible

participants without considering market barriers– “Achievable” adjusts participation based upon market barriers

(Power Council assumption ~ 85% of technical)• Relied upon secondary data sources only

– Employed results of recent surveys/studies funded separately over the last few years

• Addressed both electric and gas resources – Both fuels separately considered and summarized – Interactive effects with other fuels quantified as impact to

Operation & Maintenance costs– All sectors except industrial gas studied

• Results presented for 2006, 2012, and 2017• Equipment and operational/behavioral measures

included• Direct application renewable resources and combined

heat and power (CHP) addressed

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Resource Assessment – Data Sources

• Utilities – PGE, PacifiCorp, and NW Natural– Load forecasts and historical sales by sector and SIC code

– Survey data – (e.g. Residential Appliance Saturation Survey (RASS)

• NW Power Council/Regional Technical Forum– Measure characteristics, load shapes

• Energy Trust of Oregon– Existing program data

– Measure cost and savings assumptions and verification

• Regional/national reports and studies – Recent NW Energy Efficiency Alliance market research data from

the Commercial Building Site Assessment

– Database for Energy Efficient Resources (DEER); American Council for an Energy Efficient Economy studies

– 2004 Census, Federal Energy Regulatory Commission Form 1

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Resource Assessment – Limitations

• Industrial– Challenge of extrapolating from the number of individually site-

specific tailored Energy Trust projects

– Resulted in conservative industrial saving projections

• Emerging technologies– Newer technologies with less consumer interest and purchasing

opportunities

– Example: heat pump water heaters

• Next generation technologies– Not included in study and likely to emerge; difficult to forecast

– Example: white Light Emitting Diode (LED) lamps

• Demographics – Limited data on existing residential insulation levels

– New data will be available soon from the Alliance study

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Summary of Study Results- Definitions

1. Type of efficiency potential; Technical vs. Achievable

2. Cost of savings– Total measure cost - Direct output from study includes cost of

equipment, installation, operations and maintenance (Operations & Maintenance).

– Utility system cost – What it would cost for Energy Trust to acquire these savings; includes incentive, program management and program delivery expenses.

– Societal cost – Total measure cost plus the cost to manage and deliver the programs.

3. Cost effective savings – Traditional efficiency cost effectiveness tests not included in the

study (value of benefits change through time, variations of tests limit usefulness of output, etc.)

– Utilized a “cap” on the total measure cost to limit measure savings to those which have the most reasonable chance of being cost effective

Overall Results – Gas 2017

Gas Supply CurveAll Sectors, 2017

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

$0.000 $0.500 $1.000 $1.500 $2.000

Levelized Annual Cost, $/th

An

nu

al kT

he

rms

Technical

Achievable

All Sector 2017 Technical Potential 113 Million therm and Levelized Cost $/th, screened at $1.70

Commercial at $ 0.49149%

Residential at $ 0.70551%

Overall Results – Electric 2017

Electricity Supply CurveAll Sectors, 2017

0

100200

300400

500

600700

800

-$0.100 $0.000 $0.100 $0.200

Levelized Annual Cost, $/kWh

An

nu

al A

ve

rag

e M

W

Technical

Achievable

Overall Results – Electric 2017

2017 Electric Technical Potential 575 MWa by Sector with Total Measure Cost Cap of $0.055/kWh Levelized

Industrial39%

Commercial42%

Residential19%New = 25%

Existing = 75%

New = 18%Existing = 82%

Commercial by End Use – Electric 2017

Commercial Savings by End Use

Cooking2%

Cooling7%

Heating14%

Lighting45%

Misc.12%

Refrigeration11%

Ventilation0%

Water Heat9%

Residential by End Use – Electric 2017

Residential Savings by End Use

Appliances13%

Cooling3%

Lighting30%

Space heating48%

Water heating6%

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How can we use these results?

– The study provides total potential in terms of total measure cost

– Cost screens of 5.5 cents/kWh and $1.70/therm levelized approximate avoided cost of generation – provides estimate of potential with most reasonable chance of being cost effective

– Limited use by itself – total measure cost can include participant benefits of Operations & Maintenance savings, not what Energy Trust would pay for savings

– Does not recognize additional value for peak load measures

Other ways to looks at the results….

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Analysis of Results – Electric Savings

Focus on Achievable Savings

– Technical potential is insufficient for program design

Year Utility Technical Potential All Measures

(MWa)

Technical Potential w/cost

cap 5.5 cents/kWh (MWa)

Achievable Potential All Measures

(MWa)

Achievable Potential w/cost

cap 5.5 cents/kWh

(MWa)

2012PGE 353 270 266 202

PAC 254 199 198 149

Total 607 469 464 351

2017

PGE 440 334 362 276

PAC 308 241 199 154

Total 748 575 561 430

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Analysis of Results – Utility Cost of Savings

Calculate a utility system levelized cost for each measure.

Includes Energy Trust incentives, program management and delivery costs

Results in range of savings from 351 to 433 MWa at an estimated utility cost of between $456M and $579M

Year Achievable Savings w/cost Screen

(MWa)

Total Utility Cost First Year Cost $M/aMW

2012 351 $456 M $1.30

2017 433 $579M $1.34

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Utility System Levelized Cost - 2012

2012 Electric Achievable Potential350 MWa with Average Utility Levelized Cost of $0.012/kWh

-

50

100

150

200

250

300

350

400

- 0.01 0.02 0.03 0.04 0.05 0.06

Levelized Utilty System Cost ($/kWh lifetime)

MW

a

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Levelized Utility Cost Cents/kWh

MWa Avg. Utility Cost

cents/kWh

Total Utility Cost $M

Utility Cost $M/MWa

<2 cents/kWh

254 0.8 cents/kWh

$234 M $0.92M/MWa

2-6 cents/kWh

97 3.03 cents/kWh

$221 M $2.28M/MWa

<= 6 cents/kWh

351 1.20 cents/kWh

$454 M $1.30M/MWa

Analysis of Results – Utility Cost of Savings 2012

For perspective, in 2005, Energy Trust acquired 39 MWa at 1.3 cents/kWh levelized

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Comparison to Energy Trust Goals

Energy Trust 2012 “stretch” goal to acquire 300 MWa savings

– 2002-2005, 96 MWa acquired

– Current estimate of 150 MWa savings 2006-2012 achievable with projected $230M in funding for cumulative savings of 250MWa by 2012

– Anticipating 50 MWa short of 2012 target with currently forecasted funding

Comparison of Energy Trust Electric Savings Goal vs. Actual/Projections

0

50

100

150

200

250

300

350

March-Dec2002

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Cu

mu

lative

aM

W

Actual-2005/Forecasted-2006-2012 2002 Goal

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Analysis of Results – Societal Cost of Savings

Calculate a societal cost for each measure

– Includes total measure costs, program management, installation, etc.

– Results in same range of savings at an estimated societal cost of between $978M and $1,200M

– Levelized cost remains competitive

Year Achievable Savings w/cost Screen (MWa)

Total Societal Cost

First Year Cost $M/aMW

Levelized Cost cents/kWh

2012 351 $ 978 M $2.8 2.52017 433 $1,200

M$2.8 2.5

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Comparison to other Resource Choices

Resource Alternatives

0

5

10

15

20

25

30

35

40

45

50

AchievableEnergy Efficiency

Coal - steamelectric

Coal - IGCC, noseq

Nat Gas - CCCT Wind

$/M

Wh

Leve

lized

Source of resource costs: NWPCC, 5th Power Plan, 2005

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Equivalent Avoided CO2 Emissions

• 2003 average emission rates by utility: 1.867 lb CO2 avoided per kWh saved for PacifiCorp and 1.123 lb/kWh for PGE

• Based on weighted average estimate of 1.42 lb/kWh…

Year Achievable Savings (MWa)

Avoided CO2 output (metric tons)

2012 351 2.0 M

2017 433 2.4 M

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Future Analysis

• Calculate estimated utility and societal costs for gas efficiency potential

• Quantify economic impacts of acquiring electric and gas savings (e.g., new business income, job retention and expansion, wage increases, business and economic development benefits)

• Calculate benefit/cost ratios for specific savings measures

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Resource Assessment – Next Steps

– Results serve as a general guide for long term planning and investment strategy

– Provides input to Energy Trust strategic planning and analyses

– Serves as a useful data source/tool to understand service territory demographics

Comments/Questions - ?

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Backup

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Resource Assessment – Methodology All Sectors

Step 1: Baseline of existing gas/electric usage by utility, apply utility growth rates for future energy use estimates

Step 2: Sort energy use by building types, use/square foot, etc to get typical energy use intensity

Step 3: Screen potential measures for those with savings but limited risk

Step 4: Collect Measure data ; savings, cost, saturation and applicability

Step 5: Calculate savings and cost: Apply measures to energy use population and calculate technical and achievable savings potential and total measures cost

Step 6: Calculate measure levelized cost : Levelize the measure installation, capital, and O&M costs over the life of the measure.

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Resource Assessment – Methodology

• Residential– Utility building characteristics: housing type (SF, MF, MH) vintage,

heating & DHW fuel – Average consumption by house type through calibration of retail

sales to population data

• Commercial– Population data converted to square footage by building type with

EUI estimates and utility retail sales.

• Industrial / Agriculture

– Top down approach – Sales by SIC code split into end use process categories

– Measures characterized as % of end use load that can be saved

Residential Results – Electric 2017

Residential Technical Potential 112 MWa and Levelized Cost $/kWh, screened at $.055

0 5 10 15 20 25 30 35 40 45 50

New Appliance at $ 0.047

New DHW at $ 0.019

New Equipment at $ 0.041

New Lighting at $ 0.029

DHW Measures at $ 0.003

Replace DHW at $ 0.019

Heat Pump HW at $ 0.045

HVAC Retrofit at $ 0.043

Replace Appliance at $ 0.002

Weatherization at $ 0.038

Lighting Retrofit at $ 0.033

Achievable

Technical

Commercial Results – Electric 2017

Commercial Potential 238 MWa and Levelized Cost $/kWh, screened at $.055

0 10 20 30 40 50 60 70

New Windows at $ 0.026New DHW Measures at $

New AC at $ 0.027New Heat Reclaim at $ 0.006

New Controls at $ 0.046New Refrigeration at $ 0.010

New Lighting at $ 0.039Chiller at $ 0.024

Transformer at $ 0.008Efficient AC at $ 0.028

Heat Pump DHW at $ 0.002Clothes Washer at $ 0.045DHW Measures at $ 0.017

Cooking at $ 0.002Shell Measures at $ 0.014

Heat Reclaim at $ 0.007Economizer at $ 0.027

Controls, O&M at $ 0.030Ground Source HP at $ 0.004

PC, Monitor at $ 0.003Refrigeration at $ 0.008

Lighting at $ 0.027

MWa

Achievable

Technical

Industrial Results – Electric 2017

Industrial Technical Potential 226 MWa and Levelized Cost $/kWh, screened at $.055

0 10 20 30 40 50

Cross-Cutting MeasuresSupply & Transformer at $ -0.002

Generic O&M at $ 0.050Efficient Motors at $ 0.008

Efficient Lighting at $ 0.022

Pump Eff iciency Improvement at $ 0.000Duct/Pipe Insulation at $ 0.016

Air Compressor at $ 0.014Sensors and Controls at $ -0.001

Fan system improvements at $ 0.003Microw ave Processing at $ 0.053

Sector Measures

Electronics: process at $ -0.069Wood: Replace Pneumatics at $ -0.037

Electronics: HVAC at $ -0.065Electronics: chiller at $ 0.024

Paper: Refiner Mod at $ 0.004Metals at $ -0.060

Food: Cooling and Storage at $ 0.012

Paper: Vapor Recompression at $ 0.014Paper: ChlorOxy Mod at $ 0.010

Wood: Soft Start Press at $ 0.015Ag Irrigation at $ -0.531

Achievable

Technical