Northwest Power and Conservation CouncilProCost Version 2.2 RTF July 2007

Northwest Power and ConservationCouncil

ProCostProCost

Version 2.2Version 2.2

RTF July 2007RTF July 2007

slide 2


ProCostProCost

Spread sheet toolSpread sheet tool Compare costs & benefits of conservationCompare costs & benefits of conservation

– Equal footing with generationEqual footing with generation– Life cycle analysisLife cycle analysis– All costs and benefitsAll costs and benefits– Multiple ‘sponsor’ points of viewMultiple ‘sponsor’ points of view– 85 output metrics85 output metrics– Generates supply curvesGenerates supply curves

slide 3


UsesUses CouncilCouncil

– Used in Power Plan conservation assessmentUsed in Power Plan conservation assessment– Builds supply curves for conservationBuilds supply curves for conservation

RTFRTF– Cost-effectiveness of programs & measuresCost-effectiveness of programs & measures

Utilities & ETO & othersUtilities & ETO & others– Used as screening tool for programsUsed as screening tool for programs– Used to develop conservation supply curvesUsed to develop conservation supply curves

slide 4


InputsInputs

Measure costs & savingsMeasure costs & savings When savings occurWhen savings occur Load factor of savingsLoad factor of savings Coincidence of savings with peakCoincidence of savings with peak Avoided costsAvoided costs Financial parameters of sponsorsFinancial parameters of sponsors Discount rateDiscount rate Program parametersProgram parameters

slide 5


OutputsOutputs Life cycle costs & benefitsLife cycle costs & benefits By measureBy measure Measures combined into categories (programs)Measures combined into categories (programs) Four points of viewFour points of view

– Wholesale electric utility (BPA)Wholesale electric utility (BPA)– Retail electric utilityRetail electric utility– Natural gas utilityNatural gas utility– Total Resource Cost (TRC)Total Resource Cost (TRC)– Customer (limited)Customer (limited)

Supply curves with shaped savingsSupply curves with shaped savings

slide 6


MethodologyMethodology

Time value of quantifiable cost & benefit Time value of quantifiable cost & benefit streamsstreams

Use Present Value (PV) estimatesUse Present Value (PV) estimates ProCostGas\ProCost Value ProCostGas\ProCost Value Stream.xlsStream.xls

slide 7


Time-Based Value of SavingsTime-Based Value of Savings

Consider when the savings occurConsider when the savings occur– Time of Day and Day of Week (4 time blocks)Time of Day and Day of Week (4 time blocks)– Month (12 months)Month (12 months)– Year (20 years of avoided costs) or moreYear (20 years of avoided costs) or more– Matrix of Savings & Prices: 4 by 12 by 20Matrix of Savings & Prices: 4 by 12 by 20

slide 8


Monthly Wholesale Prices at Mid-ColumbiaMonthly Wholesale Prices at Mid-ColumbiaDraft 5Draft 5thth Power Plan, Current Trends Baseline Power Plan, Current Trends Baseline

0

20

40

60

80

100

120

140

160

180

200

2001 2006 2011 2016 2021

Mo

nth

ly W

ho

les

ale

Pri

ce

$/M

Wh

(Ye

ar

20

00

$)

On-peak prices

Off-peak prices

slide 9


Monthly Wholesale Prices at Mid-C in 2012 Monthly Wholesale Prices at Mid-C in 2012 On-Peak and Off-Peak ($/MWh in Year 2000$)On-Peak and Off-Peak ($/MWh in Year 2000$)

Monthly Average Wholesale Prices at Mid-ColumbiaYear 2012

0

20

40

60

80

100

120

140

160Ja

nuar

y

Feb

ruar

y

Mar

ch

Apr

il

May

June

July

Aug

ust

Sep

tem

ber

Oct

ober

Nov

embe

r

Wh

ole

sale

Pri

ce $

/MW

h

(Yea

r 20

00$)

On PeakOff Peak

slide 10


Typical “On-Peak” Savings ProfilesTypical “On-Peak” Savings Profiles

Shape of Savings - On Peak

0

5

10

15

20

25

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Month

Per

cen

t o

f An

nu

al M

easu

re S

avin

gs

Occ

uri

ng

in M

on

th

Commercial AirConditioning

Street Lighting

SF ResidentialWeatherization

ResidentialLighting

slide 11


Typical “Off-Peak” Savings ProfilesTypical “Off-Peak” Savings ProfilesShape of Savings - Off Peak

0

5

10

15

20

25


Month

Per

cen

t o

f An

nu

al M

easu

re S

avin

gs

Occ

uri

ng

in M

on

th


Street Lighting


Residential Lighting

slide 12


Timing-Based ValueTiming-Based Value

ShapeShape of Savingsof Savings

Value of Wholesale Value of Wholesale Power Power

Value of kWh SavedValue of kWh Saved

++

==

Shape of Savings - On Peak

0

5

10

15

20

25


Month

Per

cen

t o

f An

nu

al M

easu

re S

avi

ng

s O

ccu

rin

g in

Mo

nth


Street Lighting


ResidentialLighting

Monthly Average Wholesale Prices at Mid-ColumbiaYear 2012

0

20

40

60

80

100

120

140

160

Janu

ary

Feb

ruar

y

Mar

ch

Apr

il

May

June

July

Aug

ust

Sep

tem

ber

Oct

ober

Nov

embe

r

Wh

ole

sale

Pri

ce $

/MW

h

(Yea

r 20

00$)

On PeakOff Peak

$

slide 13


Value Depends on Shape of SavingsValue Depends on Shape of SavingsPresent Value of One kWh Energy Saved Present Value of One kWh Energy Saved

Assuming a 20-Year Measure LifeAssuming a 20-Year Measure Life

Present Value of Measure BenefitsAssume 20-year Measeure Life - Energy Value Only

$-

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

$0.90

$1.00

Sm

all

Co

mm

erci

al A

irC

on

dit

ion

ing

En

erg

y S

tar

Clo

thes

Was

her

-E

lect

ric

DH

W &

Dry

er

Res

iden

tial

CF

L

Res

iden

tial

Wea

ther

izat

ion

Eff

icie

nt

Str

eet

Lig

ht

PV

Ben

efit

$/k

Wh

Sav

ed

(Y

ear

2000

$)

slide 14


But … But … Longer-Lived Measures Have More ValueLonger-Lived Measures Have More Value

Present Value of One kWh SavedPresent Value of One kWh SavedFor Life of Measure - Energy Value OnlyFor Life of Measure - Energy Value Only

Present Value of Measure Energy Benefits PV One kWh of Energy For Measure Life

$-

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

$0.90

Re

sid

en

tia

lW

ea

the

riza

tio

n

Sm

all

Co

mm

erc

ial A

irC

on

dit

ion

ing

En

erg

y S

tar

Clo

the

sW

as

he

r

Eff

icie

nt

Str

ee

tL

igh

t

Re

sid

en

tia

lC

FL

Measure

PV

Ben

efit

$/k

Wh

En

erg

y S

aved

(Yea

r 20

00$)

45 Year

18 Year

14 Year

15 Year

6 Year

slide 15


Hour Monday Tuesday WednesdayThursday Friday Saturday Sunday HolidayDay of Week 1 2 3 4 5 6 7 8

1 3 3 3 3 3 4 4 42 3 3 3 3 3 4 4 43 3 3 3 3 3 4 4 44 3 3 3 3 3 4 4 45 2 2 2 2 2 2 2 46 2 2 2 2 2 2 2 37 2 2 2 2 2 2 2 38 2 2 2 2 2 2 2 39 1 1 1 1 1 2 2 2

10 1 1 1 1 1 2 2 211 1 1 1 1 1 2 2 212 1 1 1 1 1 2 2 213 1 1 1 1 1 2 2 214 1 1 1 1 1 2 2 215 1 1 1 1 1 2 2 216 1 1 1 1 1 2 2 217 1 1 1 1 1 2 2 218 1 1 1 1 1 2 2 219 2 2 2 2 2 2 2 320 2 2 2 2 2 2 2 321 2 2 2 2 2 2 2 322 2 2 2 2 2 2 2 423 3 3 3 3 3 4 4 424 3 3 3 3 3 4 4 4

ProCost Time-Segment MapProCost Time-Segment Map

slide 16


Plus …Plus …Other Values of ConservationOther Values of Conservation

Quantifiable Non-Energy Benefits Quantifiable Non-Energy Benefits – Water savings, maintenance laborWater savings, maintenance labor

Distribution system expansion deferral Distribution system expansion deferral – Poles, wires, transformers, substationsPoles, wires, transformers, substations

Transmission system expansion deferral Transmission system expansion deferral – Bigger poles & wires Bigger poles & wires

Externalities: CO2Externalities: CO2 Regional Act Credit of 10% to conservationRegional Act Credit of 10% to conservation Risk-mitigation value of conservationRisk-mitigation value of conservation

slide 17


Present Value of One KWh Saved Present Value of One KWh Saved Considering All BenefitsConsidering All Benefits

Present Value of Measure Benefits for Measure Life

$-

$0.50

$1.00

$1.50

$2.00

$2.50

Resid

en

tial

Weath

eri

zati

on

Sm

all

Co

mm

erc

ial

Air

Co

nd

itio

nin

g

En

erg

y S

tar

Clo

thes W

ash

er

Eff

icie

nt

Str

eet

Lig

ht

Resid

en

tial

CF

L

PV

Measu

re B

en

efi

t $/k

Wh

(Year

2000$) Distribution Deferral

Transmission Deferral

Non-Energy Benefits

CO2 Externality

Regional Act Credit

Wholesale kWh & LIneLoses

slide 18


What’s New in Version 2.2What’s New in Version 2.21.1. Time-based value of savings for Natural GasTime-based value of savings for Natural Gas2.2. Time-based value for CO2 (tons & $$) Time-based value for CO2 (tons & $$) 3.3. More perspectives: sponsors & societyMore perspectives: sponsors & society4.4. More output metrics More output metrics 5.5. Supply curve report with shape of savingsSupply curve report with shape of savings6.6. More input parameter choicesMore input parameter choices7.7. Risk-mitigation value of conservationRisk-mitigation value of conservation8.8. Revised B/C ratios to handle negative B & CRevised B/C ratios to handle negative B & C9.9. Works for Natural Gas (unitized per therm)Works for Natural Gas (unitized per therm)10.10. Fixed some errorsFixed some errors

slide 19


Wholesale Electric PerspectiveWholesale Electric Perspective BenefitsBenefits

– Electric Energy include transmission losses (kWh)Electric Energy include transmission losses (kWh)

– Transmission capacity deferralTransmission capacity deferral

– Regional Act credit (10% OF first-two items)Regional Act credit (10% OF first-two items)

– Risk-mitigation creditRisk-mitigation credit

Share of costs assigned by userShare of costs assigned by user– CapitalCapital

– O&MO&M

– Period ReplacementPeriod Replacement

– Other non-energyOther non-energy

– Program AdminProgram Admin

slide 20


Retail Electric PerspectiveRetail Electric Perspective

BenefitsBenefits– Electric Energy including TElectric Energy including T&D&D losses losses– Transmission capacity deferralTransmission capacity deferral– Local Distribution capacity deferralLocal Distribution capacity deferral– Regional Act credit (10% of first 3)Regional Act credit (10% of first 3)– Electric Risk-mitigation creditElectric Risk-mitigation credit

Share of costs assigned by userShare of costs assigned by user– Capital, O&M, Period Replacement, Program AdminCapital, O&M, Period Replacement, Program Admin

slide 21


Retail Gas PerspectiveRetail Gas Perspective

BenefitsBenefits– GasGas Energy including T&D losses Energy including T&D losses– GasGas Transmission capacity deferral Transmission capacity deferral– GasGas Local Distribution capacity deferral Local Distribution capacity deferral– GasGas Risk-mitigation benefit Risk-mitigation benefit

Share of costs assigned by userShare of costs assigned by user– Capital, O&M, Period Replacement, Program AdminCapital, O&M, Period Replacement, Program Admin

slide 22


TRC PerspectiveTRC Perspective BenefitsBenefits

– Electric energy including T&D lossesElectric energy including T&D losses– Electric Transmission capacity deferralElectric Transmission capacity deferral– Electric Local Distribution capacity deferralElectric Local Distribution capacity deferral– Regional Act creditRegional Act credit– Electric Risk-mitigation creditElectric Risk-mitigation credit– Electric CO2 cost or benefitElectric CO2 cost or benefit– Gas energy including T&D lossesGas energy including T&D losses– Gas Transmission capacity deferralGas Transmission capacity deferral– Gas Local Distribution capacity deferralGas Local Distribution capacity deferral– Gas Risk-mitigation benefit Gas Risk-mitigation benefit – Gas CO2 cost or benefitGas CO2 cost or benefit– Other Non-energy benefitOther Non-energy benefit

All costs regardless of who paysAll costs regardless of who pays

slide 23


Metrics Reported Metrics Reported SavingsSavings

– KWh, kW, therms, therms/dayKWh, kW, therms, therms/day From each perspective From each perspective

– Present Value (PV) costs & benefitsPresent Value (PV) costs & benefits– Levelized costs (per kWh or therm saved)Levelized costs (per kWh or therm saved)

» TraditionalTraditional

» Net of T&D deferral benefits (for supply curve)Net of T&D deferral benefits (for supply curve)

– B/C ratiosB/C ratios

slide 24


Customer PerspectiveCustomer Perspective

BenefitsBenefits– None reportedNone reported

Costs (based on share assigned to customer)Costs (based on share assigned to customer)– CapitalCapital– O&MO&M– Periodic ReplacementPeriodic Replacement

slide 25


StatusStatus Testing Build 253Testing Build 253 Still finding some bugsStill finding some bugs Looking for interested testersLooking for interested testers

– Report Bugs, Recommend ImprovementsReport Bugs, Recommend Improvements Download from Council drop box:Download from Council drop box:

– http://www.nwcouncil.org/dropbox/http://www.nwcouncil.org/dropbox/– Two files: Two files:

» prodraft-253-alpha test.xlsprodraft-253-alpha test.xls» MC_AND_LOADSHAPE_cg.XLSMC_AND_LOADSHAPE_cg.XLS

Schedule a workshop or web-demoSchedule a workshop or web-demo

Documents

Northwest Power and Conservation CouncilProCost Version 2.2 RTF July 2007