Northwest PowerPlanning Council

Retrofit Program “Ramp Retrofit Program “Ramp Rates” and “Maximum Rates” and “Maximum

Sustainable” Acquisition Sustainable” Acquisition LevelsLevels

What are the practical limits?What are the practical limits?

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Northwest PowerPlanning Council

Key IssuesKey Issues

What measures are subject to “ramp up”?What measures are subject to “ramp up”? Do resource acquisition costs change when Do resource acquisition costs change when

program accelerate or decelerate?program accelerate or decelerate? Are there limits to how fast programs can Are there limits to how fast programs can

be accelerated?be accelerated? Are there limits to how fast programs can Are there limits to how fast programs can

develop resources and remain sustainable?develop resources and remain sustainable? Is there an economic benefit to accelerating Is there an economic benefit to accelerating

or delaying acquisitions?or delaying acquisitions?

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Northwest PowerPlanning Council

Is there an economic benefit to Is there an economic benefit to accelerating or delaying accelerating or delaying

acquisitions?acquisitions? Developing “low cost”conservation Developing “low cost”conservation

resources early may provide hedge benefits resources early may provide hedge benefits against future market price volatilityagainst future market price volatility

Developing “low cost” conservation Developing “low cost” conservation resources early may result in higher present resources early may result in higher present value costs than waiting until “natural value costs than waiting until “natural replacement” cyclereplacement” cycle

Council will test this question in its Council will test this question in its portfolio analysis.portfolio analysis.

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Northwest PowerPlanning Council

What measures are subject to What measures are subject to “ramp up”?“ramp up”?

Residential & Commercial Thermal Shell ImprovementsResidential & Commercial Thermal Shell Improvements– Windows?Windows?

– Walls/Floors/Ceilings?Walls/Floors/Ceilings?

Residential & Commercial HVACResidential & Commercial HVAC– Equipment “early replacement”?Equipment “early replacement”?

– Commissioning?Commissioning?

Residential, Commercial & Industrial Appliances & Residential, Commercial & Industrial Appliances & EquipmentEquipment– Lighting?Lighting?

– Motors?Motors?

– Major Appliances?Major Appliances?

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Northwest PowerPlanning Council

Do resource acquisition costs Do resource acquisition costs change when program accelerate or change when program accelerate or

decelerate?decelerate?

R2 = 0.09

$0

$2

$4

$6

$8

$10

0 10 20 30 40

Total Annual Acquisitions (aMW)

Co

st/

aM

W (

Mil

lio

n 2

000$)

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Northwest PowerPlanning Council

Changes in Conservation Acquisitions Are Changes in Conservation Acquisitions Are Weakly CorrelatedWeakly Correlated and and Inversely RelatedInversely Related

to Utility Acquisition Coststo Utility Acquisition Costs

R2 = 0.14

-$8.00

-$6.00

-$4.00

-$2.00

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

-20 -10 0 10 20Change in Annual Aquisitions (aMW)

Change in A

cquis

itio

n C

ost

(Million 2

000$/a

MW

)

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Northwest PowerPlanning Council

Relationship between Relationship between Ramp RateRamp Rate and and Utility CostUtility Cost of of CConservation onservation

AAcquisitionscquisitions

Our Conclusion - There is only a weak Our Conclusion - There is only a weak relationship between ramp rates (up or down) and relationship between ramp rates (up or down) and utility conservationutility conservation acquisition costs.acquisition costs.

Utility conservation acquisition costs ($/aMW) Utility conservation acquisition costs ($/aMW) may may lowerlower when ramping up than when ramping when ramping up than when ramping down, due to:down, due to:

– Outstanding contractsOutstanding contracts– ““Lags” in personnel changesLags” in personnel changes– Desire to maintain stable infrastructureDesire to maintain stable infrastructure

Your Wit and WisdomYour Wit and Wisdom

slide 8

Northwest PowerPlanning Council

Are there limits to how fast Are there limits to how fast programs can be accelerated?programs can be accelerated?

0

5

10

15

20

Change in Annual Acquisitions (aMW)

Fre

quency

of

Obse

rvati

ons

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Northwest PowerPlanning Council

Rate at which conservation Rate at which conservation acquisitions can beacquisitions can be

Ramped UpRamped Up and and Ramped DownRamped Down Our Conclusion - Conservation can be Our Conclusion - Conservation can be

ramped up and down within a range of +/- ramped up and down within a range of +/- 15 aMW without materially changing the 15 aMW without materially changing the cost of acquisitioncost of acquisition

Your Wit and WisdomYour Wit and Wisdom

slide 10

Northwest PowerPlanning Council

Are there limits to how fast Are there limits to how fast programs can acquire conservation programs can acquire conservation resources and remain sustainable?resources and remain sustainable?

Little evidence to date since region has not Little evidence to date since region has not maintained sustained level of conservation maintained sustained level of conservation developmentdevelopment

Some (e.g. EWEB) suggest that there may Some (e.g. EWEB) suggest that there may be an upper limit to annual “throughput” be an upper limit to annual “throughput” based on markets ability to respondbased on markets ability to respond

Your Wit and WisdomYour Wit and Wisdom