The Role of Energy Efficiency in Could (and Should) Play

NorthwestPower andConservation

Council

The Role of Energy Efficiency The Role of Energy Efficiency in Could (and Should) Play in Montana’s in Could (and Should) Play in Montana’s FutureFuture

Insights from the 5Insights from the 5thth NorthwestNorthwest Power Power and Conservation Planand Conservation Plan

Tom EckmanTom EckmanManager, Conservation ResourcesManager, Conservation Resources

Northwest Power and Conservation CouncilNorthwest Power and Conservation CouncilPresented October 18, 2005Presented October 18, 2005

Montana Energy Futures ConferenceMontana Energy Futures Conference

slide 2Northwest

Power andConservation

Council

What You’re About To HearWhat You’re About To Hear

nn Energy Efficiency in the Region’s Current Energy Efficiency in the Region’s Current

Resource MixResource Mix

nn Regional Efficiency GoalsRegional Efficiency Goals

–– What These Might Mean for MontanaWhat These Might Mean for Montana

nn What’s Behind the GoalsWhat’s Behind the Goals

nn The Challenges AheadThe Challenges Ahead

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PNW Energy Efficiency AchievementsPNW Energy Efficiency Achievements1978 1978 -- 20042004

0

500

1,000

1,500

2,000

2,500

3,000

Ave

rage

Meg

awat

ts

1978 1982 1986 1990 1994 1998 2002

BPA and Utility Programs Alliance ProgramsState Codes Federal Standards

Since 1978 Utility & BPA Since 1978 Utility & BPA Programs, Energy Codes & Programs, Energy Codes & Federal Efficiency Standards Have Federal Efficiency Standards Have Produced Nearly 3000 aMW of Produced Nearly 3000 aMW of Savings.Savings.

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So What’s 3000 aMW?So What’s 3000 aMW?

nn It was enough electricity to serve the It was enough electricity to serve the entireentirestate of Montana, state of Montana, plusplus 60% of Idaho in 200460% of Idaho in 2004

-- OR OR ––

nn It was enough electricity to serve the It was enough electricity to serve the entireentirestate of Idaho state of Idaho plusplus Western Montana in 2004Western Montana in 2004

nn It Saved the Region’s Consumers Nearly It Saved the Region’s Consumers Nearly $1.25 billion$1.25 billion in 2004in 2004

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Energy Efficiency Resources Energy Efficiency Resources Significantly Reduced Projected PNW Significantly Reduced Projected PNW

Electricity SalesElectricity Sales

14,000

16,000

18,000

20,000

22,000

24,000

1980 1985 1990 1995 2000

Ave

rage

Meg

awat

ts

Medium High ForecastMedium LowMedium High Minus ConservationActual

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Energy Efficiency Met Nearly 40% of Energy Efficiency Met Nearly 40% of PNW Regional Firm Sales Growth PNW Regional Firm Sales Growth

Between 1980 Between 1980 -- 20032003

61%

39%

Generation Conservation

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Regional Utility Conservation Acquisitions Have Regional Utility Conservation Acquisitions Have Helped Balance Loads & ResourcesHelped Balance Loads & Resources

0

20

40

60

80

100

120

140

160

1978 1982 1986 1990 1994 1998 2002

Con

serv

atio

n A

cquis

itio

ns

(aM

W)

Response to West Coast

Energy CrisisResponse to NW

Recession

Response to “Restructuring

Discussions”

Creating Mr. Toad’s Wild Ride for the PNW’s Energy Efficiency InCreating Mr. Toad’s Wild Ride for the PNW’s Energy Efficiency Industrydustry

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Utility Acquired Energy Efficiency Has Been Utility Acquired Energy Efficiency Has Been A BARGAIN!A BARGAIN!

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

May-9

6

Nov-

96

May-9

7

Nov-

97

May-9

8

Nov-

98

May-9

9

Nov-

99

May-0

0

Nov-

00

May-0

1

Nov-

01

May-0

2

Nov-

02

May-0

3

Nov-

03

May-0

4

Nov-

04

May-0

5

Whol

esa

le E

lect

rici

ty P

rice

(2000$/M

WH

)

Levelized Cost of EfficiencyAcquisitionsWholesale Market Price

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So Much for the Past, So Much for the Past, What’s AheadWhat’s Ahead

55thth Plan Relies on Conservation and Renewable Plan Relies on Conservation and Renewable

Resources to of Meet Load GrowthResources to of Meet Load Growth**

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2004 2008 2012 2016 2020 2024

Year

Inst

alle

d C

apaci

ty (

MW

or

aM

W)

Conservation (aMW) Wind (MW) DR (MW)SCGTurbine (MW) CCGTurbine (MW) Coal (ICG) (MW)

**Actual future conditions (gas prices, CO2 control, conservation Actual future conditions (gas prices, CO2 control, conservation accomplishments) accomplishments) will change resource development schedulewill change resource development schedule

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CostCost--Effective and Achievable Effective and Achievable Conservation Should Meet Over 45% of Conservation Should Meet Over 45% of

PNW Load Growth from 2005PNW Load Growth from 2005--2025*2025*

0

500

1000

1500

2000

2500

3000

Cost-Effective Potential(aMW in 2025)

Agricultural Sector - 80 aMW

Non-DSI Industrial Sector - 350 aMW

Commercial Sector Non-Building Measures - 420 aMW

HVAC, Envelope & Refrigeration - 375 aMW

New Commercial Building Lighting - 220 aMW

Existing Commercial Buildings Lighting - 130 aMW

Residential Space Conditioning - 240 aMW

Residential Lighting - 530 aMW

Residential Water Heating - 325 aMW

Residential Appliances - 140 aMW

*Medium Load Forecast *Medium Load Forecast Loads & Market PricesLoads & Market Prices

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Regional NearRegional Near--Term Conservation Term Conservation Targets (2005Targets (2005--2009) = 700 aMW2009) = 700 aMW

0

20

40

60

80

100

120

140

160

2005 2006 2007 2008 2009

Res

ourc

e (a

MW

)

Residential - Lost Opportunity

Commercial - Lost Opportunity

Irrigated Agriculture - Non LostOpportunity

Industrial - Non Lost Opportunity

Residential - Non Lost Opportunity

Commercial - Non Lost Opportunity

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Montana’s Share of NearMontana’s Share of Near--Term Term Conservation Targets (2005Conservation Targets (2005--2009) 2009)

= 57 aMW= 57 aMW

0

2

4

6

8

10

12

14

2005 2006 2007 2008 2009

Res

ourc

e (a

MW

)








Council

Why Should We?Why Should We?

What’s Behind the 5What’s Behind the 5thth Plan’s Plan’s Conservation Targets?Conservation Targets?

PNW Portfolio Planning PNW Portfolio Planning –– Scenario Analysis on SteroidsScenario Analysis on Steroids

0%

2%

4%

6%

8%

10%

12%

14%

16%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0%

Annual Load Growth

Pro

babilit

y (

%)

0%2%4%6%

8%

10%12%14%16%

18%

0% 1% 2% 3% 4% 5%

Real Natural Gas Escalation Rate%)

Pro

bab

ilit

y (

%)

0%

5%

10%

15%

20%

25%

30%

3.27% 3.80% 3.85% 3.93% 2.50%

Nominal Annual Electricity Price Escalation Rate

Pro

babilit

y (

%)

0

20

40

60

80

100

120

98

467

705

842

1,069

1,19

1

1,28

3

1,33

5

1,35

3

1,37

3

1,65

0

Resource Potential

Leveli

zed

Co

st

0%2%4%6%8%

10%12%14%16%18%20%

2005

2007

2009

2011

2013

2015

2017

2019

2021

2023

2025

Carbon Tax Implementation Date

Pro

bab

ilty

(%

)

0

5000

10000

15000

20000

25000

1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975

Hydrosytem Year

Ca

pacit

y (

MW

)

0%2%4%6%8%

10%12%14%16%18%20%

Pro

ba

bilit

y

$0 $6 $12 $18 $24 $30 $36

Carbon Tax

Frequency Chart

Dollars

Mean = $689.000

.011

.022

.032

.043

0

10.75

21.5

32.25

43

($3,509) ($1,131) $1,247 $3,625 $6,003

1,000 Trials 1,000 Displayed

Portfolio Portfolio Analysis Analysis ModelModel

$35,500

$36,000

$36,500

$37,000

$37,500

$23,500 $24,000 $24,500 $25,000

NPV System Risk (2004$Millions)

NP

V S

yste

m C

ost

(2004

$M

illio

ns)

Efficient FrontierEfficient Frontier

NPV System Cost

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Plans Along the Efficient Frontier Permit Plans Along the Efficient Frontier Permit TradeTrade--Offs of Costs Against RiskOffs of Costs Against Risk

$35,500

$36,000

$36,500

$37,000

$37,500

$23,600 $23,800 $24,000 $24,200 $24,400 $24,600

NPV System Cost (Millions)

NPV

Sys

tem

Ris

k (M

illio

ns)

Least Risk

Least Cost

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Three Conservation Options TestedThree Conservation Options Tested

nn Option 1Option 1: : AcceleratedAccelerated –– Similar to the “best Similar to the “best performance” over the last 20 yearsperformance” over the last 20 years–– NonNon--lost opportunity limited to 120 aMW/yearlost opportunity limited to 120 aMW/year–– RampRamp--up lostup lost--opportunity to 85% by 2017opportunity to 85% by 2017

nn Option 2Option 2: : SustainedSustained -- Similar to typical rates over Similar to typical rates over last 20 yearslast 20 years–– NonNon--lost opportunity limited to 80 aMW/yearlost opportunity limited to 80 aMW/year–– RampRamp--up lostup lost--opportunity to 85% by 2017opportunity to 85% by 2017

nn Option 3Option 3: : Status QuoStatus Quo -- Similar to lowest rates over Similar to lowest rates over last 20 yearslast 20 years–– NonNon--lost opportunity limited to 40 aMW/yearlost opportunity limited to 40 aMW/year–– RampRamp--up lostup lost--opportunity to 85% penetration by 2025opportunity to 85% penetration by 2025

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Average Annual Conservation Average Annual Conservation Development for Alternative Levels of Development for Alternative Levels of

Deployment TestedDeployment Tested

0

500

1000

1500

2000

2500

3000

2005 2010 2015 2020Year

Sav

ings

(aM

W)

Option 3 - Status QuoOption 2 - SustainedOption 1 - Accelerated

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Accelerating Conservation Accelerating Conservation Development Reduces Cost & RiskDevelopment Reduces Cost & Risk

$20

$22

$24

$26

$28

$30

$32

$34

$36

$38

$40

Option 1 - Accelerated Option 2 - Sustained Option 3 - Status Quo

NPV (

bill

ion 2

004$)

NPV System Cost NPV System Risk

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WECC Carbon Dioxide Emissions WECC Carbon Dioxide Emissions Reductions for Alternative Reductions for Alternative

Conservation TargetsConservation Targets

0

10

20

30

40

50

60

70

80

Mill

ion T

ons

over

20 y

ears

Option 1 - Accelerated Option 2 - Sustained Option 3 - Status Quo

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Why Energy Efficiency Reduces NPV Why Energy Efficiency Reduces NPV System Cost and RiskSystem Cost and Risk

nn It’s A Cheap (avg. 2.4 cents/kWh TOTAL It’s A Cheap (avg. 2.4 cents/kWh TOTAL RESOURCE COST) Hedge Against Market RESOURCE COST) Hedge Against Market Price SpikesPrice Spikes

nn It has value even when market prices are It has value even when market prices are low low

nn It’s Not Subject to Fuel Price RiskIt’s Not Subject to Fuel Price Risknn It’s Not Subject to Carbon Control RiskIt’s Not Subject to Carbon Control Risknn It’s Significant Enough In Size to Delay It’s Significant Enough In Size to Delay

“build decisions” on generation“build decisions” on generation

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The Plan’s Targets Are A The Plan’s Targets Are A Floor, Not a CeilingFloor, Not a Ceiling

When we took the “ramp rate” constraints offthe portfolio model it developed

1500 aMW1500 aMWof Conservation in 2005

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Where Are The Savings?Where Are The Savings?

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Sources of Savings by SectorSources of Savings by Sector

Industrial 350 aMW

12%

Irrigation 80 aMW3%

Commercial 1105 aMW

39%

Residential 1340 aMW

46%

slide 25Northwest


Council

Residential Sector Target = 1340 aMWResidential Sector Target = 1340 aMW

0

200

400

600

800

1,000

1,200

1,400

Ave

rage

Meg

awat

ts

Residential Space Conditioning - 245aMW




slide 26Northwest


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Commercial Sector Target = 1105 aMWCommercial Sector Target = 1105 aMW

0

200

400

600

800

1,000

1,200

Ave

rage

Meg

awat

ts

Infrastructure

Equipment

Envelope

Lighting

HVAC

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Irrigated Agriculture Sector Target = Irrigated Agriculture Sector Target = 80 aMW80 aMW

0

10

20

30

40

50

60

70

80

90

Ave

rage

Meg

awat

ts

Replace Pumps, Nozzles &Gaskets

Replace Nozzles & Gaskets

Convert Center Pivots fromMedium to Low Pressure

Convert Center Pivots from Highto Low Pressure

slide 28Northwest


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Industrial Sector Target = Industrial Sector Target = 350 350 aMWaMW

nn Estimate of 5% of 2025 forecast loadsEstimate of 5% of 2025 forecast loadsnn 350 aMW at 1.7 cents per kWh350 aMW at 1.7 cents per kWhnn Process controls, drive systems, lighting, Process controls, drive systems, lighting,

refrigeration, compressed air, etcrefrigeration, compressed air, etcnn Potential is a function of the ongoing Potential is a function of the ongoing

changes in region’s industrial mixchanges in region’s industrial mix

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Implementation Implementation ChallengesChallenges

slide 30Northwest


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Plan Plan Conservation Action ItemsConservation Action Items

nn Ramp up “Lost Opportunity” conservationRamp up “Lost Opportunity” conservation»» Goal => 85% penetration in 12 years Goal => 85% penetration in 12 years »» 10 to 30 MWa/year 2005 through 200910 to 30 MWa/year 2005 through 2009

nn Accelerate the acquisition of “NonAccelerate the acquisition of “Non--Lost Lost Opportunity” resourcesOpportunity” resources

»» Return to acquisition levels of early 1990’sReturn to acquisition levels of early 1990’s»» Target 120 MWa/year next five yearsTarget 120 MWa/year next five years

nn Employ a mix of mechanismsEmploy a mix of mechanisms»» Local acquisition programs (utility, SBC Administrator & BPA Local acquisition programs (utility, SBC Administrator & BPA

programs)programs)»» Regional acquisition programs and coordinationRegional acquisition programs and coordination»» Market transformation venturesMarket transformation ventures

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The Total Resource Acquisition Cost* of The Total Resource Acquisition Cost* of 55thth Plan’s Conservation TargetsPlan’s Conservation Targets

2005 2005 –– 2009 = $1.64 billion2009 = $1.64 billion

$0

$50

$100

$150

$200

$250

$300

$350

$400

2005

2006

2007

2008

2009

Tota

l Reso

urc

e Cost

s(M

illio

ns

2000$)







*Incremental capital costs to install measure plus program administration costs estimated at 20% of capital.

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Meeting the Plan’s Efficiency Targets Will Meeting the Plan’s Efficiency Targets Will Likely Require Increased Regional InvestmentsLikely Require Increased Regional Investments

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Aver

age 19

91-0

4

Aver

age 20

01-2

00420

0520

09Utilit

y I

nvest

ments

(m

illio

n 2

000$)

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Although, The Share of Utility Although, The Share of Utility Revenues Required is ModestRevenues Required is Modest

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

1991

199219

9319

9419

9519

9619

9719

9819

9920

0020

0120

0220

0320

04

Aver

age 19

91-0

4

Aver

age 20

01-2

00420

0520

09Shar

e of

Ret

ail Rev

enues

(%

)

Regional Average Revenues/kWh will need to increase by $0.000006/kWh

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Utility* Efficiency Acquisition Plans for 2005 Are Utility* Efficiency Acquisition Plans for 2005 Are Close to 5Close to 5thth Plan TargetsPlan Targets

0

20

40

60

80

100

120

2005 5th Plan Target 2005 Utility Acquistion Plan

Co

nserv

ati

on

Levels

(M

Wa)

*Targets for 15 Largest PNW Utilities. These utilities represent approximately 80% of regional load.

slide 35Northwest


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Most IOU Efficiency Plans are Close Most IOU Efficiency Plans are Close to 5to 5thth Plan’s TargetsPlan’s Targets

0

5

10

15

20

25

Pacif

iCor

p (O

R,WA,

ID)

Puge

t Sou

nd Ene

rgy

Portl

and

Gener

al

Idah

o Po

wer

Avist

a Ut

ilities

North

weste

rn E

nerg

y

Conse

rvation L

evels

(M

Wa)

Plan Targets

Utility Plans

slide 36Northwest


Council

However, Several Large Public Utility Efficiency However, Several Large Public Utility Efficiency

Plans Are Well Below 5Plans Are Well Below 5thth Plan TargetsPlan Targets

0

1

2

3

4

5

6

7

8

9

10

Seat

tle C

ity Light

Snoh

omish

PUD

Taco

ma Po

wer

Cowlit

z PU

D

Clar

k PU

D

EWEB

Grant

PUD

Bent

on PUD

Flathe

ad R

EA

Con

serv

ation L

evels

(M

Wa)

Plan Targets

Utility Plans

slide 37Northwest


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SummarySummary

nn The 5th Plan’s Goal IsThe 5th Plan’s Goal Is To Make The To Make The InefficientInefficient Use of Electricity . . .Use of Electricity . . .–– ImmoralImmoral–– IllegalIllegal–– UnprofitableUnprofitable

If We Fail Both If We Fail Both CostsCosts and and Risk Risk Will Be HigherWill Be Higher

slide 38Northwest


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Backup SlidesBackup Slides

slide 39Northwest


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Montana Electric Sales Montana Electric Sales 1,490 aMW in 2004 1,490 aMW in 2004

Industrial625 aMW

42%

Commercial440 aMW

30%

Residential425 aMW

28%

Source: US DOE/EIA

slide 40Northwest


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Montana Electricity Sales Represent Montana Electricity Sales Represent 8% of Regional Sales Across All 8% of Regional Sales Across All

SectorsSectors

0%

10%

20%

30%

40%

50%

60%

WA OR ID MT

Shar

e of

Reg

ional

Sal

es

ResidentialCommerciaIndustrialTotal

slide 41Northwest


Council

Residential Sector Residential Sector ResultsResults

What’s Left To Do At What’s Left To Do At Home?Home?

65 Average MW

slide 42Northwest


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Montana Has The Region’s Lowest Montana Has The Region’s Lowest Market Shares of Electric Water and Market Shares of Electric Water and

Space HeatingSpace Heating

0%

10%

20%

30%

40%

50%

60%

70%

80%

Mar

ket

Sat

ura

tion

ID MT OR WA Region

Electric Water Heater Electric Heating Central Air Conditioning

slide 43Northwest


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Montana’s Average Electricity Montana’s Average Electricity Use/Residential Customer Is The Use/Residential Customer Is The

Lowest in the RegionLowest in the Region

0

2000

4000

6000

8000

10000

12000

14000

Ave

rage

Annual

Use

/Cust

omer

(k

Wh)

WA OR ID MT Region

slide 44Northwest


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But Residential Customer Use Has Not But Residential Customer Use Has Not Declined Since 1990, While Use in Other Declined Since 1990, While Use in Other

PNW States HasPNW States Has

0

2000

4000

6000

8000

10000

12000

14000

16000

1990 1992 1994 1996 1998 2000 2002 2004

Ave

rage

Annual

Use

/Cust

om

er (

kWh)

ID MT OR WA

slide 45Northwest


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Montana’s Housing Stock is Montana’s Housing Stock is Predominantly Single Family and Predominantly Single Family and

Manufactured HomesManufactured Homes

Multifamily3%

Manufactured Home17%

Single Family80%

slide 46Northwest


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Regional Residential Sector CostRegional Residential Sector Cost--Effective & Realistically Achievable Effective & Realistically Achievable Regional Potential = 1340 aMWRegional Potential = 1340 aMW

0

200

400

600

800

1,000

1,200

1,400

Avera

ge M

eg

aw

att

s

Residential Space Conditioning - 245aMW




slide 47Northwest


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Montana Residential Sector CostMontana Residential Sector Cost--Effective & Realistically Achievable Effective & Realistically Achievable

Regional Potential = 65 aMWRegional Potential = 65 aMW

0

10

20

30

40

50

60

70

Avera

ge M

eg

aw

att

s Residential Space Conditioning - 4 aMW




slide 48Northwest


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Regional Residential Sector Realistically Regional Residential Sector Realistically Achievable Potential for AppliancesAchievable Potential for Appliances

Clothes Washers - 135

aMW75%

Dishwashers - 10 aMW

6%

Refrigerators - 35 aMW

19%

slide 49Northwest


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Montana Residential Sector Achievable Montana Residential Sector Achievable Conservation Resource Potential for AppliancesConservation Resource Potential for Appliances

Energy Star Dishwashers

1 MW9%

Energy Star Refrigerators

2 aMW18%

Energy Star Clothes Washers8 aMW73%

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Regional Residential Sector Realistically Regional Residential Sector Realistically Achievable Potential for Water HeatingAchievable Potential for Water Heating

Efficient Tanks29%

95 aMWWaste Water

Heat Recovery4%

15 aMW

Heat Pump Water Heaters

67%225 aMW

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Montana Residential Sector Conservation Montana Residential Sector Conservation Resource Potential for Water HeatingResource Potential for Water Heating

High Efficiency Water Heaters

3 aMW27%

Waste Water Heat Recovery

1 aMW9%

Heat Pump Water Heaters

7 aMW64%

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Regional Residential Sector Realistically Regional Residential Sector Realistically Achievable Potential for Space Achievable Potential for Space

ConditioningConditioningNew Construction -

Shell Measures 40 aMW

16%

Duct Sealing & System

Commissioning & Controls 15 aMW

6%

Weatherization60 aMW

24%

Heat Pump Upgrades 55 aMW

22%

Heat Pump Conversions

75 aMW32%

slide 53Northwest


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Montana Residential Sector Conservation Montana Residential Sector Conservation Resource Potential for Space ConditioningResource Potential for Space Conditioning

Heat Pump Upgrades0.9 aMW

23%

Duct Sealing & System

Commissioning & Controls0.3 aMW

7%

Weatherization0.9 aMW

24%

Heat Pump Conversions

1.2 aMW30%

New Construction - Shell Measures

0.6 aMW16%

slide 54Northwest


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Commercial Sector Commercial Sector ResultsResults

What’s Left To Do At the What’s Left To Do At the Office?Office?

95 Average MW

slide 55Northwest


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Regional NonRegional Non--Building Resource Building Resource Potential = 430 aMWPotential = 430 aMW

0

2040

6080

100

120140

160Sew

age

Tre

atm

emt

Wat

erTre

atm

ent

LED

Tra

ffic

Sig

nal

s

Net

wor

ked

PCM

anag

emen

t

Pack

aged

Ref

riger

atio

n

Pow

erSupplie

s

LED

Exi

tSig

ns

Ave

rage

Meg

awat

ts

slide 56Northwest


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Montana NonMontana Non--Building Resource Building Resource Potential = 30 aMWPotential = 30 aMW

0

2

4

6

8

10

12

Sew

age

Tre

atm

emt

Wat

erTre

atm

ent

LED

Tra

ffic

Sig

nal

s

Net

wor

ked

PCM

anag

emen

t

Pack

aged

Ref

riger

atio

n

Pow

erSupplie

s

LED

Exi

tSig

ns

Ave

rage

Meg

awat

ts

slide 57Northwest


Council

0

100

200

300

400

500

600

New and Replacement Retrofit

MW

ain

202

5

Equipment

Refrigeration

Envelope

Lighting

HVAC

CostCost--Effective Commercial Conservation Potential Effective Commercial Conservation Potential in 2025 For Building Lighting, HVAC & Equipmentin 2025 For Building Lighting, HVAC & Equipment--

Regional = 950 aMW / Montana = 65 aMWRegional = 950 aMW / Montana = 65 aMW


Council

What’s Left To Do Out on the What’s Left To Do Out on the Farm?Farm?

Irrigated Agriculture Sector Irrigated Agriculture Sector ResultsResults

>1 Average MW

slide 59Northwest


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Industrial Sector AssessmentIndustrial Sector Assessment

nn Fourth Plan’s Estimate = 8% savings (670 Fourth Plan’s Estimate = 8% savings (670 aMW)aMW)

nn Fifth Plan is lower due to changing (less Fifth Plan is lower due to changing (less electrically intensive) industrial mix ) = 5% electrically intensive) industrial mix ) = 5% of 2025 sector loadsof 2025 sector loads

nn Montana potential @ 5% of 2004 salesMontana potential @ 5% of 2004 sales= 30 aMW= 30 aMW

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While PNW Annual Utility System While PNW Annual Utility System Investments in Energy Efficiency Have Declined Since Investments in Energy Efficiency Have Declined Since

the Early 1990’sthe Early 1990’s

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Conse

rvation I

nvest

ments

(m

illio

n 2

000$)

slide 61Northwest


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Total PNW Annual Energy Efficiency Total PNW Annual Energy Efficiency Achievements Have Been Growing, Largely Due Achievements Have Been Growing, Largely Due To The Impact of Energy Codes and StandardsTo The Impact of Energy Codes and Standards

0

50

100

150

200

250

300

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

Con

serv

atio

n A

cquis

itio

ns

(aM

W) Federal Standards

State Codes

Alliance Programs

slide 62Northwest


Council

PNW Utilities Now Invests Less Than 2% of PNW Utilities Now Invests Less Than 2% of Their Retail Sales Revenues in Energy Their Retail Sales Revenues in Energy

EfficiencyEfficiency

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Conse

rvation I

nvest

ments

(m

illio

n 2

000$)

slide 63Northwest


Council

Fortunately . . . The “First Year” Cost ($/aMW) of Fortunately . . . The “First Year” Cost ($/aMW) of Utility Acquired Energy Efficiency Has DeclinedUtility Acquired Energy Efficiency Has Declined

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Conse

rvation C

ost

/aM

W (

mill

ion 2

000$)

slide 64Northwest


Council

PNW Utilities Have Gotten More Efficient at Acquiring PNW Utilities Have Gotten More Efficient at Acquiring Energy Efficiency Energy Efficiency -- Cost Are Now Below $15 MWHCost Are Now Below $15 MWH

$0

$5

$10

$15

$20

$25

$30

$35

$40

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Leveliz

ed C

onse

rvation C

ost

(m

illio

n/M

Wh 2

000$)

slide 65Northwest


Council

Cumulative 1978 Cumulative 1978 -- 2004 Efficiency 2004 Efficiency Achievements by SourceAchievements by Source

Alliance Programs185 aMW

6%

State Codes560 aMW

19%

Federal Standards545 aMW

19%

BPA and Utility Programs1635 aMW

56%

slide 66Northwest


Council

The Share of PNW Retail Electricity Sales The Share of PNW Retail Electricity Sales Revenues Invested In Energy Efficiency Has Revenues Invested In Energy Efficiency Has

Declined Since The Early 1990’sDeclined Since The Early 1990’s

$0.0$1.0$2.0$3.0$4.0$5.0$6.0$7.0$8.0$9.0

$10.0

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Tot

al R

etail

Ele

ctrici

ty S

ales

Rev

enue

(bill

ion 2

000$)

Revenues Invested In EfficiencyRevenues Dedicated to Other Costs

slide 67Northwest


Council

Utility Acquired Energy Efficiency Has Been CostUtility Acquired Energy Efficiency Has Been Cost--Competitive with Market PurchasesCompetitive with Market Purchases

$0

$100

$200

$300

$400

$500

$600

May-9

6

Nov-

96

May-9

7

Nov-

97

May-9

8

Nov-

98

May-9

9

Nov-

99

May-0

0

Nov-

00

May-0

1

Nov-

01

May-0

2

Nov-

02

May-0

3

Nov-

03

May-0

4

Nov-

04

May-0

5

Whol

esa

le E

lect

rici

ty P

rice

(2000$/M

WH

)

Wholesale Market Price

Levelized Cost of Efficiency

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