The Council is pleased to comment on the Committee on Energy and Natural Resources’ white paper on a clean energy standard. In particular, the Council is responding to the question of energy efficiency’s role in a standard, which we believe to be an essential tool to reaching any clean energy goal.
The Pacific Northwest—Idaho, Montana, Oregon, and Washington—is unique in how it plans its energy future. The Council was authorized through the 1980 Northwest Power Act to balance its energy needs with the needs of fish and wildlife. The Act requires the Council to develop a 20-year power plan, updated every five years, to assure the region an adequate, efficient, economical, and reliable power supply, and to develop a fish and wildlife program to protect and enhance fish and wildlife affected by the region’s hydroelectric dams. The plan provides guidance to the Bonneville Power Administration and utilities on the best ways to ensure the region’s power supply.
The Act directs the Council to give priority to resources it determines to be cost-effective, and to also involve the public in making these decisions. Through the Council’s power plan, strategies to assure the adequacy of the regional power system are developed in an open forum where the public can voice its opinion.
Energy Efficiency: Successes and Benefits
A great innovation of the Act was to include energy efficiency as a resource. It’s specified as the first priority resource, and it’s given a 10 percent cost advantage for planning purposes. Second in priority are renewable resources, followed by high-efficiency generation like combined heat and power applications, and finally other generating resources.
Efficiency possesses several important properties that make it highly valuable in every utility’s resource portfolio: it’s inexpensive; it’s clean; it avoids fuel price risk; it’s useful for meeting base load needs, as well as for sudden increases in demand; it’s an effective hedge against an uncertain future, providing flexibility when there are unexpected downturns and shortages; and it’s a source of local jobs and economic activity.
Last year, the Council released its latest energy plan, finding that the region could meet 85 percent of its electricity demand growth over the next 20 years with improved energy efficiency. This may seem overly ambitious, but in fact, the region has a remarkable record of success in efficiency achievements.
Since the Council’s beginning 30 years ago, the region has saved more than 4,300 average megawatts of electricity—enough to power the states of Idaho and Montana for a year. Efficiency has met half of the region’s electricity demand, precluding the need to build 10-12 new coal or gas-fired power plants. Because consumers didn’t have to buy 4,300 average megawatts of electricity in 2009, they paid $2.3 billion less for electricity that year—even after accounting for the cost of energy-efficiency programs in their electricity rates.
Prioritizing energy efficiency as a resource also means less carbon dioxide is emitted into the atmosphere—19 million tons less in the Northwest in 2009 alone. Looking ahead, energy efficiency is projected to reduce carbon emissions by 17 million tons per year by 2030, a 30 percent reduction from 2005 levels and a significant aid to meeting the legislated carbon-reduction goals in Washington and Oregon.
How We Do It: Planning and Partnering for Energy Efficiency
The Council conducts an exhaustive assessment of the efficiency potential in residential, commercial, industrial, and agricultural sectors. As an example of the level of detail of the analysis, in the commercial sector alone, we look at the efficiency potential for seven different uses in 18 different building types. Major sources of efficiency that are analyzed for efficiency potential include home weatherization, improved lighting, irrigation pumping, and industrial motors.
Once all the potential energy efficiency measures in the region are assessed, they’re prioritized in terms of cost, including quantifiable environmental costs. This prioritization results in a supply curve of potential efficiency measures that are compared to all other available generation resources. The resulting plan provides a least-cost blueprint for meeting the Northwest’s electric load growth for the next 20 years.
The regional technical forum, an advisory committee to the Council, develops standards to verify and evaluate efficiency savings. Its members include experts in efficiency program planning, implementation, and evaluation. The forum has become an established authority for energy efficiency guidance in the region, and along with the Council’s planning, provides useful methods and technical advice for state utility planners and policymakers.
The Council’s methodology in identifying cost-effective energy efficiency has become the standard used by others in the Northwest. For example, in 2006 the state of Washington passed a ballot initiative, I-937, that requires large utilities to obtain 15 percent of their electricity from renewable resources by 2020 and to identify and acquire all cost-effective efficiency in their service territories. The Washington law requires the utilities to use the Council’s methodology to identify cost-effective efficiency.
The Council also works in partnership with the Bonneville Power Administration, the Northwest Energy Efficiency Alliance, the Northwest Energy Efficiency Task Force, and other regional organizations to advance energy efficiency, and is also involved in the federal government’s process to develop and update national appliance efficiency standards.
According to the Council’s Sixth Northwest Conservation and Electric Power Plan, nearly 6,000 average megawatts of energy efficiency could be achieved by 2030. Combined with what’s already been acquired, it amounts to over 10,000 average megawatts.
In short, energy efficiency has proven to be a smart investment that builds on the region’s foundation of low-cost, clean hydropower, enhances the region’s ability to weather unforeseen downturns, and helps to preserve our cherished natural resources.