Tacoma Power Commercial Refrigeration Equipment Program Proposed

1
Sixth Power Plan A Public Utility Point of
View Bill Gaines, Director, Tacoma Public
Utilities Craig Smith, Assistant General Manager,
Snohomish PUD Northwest Power and Conservation
Council Meeting June 11, 2009
2
Topics

• Draft 6th Plan Potential and Targets
• New and Revised Measure Readiness
• Targets Outside of Utility Control
• Acquisition Ramp Concerns
• Revenue Requirement Impacts
• Carbon Cost Assumptions
• Conservation Ramps - Council I-937

3
Topics

• Draft 6th Plan Potential and Targets
• New and Revised Measure Readiness
• Targets Outside of Utility Control
• Acquisition Ramp Concerns
• Revenue Requirement Impacts
• Carbon Cost Assumptions
• Conservation Ramps - Council I-937

4
Conservation Philosophy

• Public power utilities are committed to acquiring
  all cost-effective energy efficiency for the
  benefit of the region and our customers
• Increasing marginal costs and State requirements
  (e.g., I-937)provide additional incentive to
  pursue energy efficiency
• Many utilities, Tacoma and Snohomish included,
  are increasing internal savings targets and
  expanding delivery capabilities

5
Draft Sixth Plan Economic Potential
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Draft Sixth Plan Five Year Target
aMW
7
Topics

• Draft 6th Plan Potential and Targets
• New and Revised Measure Readiness
• Targets Outside of Utility Control
• Acquisition Ramp Concerns
• Revenue Requirement Impacts
• Carbon Cost Assumptions
• Conservation Ramps - Council I-937

8
Measure ReadinessWork Group Assessment of
Individual Measures Developed by Utility,
Bonneville and NEEA Staff

• Technology Readiness (Full/Partial/Low)
• Full no technical or product related issues
• Partially some questions about technology or
  application in the NW
• Low  product needs major work to validate
  performance or modify technology for NW
• Verified Savings Readiness (Full/Partial/Low
• Full robust savings assessments (deemed savings
  or savings calculation methodology defined)
  completed in region
• Partial transferrable savings assessments
  outside of the region or preliminary assessments
  within the region
• Low little or no savings verification conducted
  to date
• Market Readiness (Full/Partial/Low)
• Full all elements of the supply side channel
  are fully capable of delivering and can be scaled
  up easily
• Partial missing pieces of delivery chain or
  difficulties with scaling
• Low significant work required for delivery
  chain and scaling
• Program Readiness (Full/Partial/Low)
• Full successful program experience in region
• Partial pilot experience in region or
  transferrable  program experience outside of
  region
• Low Little or no program experience

9
Measure ReadinessWork Group Assessment of
Individual Measures Developed by Utility,
Bonneville and NEEA Staff
aMW
10
Measure ReadinessWork Group Assessment of
Individual Measures Developed by Utility,
Bonneville and NEEA Staff
aMW
11
Topics

• Draft 6th Plan Potential and Targets
• New and Revised Measure Readiness
• Targets Outside of Utility Control
• Acquisition Ramp Concerns
• Revenue Requirement Impacts
• Carbon Cost Assumptions
• Conservation Ramps - Council I-937

12
Regional Cumulative Conservation Achievement

• According to the Council, only about half of the
  conservation achievements recorded since 1980
  have been achieved via BPA/Utility Programs
• The other half are reported to have been achieved
  via alliance programs, state codes and federal
  standards

Source NWPCC
13
Annual Conservation Achievement Utility vs.
Alliance Programs

• Over the last 10 or so years, Alliance Programs
  such as NEEA sponsored programs have been
  responsible for a significant portion of reported
  acquisitions
• This is expected to continue to be the case in
  the future

Source NWPCC
14
Potential Alternative Treatment of Emerging
Measures
Energy Trust of OR Resource Assessment Example
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Topics

• Draft 6th Plan Potential and Targets
• New and Revised Measure Readiness
• Targets Outside of Utility Control
• Acquisition Ramp Concerns
• Revenue Requirement Impacts
• Carbon Cost Assumptions
• Conservation Ramps - Council I-937

16
5th Plan vs. Draft 6th Plan Annual Targets
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Historical Accomplishments vs. Draft 6th Plan
Annual Targets
2007-2008 CFL are estimates
Note CFL Accomplishments based on BPA/Public
acquisitions extrapolated to region
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Accomplishments vs. 5th Plan Targets

• Council staff states that targets provide both a
  floor and ceiling for achievement
• Recent experience shows that utilities and others
  in the region are willing to exceed regional
  targets if conservation is available, achievable,
  reliable and cost-effective
• Measures should meet threshold criteria before
  inclusion in targets
• Plan can address RD, market development,
  evaluation needs

Note CFL Accomplishments based on BPA/Public
acquisitions extrapolated to region
19
Topics

• Draft 6th Plan Potential and Targets
• New and Revised Measure Readiness
• Targets Outside of Utility Control
• Acquisition Ramp Concerns
• Revenue Requirement Impacts
• Carbon Cost Assumptions
• Conservation Ramps - Council I-937

20
Effect of Increased Targets

• With the phasing out of CFLs, savings will come
  from higher cost/higher touch measures
• To meet aggressive goals may require
• Increased share of the measure borne by utility
  vs. by customers
• Administrative costs may increase for marketing,
  RD, evaluation, etc.
• EE budgets requirements will increase by 200 to
  250 (more than the increase in savings)
• Staffing and infrastructure will need to grow to
  support higher targets

21
Topics

• Draft 6th Plan Potential and Targets
• New and Revised Measure Readiness
• Targets Outside of Utility Control
• Acquisition Ramp Concerns
• Revenue Requirement Impacts
• Carbon Cost Assumptions
• Conservation Ramps - Council I-937

22

23
Conservation Target Sensitivity to Carbon Cost
Assumptions?

• Council has run some sensitivity analyses on
  Carbon Variable (i.e. no Carbon Cost run)
• Results suggest only minor decrease in
  conservation acquisition target (about 5400 in
  no Carbon Cost scenario vs. 5800 in Base case)
• However, it is uncertain whether this is a
  meaningful result since RPS requirements were not
  included in the no Carbon Cost run, but were
  included in the Base Case run (i.e. apples to
  oranges comparison)
• Recommendation Run new Sensitivity case only
  modifying Carbon Costs (leave other variables
  same as base)

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Topics

• Draft 6th Plan Potential and Targets
• New and Revised Measure Readiness
• Targets Outside of Utility Control
• Acquisition Ramp Concerns
• Revenue Requirement Impacts
• Carbon Cost Assumptions
• Conservation Ramps - Council I-937

25
WA RPS (I-937) Further Acceleration of Utility
Targets
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Summary

• Significant efforts are underway to assess the
  Conservation Supply Curves and associated targets
  for understanding and to prepare for
  implementation
• The action plan should set aggressive, but
  achievable, targets for the region the targets
  recommended by the Council staff are
  unrealistically high
• Strong incentives exist for utilities to adopt
  measures that meet the cost and reliability
  thresholds as they come available
• Establishing a range for acquisition targets
  could address uncertainty
• In addition to acquisition targets, the action
  plan should include plan to develop new and
  emerging technologies to ensure sustained
  potential before they become targets