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Conservation is Cheapest Option by Eric Barker Lewiston Tribune, March 21, 2010

Region's power companies are working to convince their customers to use less of their product

Why would a company pay its customers to use its product less?

On its face, the strategy doesn't make sense. But when it comes to delivering electrical services to customers, both public and private power executives say it's the smart thing to do.

"The least expensive resource is the one you don't have to build. For us that is kind of our philosophy behind conservation, energy efficiency and wise use of energy," said Hugh Imhof, spokesman for the Spokane-based Avista Corp., which supplies power to people in eastern Washington and northern Idaho. "It is much cheaper to save energy than to build new power plants. We know our loads are going to grow and we know in the future we are going to have to build new facilities, but the longer we can push that out the better, and that is the right thing to do."

To that end, Avista, an investor-owned power company, and public utilities like Clearwater Power that receive electricity from the Bonneville Power Administration, offer customers incentives to invest in appliances and home improvements that lower their demand for electricity. The same is true of commercial users of power.

The Northwest Power and Conservation Council recently completed its sixth power plan that projects the regional population will grow by about 4 million people and demand for electricity will grow by 30 percent in the next 20 years. That would seem to indicate a dramatic investment in new generating plants is needed. But the council found about 85 percent of the projected demand, or 5,900 megawatts, can be met through conservation. The rest will likely come from renewable sources, like wind, and from natural gas plants.

John Harrison, of Portland, Ore., a spokesman for the council made up of representatives from Idaho, Washington, Oregon and Montana, said conservation costs just one-third of what it costs to build new power plants.

"The cost of 5,900 average megawatts of conservation is a little over 3 cents a kilowatt hour. You can't buy anything that cheap," he said. "The cost of a new gas or wind plants is 9 to 10 cents."

The council's plan identifies nearly 6,000 megawatts of conservation measures that are economically feasible to achieve. Harrison said some conservation will happen as people choose to upgrade appliances and build or upgrade homes and businesses. Others are dependent on direct choices made by energy users that can be influenced by incentives from utilities and governments. Much of the conservation is hidden in federal standards for appliances ranging from refrigerators and water heaters to new televisions. Federal standards for appliances continually change and require more efficiency.

"If you buy a refrigerator in 2010 it is going to be more efficient than one bought in 2008," Harrison said. "We identified 900-plus average megawatts that will come over 20 years from flat-screen televisions, believe it or not."

The turnover rate for television sets tends to be high as technology improves, providing consumers with better picture and sound quality. But TVs are also becoming more efficient.

"A 40- or 42-inch LCD flat screen TV with LED backlighting uses a third or less electricity of a similar size plasma TV and a plasma uses a similar or less (amount of electricity) than a cathode ray tube television. If you make a decision to invest in a new TV you are making a decision to invest in a more energy-efficient product."

Building codes also tend to evolve and require more efficient materials and designs. So businesses and homes built today are more efficient than ones built 10 years ago. In 2012, consumers won't be able to buy traditional incandescent light bulbs. Instead they will purchase more efficient, longer-lasting but more expensive compact fluorescent lights. They cost more up front but use less energy, providing benefits to end users and utilities alike.

More conservation is to be had by people making conscious decisions to invest in energy efficiency. Many utilities and the federal government, for instance, offer incentives for people to invest in things like better windows and insulation. President Barack Obama has proposed a $6 billion Homestar program that would offer rebates to homeowners who make energy efficiency upgrades.

Harrison said a number of years ago he made the decision to install new windows in his electrically heated home in the Portland area.

"I decided to replace single-pane windows with double-pane argon gas windows. I got $8,000 worth of windows for $3,000 because my utility helped pay for it. I made a conscious decision to invest in energy efficiency but if I went out and replaced my refrigerator just the act of doing that creates conservation."

Bob Pierce of Clearwater Power at Lewiston said the power cooperative offers a number of incentives, from deals on compact fluorescent light bulbs to rebates on heat pumps, central furnace systems and efficient water heaters. Clearwater also works with its industrial customers to identify potential conservation.

"Our mission is to educate our customers in the efficient use of electricity," he said. "We know the population is growing and we are going to have to build new power plants. The more kilowatt hours we can save, the less power plants we have to build. Anything you spend that is less than the cost of a new power plant is going to be a saving."

Rates for electricity are forecast to climb in the future but bills are not expected to rise at the same rate. That is because people will be paying more but using less.

Technology is promising to bring even more efficient use of electricity in homes and businesses. Smart-grid technology will allow communication between appliances and utilities to make sure they are used when energy is most available.

"Basically the idea is to enable appliances to make two-way communication with the supplier and the customer," said Massoud Jourabchi, manager of the power and conservation council's economic analysis department at Portland.

For example, communication between electric water heaters and a utility could reduce load at critical times or even store electricity when supply is high. That would allow utilities to take advantage of wind power when the wind is howling.

"If we raise the temperatures in water heaters, that water can be stored at a higher temperature and be used later when you would otherwise be needing to heat water," said Ken Corum, an economist with the power and conservation council at Portland. The idea is that residential users of electricity would never notice a difference. They would still have an ample supply of hot water and the heaters would be turned back on before the hot water supply is exhausted.

In periods of high demand when the system is being stretched to meet load, water heaters could be turned off for a short period of time, making the electricity available for other uses.

"It is kind of spreading the load to water heaters to the earlier hours," Jourabchi said.

Some people compare the practice to storing electricity in a massive battery that consists of tens of thousands of water heaters.

"If you do that you have a reserve that can be used by the system for a while and that is usually what it needs. It doesn't need hours and hours. You need a half-hour then the elements come on."

The same might be able to be done with cold storage facilities, especially large warehouses that store food. Jourabchi said the temperature in such facilities could fluctuate a few degrees either way without damaging the stored items.

Making smart grid happen is dependent on technological advances but it also requires buy-in from electricity customers. If people are to accept the intrusion of having a utility turn off appliances, even at low-demand times when they are unlikely to notice, there needs to be a benefit to them.

"One requirement is to have the right incentive structure. If residential or commercial customers do this they need to be able to receive some benefit from it," Jourabchi said. "If demand response programs for water heaters lowers the utility's cost, that cost savings needs to be passed on to customers."

Avista Corp. and the city of Pullman have teamed for a volunteer pilot program that will put smart meters in 1,500 homes so residents can monitor their own use of electricity and even control it remotely. The utility is also installing more efficient power lines in Pullman and Spokane.

"For Spokane we figure it will save around 15,000 tons of carbon a year that won't be generated because we won't have the loss so our energy will be used more efficiently," Imhof said. "It keeps us from having to run the gas plants and coal plants as much."

Related Pages:
Energy Efficiency: The Key to Our Clean Energy Future by Sara Patton, The Oregonian, 3/5/10
85 Percent of Electricity Demand Can Be Met with Efficiency Columbia Basin Bulletin, 2/9/10