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NPPC Issue Paper Underestimates Role of Clean Energy in Meeting BPA's Power Shortage
Public interest advocates and two utilities last month responded to the Northwest Power Planning Council's (NPPC) analysis of potential energy conservation savings and renewable energy development available to the Bonneville Power Administration (BPA) . The groups claim the Council's Draft Issue Paper on Conservation Acquisition by BPA leaves out numerous cost-effective conservation measures and fails to account for the role renewable energy could play in helping the agency meet a shortfall of more than 1000 average megawatts (aMW) going into the 2002-2006 rate period.
In their joint challenge, however, the Northwest Energy Efficiency Council , the NW Energy Coalition , the Natural Resources Defense Council , the Renewable Northwest Project and the Emerald People's Utility District applauded the Council's acknowledgement of BPA's legal obligation to invest in conservation and supports the Council in recommending BPA include a competitive bidding process as part of its conservation acquisition strategy. A third-party bidding process would allow BPA's acquisition efforts to benefit from the unique strengths and expertise of private-sector energy efficiency firms.
The groups charge that the NPPC analysis, which supports BPA's intention to acquire 150 average megawatts (aMWs) of conservation over the five-year rate period, is incomplete. A 1995 regional conservation assessment, used significantly in the analysis, underestimates energy savings in the industrial sector and lacks any conservation potential for aluminum and other Direct Service Industry (DSI) customers.
Drawing from assessments by Seattle City Light and other utilities, which indicate an industrial conservation potential 50% greater than the Council study shows, the groups argue at least 23 aMWs of conservation should be added to BPA's conservation acquisition goal. And by conservatively estimating a savings of 1.5 to 2% of the power BPA will sell annually to the DSIs during the five-year rate period, an additional 21 to 29 aMWs can be added to the 150 aMWs target, bringing the total to between 194 and 202 aMWs.
Clean energy advocates credit BPA for its green power program aimed at selling 150 aMWs of non-hydro renewable energy to its customers by 2006 but challenge the agency to take the next logical step and make its green power goal part of the acquisition strategy.
The response paper also asserts the NPPC analysis should take into account the non-quantifiable benefits renewable energy and conservation provide over purchasing power on the open power market. Investment in clean energy has tremendous environmental and public health benefits and avoids the future costs of carbon dioxide regulation, a major by-product of generation from coal and natural gas, the dominant sources of power currently available on the open market.
Investment in conservation and renewable energy can also help BPA avoid the price spikes suffered in recent years by power providers across the country during periods of high demand. Although the region's power market so far has not demonstrated such extreme price volatility, power shortages could hit the Northwest beginning this year. Increasing demand for electricity in the Northwest also means expensive upgrades of BPA's aging transmission system are not far off. Targeted investment in conservation now would allow BPA to avoid or delay the high costs of those upgrades.
The groups conclude by urging BPA to begin conservation acquisition immediately. Bonneville faces a major challenge to deliver megawatt savings within the five-year period beginning in 2002. By initiating an aggressive conservation strategy now, the agency can extend the window in which it must acquire those savings from five to seven years.
Mark Glyde