Draft Sixth Power Plan Comment

TO: The Northwest Power and Conservation Council FROM: Bill Welch and Jason Heuser DATE: November 2, 2009 SUBJECT: Comments on the Draft Sixth Power Plan Conservation Targets EWEB would like to thank the Oregon Council members for supporting the aggressive conservation targets in the 6th Plan. We would also like to acknowledge and thank Council staff for creating a plan that continues to make energy conservation the highest priority resource for the region. Like the Council, EWEB’s current and past Energy Resource Plans have placed conservation as our highest priority resource, followed by renewables and cogeneration. EWEB has been at the forefront in acquiring energy conservation in the region for many years. We have had provided conservation programs for our customers since the late 1970s and have acquired approximately 60 aMW of conservation in a relatively small service territory. We have been in the conservation business through all of the previous Power Plans. Like the Council, we believe conservation offers the lowest cost option for meeting the energy needs of our customers. It saves our customers money, reduces the exposure to power price fluctuations, and provides local jobs. We have been told by several local contractors our conservation programs have kept them in business during economic downturns in the past. Finally, it provides the most direct way to reduce greenhouse gas emissions. It’s hard to find a downside to acquiring as much cost effective conservation as possible. Despite the benefits that are obvious to us, it has not always been an easy argument. We have had to ask our past and present Boards to approve budgets that include significant expenditures for conservation—for the past dozen years we have invested over five percent of gross revenues in conservation. That is unprecedented almost anywhere in the country. We have maintained a large energy management staff for almost three decades—it now numbers about 40 people. We agree with the Council staff’s assessment there is a large amount of conservation that can be acquired in the region. Our experience in our own service territory tells us it is there. We believe it is the Council’s role to set aggressive targets, so, just as we have done, the various regional agencies, organizations, and utilities will set equally aggressive targets and fund the programs and staff to meet them. There has been much discussion and debate about the conservation targets in the 6th Plan. EWEB is not in a position to argue whether there are 1,000, 1,100 or 1,400 aMW of achievable conservation in the region over the next five years. We are currently updating our own conservation resource potential and are aware of the uncertainties inherent in any potential assessment. We appreciate the Council’s acknowledgment of the uncertainty in the estimate and its willingness to take a time-out midway through the five year period to reassess the targets. While we support the overall direction and targets contained in the 6th Plan, there is an area of concern for EWEB. Because of EWEB’s long history of aggressively implementing conservation—even when others weren’t—we are concerned about how our 60 aMW of installed conservation will be accounted for in Bonneville’s post-2011 conservation program. It appears Bonneville will rely heavily on the Council’s calculator to allocate its share of the Plan to utilities that opt-out in the post-2011 rate period. If the calculator does not adequately and accurately account for the installed conservation in individual utility service territories it will be difficult to reconcile the bottom up assessments done by utilities with the top down approach provided by the calculator. We believe we have significant resource remaining, but are already well into our resource stack. We don’t believe that is the case across the region. We ask the Council to carefully look at the way its calculator treats past conservation and that it support utilities like EWEB in the allocation of conservation targets for post-2011. We don’t want EWEB to be penalized for doing the right thing for all these years. We don’t want to be unfairly disadvantaged for our leadership role over the past 30 years in acquiring conservation. Thank you for the opportunity to express our support for the 6th Plan and to air our concerns about its implementation with regard to legacy conservation.