ML20084V112

Draft Vol 1 to 1991 Northwest Conservation & Electric Power Plan

ML20084V112
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Site:	Washington Public Power Supply System
Issue date:	05/22/1991
From:	Goller J NORTHWEST POWER PLANNING COUNCIL
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ML20084V105	List: ML20084V103 ML20084V107 ML20084V112
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PROC-910522-01, NUDOCS 9105310153
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Table of Contents

'this document is the complete Volume i of the 1) raft lW1 Northwest Power Plan.

A Decade for Action........ 3 1he technical analysis, supportive data Forecasting the Future...... 12 and planning assumptions aie contained Action Plan............... 21 n gluine 11. which can be ordeied from flow to Cominent.......... 36 the LouncH hee page,W lb the Citizens of the Pacific Northwest:

1he draft power plan you hold in your hands is unlike any we have produced in the past. Not only is it shorter and, we hope, casier to read, but it also should com-municate to you a new sense of urgency. If there ever were a time for cooperative action in the Pacific Northwest, this is it.

We felt this plan was so important that we are sending it to those of you who regularly receive our magazine, Nonhwnt Encrxv News. It replaces the January /

February 1991 issue. We hope you will take the thne to read this plan and give us your comments. Guidelines for conunent begin on page M Why is this plan so important? 1he fact is, the surplus of electricity we had through most of the 19% is gone in the latter half of the 19%, the region's de-mand for electricity grew at a rate that was equivalent to adding a city the size of Portland each year.1 hat rapid economic growth has slowed, but electricity demand is still growing.

The Pacific Northwest needs new resources to maintain its healthy economy, and it needs to begin acquiring them immediately. Ilut we have limited options. It is time for all of us-Council members, electricity providers and consumers-to look very closely at the difficult choices we face.

We have spent the better part of the past two years studying the various re.

sources we can turn to: energy efficiency, hydropower, wind power geothermal pow-er, solar energy cogeneration, coal, nuclear and others. We have a good handle on what each will cost and how much of each we can expect. We've spent months ana-lyzing and testing the possible outcomes of various combinations of icsources and future scenarios.

All of this work has pointed to the actions called for in this plan. Please read on.

1 hen let us know what you think. IIelp us move into the next century with a secure electrical power system, a thriving economy and a healthy environment.

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Jim Goller Chairman 3

thsh IW1 %.srthmeet Posee P%n %%mr 1

Draft 1991 Northwest Power Plan i

A Decado for Action The goal ofibis power This drafi 2a-rear power pian even a rew hundred mega-plan is straightforward. It is to is the most recent product of that watts do not come cheaply, nor ensure that the Pacific Northwest regionwide collaboration. In it we are they without complex conse-will have a reliable electricity sup.

face a new challenge, the chal-quences. In preparing for the re-ply well into the next century, lenge the Act was designed to gion's energy future, it is the job This plan focuses on electrical manage. For the first time since of the Northwest Power Planning resources that balance some-the Act was passed, the North-Council, working with the llonne-times-competing attributes, west actually needs new re-ville Power Administration, utili.

These resources were chosen with sources. Our challenge is to ties and electricity consumers, to great care to provide a mix that is prudently select among all avail-weigh all resource alternatives the least expensive (both in eco-able sources of electricity those and choose carefully among them.

nomic and environmental terms),

that offer the region the most val-yet most risk free, ue for its money. In this and the There is some history behind next decade, the Pacific North-this plan. Ten years ago, the Pa-west almost certainly will be cific Northwest embarked on a called upon to add thousands of grand experiment. It was a test, megawattsi of resources to its initiated by the Northwest Power power system. One thousand me, 1 Megawans are wd in thm plan to Act of 1980, to determine whether gawatts is enough to power the

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four states, sharing common city of Seattle. If the region grows energy, When megawun a used to refer needs and resources, could coor-rapidly, we could need more than to capacity, it is noted Capacity n the dinate their efforts to ensure their 13 times that amount in 20 years, maumum output or an ciectneny sys-people reliable and economical electrical senices, o,. aim w

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1he Act provided guidance on this choice-wise guidance. it called for a regional power plan Action that turns to conservation as its p[gg most cost-effective resource. This u

plan does just that.

Resources Four Objectives ngure i Four Objectives

's the plan calls on the North

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west to purchase more than improve Afa 1,3502 megawatts of conservation Flexibility 1y over the next 10 years. This means concerted efforts to stop Actions Supporting implementation wasting electricity in new and ex-isting residences, commercial buildings, industrial processes and irrigated farming practices. It also means upgrading power cases, dernonstration projects Responsibility for implement.

plants and transmission systems must be initiated to resolve ing this plan is shared by a num-to make them more efficient. (See questions.

ber of regional entities, and Figure 1.)

Finally, to make all of this cooperation will be critical to the Second, the plan calls for ef-possible. this draft power plan plan's success. (See Figure 2.)

forts to shorten the lead time cutlines regulatory changes and Utility regulators will have to play needed to bring new resources other actW. '< !mprove power a major role in streamlining re-into the power system. If it takes system planning and implementa-source acquisition processes and years to develop a resource from tion efforts. Perhaps the most im-ensuring there are no barriers-idea to reality, then the odds in-portant regulatory change that especially for conservation-that crease that conditions will have needs to be considered is a mech-can impede implementation.

changed by the time the power is anism to link power company Government support at all lev-delivered. The demand for elec-profits to energy the utility sarcs els will be necessary to require tricity could have been exacer-as well as energy the company cost-effective conservation stan.

bated, or it could have declined, sells.

dards and other policies.

Short lead times and resources 1b sum up, the four basic ob-The Ilonneville Power Admin-that can be secured in small in-jectives of this plan are: Acquire istration and the region's utilities crements, are important keys to more than 1,350 rnegawatts of will bear the fundamental respon-responding flexibly to uncertain conservation and other low-cost sibility of buying, through bidding future power needs, resources in the next 10 years; and other means. or building The third focus of this plan in-shorten lead times to provide most new resources. Utilities cludes actions to confirm still flexibility to respond quickly to serving rapidly growing areas will more resources by pinning down energy needs; confirm the costs have to be especially aggressive in their costs and availability. The and availability of additional re-implementing this plan.

Council is reviewing a category of sources; and encourage regulatory resources that are " promising,"

and other changes to help this but not quite ready for develop-plan get implemented. These ob.

ment. Other resources could be jectives are not meant to be se-bargains, but the region needs quential. Action on all of them is more information before major needed now. (See the Action 1 Numte are rounded oH in Wlume investments can be made. More Plan, which begins on page 21, research is needed, and in some and '

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contams precise figures O

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Environmental groups, con.

sumer groups and the pubHe at large need to lend their support Tlie to make this plan a reality, g g},g g.g n,,na n o g, For the Council, drafting this han plan is only the beginning. We are

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committed to its implementation.

We will actively participate with Figure 2 allinterested parties in efforts to Cooperation is runne make the potential ernbodied in Needed to Make h*"

this plan become reality.

this Plan a Reality Wily Now?

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'Ihis is not the first Northwest Power Plan:it is the third. But the region changed so dramatical-ly in the last half of the 1980s that, in some ways, the whole fo-more than M0 megawatts of ener-rny and without an inventory of cut of power planning has had to gy savings, at a price roughly half resources that can be developed change with it. The first two plans that of power from a new coal quickly. Even with moderate reDect a period when the region plant. Ilundreds of thousands of growth, the region will need an had surplus electricity, it was an homes were weatherized, hiillions additional 2,(WW) megawatts by the expensive surplus, fueled by ther.

of dollars in annual heating, cool-turn of the century.

rnal powcr plants that had cost ing and operating costs were considerably more than the hy-saved. New building codes that A System Under Stress dropower that supplies most of met the Council's energy-efficien-the region's electricity, Nonethe-cy standards were introduced in

,ne sa, uan,on could get worse.

less. the surplus bought us time.

some parts of the Northwest. All Other pressures also are innuene.

Regional power planners, pow.

in all, the region started building ing the amount of power we can er sy> tem manat;ers and electric.

the infrastructure to acquire large expect to produce in the future, ity consumers used that time to amounts of energy by saving it.

(See hgure 3.)

L make sense of the stresses lay the foundation to implement this plan. The concept that energy The Surplus Is Gone compelling this region to acquire conservation is a resource like electricity from new sources, it is Now the regm.n is in what util-important to understand that, un-any generating power plant was ny pl nners caH " load)/ resource like any other part of the nation, introduced by the Power Act, al nce s means that there the four Northwest states of Ida-This region's utility managers had ts just abut enough peer ho, hiontana, Oregon and Wash-to find ways to bring a conserva-suppued by the msdng Ptem to ington all rely on a single source tion " power plant" into their elec-meet regional electricity needs at for two-thirds of their electrici-trical grids, their present lent Smne peer is ty-Columbia River hydropower.

They developed and offered sdH sold to California, and it can prograrns to enable their consum-be recalled if necessary, but m, ers to save electricity in homes pracdeal terms, dw supply is and businesses, on farms and in industries. Even without really

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spne the progress of dw pushing to make all the efficiency improvements that are possible, last W yars, Ow region enters dw

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'Y I" the region managed to acquire successfully run conservation pro.

1 load is the term for electncuy de-grams in all sectors of the econo-nuind on a pen gmvr system.

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The Pacific Northwest Power System Must 2%

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Cope with Many son %.

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Challenges igg ION trngurts f

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Nuclear Clean Air Transmission In t a es The number of hydroelectric the individual projects. That Even before the petitions, dams that can transform the Co-agreement expires in 20(0, raising however, there were concerns lumbia's waters into power is lim.

the immediate question of how about the adequacy of Dows for ited 'Itat limit, in large part, has the river will be managed in the salmon migration. The Council's been reached.

future.

fish and wildlife program calls for 1

Both the United States and New demands on Columbia minimum Dow levels and a water Canada constructed dams on the River water are not so easy to budget. The latter refers to water l

mainstem of the Columbia River predict. In the spring of 1990, sev.

stored in reservoirs of the Colum.

and its tributaries, and the two eral groups filed petitions to have bia and Snake rivers that is countries negotiated agreements five species of Columbia and released to aid the spring migra-to allocate the cost of those dams Snake river salmon listed as tion. But only one-third of the and the power they produce, threatened or endangered under Snake River water budget comes Some of those agreements expire the Endangered Species Act, from storage. The remainder l

in this decade. Under the terms These salmon use the rivers as comes from runoff, and that has of one agreement, about 500 me-spawning and rearing habitat, but been consistently low for the past l

gawatts of energy was sold to the fish mature in the ocean.

few years. The Council is taking a l

U.S. utilities for 30 years. When Each year, during their migration new look at the water budget and l

that agreement expires in 1998, to the sea, millions of them die in Dows. If at the end of its review, that power will begin to return to the hydroelectric dams and reser-the Council feels changes are Canada.

voirs, if these fish are declared to warranted, it could amend its fish Another agreement governs be endangered, all other water and wildlife program Such the way much of the hydropower uses-irrigation, power produc.

changes could require some mad.

j system is coordinated, so it can tion, recreation, etc.-could be ifications of the actions in this be operated as if by one entity, affected.

plan.

when in fact, many agencies run l

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t in another proposal, there are g* g gs) plans to expand the use of Co-J lumbia IUver water to irrigate farmland in the upper Columbia is there a familiar ring to this call for new resources, for action now, be-Basin. Rose plans would take fore the lights dim and go out? This is not 1976, the year the Ilonneville Pow-both water and power from the er Administration issued notice that it might not be able to supply additional electricity begmning in 1983.

systen in the late '@s, utility planners geared their resource decisions to a sing.

Potential new claims on the le-point forecast of future electrical needs. The Northwest was booming-Columbia are not the only threats had been for more than a decade. Forecasten looked at the past and figured to the region's future energy sup-the future would be about the same. Electrical loads had been growing over ply. Both the price and availabil-6 percent a year, so planners decided to acquire enough resources to sustain ity of natural gas and oil, also that rate. Convinced of the urgency of their conclusion, and compelled by used to generate electricity, are the need to begin early to construct generating projects that could require inuusnced by events outside the 10 to 15 years to complete, they sank fortunes into constructing large power I

Nortlywest. For example, Iraq's P ""1"y go, g g g 3,

g g g, invasion of Kuwait in 1990 and While our electricity is still among the cheapest in the United States, it is the subsequent near-doubling of roughly six times more expensive than it was in the early '70s. The Northwest oil prices jarred the budgets of leamed a hard !csson.

power producers who depend on that fuel. Historically, the price of What is different in this power plan?

natural gas tracks the price of oil.

If gas prices climb substantially, 5tange forecase Ws forecast covers a range of possible hud growth, ex-a this region also would be af-tending from a pace that outstrips the rest of the nation to declining use.

fected.

What's more, the highest growth rate m this forecast is only 15 percent.

Wst costly fint: While there is certainly need for new resources, this in addition,if the Middle plan calls for taking the least costly path. This means making the most Eastern conflict is prolonged, and efficient use of existing supplies as well as building low-cost new re.

l oil prises stay high, with gas sources.

l prices following, more people Flexible resourtes: Dis plan seeks to add new resources with short lead a

0 may switch to electricity to heat times and those that come in small increments.

their homes, adding to the grow-

• h58'P ecisions: Large power plants (as well as smaller ones) are de-d ing demands on the power sys-vel ped using a two-step decision process: the relatively inexpensive but it ngthy process of siting, licensing and designmg is camed on first; the te n decision to build is postponed until it is clear that the power is needed.

Other resources air.o are vul-nerable. Concerns about the com.

bustion of carix n-based fuels, particularly coal, oil and gas, and Even the federal government, faces, inaction would expose the the environmental consequences by threatening to require the people and the economy of the of emissions from power plants Bonneville Power Administration Northwest to the greatest risk, that rely on these fuels, may lead to accelerate its repayment of bil-to new regulations that could, in lions of dollars in federal loans, is Selecting Resources turn, raise costs and lessen the

' challenging the stability of this re-availability of these power gion's supply of affordable elec-The past 10 years have not sources. Public opinion also may tricity.

been without cornict in the re-

' influence reliance on some re-All of these forces bring tre-gion's energy community. There sources, such as nuclear power mendous uncertainty to the pro-were long and heated debates plants, and the siting and con-cess of planning for the North-over how to forecast power needs, struction of transmission lines.

west's energy future, but one i There was argument over how thing is clear: De time to act is now. Of all the options the region Draft 194 betboost Potet han-Wume 1 1

Planning Guidelines E

negin siting, licensing and The tinte to desisains io secure an i"vea-The Couned. based its plan-tory of resources the region aCl is n0W.

nins pnicess on the following cri-can complete quickly, when l

teria:

Of all the the power is needed.

E Encourage development of E

Confirm the availability and Options the the most envinmmentauy re-costs w au resourns to re-region I*aCBS, sponsible and lowest cost re-duce uncertainties asso-sources.

ciated with resource inactiOH 5el"'i""-

E Give preference to resources would that have short lead times g

Expand the diversity of re-and that come,m small m-source choices for the future.

expose the crements to erovide creater Dexibility.

E Promote regional coopera.

Northwest tion to rem <we insiiiutionai t0 the and other barriers hindering

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greatest risk.

much energy could be saved and at what costs. For the most part, in looking at the three most important considerations this plan must however, those arguments have balance-resource cost, nsk and the environment-the incoquration of emi-moved on. The region has ronmental concerns poses the greatest challenges. Different segments of soci-reached general agreement on ety have divergent environmental values. Environmental impacts can affect how much of each resource is future resource costs and increase the risk that the resource may not be avail-available. What is needed now is able when it is needed.

consenso an how to secure the The Council worked very hard to balance the environmental consequences, costs and risks of resources in designing the least-costly and most risk-free en-electricity acquired to meet even ergy strategy. But we could not put a price tag on the loss of a species or on moderate economic and energy low.proinability events that have nearly catastrophic consequences.

load growth.

On the other hand, some implications of resource development could be Without new resources, the controlled by designing actions to prevent the problems. This was the case with econornic stability of this region the Council's energy-efficient building standards, which require much higher will be jeopardized. The region's indoor air-quality assurances than any existing building codes. By calling only utilities, its regulatory agencies, for the best and cleanest coal technologies, we also hope to reduce the ramifi-its state and hacal gohernments, c tions f turning 1 that resource.

In addition, we chose to limit our reliance on some technologies, such as and energy consumers m. general even the cleanest coal resources, to keep their em'ironmental impacts to a must act now to prevent future minimum. We made the same choice with hydropower, by protecting about power shortages. This plan is de-44M1 miles of streams from future dam construction, because they contain signed to ensure that judicious important fish and wildlife habitat.

actions are taken that will guar.

Finally, when the resource portfolio was being assembled, we tested the antee the region an electricity costs and benefits of encouraging the development of more environmentally supply at the least expense to the benign resources. We modeled alternative scenarios in which low-impact re-ratepayers and their environment.

s urces were moved up in the resource schedule and more questionable ones were dropped to the end of the planning period or climinated.

From this process, a balance was struck, so that protection of the environ-ment could be aligned with the Northwest's need for cost-effective and reliable sources of electricity. This was accomplished by promoting conservation and renewable resources that could postpone construction of coal and nuclear re-saurces.

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lhilancing Resources Dinct Costs The term "least-cost" is often De))C8(O misunderstood. It does not refer 133lallCe only to the capital, labor and overhead costs to build a power plant, or the cost to fuel and fj" 8 g maintain it over its lifetime.

Risk Envininment in least-cost planning, these costs are calculated along with all Power System resource veveloprnent, operation and decommissioning costs. But

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these direct costs are balanced

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against the environmental conse-l l

quences of using one resource g

rather than another. These less e

tangible costs are factored into resource selections along with the value of ritk management. For ex-Consumer groups and individ-These papers asked the public ample, certtin resources come in uals contributed important pet.

for more than confirmation of or smaller increments or take less spectives. Gver the last two years, additions to the data. These pa-time to bring antine. They may the Council has collected an enor-pers asked for opinions on and cost more to baild or operate mous amount of data. It sub-interpretations of the data, for than other resoerces, but their jected this data, along with guidance in direction, for areas flexibility is a chi.racteristic that assumptions and hypotheses, to that might have been overhxiked makes them particularly well the scrutiny of the public in a se-and, in short, for vision. The suited to lessening 'he risk of ries of 33 issue papers, released Councillistened to public testi-building too many or too few between April 1989 and March mony and read a three-foot-high power plants.

1990.

stack of comments on these is-All of this means that the sues. The Council weighed this Council must perform an intri-testimony, along with the techni.

cate balancing act, weighing the cal and economic data, as it

]}j$ p}3g made preliminary decisions re-direct costs, the environment and the level of risk. How such bal-garding the best mix of resources ance is achieved is a policy call,

]s the and a scheduie for bringing them and that is an important part of into the system, understanding this power plan.

Product of3 Tidsisunquestionabiyihe (See figure 4.)

gggjpgjg9 rnost dimse set of resources the Tlus plan represents far more J

Council has ever explored. Tiu,s jgd g}gg(

diversity is deliberate. It is one of than numbers fed into and spewed out of a computer. Tin,s the strengths of this plan. The plan is the product of analysis, and Councu hxiked at every resource judgment and exhaustive public that could potentially produce input. Scientific and technical ad.

exhaustive eiectricity. These inauded smau visers in each resource field par-ticipated in lengthy meetings, Public input.

resources, such as solar collectors used,o n,,,,a,e,, and me,, em.

suggesting the most up-to-date teric technologies, such as power technologies and cost figures to produced by the action of waves help shape these recommenda-in the ocean, tions.

own m rue,. un ra.-%= i e

De Council took an especially he list of resources compiled the Council judges costs. If better careful look at renewable re-by the Council should not be resources are found, they will be sources such as wind, geothermal viewed as a list of resources to brought in to displace some of and solar power. Dese resources buy. Rese resources (ranked by the current resources.

often are proposed as alternatives cost) are expected to be reliable With these potential resources to more conventional power when they arc needed. (See Fig-in mind, the Council turned to plants, which ignite public con-ure $.) But other technologies the kinds of futures the region cern because of their environmen.

may be tested oser the coming can reasonably expect and what tal consequences. (See Volume 11, years, and they may be equally can be done to best meet those Chapter 9, for further discussion cost-competitive in all the ways futures.

of the environmental consider.

ations in this plan.)

A Level Playing Field The only way to determine if a resource is cost-effective is to compare it to another resource. Is it cheaper or more expensive? This comparison is not as easy as it sounds. For one thing, not all resource costs come in equal increments. Some resources, such as a hydropower dam or conservation, require large capital outlays up front, but low operation costs after that. Other resources that produce electricity, such as gas-fired combustion turbines, are relatively inexpensive to build. But they are expensive to run be-cause of their fuel costs.

Tb acwunt for these dJferences, the Council determines the total cost of each resource (including cap-ital, financinF, fuel, operation and decommissioning). These costs are spread over the lifetime of the re-source and divided into equal annual payments. The result is called the levch:ed hfe-cyc/c cost. 'Ihis allows resources with dJferent cost pat' erns to be compared on a level playing field.

A dollar by any other name There are two ways to report costs: in nominal and tral dollars. Nominal dollars are the face value of money at any given time. If you buy something for $100 today and $200 do'lars 10 years from now, those costs are in nominal terms.

But, if during the intervening 10 years there has been inflation, then the purchasing power of a dollar has changed. It will take more dollars to buy the same things. Real dollars measure purchasing power. lb convert nominal dollars to real dollars, you must remove the effects of inflation.

The costs in this plan are reported in nominal levelized life-cycle costs. This approach allows you to compare new resource costs with the current price of electricity. For resources that have primarily capital costs, such as conservation and hydropower, the rule of thumb is that levelized costs in nominal dollars will be approximately twice as much as they would be in real dollars.

For more information, see Volume II, Chapter 13.

10 Dran Iwl %rthmes: Power Pw-w%me i

Resource Supply Maure s llow Much at What Cost?

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Anrage Megawatts liigh I'orecast Levelized Resource Available Resource Megawatts Nominal Cost Category 1.

Conservation Voltage Regulation.

100 13.

Consenation 2.

Freezen.

29 1.5.

Conservation 3.

Ilydro Efficiency Improvements.............

110.

1.7.

Consen ation 4.

New Manufactured llousing..

98.

32.

Conservation 5.

Small llydro 1...

90 3.7.

Renewsble 6.

Commercial Model Conservation Standards.

. 543..

40...

Conservation 7.

Water lient.

181 40.

. Conservatkin 8.

Industnal........

575 43..

Conservation 9.

Multifamily Residential Model Consenstion Standards 51....

4.8.

Core.cn ation

10. Transmission and Distribution Efficiency improvements 2tX) 5.0.

Consenatum

11. Multifamily Residential Weatherization 53...

5.3.

Conservation

12. Refngerators 101 55.

Conservation

13. Existing Commercial.

558 56.

Conservation

14. l!ydrofirming (Combined Cycle 1).

. 1.050 60.

liigh Efficiency

15. llydrofirming (Combined Cycle 2).

. 1,400 60.

liigh Effie4ency

16. Small llydro 2..

100...

6.2.

Renewable

17. Single-Famig Rer.idential Maiel Conservation Standards 226 6.2.

Conservation 18, Cogeneration 1.

480 6.9.

liigh Efficiency

19. Single-Family Residential Weathenration 130.

7.0.

Conservation

20. Cogeneration 2 60 7.0..

, liigh Efficiency

21. WNP-3 868.

7.2.

Thermal

22. Irngation...

77

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Consenntxin

23. Ocothermal.....

350 7.6.

. Renewsble

24. WNP-1 818 7.7.

.. Thermal

25. Eastern Montana Coal.

. 1.800 7.8.

Thermal

26. Municipal Solid Waste 30 80.

Renewable

27. Small liydro 3 130 8.3.

. Renewable

28. Eastern Washington Coal 750

. 9.1.

Thermal

29. Cogeneration 3

. 1.130

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liigh Efficieng

30. Eastern Oregon Coal....

750 9.5.

'I hermal

31. Wind 1...

. 20 96.

Renewable

32. Nevada Coal..

750 9.8.

Thermal

33. Western Washington / Oregon Coal 750 9.8.

Thermal 34 Small liydro 4 90

. 10.1.

Renewable

35. Cogeneration 4 540,

10 4

ligh Efficiency

36. Wind 2.

380 11.4.

Renewable

37. 1.liomass.

90 12.9.

Renew 3ble

38. Solar Thermal Not Cost-Effective 14 0.

Renewable

39. Ocean Waw Power.

Not Cost-Effective 16 0.

Renewable

40. Solar Photovoltaics Not Cor.t-EffectP,c 30.0.

Renewable

~

Dren IWl Northwest Pueer Plas-Wluaw 1 11

l Forecasting tMV Future The lesson history siowiy, the region could be forced Forecast Scenarios teaches is " expect the unex-to buy expensive power from oth-pected." so the council wastes no er regions or face curtailments.

The 20-year demand forecast time trying to pmpomt future blackouts and other symptoms of portrays a broad range of growth electricity needs. Instead, the an unreliable power systern,

~

banded by a low forecast, where Council assumes that the future This is why the Council is par-the recion's need for electricity can play itself out along an infi-ticularly attracted to resources

~

declines at an average annual rate nite number of paths. Some are that can be acquired relatively of -0.6 percent, and by a high an.

more likely than others, and these quickly and m small increments-nuat growth rate of 2.5 percent.

become the "20-year demand They are the best hedge against The Council looked at hundreds forecast."

uncertainty.

of possible scenarios within this The actions described in this The Council works with the range. Some w,uld have the re-plan respond to virtually any Bonneville Power Administration gion grow quic :ly, then level off.

plausible pace of economic move-to estimate the region s economic Some portra' the opposite pat-ment. This is essential, because growth and the energy it will use tern. Others indicate several the investments called for over in the next two decades. Tbgether, peaks and valleys in growth, the next 10 years are substantial.

they look at historical trends.

While the Council plans for If the region bets wrong and study reams of data and use eco-resources to meet any growth builds too many power plants, as nomic computer models to make within the overall range,it places was the case in the 1970s, elec.

projections about the future. Be-more emphasis on loads between tricity consumers will be paying a cause economic growth and the the two mid-range levels. These premium for power they c'm nei-costs of electricity and alternative are a medium-high growth rate of ther use nor sell to recover their fuels are the major determinants 1.6 percent and a medium-low investment. If too few resources of energy use, they serve as the rate of 0.5 percent. (See Figure 6.)

are acquired or are built too basis for the demand forecast.

12 Dran IMI Nonlimest Pomer No-Volume I

The four load-growth scenar-los cover what could happen in the next 20 years, but the most Loads: F..it 35Au-crucial actions are those we take ggg pgggpg ago.

,7 ;, ; {

during the first 10 years.

y

-u.

m What follows are illustrations 25A10 -

of the kinds of events that could E

/

Figure 6 20An -

happen. It is unlikely that the fu-A Wide Range tf C-ture will evolve precisely as de-215Ala -

I

""8Y scribed in any one of thea Futures e 10.000 -

scenarios, but each is plausible.

y

< 5,0001

1. High Scenario:

Economy Booms 0'

1950 1960 1970 1980 1990 20u0 2310 The next two decades could be Y'"'

characterized by strong world and national economies. The re-gion has recovered from its reces.

International businesses and resources,4 and 2.470 megawatts sion of the early 1980s and industries take a new look at the of thermal resources to meet our currently is outpacing the rest of Northwest. 'lhe environment is need for electricity in the year the nation's economy, That eco-attracting the best-educated and 2000. (See Figure 7.)

nomic vibrancy could continue-most valuable employees, an asset Because of the time it takes to Consider that the marketin8 businesses cannot pass up, bring all of these resources into outreach the region has been en-None of this is implausible; production, we will be short gaged in pays big dividends, and the regional economy has grown about 2,300 megawatts by 1995, the Northwest becomes a major faster than the current high fore-and a shoidall would continue Pacific Rim power. Worldwide cast since 1986. High economic untiljust before the year 2000 demand for our lumber supports growth would mean that the re.

This assumes the Columbia Riv-growth in our wood products in-gion's energy needs grow at an er's dams are producing only dustry. The newly democratized, annual rate of about 600 mega-their most reliable amount of but food-poor, Soviet Union be-watts of electricity, the amount power, called " critical water " In somes a big purchaser of North.

Portland now uses Council and years with better water levels in west whee.

utility response would have to be the Columbia, the deficit would Our aluminum plants continue immediate, with rapid and not be ss severe.

operating at full capacity, as aggressive deployment of conser-A roor water year would have world prices for aluminum and vation programs. Unless all four serious consequences for power efficiency improvements in the re-states fully implemented model system reliability. The region gion s mdustry make our plants conservation standards for new would have to purchase power strong competitors on the world buildings, the region's ability to from outside the Northwest and n :ket.

keep up with load growth would likely pay a premium for it. For Economic development is fall even further behind, example, a one-year deficit of booming, and Boeing continues If the region's economy follows to get big airline and government the high case, we will need 1,500 contracts. The suburban areas of megawatts of conservation,760 4.

High-efficiency resources include Seattle and Portland emerge as megawatts of renewables,1,760 elecincity CO8encrated with steam used megawatts of high-efficiency h"r cIe n1buItI"n't$'

national centers for research and m ned production in the fields of bio-bines that could be used, along with technolog, computers and ad-other strategies, to make better use of vanced materials.

the hydropmer system.

Draft 199i Northwest Power Plan-Wrwas I 13

1 regions. The Northwest's physical beauty continues to make the re-Higli 2 4^* ~

J gion a mecca for tourists. New i

% E c7-~.~m co"vendon f3cihufS-"ith their Scenario 12an -

i i u o nto promise of side tnps to moun-10,000 -

i i = =. =

tains, sea and rivers-bnng m E

M C""" "'**

big-ticket conferences.

Figure 7

{ 8.000 -

Overall, employment is in-Large Deficits in y ggg,

creasing 40 percent faster than the 1990s g

the national average, and high-

[###'

technology and commercial in-

< 2.000 -

g dustries also are growing fast.

Non-manufacturing employment 0'

increases nearly 60 percent.

1990 1995 2000 2005 2010 At this economic pace, electne T. ear loads are increasing at a rate of 1.6 percent or about 350 mega-watts per year.

2,300 megawatts, if made up at 4

2. Medium-High Scenario:

This is sufficient growth to cents per kilowatt-hour, would Growth Moderates mean a power deficit until 1998, cost the region more than $S00 with a maximum deficit of more million. If power isn't available Under this scenario, much of than 800 megawatts in 1995. Effi-from outside the region, because the growth described above taket eiency improvements supply 1.350 everyone else also is attempting place, but not at such a frenen,e megawatts in the next decade: re-to buy it, power curtailments Pace. Lumber and plywood pro-newables contribute 50(k hich-would be likely. The first to suffer duction falls from current levels, efficiency resources kick in 1,000 !

would be the aluminum industry, but by the end of the decade. the megawatts; and conventional because part of its power is inter-indust 4y is agam on an upswmg.

thermal resources provide 1,100 ruptible. But other consumers The economy is still very megawatts. (See Figure S.)

also could be cut off.

healthy. Several Northwest cities continue to turn up in the list of

3. Medium-Low Scenario:

most liveable places, drawing Economy Slows people from less attractive

~

In the medium-low growth scenario, the nation and the re-gion experience a recession in the Medium-1485 ]...... _

early 1990s. The region recovers Higli 12.000 -l

'-, c-..a sm, slowly, and employment growth i He uram I

falls slightly behind the national Scenario toum,I rate. Migration mto the region g,,,,,g c,,,,,,

3 j g,ooo 4

,9 drops off. Population growth now

. ~ ~

I is due almost entirely to the resi-Figure 8

$ 6.000 -

dent birth rate, which still ex-Smaller Dehcits a

ceeds the death rate.

j 480 ~l

f. ' ' ' _ [-

...p in the 1990s n.ru Economies in the nation s 2.000 -

' sunbelt" pick up, and industrial in ment 6 & awn away hm a

~

0 1990 1995 2000 2005 2010 lethargic Northwest. Aluminum yeu plants run at two-thirds of their capacity as world prices for the product weaken. Employment in a

o,.n m %

m.., m.- % i

.-.-,m

-- ~

..-.--.-.y---

l the lumber and wood products industries drops off by 30 per-cent.

Medium-

" So 1

l l

Even with this slowed econm BOW 12.n o -

www my, the region still needs new re-i i uc on-Scenar!O sources by the end of the decade.

m.n o -

i i mm..

E Consenation will take care of the ammmmmmmmmmmmmmmmes bulk of this need, with 960 mega.

kg,gg.

watts acquired by 2000, and the Figure 9

s 6.000 4 region develops an addhional 300 Conservation

) 4'gg _

megawatts of renewables and 60 Meets Most E

megawatts of cogeneration during Needs in the

< 2.no-the 1990s. (See Figure 9.)

1990s l

^

0, 7

4. Low Scenario:

m iws m

aos 20m YCar Recess,on Deepens i

The recession, which has spread across the country, settles Resource Scenarios scenarios, the Council was able to deeply m the Northwest, and the identify the most significant re-region never fully recovers. The Cold War was won, and defense ne challenge for power plan-source-related risks the region ners is that they don't get to pick might face and compile the best budgets are cut. Boemg s con-any of these scenarios; any one resource mix to counteract these tracts for new planes evaporate.

risks-(or, ;nost likely, some other)

There are massive layoffs m. the lh do this, the Council shifted could happen. Furthermore, the aerospace industry, with employ-economic scenarios are only one resources around, testing the ment dropping by 30 percent, power system's sensitivity to gg g

,,e are That is still better than the lum-other scenarios as well. In a ven, changes in any one of them. This ber and wood products mdustry, d

i ty was an opportunity to explore which sees a 40-percent drop.

,The alumm, um mdustry is at a have the most impact are likely to more fully the effects on the re-be the ones we know the least gi n of c Iling on different re-quarter of its operating capacity, and there is serious talk of clos-about. By developing and testing sources with different lead times, a series of alternative nsowu different costs and different envi-mg Northwest plants.

Even with a solid service in-dustry, the ripple effects of a sinking economy are strong, and LOW M'** ~

l regional unemployment increases.

- - - u-a With jobs scarce, the Northwest Scenario 12.a m -

- ~~-

begins to lose population: people 10.ao,l i

h>ok to the South and East for g

c,m..

better opportunities.

E 8.30 -i f gyj In this case, conservation more E

g than accommodates the region s Meets all Needs I

needs through the end of the de-g 4.ao-cade. (See Figure 10.)

e l

l t

0 I ---

1 t990 1995 2fo) 2to5 2010 Year nun mi mmn..a e,,.n rua-%.w i o

ronmental impacts. It illustrated calimprovements that reduce en-which parts of the region's re-vironmentalimpacts of specific We define source portfolio are robust or resources.

shaky.

The resource portfolio also in-Conservation cludes judgments of the amount as the wise Base-Case Portfolio of each resource that is likely to be available. In specific cases, the and efficient The amounts and sequences of Council has set its own limits on resources illustrated in Figures /

through 10 constitute the base-USe Of energy

• this amount. This was the case when the Council designated case or least-cost resource part-areas of the Northwest to be pro-It meanS foho. To deveiop this resource tectcd from hydropower develop-ment, because they contain stretching portfolio, the Council reviewed and evaluated each resource and important fish and wildlife habi-modified resource planning as' Our kilowatts, tat.

sumptions to incorporate signifi' If loads grow above 1 percent makin theni cant siting or dengn changes that per year, the region will experi-are likely to affect the resource.

ence energy deficits during the dO more.

For example, the Council fre-mid-1990s.1b deal with this, a wide variety of conservation and It d0eS hot quently incorpora:ed technologi-mean doing Conservation:

with less.

It s Our Middle Name Most of the time we trim our name, but the fact is, we're the Pacific North-generating resources will be need-west Electric Power and Conservation Planning Council. That's the name Con, ed to get the region back in load /

gress selected and for good reason. Energy conservation is the best electrical resource balance by about the resource money can buy. We were established to help the Northwest meet its year 2000. For this reason, the re-future energy needs at the lowest possible cost to the economy and the envi-gion needs to begin the process of ronment, and conservation is uniquely suited to that purpose-identifying sites and obtaining l

We define conservation as the wise and efficient use of energy. It means l

str tching ur kilowatts, making them do more, it does not mean doing with necessary licenses and approvals less. It doesn t mean lower thermostats, in fact, in a review of data recorded for resources that could be need-l during the " February freeze" of 1989, we !carned that our most efficieni ed during the 1990s. On the other homes (ones built to the Council's model conservation standards) saved, on hand, to avoid overcommitting to average,2 kilowatts of capacity per home daily, even though these houses these resources and creating were larger than average, and their indoor temperatures were kept higher another large surplus, the deci-than conventional homes that used more energy. At the same time, our effi.

sion to complete them should be cient homes cut the region's demand for power by nearly 200 megawatts, sav-delayed until it is clear that they ing an estimated $7 million in seven weeks.

are needed. Only conservation, This region is convinced! Every Northwest utility is promoting efficiency through marketing programs and incentives. Dey've already saved more than system efficiency improvements, 350 megawatts at a cost less than half that of power from a new coal plant.

the lowest cost hydropower and 1

State energy office programs brought us another 200 megawatts.

cogeneration facilities should ac-New energy-efficient building codes and appliance standards already tually be acquired.

adopted by federal, state and local governments will save the region up to 800 average megawatts ever the next 20 years. His figure is in addition to the 1,39 average megaatn called for over the next 10 years. In addition, if the region experiences high-nad growth over the next 20 years, this plan includes 3,200 average megawatts of conservation. Finally, we've identified about '1,400 average megawatts of promising conservation resources, a potential that con-firmation activities called for in this plan may help us realize.

le Dran 1991 Nonheest Pu=er Pua-Volume !

Alternative l'ortfolios which price or availability put All of these studies were done that resource out of teach. Under assuming that Bonneville and the The possible ramifications of this scenario, conservation and investor-owned utilities pursue alternatives to the base-case port-high-efficiency resources would independent resource develop.

folio also were analyzed, dis-still receive highest priority, as ment activities. Each undertakes cussed and debated. Instead of they do in all scenarios, but they only those actions that are cost-attempting to predict the likeli-would not be adequate on their effective and needed to meet the hood of these alternatives, the own. The region would need to needs of its customers. Tb simpli-Council focused primarily on accelerate its assessment of the fy this process, we have combined plausible conditions under which viability of coal and nuclear re-these independent actions to form our energy future could be altered sources. The price tag for moving a regional composite picture.

significantly. Such studies might purchases of these resources up Similar actions are called for by be called "what if" studies. What would be $460 million.

both Bonneville and all utilities if an existing thermal plant is If the region fails to add re-during the next several years. (For shut down? What if the region sources in the next 10 years, there a more complete discussion of achieves only 60 percent of its is enough electricity in only 17 this process, see Wlume 11.

conservation potential, about a percent of the estimated futures.

Chapter 10.)

third less than the Council as-In 83 percent of the possible fu-sumed? What if nuclear and coal tures, the region will be deficit. In Conclusions from plants are not available? What if 44 percent of the cases, the re-ForeCDSt Qnd there is a carbon tax on coal?

gion's deficit is greater than 2,000 What if confirmation efforts indi-megawatts. (See Figure 11.)

Resource Scenar.ios cate another 1,000 megawatts of The chart on pages 18 and 19 These scenarios reiterated sev-geothermal power is readily avail-shows the more important of the eral constant themes. First, it was able? These are just a few of the alternative future scenarios the evident that the best and most ef-alternatives the Council looked Council tested. Each scenario fective resource action to deal at.

modified certain key attributes of with uncertainty and risk was the

, For example, the Council con-the base-case resource portfolio.

successful acquisition of cost-ef-sidered scenarios that would he Council then examined the fective conservation and efficien-delay construction of coal and impacts the scenario would have y improvements. In almost all nuclear plants. In these scenarios, on the regional cost and the risk the region would accelerate co-of that resource package.

scenarios, the resource that helps generation, gas-fired combustion turbines and renewable resources.

These scenarios delayed construc-tion of coal and nuclear plants in No-Action the next 10 years, but added $100 u,

million to $'00 million to the Scenario l

5 l

Council's base-case strategy.

201

]h. 9 Such heavy reliance on natural j

q

{I gas for electricity generation Figure 11 j

M

{b j

y could deliver 4,200 megawatts.

Without Action, m

Y J

Yd

?

but it leaves the region vulnerable Large Deficits M 4 M G to price increases and fuel short-Are Likely in j

h M M N h 5,

o M N A( a M b

bp ~7 1 ages. If gas and oil prices in-the Year 2000 2

N

,O jjsg W #1 i crease to the highest forecasted d-i

] rate, the additional costs meurred I.fMW) 0

- 1.fM N) -1.000 + 1 (N)0 -4.tN10 -UNW) -6JWlo would be about $1.6 billion.

This potential price increase

^ * " " * " " '

for natural gas led the Council to test an alternative scenario in m

,n--,

m. ~

o

- _ = _ _.

buy the region time to adapt to With this in mind, the Coiineil Five alternative conservation uncertainties is conservation.

k>oked at the benefits of va [ us acquisition targets were tested for For this reason, conservation conservation targets for the 1990s.

the year 20fMI. These target levels plays a central role in the Coun-The question was, what level ;f correspond to the amount of con-cil's Action Plan. Conservation conservation acquisition would servation acquired in each of the programs need to be imple-balance the greatest benefits and load scenarios, ranging from low mented quickly and brought up least risk to the region's power to high i tre 12 shows the cost to a stable level of activity, so system? Should the region ac-of acqui g, different amounts of that the region can develop an in-quire enough conservation to conservation, as well as the frastructure for delivering conser-meet the highest forecast rate of amount of risk (er variability) the vation. Labor, technology, electrical load growth, the lowest region experiences with each tar-materials and expertise must be or somewhere in the middle?

get level.

acquired to secure the region's The Council chose the me-conservation resources. A major dium-high conservation target conservation acquisition program level, because it increased costs will require a stable long-term only slightly more than a medium commitment of both staff and tarr. while at the same time budgets.

substantially reducing future risk.

Alternative Resource Portfolios Scenario Resource Emphasis Draft 1991 Power Plan's Resource Portfolio least-Cost Resources First Conserwtion less Effective least-Cmt Resources First Carbon Tax Impmed on Coal l

l Geothermal Research and Development.

Slight Thermal Resources Delay.

l Myance Gas Turbmes and Cogeneration.

I

=

Moderate Thermal Delay l Mvance Additional Renewables and Gas Extended Thermal Delay Myance Moderate Cost Renewables and Gas j.

Maximum Thermal Delay.

Conservation. Renewables and liigh Efficiency Displaec Coal and Nuclear Concerns with Rehance on Gas.

Mvance WNP-1. WNP-3 and Coal l

l

=

Nuclear Unavailable.

All Non-Nuclear l

Nuclear and Coal Unavailable.

All Other Resources Acquired i

i 1

i i

i i

i i

i

-4W

-3m

-200

-100 0

1m 200 300 an0 500 NX)

Decreasing Costs (millions 5)

Increasing Costs (millions 5) is in.fi rm sen.

n.w n.n-vom= i

Acquiring enough energy sav-that can be sold outside the re-Council reconunends that the re-ings to meet medium-high load gion to recoup some of our in-gion begin the process of identify-growth helps reduce risk for two vestrnent, ing sites and obtaining the reasons.

Many of the resource scenar-necessary licenses and approvals First, all available conserva-ios illustrated the need for an in-for gas-fired resources that either tion is needed in most future load ventory of resources that can be operate in a cogeneration mode scenarios, and it takes time to brought into operation without or as stand-alone plants to back achieve the full cost-effective po-long delays. Among the best re-up the region's existing hydro-tential. By starting an aggressive sources for responding to quick power system.

effort now, the region is more economic or other turnarounds in a number of the scenarios, likely to be able to acquire all of are gas-fired technologies. Ob.

significant amounts of new or ex-this low-cost conservation, viously, the acquisition of signifi-isting resources were assumed to Second, in those scenarios cant amounts of gas-fired be unavailable. In these events, where little or no new resources technologies poses a larger and the primary resources that the are needed, the conservation ac-larger risk, due to future uncer-Council and the region can turn quired is relatively low in cost.

tainty surrounding gas availability to are newer, emerging technolo-This cicates a low-cost surplus and prices. Nevertheless. the gies with which we have less and Sensitivities C

Uncertainty Results (n ffi n 5) 13JXXbMegawutt load Range m 3110.

Acquire Conservation, Ilydne.'wer and Cogeneration llae Cue (0)

Achiew 7u Percent of Plan's Conservation Acquire More Generation l

1,5N) lose 700 Megawntts or Existmg Resources Accelernte all Resource Development l

1,5N) 25-Perccr4t increas: in fuel Cost.

Increases Costs when Coal is Acquired 350 1,0W Megawatts More Geothermal Geothermal Displaces Thermal,

- Iri3 Thermal Irad Times lenger.

Sherter trad Time Resources Acquired IN

• Gas Pnces increase Rapidly licavy Reliance on Ga Risky l 1,ut)

• Gas Pnces Stay low.

Rehance on Gas low Cost.

-41)

Medium Gas Piices liigher Cost Renewnbles Acquired.

3no Medium Gas Pnees Additional liigher Cost Renewubles and Gas Acquired -

SW

[

Coal and Nuclear Delayed as long as Possible Significant Cost increase l#W)

Medium Gas Pnces Co,eneration and Combusuon Turbines Delayed 44)

• Gas Pnces increase Rapidly Region not Reliant on Gas

-Im

• Gas Pnces Stay low j Nuclear and Coal Cost More than Gas 9X)

Sigmficant llarners to WNP-1 and WNP-3 Coal Resources Replace WNP-1 and WWP-3 3no 6HN)-Megawatt Resource las Sigmficant Energy Shortages 4,4 n i

1 i

i i

i i

I I

7CD NX)

M10 1,fXX) 1,1(J) 1,3X) 1,.4 X) 1,4 X) 1,500 IMK) 1.7t X)

Increasing Costs (millions $)

o,.n v m N.woi..a rt.n n.o-m.= i o

experience. For this reason, the Finally, a number of activities In 3Hy eyen(,

are designed to determine the Council has selected resource confirmation activities to improve availability and costs of resources our understanding of and our the scenario that may be needed in the future.

ability to predict the cost and w th both the These research, development and availability of geothermal, wind, demonstration activities wiii heip solar and other resources highest cost the wgion {npond to futum enu.

Also, new conservation tech-D gy needs with a diverse and envi-nologies are being introduced and the mnmentaiiy resn=sidie resource each year. It is important to pro-portfolio.

mote this development, so the re-highest risk gion can rapidly assimilate new conservation measures as they be-appears

" ""* ***i'Y

" I' bI'"""

to be the cost-effective.

Finally in looking at all the no-action scenarios, it was apparent that l

some resource mixes may appear Sl(OTUS(lVO, cheaper on the surface, but they also are more risky, The region is presented with a classic trade-off.

Our findings in this planning it can reduce risk substantially, process led directly to the actions but it also will pay somewhat described in the Action Plan.

higher costs for that security. In These actions are designed to se-any event, the scenario with both cure the resources that are need-the highest cost and the highest ed by the region at the lowest risk appears to be the no-action possible cost. Additional actions alternative.

are identified to help us shorten lead times and better manage the risks and uncertainties that the region faces, Conservation a

j i

Target Risk sm "

. Analysis e

t"* +

? 3* 1 4 2m J Figure 12 l

Medium-tow Trade-offs of 1 IW 1 Medium Building to a oJ

+

Medium-High

_,J Medmm-High Load-Growth

,, g,,3 j

Level

-2m r-

-500

-250 0

250 500 750 1 000 Expected Cost (millions) m ru.n iwi sonw. e ro..r ri.a-voivow i

Action I'lan Action nowis this pian i..let meant to iimii the growing areas have a major chai.

imperative, and, as already ex.

pursuit of new technologies or lenge in meeting electricity de-plained, the Council sees four less expensive alternative re-mand. In this plan, the Council broad objectives for actions.

sources. We need to get reliable assumes that Bonneville meets The first objective is simple:

information about these resources the need of its current custom-start now to buy up all the low-so that, if needed, they will be ers-public power and the direct cost resources available, because

there, service industries. At the same they all take time to develop and This plan's fourth objective fo-time, the Council assumes that it is likely they will be needed cuses on regulatory, legislative investor-owned utilities develop within the coming decade.

and environmental actions that resources independently to meet The second objective is to provide incentives for and remove the needs of their customers. (See shorten the time it takes to ac-barriers to the successful imple.

Volume II, Chapter 10, for more quire and fully develop a resource mentation of this plan. The Coun-detail.) Aggressive action is need-to the point that it is producing cil will work with regulatory, leg-ed by all utilities, but especially electricity. This shortened lead islative and environmental bodies investor-owned utilities. Coopera-time improves the region's ability to improve public policies and tion among utilities is especially to respond quickly to growth or laws that can facilitate the actions important to implement this plan.

to changing patterns of energy called for in this plan.

Let's look at each of these ob-use.

This plan includes a number jectives and the actions they'll The third objective is to pro-of actions for Bonneville and the require. (A detailed list of recom-mote diversity in future plans by region's utilities. The Council rec-mended activities to implement confirming the cost and availabil-ognizes that each utility faces dif-this power plan is in Volume II.

ity of additional resources. The ferent problems and opportuni-Chapter 1.)

l resource portfolio described in ties. Utilities serving rapidly Draft 1991 Novthwest Prmer Plan-M&aw 1 21

4 Objective 1:

ne ow-cost resources cai ed for ait conserv tion measures.

for in this plan include efficiency The Council is recommending Acquire all Low-improvements in the generation,'

that conservation programs Cost Resources transmission, distribution and should include all energy-saving end use of electricity. Energy con-measures that are expected to The region's electricity system 3en,ation in all sectors-residen-cost up to 10 cents per kilowatt-is currently in load / resource bal-tial, commercial, industrial and hour. This is partly because con-ance. That is, the supply of elec*

agricultural-falls into this cate-servation as a resource has tricity is equal to the demand for gory. It also includes low-<ost several advantages: energy sav-it. Eighty-three percent of the hydroelede and cogeneration ings have fewer environmental forecast scenarios indicate addi-resources that are cost-effective impacts than generating re-tional growth in electricity and needed during the next 10 sources: they reduce the need for demand by the year 2000. There-vears under most future scenar-the high-cost generating re-fore, the need for additional re-ios. The average cost of these re-sources included in this plan; and sources is highly probable during sources is less than the regional they closely track growth and de-the coming decade, and with avoided cost 5 of about 7 cents per cline in energy use.

strong growth, that need is ur-kilowatt-hour, gent. Under these conditions, While the current regional immediate acquisition of particu-avoided cost is useful as a guide larly low-cost resources makes for acquiring generating re-

5. Avoided cast is an investment guide-Une t use when chasing rmurces. h sense.

sources, it is not the recom-is the cost of alternatives that are mended cost-effectiveness limit neded if you purchase the resource you are reviewing.

The Power r'"" m c a" m """ ancienundustnes 240 Megawtts System

,g wuss Figure 13 ceneration upgrades d

Acquire at Least ni Megans m,

1,350 Megawatts of El Conservation and h.

N EfDcient Businesses Efficiency N

co Megaom Improvements by

~

the Year 2000 P

a m

E*

Efficient Farms 40 Megawatts Efficient Homes 390 Megantts l

n

()tatt l'M1 Northwest *rmer Plan-W4ume !

I

But energy savings also pre-1998. because the residential sent a problem that is addressed NO weatherization crosram is com-pleted. This reduction in invest-by including measures up to the Opportunity menuevel may not occur if ooier 10-cent limit. If the 10-cent mea-sures are postponed, the added conservation programs are expense of returning to the site, for energy b,onyht up to speed faste, o, ad.

coupled with technical and physi-Conservation di d " ' '"S"'""d" "5'"

cal barriers to the mstallation of tion measures are identified.

new measures in existing struc-should be wbiie we are tarsetins tan tures, greatly reduce the cost-megawatts of end-use efficiency effectiveness. Furthermore, the inissed. This improvements <and 260 mega-optimum energy-saving package W ll n1000 watts of system upgrades), the at any given site or in any given actual amount of efficiency im-consenation program includes Contacting provements could be higher, de-lower-cost measures that, when 6

pending on how well acquisition Hearly every mec8eniems wer*. hew suicxix combined with the 10-cent mea-sures, result in average costs that the infrastructure is developed to residence, sungon this icvei of acqui iuon are less than the 7-cent avoided and the rate of development of cost.

COIBInerCial new conservation measures. The EITiciency Improvements 1,350-megawatt figure is not to be enterprise inte,p,eted as a cap. it i, instead.

The Council calls for immedi-ggd a planning target. As additional are activities to begin acquisition low-cost efficiency improvements of all regionally cost-effective ef-jygfgggpigl present themselves, they should ficiency improvements. The be acquired. Acquisition budgets facility in the need to be wept i,exibie enough to Council has identified 1,350 aver-age megawatts of efficiency gains to meet regional load growth over Northwest.

acquire all additional cost-effec-uve coo ervauen resou,ces.

the next decade. This is enough The first objective, like all sig-energy to meet the needs of two nificant resource decisions, does l

cities the size of Portland and is not come without risk. If electri-consistent with the target of ac-quiring enough conservation to meet medium-high load growth.

(See Ficure 13.)

No $pportunity for energy Eff,iciency conservation should be missed, Spending 3m -

- ' 9 "-

The successful completion of this K

action item will mean contacting Figure 14

_! *n 1 N

nearly every residence, commer-Expenditures by "E

i cial enterprise and industrial fa-Consumers and I300j cility in the Northwest. Acquiring Utilities Will 1

~~~~~'

the efficiency improvements iden.

Total $5 Billion 5 ** l I

tified under this objective will re-to $6 Billion h im J t

quire cap..al expenditures by 0]

utilities and customers of $5 bil-lion to $6 billion in the next 10 two tw2 Iwt tw6 Iws axo so2 years. (See Figure 14.) The annual year investment in conservation by in-vestor-owned utilities declines in u

o,.w p -,..n..a

cal loads suddenly drop off, the continue their traditional conser-The 1,350-varion Programs.

resource commitments started in this action item could lead to a In addition to improving effi-moderate energy surplus. Howev.

niegaWallS Of ciency in the end use of electric-er, conservation needs a substan.

conservation ity, this plan calls for acquiring tial long-term commitment to all ce,,.cffec,,ve eff,c,ency,m.

allow for programs and other ac-are not to be Provements in existing generating quisition mechanisms to be de-facilities, as well as in the trans.

signed, implemented, evaluated interpreted mission and distribution of elec-and modified. For this reason, the tricity. Most generating plants Council's highest priority is a aS a cap, can be modined to get more ener-stable,'yet aggressive, conserva-gy for a given amount of fuel In8keab tion effort during the 1990s.

9 burned or water passed through There is little risk of "overbuild-thev are a the turbines. Transmission and ing" conservation, because signifi-J distribution systems also can be cant energy savings are needed in p}ggg{gg modified to reduce energy losses.

all of the most likely growth sce-These actions are expected to narios. With slower growth, con-(arge(.

provide about 260 megawatts dur-servation savings from new ing the next decade, buildings and equipment are au-innovative marketing. Bonneville tomatically reduced, because "E

and the utilities should encourage fewer homes and businesses creative market-based ap.

If loads grow faster than the proaches for acquiring cost-effec-medium-low forecast rate, effi.

Acquiring these end-use effi-tive conservation measures, ciency improvements cannot pro-ciency resources will require a va-whether these are developed by vide all the ener8Y needed in the riety of approaches, meluding utijity or non-utility provi ers. At next decade. To meet this chal-utility conservation programs and the same time, utilities need to lenge, the plan calls for the devel-opment of the least expensive and most environmentally sound hy.

Acquire These Resources dr0 Power and cogeneration facili-ties.

Resources Megawatts Acquisition of hydropower and cogeneration resources Conservation Resources:

should incorporate provisions for New Residential..

................ 110 beginning the siting, licensing and New Commercial............

170 design phases of development.

Appliances............

..... 90 while deferring construction until Manufactured Housing...

40 it is clear the energy is needed.

In M.;sn H 240 E dsting Commercial....

250 Ilydroponer Existing Residential

... 150 Irrigation.........

.. 40 The Council recommends that System Efficiency Improvements.... 260 Bmneville and the region's utili-Total Conservation Megawatts.

... 1.350 ties begin the process of acquir-ing hydropower by siting.

Generating Resources:

licensing and designing facilities Low-Cost Hydropower...

150 at the most cost-effective sites in Low-Cost Cogeneration.

300 the Northwest. The Council esti-Total Generating Megawatts..

450 mates this would yield about 150 Total Aequisition Megawatts....... 1,800 24 Draft lW1 Northwest Power Ptoll-Wume I

hydropower projects must comply predict the cost and availability acquire the cost-effective direct with the protected area require-of this resource, Nonetheless, the applicat ons of renewable energy ments of the Council's Columbia Council recommends that Bonne-that are available in the region.

River Basin Fish and Wildlife ville and this region's utilities ne-Because of their site-specific na.

Program and with the Council's gotiate with utilities outside the ture, the difficulty in predicting hydropower acquisition criteria region to acquire additional re-the availability of these renewable (see Volume 11, Chapter 11).

sources that are cost-. competitive resources, and the fact that they and compatibk with the Coun-are not likely to be available in Cogeneration cil's resource portfolio.

large amounts, the Council has The Council recommends that in p rticular,it appears there not included specific amounts of

"'# SI ".ific nt opportunities for this resource m its power plan.

8 Bonneville and the region's utili-ties also begin the process of ac-interregmnal power exchanges.

Instead, as on-site renewables are quiring the most cost-effective These exchanges have the poten-acquired, the Council will incor-and environmentally sound co-tial of providing energy to the porate their impact in future elec-Northwest during the times of tric load forecasts.

generation resources m the re-gion. Studies conducted by year when this region needs it Bonneville, the utilities and the most and capacity to the South-Acquisition I,rinciples west when it is most valuable to Council indicate that approxi-mately 300 megawatts of these re-ht region. Possible chnges in All of the acquisition efforts called for in this Action Plan sources will be needed during the the operation of the Northwest's next 10 years. Because of their hy&opower system as a resuh of should comply with the Council's sigmficant potential and apparent for Osh Dows or th system acquisition principles (see Vol-acceptability to the public, cogen-opasion review will likely creme ume II, Chapter 11). These prin-eration resources could be a very more opportunities for advanta-ciples are designed to ensure the important component of future geous exchanges..

cost-effectiveness of resources,

.B th extem thse sesonal ud the incorporation of impor-electric power generation.

tant environmental criteria and Cogeneration projects that exchanges can be negotiated, ad-match their electricity output with ditional firm (guaranteed) energy risk management strategies in the could be available to the Pacific equisition process, mdustnal heat requirements will Nonhwest withom th construc-This plan recognizes the mimmize the additional combus-tion of natural gas or biomass tion of new gennaing resources unique aspects of acquiring any and thus have minimum impacts o apeciGc amoums of this re-resource. Many factors in0uence b e been included in the the integration of a resource with on the environment.

This action must address the resource ponfolio, bm thy will each utility's system. Not all of mstitutional, environmental and be added as contracts are signed.

these factors are incorpora:ed in Access to transmission will h the general regional cost-effec-power system integration prob-tiveness limits calculated in this l lems that will undoubtedly occur y to facilitaing thse &

IP an and described in detailin changes.

as sigmhcant amounts of cogen-Volume 11, Chapter 14. Some of eration are acquired.

On-Site Renewables th nwre important factors that i

are difficult to integrate include

- Resources from The Council kmked at a num-environmental concerns, siting is-Outside the Region ber of on-site applications of sues, system interconnection and renewable energy that can effec-

, The Council is aware that sig-tively displace electric loads.

mficant amounts of energy may Rese applications, such as solar be available from utility systems photovoltaics and solar and geo-surrounding the Pacific North-thermal water heating, can be west, but it is very difficult t cost-effective in particular loca-tions. The Council recommends that Bonneville and the utilities UfGft lW1 *,ofthwest Powff l%d-Wfume l M

I i

future uncertainties in costs of esources has an obviotr eco-changes in siting and ratemaking fuel, operations, maintenance and notaic impact,in that an inade-regulations will be needed to al-repairs. The Council will work quate power supply can curtail low multiple decision points.

with utilities, developers and reg-economic development. But over-This objective calls for actions ulators to ensure that non-. cost building resources also has seri-to reduce lead times for three factors are appropriately incorpo-ous economic repercussions, resources: cogeneration, hydro-rated into the resource acquisi-A diverse inventory of re-power and resources such as tions.

sources with short lead times combustion turbines, which gives the Northwest a key advan-would be used to firm up nonfirm Objective 2:

tage: flexibility. It enables us to hydropower? In preparation for Reduce Resource re et quickly t changes in de-the possibility of rapid load mand for power and thus secure growth during the 1990s, this plan Lead Times a reiiabie o,,a low-cost system.

recommends siting, licensing and The Coun<.il has found that the design of the most cost-effective Reducing the time it takes from a decision to build a re-

".i ng, ns ng and desyn acum, of Wese resources Mng h nen ties can take half the timt needed five years. These resources gener-source until it begins produem.g electricity is critical to reducing to devdop a resource, but cost a ally should have costs of less than investment risk. Some resources sm H 'ractmn of the total project 10 cents per kilowatt-hour. They cost. '.See Figure 15.)

will represent substantial mvest-may take 10 or more years to go

., tie key to reducing lead times ments if actually completed, but from concept to delivered energy.

is t introduce multiple decismn the preparation needed to con-Such resources force planners to make major investments now, Points in the resource develop-firm these resources in the next hoping the resource will be need, ment Process, so that energy five years will be relatively inex-ed 10 years from now. But eco-needs can be periodically reas-pensive. the plan does not call nomic changes, new regulations sessed before committing large for construction until it is clear and emerging technologies are amounts of money to the next that these resources are needed, only a few of the factors that can step tn development. This con-alter the need for a particular re-upt n, ghat is called the " options ll)droponer source. The more we can shorten process in Volume 11 and in pre-The Council recommends that lead times, the greater chance we vi us plans. While this concept have of accurately matching de-has the potential to reduce risk Bonneville and the utilities begin mand with supply. Underbuilding and save ratepayers money, the process of siting, licensing ects that are somewhat more ex-pensive than those called for in Objective 1. These projects also Resource im must comply with prctected area Cost and Timing

/

1

/

= = = = = = = = = = - -

j

/

6.

Hydroelectric resources are divided Figure 15

/conmuction mto " firm" and "nonfirm" categones.

Cost and Timing nn power can be guaranteed and ud

=

of Resource uSn"NSI

"'"P'*""""'

s 2

of electncity the dams can provide un-Pre-Construction der even the worst recorded water con-and Construction 75l J

ditions. Nonfirm power is what is (Hydropower) o' available in any year that has additional 0

1 2

3 4

5 6

water. If nonfirm power coulJ be Years backed up by othcr rcsources. such as combustion turbmes it could be counted on to serve guaranteed loads.

N

Shorten Lead Times for These Resources en"8y transactions increased in-terruptible loads within the re-gion and gas-fired combustion Hydropower...........

^00 average rnegawatts turbine power plants are prime Cogeneration........ 500 average megawatts candidates. Other strategies for Hydrofirming.......... 1,000 average megawatts making better use of the existing Total................

1,700 average megawatts hydropower system also should be identified.

For strategies that require spe-requirements. The energy from Research indicates that cogen-cific sites and licenses, the Coun-these projects may not be needed cration development is very sensi-cil recommends that Bonneville during the next 10 years: however, tive to utilities' avoided costs. If and the utilities acquite the nec-if loads do grow rapidly, these loads grow quickly, avoided costs essary sites and licenses and con-projects not only will be cost-are likely to increase significantly, duct the design process so these effectivc, but necessary. If load This will facilitate the rapid de-facilities can be constructed growth does not occur at a rapid velopment of the cogeneration re-quickly when needed.

pace, these projects can Se held source. On the downside,if the for up to four years under current economy stagnates, and there is Objective 3:

Federal Energy Regulatory Cam-little or no load growth, avoided Determine Cost mission regulations.

costs will remain low, and there will be much less cogeneration and Availability Cogeneration development. Gaining a better of Resources sense of how much cost-effective Estimates suggest that be-cogeneration potential is available in addition to resources in-tween 700 and 3,700 megawatts of in this region, and taking steps to cluded in the Council's portfolio, cost-effective cogeneration op-reduce the time it takes to con, there is a category of resources portunities exist in the Northwest.

struct these facilities, will signifi.

considered " promising," but be-While cogeneration facilities cantly improve the flexibility of cause of uncertainties not yet typically have relatively short lead th region's power system.

ready for development. These times. their mstallation is often promising resources could reduce tied to industrial plant expansions liydrofirming the cost and environmental im-rather than utility resource acqui-pacts of the portfolio. The region sition schedules. If, when an in-Bonneville and the region's should confirm these resources dustry plans to add or replace a utilities should ic.4 ate alter-through research, development steam boiler,it could egotiate an native methods for cost-effective-and demonstration programs, agreement that would speed de-ly backing up as much as 1,000 (See Figure 16.)

velopment of cogeneration, the megawatts of the region's nonfirm Promising resources include lead time for acquisition could be hydropower. Hydrofirming strate-additional amounts of conserva-reduced. For this reason, the gies will become even more im-tion, biomass, geothermal, wind Council recommends that Bonne-portant if flows are increased for and solar resources.

ville and the utilities secure the fish, because such flows would Other resources in the portfo-necessary approvals and con-draw on water generally stored lio may be technically viable, but tracts that would enable them to until it i.. aceded to generate firm have uncertainties that need fur-t

install quickly an additional 500 power later in the year.

ther resolution. These include i megawatts of cogeneration equip-If back-up strategies can be conservation voltage regulation, i ment in regional industrial facili-developed, a portion of the non-Washington Public Power Supply ties, as need and opportunities firm hydropower currently pro-System nuclear projects 1 and 3 arise.

duced in this region can be used (WNP-1 and WNP-3) and state-to meet firm loads. Interregiona!

of-the-art coal plaats.

o,cn e,eu %.w a

Confirm New

/b h

• %adh Ol Ge ta Resources o x a

i N

ka o

e

,C q.i dedrgog' Derno *"*thent ang ot

• 10

Site,

'p Co t e *" ate "Out Der 3 To2,o "

st e

l"act

,C C8ps I

t e

Figure 16 e

t or cades M

s#

taic, Strategy to Promote "Rea,k t

Aas 83 G

Renewables

/

Re Council recommends that these activities could speed up identify and recommend an agen-l Ponneville and the utilities initi-the introduction of 1,100 mega-da for confirming these resources.

ate the following actions to deter-watts of potentially cost-effective

,nine the cost and availability of conservation. The Council will Geothermal resources that could play a signif-convene a Conservation Research, icant role in future plans. Re-Development and Demonstration ne ge thermal resources of search, development and Advisory Committee to identify the Northwest may offer the po-demonstration projects should and recommend an agenda for tential for producing several help expand resource diversity, confirming these resources. The thousand megawatts of cost-Since the entire region will bene.

region should explore joint re-effective energy. While geother-fit from these activities, they search with California and the mal energ has been proven m j

should be sponsored joint 1/ by U.S. Department of Energy.

other areas of the country, geo-Bonneville and the utilities, thermal energy from the type of l

Biomass fields found in the Cascades has Conservation not been proven. Moreover, pos.

There is great uncertainty re-sible environmental and other New conservation technologies garding the amount of power that constraints on the development of appear constantly. This plan calls could be produced using biomass this resource are poorly under-j for activities to monitor their de-residues and municipal solid stood.

I velopment and, where appropri-waste, but abundant combustible This plan recommends imple-i ate, to undertake research, residues are available for power mentation of a geothermal re-development and demonstration production in the Northwest. This search, development and of the most promising new tech-plan calls for the Council's Re-demonstration agenda including nologies not currently in the re-search, Development and Demon-

1) monitoring of geothermal tech-l source portfolio. If successful, stration Advisory Committee to nology and development activities u

o,.a mm

% n _ww

occurring outside the Northwest; source. The Northwest needs to the field; and 5) developing a

2) collecting environmental base-test the reliability of wind turbine commercial-scale wind demon-line data at promising geothermal generators in the colder areas and stration project.

resource areas: 3) identifying and gain operating experience with Bonneville and the utilities preparing plans for resolving con-commercial-scale pr. ets.

should secure a commercial scale straints to geothermal develop.

This plan recomniends imple-wind demonstration project. A ment at promising resource areas; mentation of a wind research, de-price premium should be offered and 4) confirming the feasibility velopment and demonstration for projects that provide addi-of generating electricity from agenda including 1) monitoring of tional information about areas Northwest geothermal resources wind technology and development with significant resource potential through development of a series activities occurring outside the and challenging operating condi-of pilot projects.

Northwest: 2) collecting addition-tions. This action, if successful.

The key uncertainty is whether al information regarding quantity will coni'irm that wind power can the geothermal resources of the and quality o; wind resources at be incorporated into the region's Cascades can support electric the better wind resource areas; 3) power system as a reliable and power generation. For this rea-identifying and pieparing plans cost-effective source of power.

son, the Council recommends for resolving constraints to wind that Bonneville and the utilities development at promising re-acquire at least 10 megawatts of source areas: 4) developing cold-geothermal energy from each of climate wind turbine studies in three separate fields ultimately capable of producing at least 100 average megawatts each. These acquisitions should be secured through output contracts, where Prornising Resources the developer bears the risk of development in return for guaran-Several thousand megawatts of promising conservation and renewable re-teed sales at a price higher than sources have been identified by the Council. These resources are not included current avoided costs. The objec-in the resource portfolio of this plan because of uncertainties regarding their tive of these efforts is to confirm cost or availability. However, the Council has included actions in this plan to a larger resource. If successful, confirm their cost and availability. If these resources are confirmed and are these demonstration projects also mst-effective, they will be included in future power plans, would resul in shortening the t

Conservation Resources:

lead time of 300 megawatts of geothermal power currently in the Residential Space-lieating Measures...... 2N) average megawatts plan and potentially confirm a Residential Water-licating Measures... 100 to Do average megawatts much larger resource.

Residential Lighting..................... 115 average megawatts

[

Residential Appliances...

. 290 average megawatts i'

"i " "##*""* "'" " ' " 50 average megawans Wind Industrial C msc.vation Measures...

450 average megawatts ansmissi n md Distribution Loss Reduction

• The wind resources of the Northwest also may offer the po-Renewable Resources:

tential for producing several thousand megawatts of cost-ef-Hydropower Efficiency improveraents....

150 average megawatts Geothermal.......

1,(XX)+ average megawatts fective energy. However, the sa.

e W nd.....

1,000 + average megawatts and quality of promising resource areas are not fully understood.

Other Resources:

and there is great uncertainty re-Thermal Plant Efficiency Improvements.

about 100 average megawatts gardmg system mtegration re-quirernents and other constraints a

Mditional savings, presently unquantified, from distnbution needer voltage upgrade to the development of this re.

and improved substation transformer efficiency.

Draft 1T91 Mrthwest Power Nn-Volume i N

Solar WNP-1 and WNP-3 The Council has heard testi-mony that these issues can be re-The costs of solar electric gen-The Washington Public Power solved and that the plants can be eration technology continue to de.

Supply System's nuclear project I successfully completed. Other tes-cline, and solar eventually may (WNP-1)is located at Hanford, timony suggested that the prob.

provide a significant contribution Washington, and is 65-percent lems are insurmountable, and to the Northwest's electrical sup-complete. WNP-3 is at Satsop, Bonneville should stop spending ply, This plan recommends imple.

Washington, and is 76-percent money to preserve the plants, it is mentation of a solar research, complete. Bonneville and its cus-time to determine whether preser-development and demonstration tomers are spending approd-vation of these plants is a pru-7 agenda including 1) monitoring of mately $11 million per year to dent insurance policy. That is, in solar technology and development preserve these two nuclear plants.

the event that the plants are activities occurring outside the If both plants were needed and needed, will anyone be able to Northwest: 2) expanded collection could be completed, they would complete their construction and of regional solar insolation data supply approumately 1,600 mega-cost-effectively operate them? If and 3) identification and acquisi-watts of power. However, there not, they should be terminated.

tion of cost-effective applications are uncertainties regarding the Bonneville and the Supply Sys-of solar photovoltaics.

region's ability to complete and tem should identify all the issues operate these plants. For exam-that need to be addressed to de-Conservation Voltage ple, there is controversy about the termine whether these two plants llegtilation agreements that control the fi-could be made operational or nancing, budg 'ng and manage-whether they should be termi-l The effectiveness of improved ment of these projects. Other nated. Bonneville and the Supply l

control of distribution system issues include compliance with System should work to resolve voltage in reducing end-use loads the National Environmental these issues in a deliberate way, is not fully understood for the Policy Act; the Washington state pursuing the most cost-effective types of dis.:ribution feeders and law requiring cost-effectiveness issues first. In most instances, re-loads found in the Northwest. An studies prior to resuming con-solving these issues also will effort should be made to docu-struction and licensing by the shorten the lead time for the ment feeder performance and U.S. Nuclear Regulatory Commis-plants.

load savings through planned sion; as well as public acceptance.

conservation voltage regulation (These issues are discussed in programs at several regional utili*

Volume II, Chapter 8.)

ties.

7. This figure does not include proper-ty taxes on the porton of WNP-3 owned by investor-owned utihties he-cause the assessed value on that portion is under dispute.

L Actions of the Past

/

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t This is not a recommendation for possible future construction Objective 4:

to resume construction or to of new, coal-fired power plants.

change the preservation status of Each site should be capable of Actions Supporting the plants. Rather, the Council is supporting multiple units, total-lillpleHientat,on i

seeking a determination of wheth-ling at least 500 megawatts of er the plants could be completed generating capacity.

Regulatory Policy and successfully operated in the For the same reasons, trans-event they are needed.

mission corridors for connections Since the passage of the to the regional power grid also Northwest Power Act (1980) and Coal should be identified, secured and the development of the first re-S on I ower plan (1983), several i

P licensed. Possible fuel supplies Because of the financial, envi-should be identified and plans regulatoy conditions have been ronmental and public acceptance prepared for the development, as identified that tend to either frus-risks presented by coal-fired re-trate or dimmish the incentive for required, of the necessary fuel source development, the Council transportation facilities, i'ower utih, ties to acquire conservation is not recommending construction resources. The Council recom-plant feasibility studies should be of large-scale, new, coal-fired completed for these sites, focus-mends that the region's public power plants. However, rapid sing on technologies featuring utility commissions, legislatures load growth, the loss of an exist-high efficiency, low emissions, and other regulatory bodies re-ing resource, or the failure t short lead time and modular de-view current pohcies and revise demonstrate that alternative ener-velopraent. Consideration should those poucies so that equitable gy sources are cost-effective may be given to phased development regul tory treatment is provided dictate the need to develop prov-of coal-gasif; cation, combined-for c nserv tion and generating en energy resources such as coal resources. Policies should be de-cycle power plants, by 1998. But first, actions are The proposed Creston site in Vel 0 Ped that link a utility's profits needed to address regulatory and Washington could fulfill part of to energy the gtility saves as well licensing issues and impediments this objective, s the energy it sells. The Council to the development of the re-supports regulatory actions that source. The region needs to deter-provide positive incentives for mine whether anyone will sponsor aggressive conservation actions.

pre-construction activities for The Council also recommends coal plants.

that public utility commissions, The Council recommends that siting agencies, state legislatures j

within the next five years, Bonne-and fe:ieral regulatory agencies l

ville and the utilities should iden-l tify, secure and license three sites i

1 f

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1. f $r/ ? ! /4V / a t8/U te

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I review their regulatory practices already included in the resource monitored and evaluated thor-to facilitate the acquisition of portfolio. The Council asks the oughly to determine the effective-generating resources included in regulatory commissions to pro-ness of the region's efforts and to this plan. Regulatory policies vide appropriate rate treatment continually improve on those ef-should encourage utilities to in-for utility participation in re-forts. Just as power plants are vest in activities that reduce re-search activities.

watched carefully to ensure their source lead time and increase best operation, conservation flexibility. The Council recom.

Conservation needs to be verified and fine-mends that utilities receive ap-tuned, if we are to learn from our i

propriate rate treatment for such An integral part of the acqui-experience, activities.

sition of more than 1,000 mega-A second activity promoting w tts of conservation over the Finally, regulatory policies also successful conservation acquisi-i affect utility incentives to partici-next 10 years will be the measure-tion is the open exchange of in-pate in research, development ment of actual energy savings.

formation on the effectiveness of and demonstration activities.

Conservation poses unique chal-conservation efforts. The Council These activities are essential to lenges in reliable measurement of will meet periodically with utili-identifying resources that may savings and the predictability of ties to facilitate an exchange of prove to be cheaper and more en-savmgs over time. All conserva-the utilities

• conservation acquisi-vironmentally sound than those tion acquisit on efforts should be tion plans, including their bud-gets, timelines, staffing level and expected penetration rates, and to review current estimates of the A New Utility World amount and co t of acquired con.

servation.

Until about a dozen years ago, th: only way utilities acquired new power The Council also will explore supplies was to build generating plants. The process was cumbersome, with sit-the coordination of some West ing, licensing, design and construction dilemmas to work through with both the Coast conservation activities, public and regulatory agencies.

Appliance and other equipment Then in 1978, with the signing of the Public Utility Regulatory Policies Act manufacturers would be far more (PURPA), things got more complicated. PURPA required utilities to purchase power from qualified non-utility producers at the price the utility would have likely to cooperate with requests had to pay to construct its own new generating plant (the avoided cost). This for energy-efficient products, if a strategy was designed to encourage competitive small-scale resources, such as larger market could be guaran-industrial cogeneration and small hydrocicctric projects.

teed. In addition, research and Although there is disagreement about all of its benefits, PURPA succeeded development agendas and find-in opening the door to outside power producers with resources supplying every-ings could be shared.

thing from kilowatts to hundreds of megawatts. 'RKlay, utilities increasingly turn to outside sources for energy-efficiency improvements (the suppliers are known Least-Cost Planning as " energy service companies" ESCos) as well as targe thermal resources (supplied by independent power producers or IPPs). Many utilities have even Many of the region's utilities formed their own subsidiaries devoted to resource development for themselves are actively engaged in the pro-duction of least-cost resource hese n a ers have brought with them new ways for utilities to acquire lP ans. Utilities should review resources. Utilities now are calling for bids from resource providers and choos.

ing the resources that best fit utility needs.

their plans to ensure they are tak.

This has added complexity to the difficult process of planning and acquiring ing actions that are consistent resources. The specific resources called for in this plan may be developed by with the regional plan. These re-non-utility providers. Further, utilities may be offered options that break with views should identify specific ac-the sequence of acquisitions identified in the resource portfoli -

tions the utility will take, such as Nonetheless, the Council will evaluate all resources proposed for acquisi-participating in Bonneville con-tion and support those that conform to the goals and objectives of this plan.

g; Ite most important message in this plan is that the Council is serious about this region's need to acquire cost-effective energy now. This commitment is its own programs. The C,ouncil shared by everyone involved with the implementation of this plan.

and Bonneville will provide assis-n onnmmmm rwvw

e9 tance to utilities in their planning Bonneville also needs to recon-efforts. The Council also intends We will sider some of the provi ions of its to conduct periodic workshops to average system cost methodology help the region take stock of Continue used in the residential exchange program? The region's investor-planning and conservation efforts, to deyelop o wned utiiities wiii be,esponsisie Environmental Impacts 3gggpg for acquiring nm than a ne gawatts of conservation over the The Council accounted for en-COInDlete next m years. nonneville's aver-vironmental impacts in all its re-jr.

age system cost methodology con-source decisions. We will continue reflect 10n Of tains provisions that hinder the to develop a more complete re-implementation of conservation flection of environmental uncer-enVlr0nnlental actions. For example, audits, ad-tainties in resource planning. The Council will work with Northwest unCertalutleS vertising and suppert costs for the Councirs model conservation public utility commissions, Bon-neville, utilities and other inter-g pg g pgg standards are excluded from an investor-owned utility's exchange-j ested parties to identify alterna-p 8HHlHg, able costs, although they may be tive methods to evaluate and in-necessary components of conser-corporate ches of unmitigat-vation programs developed to be ed enviroamental n, pacts int

. resource decisions.

utilities that wish to develop con-consistent with the plan.

servation or other resources for Bonneville Policy themselves. However, it does not provide any direct incentive for Just as the region's regulatory utilities that may not be inter-commissions can have a signifi-ested in developing resources.

cant impact on the incentives if billing credits and other ac-provided to utilities for acquisi-quisition methods, including pro-tion of resources, Bonneville has grams for conservation, are not

8. The pnonty firm rate is the rate a significant role in the successful successful at attaining the plan's that applies to Ibnnentle's pubhc utility implementation of the actions conservation goals, we still need loads and exchanging investor-owned called for in this plan. Bonne-conservation from every end-use utihty residential and sman farm loads.

ville's utility customers see the sector and utility in the region, s

t The residential exchange was priority firm rate as their For this reason, if the plan's con-created in the Northwest Power Act to avoided cost, when making deci-servation goals are not being aHow the region's investor-owned utili-sions about conservation and oth-achieved, the Council recom.

ties' residential and small farm custom-er resource development. This mends that Bonneville and its c]sha e "'he ni fthe d ral rate is significantly lower than customers investigate developin8 Some high-cost pubhc utihties also par-long-term regional avoided cost a multilevel priority firm rate.

ticipate m the exchange, Ikmneville re-estimates and provides little in-Such a rate, with the highest duces the utility's cost of semng these centive for utility resource devel-level set at the avoided cost, by p" "g enngyjsy te n *

, h y,

,g opment.

would eliminate the difference and seHing the utility energy to meet By paying utilities up to the that would otherwise have been these loads at Ikmneville's pnonty firm difference between avoided cost paid as a billing credit. Thus, the rate. Ibnnevi le calculates the pnce it and the priority firm rate, Bonne-two approaches are mutually ex-

"'" P [th usmg the aw rage sys-

, me l

vtlle's billing credits program re-clusive alternatives.

moves the disincentive for Dratt it91 Nontr=est Prmr Plan-Wlume 1 33

Such disincentives can lead to may involve the Council in land investment in higher-cost genera-WO WlHQQd use planning and zoning issues to tion. Because these costs would resolve the conflicts inherent in be exchangeable, they would lead a reg 10nWlae resource development. The Coun. to higher Bonneville and regional Coll 3DOraliOn cil will help develop and support costs. Bonneville should reopen pmposed initiauves when new the average system cost method-t o n r "o m w'

• legislauon or poucies am needed.

ology for the limited purpose of r If this Action Plan is to be-eliminating any disincentives to D0th the come a reatiiv. iesisiative and utilities to act consistentiv with rulemaking initiatives need to se-the Council's plan. Northwest's cure energy amservation through ~ improved building codes and Council Actions economy standards for new,esidentiai and The Councilintends to play an GNd llS commercial buildings, appliances and lighting. The Council will active role m promotmg the im-ggdpgggggg{* support such initiatives and also plementation of this power plan. work to see that related health The Council will continue to iden-and environmental issues are re-tify and seek removal of barriers to implementation of this Action The Council recognizes that solved by the appropriate agen. e es. Plan. The Council will actively federallaw requires the Federal promote incentives for risk _ Energv Regulatory Commission The Council also will partici-management actions and facili, to consider an applicant's conser-P. ate actively in the implementa-tate the decision-making vation efforts in its relicensing t on of the plan by providing a processes surrounding the re-and initial licensing decisions, f rum for exchanging information gion's efforts to achieve the goals ne Council will work with inter-0",the effectiveness of implemen. of the plan. ested utilities in the relicensing tation actions. Implementors are and licensing processes, to show asked to report on progress that these requirements have toward implementing the plan, been satisfied fully through the and the Council will revise the utilities' conservation efforts in plan as better information be-e mes available. accordance with this power plan. The Council will participate in the siting initiatives of utilities and resource developers to en-courage the development of least-cost resources and transmission; improve the ability to shorten re-source lead times and site-bank potential resources: and support need-for-power findings. This u Draft IW1 Norta*est Pn=er Pua-WW t

It's Time ne actions in this power plan address a lot of concerns, ~ ' but the bottom line is-they are the cheapest and most constructive way to buy time. The region is growing-f fast! If this economic expansion continues, we'll be prospering, but we'll also face some very hard choices about how to fuel that prosperity, Frankly, we don't / expect the regional growth patterns of the late j 1980s to persist. But it's our job to look at both the best-and worst-case scenarios, because either g could come about. After testing literally hundreds of different re-I source combinations, against as many forecasts of g energy use, we've put together a four-part strategy we believe is the best possible balance of resource cost, \\ environmental protection and risk management to carry g this region into the 21st century. One important goal is to \\ delay the need to build large thermal power plants. These plants are expensive. They take a long time to bring into op-eration, and it is possible that the need for them could disappear at just about the time they are completed. Furthermore, there are seri-ous environmental and societal concerns, and dozens of unanswered ques-tions, about even the cleanest, most advanced technologies. So we want answers, and it may take some time to get them. Because we don't think we have time to just think about these problems, our four objectives are designed for simultaneous im. piementation. We start the way we usually start, with energy conservation in our homes, businesses, indus-tries and on our farms. Efficiency is simply the best deal around. We can save energy for about half the cost of most other options. At the same time, we want to make sure our existing power plants, and the transmission and distribution system we rely on, operate as efliciently as possi-ble, too. To this block of low-cost resources we've added some relatively inexpensive hydropow. er and industrial cogeneration. While we're busy buying up energy savings-and we will be busy if we get the full 1,350 me-gawatts of savings we're after in the next 10 years-we also want to be working on ways to bring other resources online more quickly. The point here is to begin the relatively inexpensive siting. licensing and design processes for certain resources, but stop there and wait for a second deci. sion, closer to the time the electricity is needed. This shortens the resource's lead time, so it can be completed quickly. It also provides a measure of insurance that large amounts of capital will not be wasted on power plant construction that proves to be unnecessary. Then there are all of the questions about resources we call " promising." which are not quite ready for development, and the problems with coal and nuclear. This plan calls for research and demonstrations of the promising resources and more focus on resolving issues surrounding j thermal ones. j Finally, this plan looks at the kinds of regulatory, policy and environmental actions that will be necessary to reach those other three objectives. This will take cooperation. We'll need a re-gionwide collaboration to preserve both the Northwest's economy and its environment. m.n m wn...o,.. % _ % n

Power Plan 19m 1991 Nv ec Jan reb war Apr may

on

oi Schedule ununumusumummuseummuu Draft Plan Adopted 3,.

11/15/90 Draft Plan Available Figure 17 12/v90 Process for Pubiie commeniliieanng;1 [ e i, c',. - ggg- ' ';gg - 12/1/9 through 3/15 Completing the Power Plan incor; urate Public Comment 3/15N1 through 4/19/91 l ; ^ e

• 1l Final Plan Adopted 4/24-25/91 h

Pniductionmnniing 5/1/91 through 6/3091 l' '] x h Res;nnse to Comments 5/8-9/91 l Final Plan Available 7/1/91 The comments, written and oral, that the Northwest Power Planning Council receives on this draft power plan are among the most important aspects in the developmer.t of the 1991 Power Plan. To en-sure that the comments are used most effectively, the Council asks that you follow these guidelines in their preparation. Instructions for Written Comment

1. All written comments must be received in the Council's central office,851 S.W. Sixth Avenue, Suite 1100, Portland, Oregon 97204 no later than 5 p.m., on March 15,1991. Comments received after that time will not be considered.

2. Comments should be clearly marked. If you are commenting on Volume I, refer to document num-ber 90-18. If you are commenting on Volume II, refer to document number 90-18A.

3. Your written comments should be specific and concise and refer to chapters or page numbers in the plan. Please avoid grouping comments on one page that concern different sections of the plan.

4. If appropriate, submit a " marked up" copy of the draft (or appropriate sections) indicating sugges-tions and/or revisions. Suggested deletions should be lined out and placed in parentheses, like this:

(L-ine out poniom-of-thdrafHe be d&:ed.). Suggested new language should be underlined, like this: Underline all new language.

5. If possible, please type your comments (double-spaced).

6. Provide 10 copies of all comments and supporting materials. If necessary, the Council will provide copying services at no cost for 10 copies of testimony.

M Dran 1991 Northwest Potet PLaa-Wlume t

s. Instructions for Oral Comment at Hearings Public hearings to solicit your opinions are being held in all four Northwest states.

1. Requests for time slots to comment at these hearings should be made at least two workdays prior

- to the hearing. To sign up for hearings in Idaho, hiontana and Washington, please contact those state offices (addresses and phone numbers are listed on page 3S). Tb sign up for hearings in Ore-gon, please contact Judi Hertz in the Council's central office,851 S.W. Sixth Avenue, Suite 1100, Portland, Oregon 97204,503-222-5161 or toll-free 800-222-3355 in Idaho, hiontana and Washington or 800-452-2324 in Oregon.

2. Those who do not sign up for time slots will be allowed to testify as time permits.

3. Use the hearing to summarize your written comments. The comments themselves should not be read.

4. If possible,10 copies of your testimony should be submitted to the Council recorder at the hear-ings. This person will be sitting et a table near the Council members and will be identified by the chairman at the start of the hearing. When preparing these copies, refer to the instructions on page 36 for written comments.

5. A 10-minute guideline is suggested for comments given at hearings. On certain occasions, the num-ber of people signed u to talk may be so large that it will be necessary to impose shorter time lim-its to enable all commentors to speak.

6. Your appearance at more than one hearing is unnecessary. Scheduling preference will be given to individuals and groups that have not testified at other hearings.

Hearings Schedule The tentative dates and locations of public hearings on this plan are: Boise. Idaho............. January 9-10,1991, at the Owyhee Plaza Hotel, during the regularly scheduled Council meeting. Idaho Falls, Idaho......... Tb be announced.

• 1 Lewiston. Idaho........... To be announced.

Seattle, Washington........ January 17,1991 ~= Tri Cities, Washington..... January 29,1991 e _ Spokane,' Washington...... February 12,1991, at the Sheraton Spokane Hotel,10 a.m. to 4 p.m. -= = - Portland, Oregon..........- February 28,1991, in conjunction with the regularly scheduled ~ Council working session. .-- hiissoula, hiontana....... hf arch 13, 1991, at the Village Red Lion, during the regularly scheduled Council meeting and from 7 p.m. to 9 p.m. These were the hearings scheduled when we went to press. Please contact your state's Council office _(addresses and phone numbers are listed on page 38) to confirm times and exact locations. The Coun-cil's newsletter, Update, also will carry more current information. Dran 1991 North =ea Power Plan-Volume i 37

.. - - - - ~ - -, -. _ - .. _ - - - ~ - - - .. ~., _. ~ - - _ _. - _ - i

1. +,

e Order Form Nmdiwnt Power Planning Council Idaho Volume I is the basic power plan, It contains all of the plan's major Northwest Power Planning Council policies, directions and actions. Volume 11 is the technical, supporting Staichouse Mail - documentation. Volume 11 lays the foundation for Volume I and dis. 450 West State

cusses in greater detail the conclusions and recommendations of Vol.

%3d'f20f-4-2956 e ume I. 'Ib reduce environmental and economic waste by mailitig out Council Memben: ' unnecessary paper, Volume Il chapters have been divided into six James Coller, chairman groups, We request that you order only the groups you will need, Robert Sawik Chapter titles and number of pages have been included, for your infor-Afontana mation. Northwest Power Planning Council Capitol Station O Complete set of Volume II. licicna, Montana 59620 '!blephone: 406-444-3952 O Group 1:(60 pages) Council Memben: Chapter 1: Recommended Activities for Implementation of the John Brenden Power Plan: Chapter 11: Resource Acquisition Process.. Stan Grace O Group 2:(80 pages) Oregon Chapter 2: llackground and Histoty of the Northwest Power N' orthwest Powe Planning Council System; Chapter 3: The Council's Planning Strategy; Chapter 4: 1400 S.W. Fifth Avenue The Existing Regional Electric Power System, Portland, Oregon 97201 'Iblephone: 503-229-5171 0 Group 3:(210 pages) Council Members: Chapter 5: Economic Forecasts for the Pacific Northwest; Angus Duncan Chapter 6: Forecast of Electricity Use in the Pacific Northwest. Ted Itallock O Group 4:(190 pages). Washington Chapter 7: Conservation Resources; Chapter 12: hici Northwest Power Planning Council Conservation Standards and Surcharge Methodology. whington State 'nergy ofnee . O Group Si(360 pages) 809 Legion %hy, S.F. Olympia, Washington 98504 ' Chapter 8: Generating Resources: Chapter 9: Accounting for Telephone: 206-956-2200 Environmental Effects in Resource Planning: Chapter 16: Confir. Council Memben mation. Agendas for Geothermal, Ocean, Wind and Solar Re, R. Ted Bottiger, vice chairman sources. Northwest Power Planning Council -O Group 6:(120 pages). Anderson Itall n4-36 Chapter 10: Resource Portfolio; Chapter 13: Financial Assumptions: $'h Nihth and Elm Streets g, Chapter 14: Resource Cost-Effectiveness; Chapter 15: Risk Assess-Cheney, %5shington 99004 ment and Decision Analysis. I Telephone: 509-359-7352 Council Member:. . O Additional copies of Volume I (specify number). Tom 'lyulose Mail requests to: Central Office - Northwest Power Planning Council Northwest Power Planning Council Attn: Public involvement Division 851 S.W. Sixth Avenue. S_uite litA) 851 S.W. Sixth Avenue, Suite 1100 P niand, Oregon 97204 lblephone: 503-222-5161 Portland, Oregon 97204 Toll Free: 1-800-222-3355 (1-800-452-2324 in Oregon) Name: The Northwest Power Planning Council is - Organization: required by an Act of Congress to develop a program to protect, mitigate and enhance- ~ Address-the Columbia Basin's fisheries and a regional electne energy plan that provides a reliable electricity supply at the lowest cost. For fur. ther information, see Pacific Northwest Elec.

C ty/ State / Zip-tric Power Planning and Conservation Act-Public law 96-501.

Note: Additional complete copies of both Volume I and Volume 11 will be available at Pna<ed on recycie t ceper many public hbrancs. Dran l'NI Noethwest Pueer Plan-% Ome i - m. s. ,,,,.,, _ _ -...}}