?                     Model setup (AURORA version 6.1.60; run period 2001-2025, no FERC price caps, operating reserves set at 6.25%, 16 WECC load-resource areas)?                     General assumptions (New projects are developed by resource-specific mix of developers, projects under consideration are completed as scheduled, additional projects are market-driver, projects scheduled for retirement are retired; most units carry an intra-regional transmission cost; pancaked inter-area transmission losses and rates, bid margin set at 5% of variable cost)

?                     Current trends ? base case assumptions (NPPC draft medium fuel price forecasts, NPPC draft medium load forecasts, various new resource options ? gas-fired combined-cycle GT, duct firing for above, gas-fired simple-cycle CT, wind, pulverized coal-fired steam-electric, solar PV ? permanent 1.7 cants kWh production incentive for new wind and solar, etc.)

            King's presentation included the following tables on new resource characteristics:

New Resources Characteristics 1

New Resources Characteristics 2

            Moving on, King touched on:

?                     Mid-Columbia price forecast ? average annual (graph)
?                     2002-?20 Mid-Columbia price forecast ? levelized and compared to earlier forecasts (graph)
?                     Mid-Columbia 2001-?10 monthly average prices and loads (graph)
?                     Mid-Columbia monthly prices and loads ? 2010 detail (graph)
?                     WECC resource mix (by year 2001-?20) ? graph
?                     WECC fuel usage (nuclear, total oil, total gas, total coal, geothermal, biomass) -- by year 2001-?20 ? graph
?                     WECC CO2 production, by year 2001-?20 ? graph
?                     WECC peak hour reserves ? graph

            King's presentation closed with the following summary tables:

Base and Sensitivity Studies 1

Base and Sensitivity Studies 2

            In terms of results, King drew the group's attention to the ?Mid-Columbia price forecast ? average annual? graph; he noted that the top line represented the current best estimate. It shows prices climbing steadily from their current range of $25-$30 per MW/h to about $40/Mw/h, on an annual average, for the years 2007-2014. After that, King's forecast shows energy prices declining slightly, to the $35-$40 per MW/h range, through the end of the forecast period (2020).

            Jim Lazar participant asked when this draft power price forecast will be final? We'll probably put this forecast out as a white paper some time in the December time-frame, King replied; you?re welcome to use or not use the draft forecast in your own analyses, as you see fit, in the interim. As a practical matter, said Eckman, nothing is final until the Power Plan is final.

            Moving on, Eckman drew the group's attention to a graph labeled ?Cumulative Acquisitions and Net Present Value of Sustained vs. Market-Responsive Strategies? covering the period January 2000-January 2040. He demonstrated how the shape of this graph changes under a range of assumptions and inputs.

            Eckman said, that this analysis strongly suggests is that in the vast majority of cases the net present value of the sustained-development investment will be greater than the net present value of the market-driven scenario. Eckman cautioned, that the magnitude of the difference between the ?sustained case? and alternative conservation deployment strategies depends on several factors, including the shape of the conservation supply curve, the measure life of the conservation resources being developed and other variables, such as fuel price volatility, that are not yet incorporated into the model.

            The group discussed whether the sustained, stabilized conservation acquisition strategy makes more economic sense to the region than a market-driven approach. In response to a question, Eckman said that what he is seeing is that, over the long term, the sustained case provides a potentially substantial gain in net benefit to the region; however, over the short term, the sustained development case might overbuild conservation somewhat, with somewhat negative short-term financial consequences, in comparison to the market-driven resource acquisition scenario. He added that the models demonstrated in this morning's sessions are available via the CRAC website. 

3. Discussion of Implications for Regional Policy of Stabilized Conservation Acquisitions/Investments.

            This topic was addressed during the previous agenda item.

4. Review of Technologies, Measures and Practices Being Considered for Commercial Sector Conservation Potential.

            Charlie Grist led this presentation, noting that this topic is on today's agenda in an effort to ensure that no stone is left unturned in the effort to compile a comprehensive, modern list of commercial-sector conservation technologies, measures and practices. He began by listing the sources he had scoured for measures, then, using a series of overheads, touched on the following major topic areas:

?            The goal of this analysis: to compile a modern list of measures, to characterize key uncertainties, to characterize the population to which the measures apply, and to identify the range of cost-effectiveness

?            Results of the analysis: slim on commercialized technological breakthroughs (but cost declining and quality increasing), several new applications and markets (old technology applied to new ?stock?), more squishy stuff on the list (design, controls, practices)
?            New technology: lighting, envelope, HVAC, process

?            Old tech on new ?stock:? refrigeration measures, office equipment control, packaged HVAC replaces built-up, duct sealing goes commercial

?            Seeing more ?squishy stuff:? it's not just widgets anymore; big savings require more human intervention in design, application and operation ? chiller optimization, commissioning, HVAC control strategies, integrated building design, new and retrofit; daylighting

?            Weak links: estimates of saturation of efficient measures, estimates of natural penetration of measures, estimates of program penetration, HVAC interactions and lighting changes, range of cost-effectiveness, prototype bias

?            Summary: Xenergy 2002 CA. Held in July 2002; existing buildings retrofit and ROB only, PG&E, SCE and SDG&E; near-term potential only; no heating or water heating measures; about 50 measures.

?            Xenergy 2002 CA ? commercial energy savings potential by end-use (cooling, interior lighting, ventilation, office equipment, refrigeration, exterior lighting) ? graph.

?            Xenergy 2002 CA - commercial energy savings potential as a percent of base end-use consumption (graph)

?            Xenergy 2002 CA ? commercial energy-efficiency supply curve ? energy (graph)

?            Xenergy 2002 CA -- GWH savings, cumulative GWH savings, levelized energy cost ($/kWh), percent savings, by measure (table).

            Grist noted that the latter four overheads resulted from Xenergy's July 2002 California study. He then went through this information in some detail. The group also devoted a few minutes of discussion to the appropriate horizon, in terms of the timeline by which a given measure can realistically be expected to yield significant conservation benefits. In particular, the discussion focused on whether this analysis should focus primarily on safer, more proven technologies over the short term, or on promising but unproven technologies over the longer term.

5. Review of Technologies, Measures and Practices Being Considered for Residential Sector Conservation Potential.

            Eckman led this presentation, noting that the objective of this assessment is:

?           Identify technologies, measures or practices that can improve the energy efficiency of electricity use in the residential sector

?           Review existing analysis to establish preliminary estimates of unit level incremental cost and savings, current market saturation/penetration, ?order of magnitude? regional resource potential.
            . Working from a series of PowerPoint slides, Eckman touched on the following major topic areas:

?           Measures considered in the Fourth Power Plan: space heating in new and existing residential buildings, insulation, improved glazing, air sealing, water heating and appliances, refrigerator and freezer, lighting

?           Fourth Power plan's resource potential (freezers, refrigerators, water heating, lighting, new residential space heating, existing residential space heating), Total: 696 aMW

            Eckman noted that this is the amount of residential conservation that has already or will be captured in the Northwest through the programs implemented in the Fourth Power Plan, new national standards, state energy codes and regional market transformation efforts. He then continued on through his presentation:

?           The GOOD news ? Since the Fourth Power Plan was adopted, the long term load forecast for the residential sector will be adjusted downward by almost 700 aMW to account for new codes, standards and market transformation and there's still something left to do (avoided cost forecasts are higher, technology has improved, new practices are now available)

?           Residential appliances: New models of refrigerators, dishwashers, clothes washers, freezers, room air conditioners are available that a significantly more efficient than current or recently adopted national standards.

?           Residential water heating: Even after the implementation of the new federal standard in 2004, there are heat pump and solar water heaters that are nearly double the efficiency of the most efficient ?resistance? models. In addition, a new technology (GFX waste water heat recovery) could save 150 - 600 kWh/yr per home.

?          Residential space conditioning:

?          Existing home weatherization - Need data on number of homes remaining to be retrofit

?          Appears to be significant potential for HVAC system improvement, including duct sealing, heat pump ?re-commissioning? and heat pump conversions.

?          New homes - Still some small savings from thermal shell improvements, but larger opportunities from HVAC system improvement, including duct sealing, heat pump ?commissioning,? heat pump upgrades and air sealing.

            Eckman asked for other CRAC suggestions as to other measures this analysis should be looking at. A few minutes of discussion yielded the following potential measures:

?          Consumer electronics ? in particular, what will the penetration of gas plasma, LED and other flat screen technology be in the next two decades, and what is the conservation and energy use potential of this technology?

?          Whole-house and utility system voltage regulation

?          Hot tubs and spas ? heaters and insulation

            This will go out on the web so that you can take a look at the data behind the slides, said Eckman; please call me with any questions. Eckman also noted that he is trying, where possible, to develop the residential resource potential estimates using ?state-level? data.  He hopes that this will facilitate discussion of conservation potential at the utility level.

6. Next CRAC Meeting Date.

            The next meeting of the Conservation Resources Advisory Committee was set for Monday, November 4. Meeting summary prepared by Jeff Kuechle, NWPPC contractor.