Press release: Council analysis proposes challenging the Northwest to develop a 300-megawatt "conservation power plant"

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Contact:

• Larry Cassidy, Chairman, 360-693-6951
• John Harrison, information officer, 503-222-5161

Related links:

• January 2002 press release: Council urges continued regionwide energy conservation challenge [Council accepts this proposal]
• Council analysis: An Efficiency Power Plant in Three Years -
  An Interim Goal for the Northwest

October 18, 2001

Over the next three years, the Pacific Northwest could acquire an amount of energy conservation equal to the output of a large natural gas-fired power plant, about 300 megawatts, at a lower cost than building such a plant, according to an analysis by the Council. New energy conservation would save electricity now and also help moderate future price spikes such as those that battered the region’s utilities and consumers in the last year.

Meeting today in Portland, the Council discussed a draft of the analysis prepared by its power planning staff. [The Council invited comments through November 16, 2001.]

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The 300 megawatts, which the analysis calls a “conservation power plant” is an interim target to be pursued while the Council works on revising its Northwest Power Plan, which dates to 1998. Among other issues, the next power plan will address how to maintain investments in conservation in a competitive energy market. The interim target is intended to encourage utilities and others responsible for conservation implementation to maintain the conservation momentum developed over the last year in response to high power prices.

During the last few years of the 1990s, utilities developed conservation at half the rate the Council had determined to be cost effective. Had the cost-effective conservation been fully developed, it would have displaced approximately 180 megawatts of power, enough for about 100,000 average Northwest homes. Because it was not developed, the region’s utilities had to purchase that much more power, often at extraordinarily high rates. By establishing an interim conservation target, the Council seeks to ensure that the region is not in the same position when prices become volatile again.

According to the analysis, the region could acquire approximately 100-110 megawatts of new conservation per year for the next three years for less than the cost of power from a new combustion turbine - about 3 cents per kilowatt-hour for the conservation. The cost of a new gas-fired plant is in the range of 3 to 3.5 cents per kilowatt-hour. Almost 60 percent of the conservation potential is in commercial and industrial structures and applications, according to the analysis.

“While electricity prices are low today compared to earlier this year, we need to recognize that demand for power also is significantly lower than it was year ago, and that contributes to lower prices,” Council Chairman Larry Cassidy said. “However, there is false security in those low prices because the region’s power supply still is not as adequate as it should be. Acquiring 300 megawatts of efficiency improvements would help insulate utilities and their customers from volatile wholesale prices, which we have seen rise and fall dramatically with demand for power.”

Cassidy said the investment in conservation would be good for the environment by displacing a natural gas-fired combustion turbine, and also good for the economy by improving the efficiency of energy use and, therefore, helping to reduce operating costs of businesses and industries. Acquiring 300 megawatts of cost-competitive conservation also would show that the region’s utilities and governments are committed to a diverse portfolio of power resources, he said. That amount of conservation would be a little less than 10 percent of the 3,400 megawatts of new, gas-fired generation that is either recently completed or under construction in the Northwest.

There already is a significant commitment by many of the region’s utilities to acquire new conservation, and the acquisition envisioned in the Council’s proposal would give that effort further impetus. Additionally, acquiring the new conservation would be consistent with the conservation policy adopted earlier this year by the Western Governors Association.

The Council is an agency of the states of Idaho, Montana, Oregon and Washington and is directed by the Northwest Power Act of 1980 with preparing a program to protect, mitigate and enhance fish and wildlife of the Columbia River Basin that have been affected by hydropower while also assuring the region an adequate, efficient, economical and reliable power supply.

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