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Conservation:An Alternative Energy Source for Local Communities

Ted Coates, Power Manager

September 20, 2008

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Tacoma Power BackgroundTacoma Power Background

Tacoma Power established in 1893 with public purchase of Tacoma Light & Water Company

Number of Customers: 162,587

Number of Employees: 800

Service Territory: approximately 180 square miles

Governed by five member Public Utility Board

Average Cost of Power to Customers: approximately 6.19 cents

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2006 Sources of Energy2006 Sources of Energy

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0

100

200

300

400

500

600

700

800

900

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

aM

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Owned Hydro Resources: Critical Water

Other Contracts (Priest & SCBID)

BPA

Forecasted Load

(150)

(100)

(50)

-

50

100

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

aMW

Critical Water Surplus/Deficit

Projected Load Growth: Approximately 1.0% per year for 20 year forecast

Customer Load ForecastCustomer Load Forecast

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Key Objective from our 2004 IRPEvaluate Conservation Acquisition OpportunitiesKey Objective from our 2004 IRPEvaluate Conservation Acquisition Opportunities

Develop a Conservation Potential Assessment (CPA) to identify available conservation acquisition opportunities

The CPA is a road map that estimates the type, amount, and cost of conservation opportunities within the Tacoma Power service area

Tacoma Power retained a consulting firm, Quantec to conduct the CPA

Completed in January 2007, the CPA estimates about 54 aMW of achievable conservation over the next 10 years

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I-937 – The Energy Independence ActI-937 – The Energy Independence Act

Passed by public vote in 2006

With regard to conservation, this new law requires Washington utilities to acquire all “cost-effective” conservation (starting in 2010)

The Law specifies administrative penalties to be assessed for shortfalls - $50 per megawatt hour (2006 dollars subject to inflation)

As a result of this law, the 54 aMW of achievable conservation over 10 years identified in the CPA has been transformed into an enforceable annual conservation target of 5.4 aMW

Tacoma Power has begun an update to that CPA which may change the conservation target

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Effect of Conservation Acquisitions on Tacoma Power’s Load and Resource BalanceEffect of Conservation Acquisitions on Tacoma Power’s Load and Resource Balance

(100)

(50)

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50

100

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

aMW

Critical Water Surplus/Deficit

0

100

200

300

400

500

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700

800

900

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

aM

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Owned Hydro Resources: Critical Water

Other Contracts (Priest & SCBID)

BPA

Forecasted Load

Forecasted Load after Conservation Acquisitions

Conservation Acquisition

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How Will We Achieve This Energy Conservation?How Will We Achieve This Energy Conservation?

Energy Conservation is the ability to achieve the same amount of work with less energy

It is not shivering in the dark, or shuttering businesses

Guiding principles: Meet customer needs

Meet cost effectiveness tests

Be consistent with neighboring utilities PSE, SCL and SnoPUD

Maximize use of trade allies

Program Challenges: Infrastructure to deliver conservation

Competition for trade allies, equipment and qualified staff

Economic conditions may impact conservation results

Customer and contractor acceptance of new technologies

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How Will We Achieve This Energy Conservation?How Will We Achieve This Energy Conservation?

Residential Example

Approximately 141,400 Residential accounts:

86,400 Single Family HomesRoughly 30,000 are electrically heated

2,600 Multi-Family Buildings30,400 multi-family unitsLarge majority electrically heated

Residential date from: County Assessor’s office Customer Accounts

building type, age, etc.2005 residential survey results

presence of electric heat Previous Conservation Work2000 Census demographics

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Residential Customer ResearchResidential Customer Research

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Proposed ProgramsResidentialProposed ProgramsResidential

Energy Efficient Showerheads & Aerators High Efficiency Water Heaters Program Residential Lighting Program Residential New Construction

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Proposed ProgramsResidentialProposed ProgramsResidential

Weatherization (Low Income & Non Low Income) High Efficiency Heat Pump Program Appliances

Energy Star Washwise Refrigerator Decommissioning

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Proposed ProgramsCommercial & IndustrialProposed ProgramsCommercial & Industrial

Expanded Bright Rebates Program (lighting)

Efficiency Options Program (custom projects)

Energy Smart Grocer Program (contracted delivery)

Fort Lewis & McChord Conservation Project

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Proposed ProgramsCommercial & IndustrialProposed ProgramsCommercial & Industrial

Equipment Rebates Program (VFDs, motors, HVAC)

Enhanced Compressed Air Program New Construction Program Building Retro-Commissioning Program Resource Conservation Manager

Program

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Implications for Local Communities?Implications for Local Communities?

First, utilities will aggressively promote conservation to their customers.

It is important for local governments to support these efforts.

Second, Conservation costs money so rates are likely to rise.However, customer bills should be less affected due to the energy

savings.

Moreover, increased conservation will reduce the need for new and expensive generating resources and expanded “transmission and distribution” facilities.

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