Survey Shows Costs of Energy Conservation Going Down

Aug 16 - Missoulian

The purchasing power of purchasing power is better than ever, with the cost of energy conservation down by more than half in the past decade.

That's the word from a new report issued by the Northwest Power and Conservation Council, a four-state agency charged with ensuring affordable and reliable hydropower.

Late last year, the council released a new regional power plan that predicted the growing Northwest would need a whole lot more electricity in the coming two decades. About half that electricity - some 2,500 megawatts - would be gained through energy conservation rather than new power plants.

This week, the conservation side of that equation received a jolt of good news, with a council survey revealing that conservation costs have dropped dramatically.

In 1991, the average price tag for conserving a megawatt of electricity was $3.9 million. Today, that same megawatt can be had for $1.6 million. (A megawatt is enough power to light 10,000 100- watt light bulbs continuously for one year.)

"At a time of record-high energy prices, it's good news for electricity ratepayers that demand for power is being reduced in a cost-effective manner," said council chairwoman Melinda Eden.

The report, she said, was compiled from a number of sources. They surveyed regional utilities. They calculated savings gained through new state and federal energy codes. They tallied sales of energy- efficient appliances and machinery. And they decided saving electricity was cheaper than ever.

Since 1978, the council estimates energy conservation has saved the region about 2,925 megawatts - more than enough to power two Seattles. More gains are possible, the report concludes, now that each conservation dollar is buying more than twice as much energy efficiency as it did just 15 years ago.

The upfront cost of conservation remains high, Eden admits, even higher than the first-year cost of building a new power plant. But energy efficiency measures are generally paid for all at once, she added, noting that power plant construction costs are spread out over years. Level the playing field over the time of the plant payment, and today's conservation costs are less than half the cost of building a new power plant.

That means lower rates for everyone, Eden said, as well as reduced need for costly transmission and grid upgrades.

According to the survey, and perhaps not surprisingly, the amount of energy saved went up as the cost of saving energy went down.

The biggest chunk of conservation came from Bonneville Power Administration, the agency that markets hydropower from the region's federal dams. In 2004, BPA and its public utility customers spent nearly $180 million on conservation. In fact, BPA has been responsible for more than half the total conservation load since 1978, saving enough electricity to power a city the size of Seattle and then some.

Other big energy efficiencies were found thanks to stiffer federal standards and improved state energy codes - each of which saved about 550 megawatts.

And just in the past five years, a full 185 megawatts were picked up simply through energy-efficient appliances, machinery and lighting.

A simple household light bulb can make a big difference, the council reported, both to the grid and to the ratepayer. Throughout the region, if each household replaced just one traditional bulb per year with a compact fluorescent, the savings would preclude the need for at least one big power plant in just 20 years.

Sure, the new bulb is a bit more expensive, but it lasts about 10,000 hours, compared with the 1,000 hours for the old incandescents. And it takes less juice to use, with a 15-watt fluorescent putting out the same light as a 60-watt incandescent.

Conservation, the council has stressed, reduces not only the individual power bill, but also the chance of rolling blackouts and power shortages.

And now, it appears, cheaper bulbs and appliances, among other things, are making conservation and energy efficiency more affordable.

If BPA and others continue to pursue energy savings, Eden said, the region can "reduce the need for new and more expensive generating plants in the future" and at the same time "protect ratepayers from future high power-market prices."

Read the report

Find the energy conservation report on the Northwest Power and Conservation Council's Web site at www.nwcouncil.org/energy/rtf/consreport/2004/Default.asp .