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Doug Bechtel
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We have discussed the reinvention of the Bonneville Power Administration in several OPALCO-GRAMS. One of the major areas of reinvention is going to be in the conservation programs. Bonne-ville Power Administration, like too many governmental entities, tries to be all things to all people. In the conservation area, this has resulted in programs that were totally out of control and cost far more than they should. Here at OPALCO, we send BPA about $4 million a year to buy power from them. In return, they pay us to run conservation programs that amount to nearly 20% of what we pay them.
BPA also says that 40 cents on every dollar that is spent on conservation goes to program administration costs within BPA. This means that the true cost of the conservation programs that we operate at OPALCO is about a million and a quarter dollars per year (about 1/3 of what we send them). If you think that is a lot, Seattle City Light is also a BPA customer. Unlike OPALCO, SCL generates much of their own power. Nevertheless, BPA pays them far more to run conservation programs than they pay Bonneville for power.
The easy way out for BPA is to reinvent conservation and define the reinvention to mean that their customer utilities have to pay for their own programs. There is great concern in the region that if Bonneville doesn’t pay their customers to acquire conservation, we won’t be as committed
to conservation, and Bonneville won’t meet the 660 average megawatts goal established by the Power Planning Council. I have done a little hen scratching on the back of an envelope, and I figure that our share of this region’s goal is to save a million kilowatt hours a year through our conservation. We have been doing a pretty good job on the existing programs. Even though the number of consumers we serve grows at about a 3.5% growth rate, our actual sales are only going up by about 2.25%. A large portion of this difference results from our conservation efforts.
While it seems obvious to me that OPALCO will continue to have conservation programs, I don’t think our members want us to spend 12% of our income on these programs. The real question that we need to answer is, “What is the most cost effective way to meet the energy needs of our members?” I think we are going to find that there is no one clear answer to that question. There are certain guidelines that we can use to gauge how much we should spend on conservation. First and foremost, OPALCO remains committed to achieving our portion of the region’s conservation goals. A million kilowatt hours a year is an aggressive goal - a goal that we have not managed to meet under the BPA programs, although we have come close a couple of times. I expect to spend the next several months looking at all the resource alternatives that are available to us. These alternatives include new generation of various kinds and making sure that the OPALCO electric system is as efficient as we can afford to make it. We have had an energy-saving rate available to our members for over a year now. We have thirty members taking advantage of this rate, and we need to sit down and take pen to paper and figure out how much conservation this special rate encourages.
More next time.
Doug Bechtel
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