Review of Conservation Costs and Benefits: Five Years of Experience under the Northwest Power Act

Abstract

In 1980, Congress passed the Pacific Northwest Electric Power Planning and Conservation Act (Public Law 96-501). In the Act, Congress mandated that conservation (i.e., improvements in energy efficiency that result in reduced consumptions) be treated as a resource and that all resources be evaluated against uniform criteria to determine the lowest cost mix of resources to meet the Northwest’s energy needs. Since the passage of the Act, the total regional expenditure on conservation by the federal Bonneville Power Administration, public utilities, and investor-owned utilities has been approximately $800 million to $900 million. This includes research and development elements of the program. This paper describes the costs and benefits of conservation programs implemented in the Pacific Northwest and some of the lessons learned to date. The analysis indicates that conservation programs that were run to acquire energy have achieved savings at levelized costs ranging between 1.9 and 2.9 cents per kilowatt hours. Research, development and pilot projects have produced savings at costs that range from less than .10 cents to 8.9 cents per kilowatt hour. Based on the results described in this paper, the Northwest Power Planning Council has concluded that conservation is indeed a resource that the Pacific Northwest can rely on to help meet future needs for electricity. The Council also concluded the region will be able secure conservation measure and resources at a cost lower than it would otherwise have to pay for additional generating resources.