Avista Utilities plans to launch new energy-conservation programs for business customers this summer as it moves deeper into a three-year drive to delay the need to develop a thermal generating plant.


The effort will include agreements under which Avista will pay manufacturing customers that can curb their energy consumption during peak-demand times, says Bruce Folsom, Avistas new senior manager of demand-side management.


The Spokane-based utility also will redouble its efforts to help commercial customers use energy efficiently, will search for efficiencies in its own electricity transmission and distribution systems, and will launch pilot energy-saving programs for residential customers, Folsom says.


Our management told us to leave no stone unturned, Folsom says.


Expect to see an advertising blitz on the new programs soon, he says, adding, Well be communicating more with our customers about this than we have in the past.


Meanwhile, Avista faces other constraints, including rising public concern about global warming, as it plans to meet future energy demand.


In its 2005 integrated resource plan, Avista projected that it would need to build a major generating plant within 10 to 15 years to meet demandand said a coal-fired generating plant would be its lowest-cost resource.


Yet, in the current session of the Washington Legislature, a Senate bill to combat global warming would prohibit development of generating plants that would produce more emissions than natural gas-fired, combined-cycle plants. That means no coal plants, Folsom says.


Avista supported the legislation because it was clear lawmakers wanted to take strong action on global warming, company spokesman Hugh Imhof says.


We did support the bill; we did help draft it, he says.


The bill, which passed the House last week and awaited final Senate action earlier this week, would allow Avista to continue to distribute in Washington electricity generated at two coal-fired generating plants in Colstrip, Mont., 15 percent of which Avista owns and from which it gets 12 percent of its electricity, Folsom says.


Avista anticipates that its 2007 integrated resource plan, due out in September, will call for just one type of advanced-technology coal plant over the next 20 years, and that plant would have to be far cleaner than current coal technology allows, Imhof says. Unless the science advances, no coal plant, he says.


Also, Avista expects that not long after President George W. Bush leaves office in January 2009, the federal government will enact legislation to address global warming. To prepare for the new political climate and to help guide its own efforts to reduce greenhouse-gas emissions, the company recently appointed an internal Climate Change Council.


Its a multi-department team that will look at all climate-change policies coming out of Washington, D.C., and our state, as well as other states that we can learn from, says Folsom, a council member.


The Spokane utility, of course, long has offered energy-conservation programs and has more than 21 of them now. For example, spray heads in commercial pre-washing dish-cleaning systems use so much water, natural gas, and electricity, that the federal government has devised building-code standards for them, says Jonathan Powell, an Avista senior analyst. He says, We are going out and physically installing for customers, at no cost to those customers, technology that meets that federal code.


Also, commercial lighting systems have become so efficient in recent years its cost-effective to replace lighting that was installed as recently as 10 years ago, Powell says.


Avista long has employed specialists who do energy audits at businesses premises, and for commercial customers it will pay up to 50 percent of the upfront cash cost of any energy-efficiency improvement that will pay for itself within 10 years, Powell says. Folsom says the company is staffing up to do more energy audits.


In 2006, he says, we achieved over 49 million kilowatt-hours and over 1 million therms (of natural gas) in savings at costs less than generating electricity through new power plants.


Combined, those efforts saved the equivalent of 5.6 average megawatts of electricity last year, which is enough power to heat and light 4,200 homes, Folsom says. Avistas conservation efforts over the past 16 years now save 85 to 90 average megawatts of electricity each year, or about 8 percent of the companys average system load of 1,100 megawatts, Folsom says.


Avista belongs to the Northwest Energy Efficiency Alliance, through which regional utilities urge appliance dealers to sell energy-efficient units and promote the sale of electricity-saving compact fluorescent light bulbs, Powell says. We have four times the concentration of compact fluorescents in the Northwest than the national average, he says.


Avista also supports the federal Energy Star efficiency program, through which the energy use of appliances is certified to consumers. The company provides some financial incentives to customers who buy efficient furnaces, heat pumps, water heaters, windows, or other items.


Now, its exploring additional opportunities. For example, Powell says, Half of all lighting is bought during the back-to-school period, and the company might be able to encourage energy-efficient purchasing decisions at that time, Powell says.


In its current efforts, Avista is concentrating on curbing peak demand during the summer months after wholesale electricity price levels shot up to the unheard of level of 20 cents a kilowatt-hour last July, Folsom says. Summer peak demand is a particular concern because generating plants often are offline during the summer, he says. When we have a winter peak, thats when the hydro system is cranking out kilowatts.


Through the bilateral agreements with major industrial customers, Avista would pay big energy users such as newsprint makers and pulp and paper producers to curb consumption on peak days, giving them financial incentives to curtail production and have their workers do such things as maintenance work, he says.


On its own distribution system, Avista already has begun replacing older, less-efficient transformers with newer ones, and theres potential for the company to design new substations that would lose less power than older substations, Folsom says.


He explains that any utility will have line loss of 6 percent to 8 percent of its electricity, and adds, If you could save any of that, it would be a substantial savings.


Also, the company is installing automatic meter reading (AMR) technology that will give it a new mechanism for interactive energy-saving programs, Folsom says.


We are in the process of installing AMR on every customer in Idaho, both gas and electric, in a $17 million project thats to be done this year, he says. The company intends to do the same thing in Washington in an effort thats expected to begin in 2008 and to cost at least $30 million.


Such technology will give Avista the ability to use Internet links to turn off air conditioners for an hour or two on peak-demand days in the homes of customers whove given their consent, Folsom says. With AMR technology, Avista also could employ time of use rates through which it would charge higher rates for energy use during peak-demand hours and lower rates at other times of day.


Powell adds that Avista also might set up agreements with retail customers that would enable it to send commands over the Internet to dim store lights when energy use climbed on such days.


The company also is doing some things at its own installations, Folsom says. Were looking at our lighting throughout all of our facilities, he says. Some months ago, Avista replaced 2,100 25-watt incandescent light bulbs in two big lighted signs at its historic Post Street substation in downtown Spokane, putting in 5-watt compact fluorescent bulbs. In its corporate offices, Avista has replaced overly bright T-12 fluorescent light tubes with T-8 tubes.


Of course, energy price levels can influence conservation efforts tremendously, Folsom says. In 2001, after wholesale energy prices skyrocketed to astronomical levels, Avista offered across-the-board savings of 5 cents per kilowatt-hour for any reduction in energy usage from customers consumption in the year-earlier period.


We saved three times the energy, at (only) twice the cost, in half the time compared with any previous Avista conservation effort, he says.


Thus far, Folsom wont release any estimates of how much energy Avista believes it will be able to save through its new programs, but says some estimates will be released when the company announces its new plans.


Our leadership has said 25 average megawatts of annual savings is equivalent to pushing out the need for a (generating) resource for one year, he says. Our challenge is to find how many increments of 25 average megawatts we can save, and that will tell us how many years we can push back a plant.


Contact Richard Ripley at (509) 344-1261 or via e-mail at [email protected].