The West Coast Leads the Way on Energy and Climate Protection

Edward W. Sheets

Summary

The following article presents the West Coast's (Oregon's, Washington's and California's) programs and plans to address energy and climate challenges and how these approaches can serve as models for the Energy Bill currently being discussed in Congress.

Congress and the Bush Administration have been struggling for the last seven years to develop a program to reduce this nation's dependence on fossil fuels and reduce emissions of greenhouse gases. The states of California, Oregon, and Washington have been successfully pursuing these goals for more than thirty years. In the process, they have saved consumers billions of dollars, improved the environment, and cut greenhouse gas emissions.

Between 2000 and 2004, Congress labored to pass energy legislation that focused on increasing the production of energy from coal, oil, natural gas and nuclear power. There was little focus on energy efficiency or renewable resources (See Energy Bill in Volume 6, no. 3 of Open Spaces).

The 2007 federal legislation is designed to reduce energy use through programs to improve energy efficiency and promote renewable resources. The Senate bill includes a provision to strengthen the mileage standards for cars and trucks, but has no requirements for renewable resources. The House bill has a requirement for utilities to get a percentage of their electricity from renewable resources, but did not include any improvements in vehicle mileage standards.

In 1980, Congress passed the Northwest Power Act to set policy for electricity resource development in Oregon, Washington, Idaho and Montana. This legislation established priorities for new resources with highest priorities going to energy efficiency and renewable resources and provided tools to implement these policies. The Oregon and Washington legislature passed energy efficient building codes in the mid-1980s. During this same period, California has also had aggressive programs and codes to save energy and promote renewable resources.

This article describes the efforts of California, Oregon, and Washington to promote the development of low cost ways to meet energy needs while minimizing impacts on the environment. This experience over the last 30 years provides valuable lessons for the rest of the country.

The lowest cost resource

After 30 years of experience we know that improving energy efficiency will save energy at about half the cost of supplying additional energy from new power plants that burn coal or natural gas. The saved energy can be used to serve new demands.

Energy conservation or energy efficiency means getting the service you want while using less energy. People want hot showers and cold beer. If you insulate the hot water tank and use an Energy Star refrigerator you have improved energy efficiency. A modern 20 watt compact florescent light can provide the same light as the old 100 watt bulb-saving 80 percent of the electricity for other uses.
Energy conservation does not mean curtailment-homes that are too cold or too hot. In an emergency, consumers may be asked to cut back, but this curtailment is not a sustainable, long-term strategy.

There is a growing interest in reducing the peak demand for energy. Utilities have to build power plants and design electricity and natural gas distribution systems to meet the highest demand of the year. However, many of these facilities sit idle for much of the time, increasing the costs to consumers. Many energy efficiency programs help address this problem. A well insulated house or office building does not need as much energy to heat it up on winter mornings or cool it down on summer afternoons. This reduces the peak demand.

Some utilities are exploring programs to pay consumers to reduce demand during peak periods. For example, the utility could remotely turn off one of the heating coils in your hot water heater between 6 and 10 am . Your shower would still be hot, but it would take longer to heat the new water in the tank. If you were going off to work anyway, you might sign up for such a program in return for a credit on your electricity bill. There are similar approaches that work for some businesses.

Other utilities offer time-of-use pricing. For example, rather than paying an average rate of 6 cents per kilowatt hour, you might pay 10 cents during peak periods, 4 cents in the middle of the day, and 2 cents in the evening. If you can delay when you run your dishwasher or do most of your wash on the weekends you could save money.

Good for consumers and good for the environment

The California Energy Commission reports that energy conservation programs in California are saving 40 billion kilowatt hours per year-equal to the power needs of more than 5 million California homes. Since 1975, California 's building and appliance efficiency standards have reduced energy costs for individuals and businesses in California by $56 billion compared to the costs of adding power from new coal or natural gas power plants. From 1997 to 2004, programs run by utilities have saved consumers over $4 billion-more than $1 billion in 2005 alone.

Based on analysis by the California Energy Commission these programs have meant that electricity use per person has remained relatively stable over the past 30 years, while nationwide electricity use has increased by almost 50 percent.

Since 1975, energy efficiency investments have increased California's economy by 3 percent. Each dollar spent on energy efficiency in California provides about $2 in net benefits. By 2010, California's building energy efficiency standards will create 8,000 new jobs in California with a net economic benefit of $4 billion to the state's economy.

The California Energy Commission also estimates that these energy efficiency programs have resulted in a 17 percent decrease in carbon dioxide emissions from the electricity generation by eliminating the emissions for the equivalent of 24 large power plants.

The results for energy conservation programs in the Northwest are also impressive. Since 1981, the region has saved 26 billion kilowatt hours per year (equivalent to the electricity used by three cities the size of Seattle for a year) through energy efficiency programs, building codes, and appliance standards at a cost that is about half of fossil or nuclear energy. In 2004, these programs saved consumers $1.25 billion and lowered carbon emissions by an estimated 13 million tons.

Electricity use per capita is higher than the national average in Oregon and Washington because a high percentage of houses are electrically heated. Since passage of the Northwest Power Act, electricity use per capita has declined in Oregon and Washington; during this period the national per capita use increased 26 percent.

The Pacific Northwest still has much more cost-effective conservation available; the latest plan by the Northwest Power and Conservation Council identifies another 25 billion kilowatt hours of savings that cost half as much as new generating resources.

Renewable Resources

There are a number of ways to generate electricity using sources that are renewable. For example, wind, water power, and geothermal energy can turn a turbine; a number of plants and trees and biomass waste from forests and cities can be burned to create steam to turn a turbine; solar energy can heat water or be converted directly into electricity.

The costs of producing electricity from these technologies are declining. There are also federal and state incentives that reduce the costs. In some cases, renewable resources are cost competitive with fossil-fired power plants.

These technologies have two significant advantages. First, the do not emit any greenhouse gases and thus are a key strategy in meeting state goals to reduce these emissions. Burning coal, natural gas, or any petroleum product creates carbon dioxide-a greenhouse gas. In the case of biomass, as new plants grow they absorb greenhouse gases equal to the amount emitted when they are burned-so there is no net increase.

These technologies also reduce risks to consumers and utilities in two ways. First, investment in renewable resources removes the risk associated with federal government or state actions that may impose carbon taxes or caps on carbon emissions. These policies would add costs to power plants that burn coal or natural gas.

Second, these technologies do not take very long to build and they can be sized to meet the needs of utilities. Coal and nuclear plants are large and take a long time to build; this increases the risk that these plants will not be needed by the time they are completed. The Northwest got a very expensive lesson in the risks of large, long-lead time resources in the 1980s. Utilities had committed to building a number of nuclear plants. When the region's economy slowed, the plants were not needed and consumers paid billions of dollars for plants that never produced power.

Transportation

Emissions from cars and trucks are a major source of greenhouse gases. More than half of the oil and gasoline for these vehicles has to be imported. The Congress has not updated the Corporate Average Fuel Efficiency standards (CAFE) since 1985 ; The federal standards are a fleet average of 27.5 miles per gallon for passenger cars and 22.2 miles per gallon for trucks and SUVs

This year, the Senate adopted provisions that would require an average of 35 miles per gallon by 2020 for cars, small trucks and SUVs. The House bill does not include any change in mileage standards.

California , Oregon , Washington , Connecticut , Maine , Maryland , Maryland , Massachusetts , New Jersey , New York , Pennsylvania , Rhode Island , and Vermont have adopted more stringent vehicle standards than the Senate provision. The goal of the state standards is to reduce carbon dioxide emissions . Six other states are considering adoption of the standards. These standards for greenhouse gases can be translated into improvements in fuel efficiency; they will have the effect of increasing the average miles per gallon for passenger cars and small trucks/SUVs sold in these state in 2016 to approximately 40 miles per gallon. Full size trucks and large SUVs would have an average of 25 miles per gallon. These figures assume efficient air conditioning systems; if manufacturers choose to use conventional air conditioners they would need to achieve higher efficiencies.

In 2005, the California Air Resources Board completed a study on the feasibility and economics of the state vehicle emission standards. The report concluded that the standards, which phase in between 2009 and 2016, are based on technology that is currently available in a number of vehicles currently sold in this country. This approach was taken to ensure that automobile manufacturers can meet the standards while continuing to provide the full range of vehicles available today. Compared to the 2002 fleet, the 2009 to 2012 standards will result in a 22 percent reduction in greenhouse emissions; by 2016 the reduction will be about 30 percent.

The California study assumed that manufacturers could use existing technology, including cylinder deactivation, efficient transmissions, variable valve timing, turbo charging, and more efficient, low-leak air conditioning to meet the standards.

The California Air Resources Board calculated that the 2012 standards would add $367 to the cost of a car or small truck and save 1,630 gallons of gas over the life of the vehicle. When they did the study they assumed gasoline cost $1.74 per gallon and calculated a present value of the savings at $1,980 -higher fuel prices would increase the savings. The 2016 standards would cost $1,064 and have a present value savings of $2,773. The estimated costs for trucks and SUVs were slightly lower and the savings were higher. The Alliance of Automobile manufacturers disputed the costs and availability of the technology that were assumed in the California study.

The twelve states are waiting for a waiver from the federal government to implement the standards. Because of its serious air quality problems, California is the only state under the Federal Clean Air Act with the authority to set stricter-than-federal standards for vehicles, as long as it gets a waiver from the Environmental Protection Agency. However, once California receives a waiver, then other states can adopt California's standards. In December 2005, the California Air Resources Board requested a waiver from EPA. The EPA argued that it could not regulate greenhouse gas emissions because of the "substantial scientific uncertainty" about the harmful effects of greenhouse gas emissions.

The U.S. Supreme Court recently ruled that the EPA has the authority to regulate greenhouse gases. The EPA had argued that it could not regulate greenhouse gas emissions because of the "substantial scientific uncertainty" about the harmful effects of greenhouse gas emissions. In its ruling, the Supreme Court stated that, gases such as carbon dioxide "act like a ceiling of a greenhouse, trapping solar energy and retarding the escape of reflected heat." The Supreme Court indicated that the effects of greenhouse gases on climate and weather are covered under the Clean Air Act because such effects threaten human welfare. The California Air Resources Board reports that "f ollowing the ruling, Governor Schwarzenegger the California Air Resources Board expected the EPA to move quickly to grant its [the Board's] request for a waiver."

California's plans for the future

In August of 2006, the California Legislature passed Assembly Bill 32 requiring the California Air Resources Board to develop regulations and market mechanisms that will reduce California 's greenhouse gas emissions in 2020 to 1990 levels-a 25 percent reduction. The legislation sets a goal to reduce 2050 emissions to 80 percent below the 1990 levels. This is a significant goal given that California has an economy that is larger than most countries and is the 12th largest emitter of carbon in the world. 

California has adopted aggressive plans to achieve significant energy savings through investments in energy efficiency. The California Energy Commission estimates that by 2013, California can achieve 30 billion kilowatt hours of additional cost-effective efficiency savings.

In September 2004, as part of the state's Energy Action Plan, the California Public Utilities Commission adopted energy efficiency goals for regulated utilities that will cut the growth of electricity and natural gas consumption by more than half by 2013, with net savings of $10 billion. These goals, in conjunction with programs funded by the public goods charge on utility bills, will more than double the current level of energy savings over the next decade. California's building and appliance standards are expected to save another $23 billion by 2013.

The plan will also reduce the need to build three large power plans; reducing carbon dioxide emissions by more than 3 million tons per year by 2008. This is equivalent to removing the annual emissions of 650,000 cars and trucks.

California has also passed legislation that sets standards for adding renewable resources. These laws require electric utilities to increase the amount of renewable energy they procure each year by at least 1 percent until 20 percent of their retail sales are served with renewable energy by 2010. The California Public Utilities Commission's 2007 report to the California Legislature shows that utilities are on track to meet the goal. The Commission is considering ways to achieve a 33 percent standard by 2020.

Oregon's energy efficiency and renewable resources programs

Oregon has set a greenhouse gas reduction goal in three phases: first, to begin to reduce greenhouse gas emissions by 2010, second, to achieve greenhouse gas levels 10% less than 1990 levels by 2020; and third by 2050 to achieve greenhouse gas levels 75% below 1990 levels.

The Oregon Legislature established an innovative approach for energy efficiency programs in 1999. The legislation set a three percent fee for consumers served by Pacific Power and Portland General Electric to fund energy efficiency and renewable resources and transferred responsibility for implementing these programs from the utilities to a non-profit corporation. The public-purpose fee was intended to replace the funding that had been spent on conservation by the utilities. The Energy Trust of Oregon has been successfully operating programs for residential, commercial, industrial, and agricultural customers and renewable energy generation programs for solar, wind and biomass resources. (See Energy Trust in Volume 5, number 2 of Open Spaces).

These programs have saved and generated over 1.3 billion kilowatt hours of electricity, enough to power 115,000 homes -- or a city more than half the size of Portland . The Energy Trust has expanded it programs to improve efficiency in natural gas heated homes and businesses. These programs have saved over 5 million therms of natural gas, enough to heat 10,600 homes. These investments in clean energy have created 700 jobs and kept millions of dollars in the Oregon economy. The Energy Trust estimates that these programs have reduce carbon dioxide emissions by 2.1 billion pounds, the equivalent of planting 3,500 acres of trees or taking 187,000 cars off the road.

In 2007, the Oregon Legislature extended the public purpose charge through 2025. The bill also authorizes investor-owned utilities to provide financing for energy conservation beyond what is provided by the public purpose charge. The new legislation also establishes energy efficiency standards for certain appliances and electrical equipment, based on standards adopted by California and other states.

The legislation also requires the three large utilities that serve 75 percent of the state to acquire five percent of their power from renewable resources by 2011, 15 percent by 2020, and 25 percent by 2025. The Oregon Department of Energy estimates that achieving these standards will meet most of the electricity growth needs of these utilities. Small utilities must acquire five to ten percent of their needs from renewable resources by 2025. This legislation changed the role of the Energy Trust in promoting renewable resources. The Trust will use its funds to promote renewable energy projects that are 20 megawatts or less; these programs will encourage a diversity of the types of renewable energy resources developed.

The bill also establishes an Oregon Global Warming Commission. The Commission is responsible for developing recommendations to meet the greenhouse gas reduction targets.  The Commission is also responsible for examining cap and trade systems, for developing an educational strategy on global warming issues, for tracking global warming impacts on Oregon and other issues. The bill also creates the Oregon Climate Research Institute in the Oregon university system.

Washington voters take the lead

In 2006, voters passed initiative 937 to require utilities to implement all the cost-effective conservation in their service areas based on plans developed by the Northwest Power and Conservation Council. The initiative established a Renewable Portfolio Standard that requires utilities to acquire renewable resources to meet three percent of their needs by 2009, 9 percent by 2016, and 15 percent by 2020. The RPS will result in 93 million kilowatt-hours in 2009, 281 million kilowatt-hours in 2016, and 468 million kilowatt-hours in 2020.

Governor Gregoire issued an executive order setting greenhouse gas reduction goals. It states that "By 2020, we will reduce our emissions to what they were in 1990, and then reduce them by another 25 percent by 2035.  By 2050, emissions from Washington will be fully 50 percent below our 1990 levels.  Goals like these not only inspire, they offer all of us incentives for the future."

State efforts are expanding

On August 22, the governors of Washington , Arizona , California , New Mexico , and Oregon , established a regional goal to reduce greenhouse gas emissions in the West to 15 percent below 2005 levels by 2020. A number of other states are implementing innovative programs.

There is still hope that the Congress will take the best features of the House and Senate bills and pass legislation that will start the entire country on a path to save energy, reduce our dependence on foreign oil, and lower the impacts on the environment. Until then, California, Oregon, Washington and other states are leading the way to improve energy efficiency, promote renewable resources, save consumers money, and reduce greenhouse emissions.

What you can do:

•  Sign up for energy efficiency programs with your local utility

•  Sign up to buy your electricity from renewable resources (many utilities offer this product).

•  Purchase greenhouse credits to offset your other emissions (e.g. the Bonneville Environmental Foundation at www.greentagsusa.org . ).

•  Use public transportation, trade in the SUV for an energy efficient vehicle, get a tune up, and check the inflation of your tires.

•  Support business that are carbon neutral.

•  Contact your senators and representatives and urge them to pass a strong energy bill that includes both increased mileage and renewable resource standards.

•  Visit www.climateprotect.org for more ideas.