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November 2006 Power Report Newsletter
Articles in this issue:
Pricing update for 2007
Energy costs push up PGE pricing estimates
Electricity prices are going up in 2007, but the exact amount and timing are still being determined. While we are nearing the end of a 10-month rate case process before the Oregon Public Utility Commission (OPUC), there are still a number of issues outstanding that await OPUC decisions, related to power costs and cost of capital.
We currently expect three price changes in early 2007 for large non-residential customers, totaling about 11.4 percent. They consist of:
- An increase on Jan. 1, 2007, of approximately 7.2 percent, reflecting higher wholesale electricity and natural gas costs. About 2 percent of this increase is the result of customer direct access decisions in September. See article immediately below for details.
- An increase on or about Jan. 17, 2007, of approximately 0.9 percent that reflects PGE’s general costs of doing business.
- An increase on or about March 1, 2007, of approximately 3.0 percent based on the costs of the new Port Westward power plant, which is being built to help meet our local need for electricity.
Your actual impacts will vary based on your unique usage and demand. Watch your December bill for an insert on pricing changes or check our Pricing plans section. To learn how your business can save by taking advantage of energy efficiency incentives and tax credits, contact your PGE representative.
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How multi-year direct access choices added 2 percent to 2007 power costs
Under multi-year direct access rules, when customers leave PGE Cost of Service, it can affect the remaining customers either positively or negatively. This year for the first time, the opt-out choices resulted in a 2 percent price increase for large nonresidential customers.
How multi-year opt out works
PGE customers with loads greater than 1 MWa (8,760,000 kWh of usage per year) have the option of switching to an alternative energy supplier or market pricing for a period of either three or five years. Customers have 30 days, from Sept. 1-30, to make the choice.
This process is separate from the one-year direct access option that any large non-residential customer can sign up for in November. Eligibility for the multi-year opt out, which is Schedule 483, is limited to about 115 of PGE’s largest customers.
In previous years, the multi-year opt outs comprised about 10 MWa of load. This year, multi-year enrollments totalled about 160 MWa. Hence, our need for power was reduced by this amount.
How it worked this year
These two factors played into the economics of opt-out decisions this year:
- A 1.7 cents per kWh credit was available for customers opting out. Known as a Schedule 129 transition adjustment, this credit reimburses exiting customers for their stake in PGE's long-term resources.
- More importantly, wholesale prices declined significantly during the 30-day enrollment period, improving the economics for customers eligible to leave PGE Cost of Service. This September, the wholesale market was unusually volatile, and prices moved down more than $10 per MWh.
Together, these factors added about 2 percent to the 2007 pricing forecast, primarily from the cost of recovering the lost market value on the 160 MWa of load that had been secured for customers opting out.
Based on this experience, we plan to ask the Industrial Customers of Northwest Utilities to reconsider the length of the enrollment window in hopes of minimizing customer impacts in the future. We will work with them and other stakeholders to determine if a change would be appropriate. |
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PGE service option changes
Here are some other service option changes and dates to keep in mind:
Pricing options enrollment coming Nov. 15-22
Now’s the time to decide if you want to stay with or return to PGE’s Annual Cost of Service Rate, or if you want to opt for one of PGE’s other pricing plans or an Energy Service Supplier.
Updated indicative prices for Cost of Service, reflecting the annual update on power costs, have already been posted online and will be updated Nov. 8, one week before the enrollment window opens. These are nonbinding estimates of our Annual Cost of Service pricing for 2007. The estimates DO NOT reflect the proposed general rate case or Port Westward numbers, as those items are still under review by the OPUC.
Enrollment is handled online from Nov. 15 through Nov. 22. If you decide to remain with your current plan, no action is needed — you don’t have to re-enroll.
Shopping credit extended
The shopping credit for smaller direct access loads will continue through 2009. It will be reduced gradually: 0.5¢/kWh in 2007; 0.4¢ kWh in 2008; 0.3¢ in 2009; zero in 2010.
More opportunities to move to Direct Access
Beginning in 2007, there will be quarterly windows — February, May, August and November — when you can choose to switch to Direct Access. Previously there were just two opportunities each year. (Notify PGE in November if you want to return to Cost of Service in January.)
To find out how pricing changes will directly affect you, contact your PGE representative, and continue to check our Pricing facts & figures section for the latest information about pricing.
*Individual increases will vary depending on your delivery voltage.
Efficiency improvements generate savings for Novellus Systems
Novellus Systems Inc., a leading provider of advanced manufacturing equipment for the global semiconductor industry, is polishing its bottom line through energy-efficiency improvements.
This summer, Novellus completed the installation of a variable frequency drive on a cooling tower fan at their Tualatin campus. Novellus, working with Trane Oregon, modeled the chilled water plant with actual load data, and guided by the model, made programming changes to optimize chiller loading and condenser water temperature to increase the overall efficiency of the chiller and cooling tower combined.
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| Celebrating a $110,000 efficiency incentive check are, from left, Novellus Facility Manager Mike Halvorson; Ken Self with ETO; Novellus Facilities Engineer Travis Leuenberger; PGE Key Customer Manager Joe Davis and PGE Energy Efficiency Specialist Doug Findlay. |
The cooling tower is part of the chilled water system the company needs for production processes. These measures are projected to save 265,700 kilowatt-hours (kWh) of electricity annually. Novellus also earned a $26,893 production efficiency incentive from Energy Trust of Oregon (ETO).
This project builds on other improvements Novellus made last year to centralize the Tualatin Campus chilled water system. They shut down an oversized, less efficient series of chillers in one building and installed underground piping so a more efficient set of chillers in another building could serve both locations, thus saving more than 551,000 kWh annually and earning a $110,249 incentive from Energy Trust.
“We face a daily challenge to manage increasing energy costs and identifying new ways to use resources more efficiently,” said Mike Halvorson, facilities manager for Novellus. When it came to controlling energy costs, the ETO incentives were a deciding factor that enabled Novellus to proceed with energy efficiency projects that reduced their annual electrical costs. “Efficiency improvements are definitely worth the effort,” Halvorson said.
Talk to your PGE representative to see how you might benefit from production efficiency or building efficiency measures.
PGE teams up with customers to prepare for winter storm season
The Oregon winter forecast, from State Climatologist George Taylor, calls for warmer than average temperatures but a good chance of “one or more significant snow events” in the Portland area.
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Whatever winter storms might blow our way, PGE is prepared to respond immediately to any power outages. |
“PGE is better prepared for outages than just a decade ago,” says Dave Ford, who coordinates PGE’s emergency response planning. “Following the major ice storm that struck in 1995, PGE improved coordination with other emergency responders in the community.”
PGE conducted its annual outage drill Oct. 24. To simulate realistic scenarios that might occur during a major outage, Intel and Precision Castparts were invited to participate.
“We have included both private and public sector key customers in our drills every year. It enables us to better test communications and to measure response capability, timing and readiness level,” explains Ford. “The more realistic the scenario, the better we become. We have a script, but we may modify it to meet the customer’s needs. They may want to exercise their own capabilities and make sure their people know how to respond in the event of an outage.”
“Working with key customers helps us anticipate problems that might actually come up during an outage and know how to quickly resolve those issues. We work hard all year to prevent power outages, but if a major storm knocks out the power, PGE is ready to roll.”
PGE’s first priority during an outage is to guard public safety and clear downed power lines. After that, we work to restore power to the greatest number of people as quickly as possible, moving from transmission lines to substations, then distribution lines, neighborhood “tap” lines and finally individual businesses and homes.
If the power goes out at your facility, contact your PGE representative immediately. But plan ahead now; create an outage response plan to help minimize disruptions and protect equipment. Make sure key personnel know what to do if the power goes out. For more information, check the Preparing for an Outage section or talk with your PGE representative today.
Innovative wind foils ensure Gresham reliability amid gusty gorge winds
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These transmission line
‘pretzels’ foil high winds. |
PGE is committed to continuous system improvements to ensure reliable service for our customers. That often involves innovative solutions. One example is the metal wind foils we recently installed on transmission lines that deliver power to the ON Semiconductor facility from the McGill Reliability Center Substation in Gresham.
During winter storms, gusty east winds from the Columbia Gorge produced “line galloping;” even though the lines were properly spaced, severe winds would occasionally send each line of a three-phase system circling in opposite directions and the lines would touch, causing momentary voltage dips.
PGE developed an engineering solution that first involved reconductoring the line to remove excess slack. We then installed approximately 50 wind foils — essentially 8-foot-long metal pretzels — that wrap around the transmission lines and add just enough extra weight to counterbalance the high winds.
The occasional line galloping and resulting voltage dips have been eliminated.
“This is just another example of how PGE listens to customers’ concerns,” said Craig Zuck, PGE Key Customer manager. “And we develop new ways to solve problems.”
Seminar: Employees drive savings at Stimson and Boise Cascade
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Involving employees in energy efficiency initiatives paid big dividends for Stimpson Lumber Company and Boise Cascade. |
At an Oct. 17 PGE seminar, representatives from Stimson Lumber Company and Boise Cascade shared the secrets to their success at implementing employee energy-efficiency awareness initiatives.
Bill Peressini, CFO and vice president of Stimson Lumber Company, shared successful approaches at their Forest Grove Complex that includes two sawmills and a hardboard plant. Patrick Loupin, technology resources manager and “energy czar” at Boise Cascade’s pulp and paper mill in St. Helens, talked about achieving savings through low- or no-capital projects and high employee involvement.
Among the key takeaways:
- Look for operational improvements. Operational changes, like turning off lights and equipment, typically can generate 10 percent savings.
- Set a big challenge with aggressive goals. Use key performance indicators to set the goals, which will differ by company.
- Get everyone involved. Create a team and solicit ideas from a broad pool. “Top down” efforts aren’t as effective.
- Audit. “Even wandering around during a shutdown is an easy way to audit and spot obvious things like lights left on unnecessarily,” explains Loupin. Energy management program such as PGE’s E-Manager can help you understand your usage in much greater detail, and quickly spot and correct anomalies.
- Check and communicate results. Collect data at the beginning and end of the project and then celebrate. Reward people who have helped. It’s also important that if production goes up, you need to index energy use so results are an accurate apples-to-apples comparison.
- PGE can consult and offer technical assistance. Both Peressini and Loupin lauded PGE’s support in planning and implementing energy efficiency awareness programs at their companies.
To learn more, read the complete story.
Plan ahead for Energy Trust of Oregon incentives
Get in line now for production efficiency dollars. Energy Trust of Oregon will have some incentives available for production efficiency projects completed in 2007. These incentives are distributed on a first-come, first-serve basis. Check the Energy Trust Web site for the most current report on the amount of production efficiency dollars now available. Building efficiency incentives are also available for 2007. Your PGE representative can help you get the ball rolling.
Coyote Springs sheds unused equipment
 Streamlining can save money. This year, PGE permanently removed unneeded oil-firing equipment at our Coyote Springs plant in Boardman, Ore., thus saving hundreds of thousands of dollars. This is another step we’ve taken to help control costs.
The Coyote Springs Plant was built as a dual-fuel plant, but has always intentionally burned natural gas. To keep the oil-fired capability tuned up, the plant had to run on oil for several hours each month. Oil pipes had to be disconnected and cleaned. The oil firing hardware and pipes also had to be removed periodically for inspections and maintenance.
By removing the unnecessary equipment, PGE will annually save 430 man-hours and boost plant output by about 1,700 megawatt-hours. This translates into approximately $655,000 in savings.
Blumenauer presents Green Power Leadership award to Burgerville restaurant chain
In September, some of Oregon’s top companies were honored at a special PGE ceremony celebrating their commitment to renewable power.
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Congressman Earl Blumenauer presents the Green Power Leadership award to Jack Graves of The Holland Inc., owner of Burgerville restaurants.
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Oregon Congressman Earl Bluemenauer, who spoke at the event about the future of renewable energy for our state and economy, presented a Green Power Leadership award to The Holland Inc., parent company of Burgerville. The Holland is the largest green-power customer to sign up this year.
PGE President and CEO Peggy Fowler lauded the renewable customers for being part of a pioneering movement that’s transforming the energy industry.
“With your support, PGE ranks number two in the nation for renewable power sales overall,” said Fowler. “That sends a powerful and very positive signal to renewable power developers in the Northwest.”
Strong customer support for renewable power allows PGE to invest in wind power projects such as our recent purchase of 100 percent of the energy produced by the Klondike II wind farm in eastern Oregon.
The following companies were recognized for purchasing renewable power for their entire load:
100% Clean Wind
Glumac
KEEN Footwear
PAE Consulting Engineers, Inc.
Stoller Vineyards
Providence Newberg Hospital
Yahoo!
The following companies were also recognized for their commitment to renewable power:
Boise White Paper LLC
Kaiser Permanente
Lewis and Clark College
Metro Latex Paint Recycling Facility
Metro South Hazardous Waste Facility
Oregon Department of Energy
Portland State University
Starbucks
State of Oregon, DAS
Vernier Software Technology
If your company is looking for an easy, affordable way to support renewable power and publicize your commitment to the environment, see the Clean Wind section or talk with your PGE representative.
Upcoming seminars
Nov. 8 class on lighting in healthcare facilities
 Lighting plays a vitally important role in health care facilities, from maximizing energy efficiency to making patients and visitors feel good and heal faster. This class will explore the options for creating a quality lighted environments in new and existing health care facilities. Learn how designs affect energy consumption, light levels and lighting quality. PGE is hosting this class by the Lighting Design Lab from 2:30 to 4:30 p.m. on Nov. 8 at the World Trade Center in downtown Portland. See our seminar flyer (pdf) for registration information.
View past issues of Power Report newsletter.
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