Climate Challenge Participation Accord

DOE's Energy Partnerships for a Strong Economy

The Climate Challenge Program is a joint, voluntary effort of the United States Department of Energy (DOE) and the electric utility industry undertaken in pursuit of the President's goals for reducing greenhouse gas emissions. The framework of the Climate Challenge Program was established in the Climate Challenge Memorandum of Understanding dated April 20, 1994 (Climate Challenge MOU) (see Attachment A to this Participation Accord).

This Participation Accord describes the actions that the Lower Colorado River Authority (LCRA) and DOE have committed to undertake under the Climate Challenge Program. LCRA's commitments include specific activities and efforts to reduce, avoid, or sequester greenhouse gas emissions. DOE's commitments include specific actions designed to assist LCRA in achieving its Climate Challenge commitments.

I. LCRA Commitments

A.
Consistent with paragraph II.B.1.f and Exhibit B of the Climate Challenge Program MOU, LCRA will undertake specific projects or actions, or make specific expenditures on projects or actions, to reduce greenhouse gas emissions as listed below:

1.

Projects with quantifiable CO₂ emission reductions that will be reported annually to DOE by LCRA include the following, which are described in more detail in Attachments B through E:

a.

expand the use of coal combustion by-products from LCRA's Fayette Power Project,

b.
expand implementation of commercial and residential demand-side management programs,

c.
complete the wind-power project expected to provide at least 90 GWHs of energy from a 25 MW installation, and

d.
expand supply-side energy efficiency improvements in LCRA's existing electric generating and transmission system.

The above projects have the potential to achieve annual greenhouse gas emission reductions of approximately 400,000 tons in Fiscal Year 2000 under LCRA's existing economic and regulatory environment.

2.

Additional LCRA projects anticipated to include CO₂ emission reductions that have not been quantified include the following projects, which are described in more detail in Attachments F through J:

a.

continue to expand educational programs such as In Concert with the Environment and Energy Source,

b.
rehabilitate and modernize the turbines/generators and associated equipment at two of LCRA's hydroelectric generating stations to increase the power generating capacity and extend the life of the plants for another fifty years,

c.
participate in the development and implementation of public power initiatives developed in response to the Climate Challenge program,

d.
convert up to 90 percent of LCRA's fleet vehicles to alternative fuels and purchase dual fuel or electric vehicles, and

e.
continue to expand LCRA's recycling and pollution prevention programs.

Through all of the projects listed in Section A above, LCRA will attempt to maintain an annual entity-wide CO₂ emission rate (lbs CO₂/MWH) at the level achieved during 1989-1991 baseline period.

B.

LCRA will report to DOE annually on activities and achievements under the Climate Challenge Program. Results achieved during each year shall be reported in a clear and understandable manner that is consistent with the guidelines adopted pursuant to subsection 1605(b) of the Energy Policy Act and the model accounting protocols in Exhibit B of the Climate Challenge Program MOU. The first such report may include a description of the activities and achievements of LCRA prior to its becoming a participant in the Program, expressed on an annual basis to the extent possible.

C.
No later than March 31, 1996, LCRA will meet with DOE regarding its participation in the Climate Challenge Program. The purpose of such meeting will be to evaluate LCRA's progress towards achieving the Climate Challenge commitments and possible adjustments to these commitments based on the availability of reasonable cost-justified activities for reducing greenhouse gas emissions.

D.
The Climate Challenge representative for LCRA will be Dr. Charles Urdy, P.O. Box 220, Austin, Texas 78767. LCRA will notify DOE prior to or, in any event, no later than 30 days after any change in the contact.

II. DOE Commitments

A.
DOE will perform the actions and fulfill the commitments set out in section III of the Climate Challenge MOU.

B.
The Climate Challenge representative for DOE will be Dr. Allan Hoffman, U.S. Department of Energy, 1000 Independence Avenue, S.W., Washington D.C. 20585, telephone number (202) 586-1786. DOE will notify LCRA prior to or, in any event, no later than 30 days after any change in representative.

C.
DOE will meet with LCRA upon request regarding possible adjustments of the Climate Challenge commitments set forth in subsection I.A. of this Participation Accord.

D.
DOE will consider requests to intervene in proceedings of federal, state and local commissions and boards on issues pertinent to the Climate Challenge Program. Before DOE intervenes in regulatory and other proceedings pertaining to LCRA for purposes of addressing Climate Challenge Program issues, it will provide notice to LCRA.

E.
To the extent permitted by applicable law and regulations and by the availability of funds, DOE will consider LCRA's participation in Climate Challenge as a factor to be weighed positively in evaluating applications for financial and other assistance submitted to DOE in support of commitments made by LCRA under this Participation Accord.

F.
DOE agrees to provide public recognition to LCRA for its Climate Challenge activities. DOE will, among other things, prepare an annual report summarizing results achieved under Climate Challenge and highlighting any outstanding achievements or innovative approaches of LCRA.

III. General Provisions

A.
Use of DOE-developed materials by LCRA will be governed by the provisions of section IV of the Climate Challenge MOU.

B.
In addition to the foregoing provisions, DOE and LCRA agree to act in accordance with the principles set out in section I of the Climate Challenge Program MOU and the general provisions set out in subsections V.A.-V.D. V.F and V.G of the Climate Challenge Program MOU, which are hereby incorporated by reference.

C.
Either party may withdraw from this Participation Accord or any of its activities under the Climate Challenge Program without penalty and without being subject to remedies at law or equity.

(Original signed by) __________________________________ _________________ Lower Colorado River Authority Date (Original signed by) __________________________________ _________________ U.S. Department of Energy Date

Project: Coal Combustion By-Products Recycling
Project Contact: Don Callaway, Technical Services Division, Fayette Power Project

Description
Coal combustion byproducts (CCB's), produced at the Fayette Power Project (FPP), are currently recycled into building and construction materials, road base, soil stabilization projects, and many other materials and applications in central Texas. LCRA has pursued recycling of the ASTM Class C fly ash as a substitute for Portland Cement for many years. Although we recycled about 80 percent of the fly ash that we produce in 1994, LCRA plans to continue and even expand the recycling of CCBs for high greenhouse gas impact uses. Markets for fly ash in the central Texas area have changed dramatically, in that the acceptance of the use of fly ash has increased, and demand is currently exceeding supply.

Expected Greenhouse Gas Reductions
In fiscal year 2000 approximately 226,000 tons of FPP fly ash will be recycled as a substitute for Portland Cement. Resulting emissions reductions are expected to be 226,000 tons of carbon dioxide. LCRA's share of this reduction will be 64% or approximately 145,000 tons. Tonnages projected for fiscal year 2000 are based on the assumptions that Fayette Power Project will continue to produce Class C fly ash at the current rate and that 90% of that fly ash will be directly substituted for Portland Cement. The projected 90% recycling rate is based upon the rate that LCRA achieved in the last six months.

Expected Costs
There are no net costs of FPP's recycling program. Current CCB recycling efforts result in net income from royalties on sales of CCBs and on avoided disposal costs.

Description
LCRA and its 44 wholesale customers partner in the design, implementation, and evaluation of residential and commercial Demand Side Management (DSM) programs. For example, based on fiscal year 1994 trends, three of our wholesale customers, Pedernales Electric Cooperative, Bluebonnet Electric Cooperative, and Guadalupe Valley Electric Cooperative are forecast to respectively provide about 36 percent, 11 percent, and 9 percent of future DSM greenhouse gas reductions. The DSM programs target the electricity end-user with information and incentives to use electricity more efficiently. More efficient use of electricity reduces emissions of greenhouse gases.

Residential DSM Programs
The Good Cents home program is a demand side management program targeted to the new home market. The program requires upgrades in building shell insulation and infiltration values and efficient heating and cooling equipment. The residential retrofit program provides incentives for retrofitting efficient heating and cooling equipment and increasing attic insulation.

Commercial DSM Programs
LCRA and its wholesale customers offer a Commercial Lighting Program that targets businesses with information and rebates to install efficient fluorescent lighting. A more inclusive commercial program to target additional end-uses is currently under development.

Achieved and Expected Greenhouse Gas Reductions
LCRA demand-side efficiency improvements are designed to last for many years. Projections beyond fiscal year 1994 assume continued DSM improvements and include savings from improvements since 1991. Greenhouse gas reduction in fiscal years 1991 to 1994 range from 10,000 to 45,000 tons per year. DSM programs are forecast to contribute an annual energy savings of 176 GWH and emissions reductions of approximately 140,000 tons in fiscal year 2000.

Actual and Expected Costs
Annual cost for DSM programs, including capital dollars and general indirect overhead expenditures, are estimated to range from $4 million to $8 million per year.

Project: Wind Power Project
Project Contact: Debbie Lewis, Senior System Planner, Electric Resource Planning

Description
The LCRA has partnered with the Texas General Land Office and Kenetech to develop a 50 MW wind power project in west Texas. Kenetech will install approximately 150 wind turbines for the entire 50 MW project. LCRA's share of the output is 25 MW. LCRA will receive an estimated 90 GWH per year from the wind power project starting in the Summer of 1996.

Expected Greenhouse Gas Reductions
The energy from the wind power project will offset existing production from LCRA's coal and gas plants. Wind power is expected to provide emissions reductions of 76,000 tons of carbon dioxide each year.

Expected Costs
Annual energy and transmission costs for the project are roughly estimated to be five million dollars.

Project: Supply-Side Energy Efficiency Improvements
Project Contact: William Maxwell, Manager of Plant Support Engineering, Office of Power Production

Description
The LCRA electric generating system consists of seven steam electric units located at three plants and thirteen hydro-electric units located at six dams along the Colorado River. The electric distribution system includes over 2,300 miles of 69 and 345 kV transmission lines and 175 electric substations. LCRA continually looks for ways to improve efficiency and reliability of the electric generating and distribution systems due to the fact these improvements will significantly affect revenues and expenses. More efficient energy generation and transmission systems also reduce the levels of greenhouse gas emissions.

Generation Programs
For many years LCRA has endeavored to improve and maintain unit efficiencies. Some of the programs initiated to improve unit efficiency include the following: advanced operator training, maintenance awareness training, installation of adjustable seals in turbines, installation of on-line controllable loss monitors, and high precision testing of the units. A description of each of these programs is provided below.

Advanced Operator Training
LCRA sent its plant operators to a 40-hour advanced operator training (AOT) course. The course focused on equipment operating principles, operator actions affecting unit heat rate, and how to reduce unit heat rate. It is not practical to quantify, with certainty, the heat rate benefits of this training. However, LCRA believes heat rate has been improved by at least 0.1% as a result of having better trained operators.

Maintenance Awareness Training
LCRA sent 166 of its key maintenance personnel to a 30-hour maintenance awareness training course. The class focus was on equipment operating principles, maintenance practices which can affect unit heat rate, and how to reduce heat rate. Again, as with the AOT course, it is not practical to quantify the heat rate benefits of the maintenance training. However, LCRA believes unit heat rate was improved by at least 0.1% as a result of having better trained maintenance personnel.

Installation of Adjustable Seals
LCRA installed adjustable seals in the High Pressure and Intermediate Pressure sections of some of its steam turbines. The purpose of these devices is to improve turbine efficiency by reducing the clearances between rotating and stationary parts, and direct more of the steam through the blade path. The heat rate improvement produces a fuel savings in one to two years, which is roughly equal to the cost of installing the seals.

On-line Controllable Loss Monitors
These systems report directly to the operator the status of a few plant operating parameters which are key to efficiency and the approximate quantitative impact of the current values of these parameters on the unit heat rate. The benefits of these performance monitoring systems are currently being evaluated.

Performance Testing and Analysis
LCRA engineers install temperature and pressure sensors at critical locations on equipment, measure these values, and compare them to optimum or design values. From this analysis, the engineers can determine the physical condition of the equipment and how it has changed relative to previous conditions.

LCRA is also investigating potential reductions of auxiliary power consumption at each steam generating station. These studies are focusing on plant lighting systems, installation of adjustable speed drive motors, and plant and substation air conditioning systems.

Transmission and Distribution
LCRA continues to upgrade the transmission and distribution system for reliability and energy efficiency improvements. LCRA continues to build new substations to shorten the distance from the wholesale delivery point to the load and reconductor lines to decrease transmission losses. Energy savings from transmission and distribution upgrades are estimated to be 46 GWH in fiscal year 2000.

Expected Greenhouse Gas Reductions
Emissions reductions from transmission and distribution efficiency energy savings are expected to be 37,000 tons of carbon dioxide in fiscal year 2000. LCRA will determine emissions reductions from other supply side efficiency improvements that have been performed since 1991 and include these estimates in future reports.

Actual and Expected Costs
The cost of the AOT training was approximately $180,000. The cost of maintenance awareness training was approximately $80,000. Projected costs for all generation and transmission improvements have not been calculated.

Project: Educational Programs
Project Contact: John Williams, Coordinator of Education Programs, Communications

Description
LCRA is involved in several environmental education programs. Two of these programs target children with information on energy conservation. Teaching children energy conservation techniques and habits, reduces energy use and thereby reduces greenhouse gases.

One program, In Concert with the Environment, helps students evaluate their household use of resources that affect the environment. The program is targeted at grades seven through ten. Through the program, students work in a student handbook and complete an Energy Survey of their home. Students sign a commitment to take specific actions that save resources and reduce greenhouse gas emissions. Students might agree to take actions such as recycling at home, car-pooling or walking more, installing energy and water saving shower heads, or setting back the thermostat.

In fiscal year 1994, the first year of the In Concert with the Environment program, 1,191 students were involved with the program. In fiscal year 1995, the program is targeted to reach 1,350 high-school and junior high students.

Another program, Energy Source, targets grades Kindergarten through 12. The program is composed of seven units, each designed for a different grade level, which focus on energy terms and concepts, historical use of major fuel sources, current and future energy sources and uses, efficient energy uses and personal conservation habits. The curricula is used annually in about 90 schools and reaches 30,000 students per year.

Expected Greenhouse Gas Reductions
Actions that students agree to take through the In Concert with the Environment Program or learn about in the Energy Source Program reduce greenhouse gases through reduced energy use. The actual quantity and duration of greenhouse gas reductions through LCRA's educational efforts is not quantifiable.

Actual and Expected Costs
LCRA currently pays for the program materials for In Concert with the Environment and Energy Source. In addition, LCRA provides facilitators and class room computers for the In Concert with the Environment. The annual cost for these programs at current participation levels is approximately $200,000.

Project: Hydroelectric Dam Modernization
Project Contacts: Bobby Atkinson, Project Manager, Office of Power Production

Description
Recent engineering studies have established that the electric generating equipment at two of LCRA's six hydroelectric dams must be rehabilitated or replaced in order to avoid the potential catastrophic failure of the equipment and to continue to provide reliable plant operation. The primary goal of this project is to rehabilitate and modernize the turbines/generators and associated equipment at the dams. This work will increase the power generating capacity of each of the units and extend the life of the plants for another fifty years. The project is expected to take four to six years to complete.

Emissions Reductions
The increased energy efficiency and additional generating capacity resulting from this project will offset greenhouse gas emissions from LCRA's existing coal and gas power plants. Information on the increased generation from the hydroelectric plants and the timeline for completion of the project is currently unknown.

Actual and Expected Costs
This is a multi-year project with costs spread out over several years. The costs and execution strategy for this project remain in the planning stage. A preliminary estimate of the total project cost is $14,000,000.

Description
LCRA is becoming a founding member of a joint public power effort and will participate in the development and implementation of cost-justified projects and activities for reducing, avoiding, or sequestering greenhouse gas emissions. Three industrial initiatives have been initially selected for development. These include Combined Purchasing, Electric End Use Technology, and Partnership in Joint Implementation. As a founding member, LCRA will have an opportunity to participate in various initiatives, as well as the selection, design and development of future public power Climate Challenge projects.

The greenhouse gas emission reductions and expected project costs will be developed after the public power projects are identified and participation levels are determined.

Project: Fleet Vehicle Conversion to Alternative Fuels
Project Contact: Glen Kadura, Fleet and Materials Management

Description
LCRA has voluntarily initiated a program to convert 90 percent of the existing fleet vehicles to allow the use of compressed natural gas or comparable alternative fuels. Since 1992, a total of 85 fleet vehicles have been converted to use natural gas or propane. An additional 39 vehicles will be converted in Fiscal Year 1995. By 1998, LCRA expects to have converted 234 vehicles to alternative fuels.

Expected Greenhouse Gas Reductions
Transportation activities give rise to the emission of three greenhouse gases: carbon dioxide, methane and nitrous oxide. The calculation of emission reductions requires estimating the amount of alternative fuels used, the amount of gasoline that would have been used but for this project, the emissions from each, and the difference. LCRA is in the process of estimating fuel economy from existing vehicle data while the vehicle used gasoline and while using alternative fuels. Multiplying the fuel economy for both types of fuel by the actual distance driven for a converted vehicle will yield the basis for estimating greenhouse gas reductions.

Actual and Expected Costs
LCRA's current average cost of vehicle conversions is $1,500 per vehicle. Total estimated costs (in current dollars) of converting all 234 vehicles is expected to be $625,000.

Project: Recycling and Pollution Prevention Program
Project Contact: Mark Johnson, Pollution Prevention Coordinator, Environmental Services

Description
LCRA is developing a comprehensive multi-media pollution prevention program for our facility operations. The program includes conducting pollution prevention audits of LCRA facilities to identify and quantify pollutants generated and to identify the generating processes and operations. The pollutants to be targeted for reduction are being prioritized according to potential environmental impacts, toxicity, regulatory factors (i.e., priority pollutants and TRI chemicals) and quantities. Technical feasibility and cost/benefit studies for pollution prevention projects considered to have a high probability for success are being performed. The studies include reduction estimates from existing pollution prevention and recycling activities and feasible projects. LCRA is also sharing the program results with regulatory agencies, other utilities, and the public.

General Office Complex Recycling Program
The General Office Complex Recycling Program was started in May of 1994 at LCRA's administrative office complex. Twenty three tons of office paper have been recycled since the beginning of the program. The program is expected to recycle 50 tons of paper annually.

Actual and Expected Costs
The pollution prevention project has been scheduled to be developed over a two year time frame and is being partially funded by a grant from the Environmental Protection Agency. The total project costs have been estimated to be $232,700. EPA is providing $89,600 for this project and LCRA is funding the remaining $143,100.

Please send comments to:
Lawrence.Mansueti@hq.doe.gov