CLIMATE CHALLENGE PARTICIPATION ACCORD
BETWEEN
NEVADA POWER COMPANY
AND
THE UNITED STATES DEPARTMENT OF ENERGY

This Participation Accord describes the commitments that Nevada Power Company (NPC) and the U. S. Department of Energy (DOE) have made to participate in the Climate Challenge Program in pursuit of the President's goals for reducing greenhouse gas emissions. The Climate Challenge Program is a joint, voluntary effort of DOE and the electric utility industry to reduce, avoid or sequester greenhouse gas emissions.  The framework of the Climate Challenge Program was established in the Climate Challenge Memorandum of Understanding and the exhibits thereto dated April 20, 1994 (the Climate Challenge Program MOU), provided as Attachment A to this Participation Accord.

Nevada Power Company is the nation's fastest growling electric utility, with a current work- force of approximately 1,800 employees providing electric energy services to over 455,000 customers, across 4,500 square miles in portions of Clark and Nye Counties in southern Nevada.  Nevada Power currently provides over 4.1 million Megawatts annually to its service territory.  With the projected southern Nevada growth rate of approximately 7% expected to continue into the next decade, Nevada Power may provide nearly 5 million Megawatts of electrical energy in the year 2000.  The Company's prevailing energy mix is derived from fossil sources composed of roughly 4.5% natural gas and 5.1% subbituminous coal.  While fuel oils are also utilized from time to time, this component typically accounts for less than 1% of the Company's total system heat input requirements.

 I. Utility Commitments

A. Programs

1. Industry Programs

Consistent with paragraph II.(B)(1.)(a.) of the Climate Challenge Program MOU, NPC will make annual contributions in sponsorship of the UtiliTree Carbon Company, and Internal Revenue Code §501(c)(6) nonprofit organization. The contribution amounts and years specified shall be those documented in the UtitiTree Financial Commitment Form provided as Attachment B to this Accord.

2. NPC Programs

Consistent with paragraph II.(b)(1.)(f.) of the Climate Challenge Program MOU, NPC will continue to undertake the following or similar programs as may be approved under NPC's effective filing with the Nevada Public Service Commission, or other orders and agreements, to reduce greenhouse gas emissions

a. Demand-side Programs

NPC will pursue projects that mitigate emissions of C02 which include, but are not limited to the following:

1. Local Customer Demand-side Programs
2. EPA Green Lights Program
3. Alternative-fuel Vehicles Program

b. Renewable Energy Programs

NPC will pursue projects that mitigate emissions of C0₂ which include, but are not limited to the following:

1. 18 kW integrated High Concentration Photovoltaic Array Project
2. 20 kW SAIC Dish/Stirling Project
3. 18 kW NCP/EPA/EPRI Flat-Plate Photovoltaic Project
4. 1.2 kW Ascension AC Photovoltaic Module Project
5. 1 kW Solarex AC Photovoltaic PowerWallTM Module Project
6. 20 kW UPVG Team-up Photovoltaic Project

3. Other Programs

Pending satisfactory evaluation, NPC will pursue other projects that cost-effectively reduce C02 emissions including the following:

1. EPA's STAR.Efficiency Program
NPC's committments and details relative to these programs are more fully described in Attachment C to this Accord.

B. NPC will report annually its 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) Energy Policy Act and the Climate Challenge accounting protocol Exhibit B of the Climate Challenge Program MOU. The first such report may include a description of the activities and achievements of NPC prior to its becoming a participant in the Program, expressed on an annual basis to the extent possible.

C. NPC will confer with DOE on or before December 31, 1998 to evaluate jointly the progress of NPC in achieving its Climate Challenge Program goals and to discuss possible adjustments to its voluntary commitments.

D. The Climate Challenge Program representative for NPC will be:

Mr. Gregory Sanks
Air Programs Administrator
Nevada Power Company
P0 Box 230 M/S #30
Las Vegas, NV 89151
(702) 227-2675

NPC agrees to notify DOE prior to or, in the event, no later than 30 days after any change in the contact.

II. DOE Commitments

A. DOE's commitments to NPC are those set out in section III of the Climate Challenge Program MOU, which are hereby incorporated by reference in this Participation Accord.

B. DOE will consider NPC requests to intervene in regulatory 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 NPC for purposes of addressing Climate Challenge Program Issues, it will provide notice to NPC.

C. DOE will provide an annual report to NPC describing the actions that it has taken to fulfill its commitments under section III and Exhibit C of the Climate Challenge Program MOU and the results of those actions.

D. The Climate Challenge Program representative for DOE, who will serve as liaison to NPC, will be:
Mr. Larry Mansueti
Director, Climate Challenge Program
Room 6B128
U.S. Department of Energy
1000 Independence Ave.
SW Washington, D.C. 20595
(202) 586-2588

III. General Provisions

A. Use of DOE-developed materials by NPC will be governed by the provisions of section IV of the Climate Challenge Program MOU, which are hereby incorporated in this Participation Accord by reference.

B. In addition to the foregoing provisions, DOE and NPC 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.) - (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.

Chairman of the Board and Chief Executive Officer
Nevada Power Company

      January 15, 1997              (date)
 
 
 

Secretary of Energy
U.S. Department of Energy

      April 28, 1997                 (date)

Attachments: Attachment A - Climate Challenge Program MOU and exhibits
 Attachment B - UtiliTree Financial Commitment Form
 Attachment C - NPC Program Descriptions

Nevada Power Co (company name) commits to financially sponsor the UtiliTree Carbon Company in the following amounts:

1996 $ 12,000                                     1998 $ 3,000                                   2000 $ 3,000

1997 $…..3,000
 

Nevada Power Co (company nine) is making this contribution/commitment in specific reliance on your representation that the contribution will be to a non-profit, non-stock corporation which will qualify for tax-exempt status under Section 501 (c) (6) of the Internal Revenue Code. These funds are not to be used in any fbr-profit enterprise or undertaking. These funds will be kept in a separate escrow type of account pending confirmation of tax-exempt status. In the event that tax-exempt status is denied, Nevada Power Co - (Company name) requests that it be promptly notified, and reserves the right to request prompt and unconditional return of all funds at that time. Please furnish the Tax Identification Number as soon as one is issued and proof of tax exempt status as soon as it is received.

Our designated representative will be:

Dennis Schwehr (name)                                             Director of Env Safety (title)

Nevada Power Company (address)
6226 W Sahara Ave / PO Box 230 MS# 30 (address)
Las Vegas, NV 89102 (city,state, zip code)
702/ 367-567 (tel) 702 / 227-2051 (fax)
Signed: (name) Richard L. Hinckley
Vice President, Secretary, and Chief Counsel
Date:    9/25/95

I. BACKGROUND

Providing energy services to rneet the phenomenal growth rate of southern Nevada is a formidable task that presents an inherently unique set of challenges to the success of Nevada Power's commitments under this Accord to mitigate emissions of greenhouse gases. NPC plans to meet these challenges in part by increasing the use of natural gas for both primary and secondary fuel sources, and phasing out reliance upon liquid fossil fuels. While DSM programs may progressively account for less greenhouse gas reductions under NPC's conservation mix over time due to diminished cost-effectiveness of such programs, NPC's investments in renewable energy research and implementation are expected to position the company for increased utilization of such technologies when they are economically viable, thereby reducing the demand for fossil-fuel derived energy in the long term.

II. PROGRAM DETAILS

NPC has or will undertake the following actions to reduce, avoid or sequester greenhouse emissioins:

A. Industry Programs

1. UtiliTree Carbon Company I (A.)(1.)

NPC will report annually on Form IEI-1605 the actual amounts contributed to the UtiliTree Industry ]Program and the reductions in greenhouse gases resulting from NPC's contribution in accordance with the allocation of the total Program Reductions among the Program Participants as specified by the Program Governing Committee or Board of Directors. An initial estimation of NPC's allocation of sequestered CO₂, by the year 2000 from participation in this program amounts approximately 2,500 tons with (quantities increasing significantly throughout the next 30 years.

B. NPC Programs Background

1. DSM Programs

From 1992 until 1996, NPC provided DSM qualified programs to the public. Due to recent changes caused by industry deregulation and competitive restructuring, many of these programs have either been discontinued or are undergoing reevaluation. While NPC may recognize the success of all ten of these programs within its first annual report to DOE in accordance with section I.(B.) of this Accord, only those DSM programs active as of the date of this Accord and listed below, are offered for application toward NPC's Climate Challenge Program goals.

For the purpose of constructing this Participation Accord, all listed program reduction calculations utilize methodologies consistent with the Environmental Protection Agency's Conservation Verification Protocols Guidance Document (EPA 430/B-95-012) issued under reference to the Energy Conservation and Renewable Energy Reserve provisions codified at 40 CFR 73, Subpart F of the federal Acid Rain program. Future reductions will be reported in accordance with section C. of this Accord.

Should additional programs appear appropriate for purposes of the Climate Challenge Program, NPC will discuss inclusion of such programs with DOE's designated Climate Challenge Program liaison identified under section II.(D.) of this Participation Accord.

a. Local Commercial Lighting Program

The commercial lighting program has been NPC's largest contributor to peak reduction of all nondispatchable programs to date. It is available to all commercial customers who install high efficiency lighting. The program focuses on load shifting with conservation impacts continuing throughout the year. The replacement market continues to be the largest market; however, additional in-roads have been made in the new construction market which may be identified in forthcoming reports.

Approximately 37% of the kWh benefits of this program are realized during the summer months, with 30% of savings occurring during peak hours. Non-summer benefits account for the remaining 63% of the program total. At present growth projections, NPC estimates that this program will account for over 6,000 tons of C0₂ reductions in the year 2000.

b. Local Custom Incentives - Customer Rebate Program
The custom incentive program is available to all commercial customers whose conservation or load management measures do not fall within the scope of other NPC programs. The structure of the program may include load shifting, conservation or other enticements. Many of the program participants utilize adjustable speed drives, electric chillers, etc. These technologies produce benefits at an uneven rate throughout the year and are time dependent. Other participants are involved in a myriad of different technologies, producing benefits at different schedules. Instead of differentiating the returns by each adopted technology, the technology components are evaluated as a whole. Under this examination, approximately 39% of the reductions occur in the summer months. Of these, 26% occur during peak load hours. At current average participation levels, net annual savings of CO₂ in 2000 will exceed 3,000 tons.

c. EPA Green Lights Program
NPC joined the Green Lights program in June of 1995. Efforts to reduce energy consumption from approximately 755,000 square feet of Company-owned office space are currently on-going. Lighting evaluations have been partially completed, and energy efficient lighting retrofit projects are scheduled. NPC will continue this effort throughout 1997 and will report progress under the provisions of this Accord and that of a MOU with EPA.

d. Alternative Fuel Vehicles Programs
At present, NPC operates a total of eleven alternative fuel vehicles: nine compressed natural gas or propane fueled and two electric vehicles. NPC will purchase its new tight duty transportation in accordance with applicable provisions of the 1992 Energy Policy Act. Under these provisions, NPC will begin acquiring 30% of its new annual tight duty vehicle needs through the electric vehicle market, providing a viable product is available at that time. Emissions reductions of C0₂ attributable to this program will be estimated and reported pursuant to this Accord once procurement schedules and vehicle emissions offset characteristics are more firmly established in 1999.

2. Renewable Energy Projects

NPC has allocated approximately $1.7 million toward development of solar energy-based renewable technologies since July of 1994 and has approximately 38 kW of solar technology currently under testing conditions. NPC will have 80 kW of generation under field testing by mid 1997.

Because these renewable projects are presently non-dispatchable (i.e. not currently used to offset generation), and usage values (kWh) cannot be predicted for the year 2000, emissions savings cannot be calculated. Therefore, estimates of CO₂ savings for the year 2000 have not been provided. Nevertheless, as NPC gains experience with the various technologies, and potential application to the power grid allows savings to be calculated, such data will be reported.

The basic impediment to utilizing NPC's renewable technologies for dispatchable power generation is one of cost-effectiveness and scale. To the extent that these obstacles are reduced or eliminated in the future, NPC will be free to utilize its investment in technical knowledge and applicatio and to move into the applied solar energy field in expedited fashion. Until that time, NPC will continue to evaluate a range of solar and other renewable energy technologies including, but not limited to, the following.

a. 18kW Integrated High Concentration Photovoltaic Array Project
NPC signed a Tailored Collaboration Agreement with EPRI for funding for this PV project in December of this year. Construction and operational testing of the array will be completed during the first quarter of 1997.

b. 20 kW SAIC Dish/Stirling Project
Phase I of this 3-phase project is complete. In December of 1995, DOE released funding support for Phases II and III. As a result, five commercial prototype Dish/Stirling systems are now scheduled for installation at various locations in the western U.S. NPC will site one system at its Solar Fest Facility in the second quarter of 1997.

c. 18 kW NPC/EPA/EPRI Flat-Plate Photovoltaic Project
NPC installed and energized an 18 kW PV system on the campus of the University of Nevada Las Vegas in December of 1994. Despite experiencing mechanical problems which have caused some equipment degradation, the system is currently operating to full capability.

d. 1.2 kW Ascension AC Photovoltaic Module Project
NPC will purchase four PV modules and conduct side-by-side field testing with the Power-Wall^TM modules (e.) for one year. NPC will install and operate the successful module set during 1997.

e. 1 kW Solarex AC Photovoltaic Power Wall^TM Module Project
NPC will purchase four PV modules and conduct side-by-side field testing with the Ascension modules (d.) for one year. NPC will install and operate the successful module set during 1997.

f. 20 kW UPVG Team-up Photovoltaic Project
In October 1996, NPC installed five 4 kw grid-tied PV systems on the roofs of selected residential customers in its service territory. All five systems are functioning normally. This project is the result of a joint effort between the Utility Photovoltaic Group (UPVG), the U.S. Department of Energy, UtiliCorp United and NPC.

3. Other Programs

a. EPA STAR Programs
NPC is currently in the process of ascertaining whether suppliers of replacement electrical transformers used by NPC meets the criteria of EPA's Energy Star Program. If such is the case, NPC will join of this program during 1997.

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