Climate Challenge Participation AccordDOE's Energy Partnerships for a Strong Economy
I. Utility Commitments A. Consistent with paragraphs lI.B.1 .a and ll.B.1.f of the Climate Challenge Program MOU, Northern States Power will make a specified contribution to particular industry initiatives and commits to undertake or continue specific projects or actions, or make specific expenditures on projects or actions, to reduce, avoid, limit, offset or sequester greenhouse gas emissions. The following represent the actions Northern States Power has taken or intends to take toward achieving these commitments: Wind In May, 1994, NSP began purchasing all energy and capacity from a 25 MW wind facility located on Buffalo Ridge near the town of Lake Benton in Lincoln County, Minnesota (southwestern Minnesota). The 25 MW wind facility, developed by Kenetech Windpower, was built in response to an RFP issued by NSP in April 1993. NSP has issued a new RFP for an additional 100 MWs of windpower, and will begin purchasing energy and capacity from this project in November, 1996. Additional commitments to wind will be made in the future. Storage of Spent Nuclear Fuel Prairie Island is a nuclear facility consisting of two units totaling 1,040 Mws, representing 20% of NSP's energy generation. The capacity factor of these two units averages around 85%. The original storage pool has been reorganized twice and additional storage was required to keep the plant running. Without this additional storage, the Prairie Island facility would have prematurely shut down, with the energy to be replaced with a variety of greenhouse gas emitting generation. Unit 1 would have been shut down in 1995, with the second unit shut down in 1996. In response to this situation, NSP sought and was granted dry cask storage by the Minnesota state legislature in the spring of 1994, which allowed its Prairie Island facility to remain operating. To obtain the dry cask storage, NSP must continue to fulfill a variety of requirements set forth in the legislation. Demand-side management NSP is committed to continuing a portfolio of cost-effective energy efficiency measures, subject to approval by appropriate regulatory authorities. The portfolio of demand-side management programs is subject to change; thus this commitment will change accordingly. In 1993 NSP filed its Conservation Improvement Program (CIP) for the state of Minnesota for 1994 and 1995. The CIP currently has 46 conservation programs, including product development and research programs. Approved estimated expenditures for conservation in this plan for 1995 is approximately $40 million. Specific examples of some demand-side management programs in Minnesota which are innovative or represent potentially large impacts can be found in Attachment B. Northern States Power also has demand - side management activities in North and South Dakota, and its Wisconsin Company. Recycling BRITE (Being Responsible in Todays Environment) is a volunteer, employee-driven waste management program which started in 1990. It originated by reducing, reusing, and recycling 6 different waste streams. NSP has expanded this program since January 1,1991, and is committed to continuing and expanding the BRITE program. The program now encompasses 15 different waste streams. In 1994 alone, NSP employees collected and recycled over 3,500 tons of wastes while actually discarding 1,610 tons of municipal solid wastes (MSW) in area landfills and incinerators. The goal for 1995 is to reduce the volume of wastes (MSW) by an additional 20% from 1994, or 320 tons. Motor Challenge NSP will continue to participate in the Motor Challenge, a program developed by the DOE to promote voluntary collaborative efforts between the private and public sectors to demonstrate, evaluate, and accelerate the use of efficient industrial electric motor systems. Green Lights NSP will continue to participate in the EPA Green Lights program. The agreement acknowledges a shared commitment between NSP and the EPA to the promotion, and continuing development of energy-efficient lighting for indoor and outdoor applications. As a participant, NSP has agreed to survey the lighting needs in its own facilities and retrofit where cost-effective. Utility Forest Carbon Management Program NSP contributed $5,000 in 1994 for Phase I participation in the Utility Forest Carbon Management Program, an industry initiative identified in Exhibit A, "Industry Programs. NSP will continue to participate in Phase I, and will evaluate the benefits of participating in Phase II. B. Northern States Power will report 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) Energy Policy Act and the Climate Challenge, 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 Northern States Power prior to its becoming a participant in the Program, expressed on an annual basis to the extent possible. C. Northern States Power will confer with DOE on or before March 31,1997 to evaluate jointly the progress of Northern States Power in achieving its Climate Challenge Program goals and to discuss possible adjustments to its voluntary commitments. D. The Climate Challenge Program representative for Northern States Power will be Michelle Martens, Northern States Power, 414 Nicollet Mall, Minneapolis, Minnesota, 55401. Northern States Power agrees to notify DOE prior to or, in any event, no later than 30 days after any change in the contact. II. DOE Commitments
A. DOE's commitments to Northern States Power are those set out in section III of the Climate Challenge Program MOU, which are hereby incorporated in this Participation Accord by reference. B. DOE will consider Northern States Power's 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 Northern States Power for purposes of addressing Climate Challenge Program issues, it will provide notice to Northern States Power C. DOE will provide an annual report to Northern States Power 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 Northern States Power, will be Allan Hoffman, Department of Energy, Room 6B-128 (EE-10), 1000 Independence Avenue SW, Washington D.C. 20585. Phone (202) 586- 1786. DOE agrees to notify Northern States Power prior to or, in any event, no later than 30 days after any change in liaison responsibilities or personnel. III. General Provisions A. Use of DOE-developed materials by Northern States Power 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 Northern States Power agree to act in accordance with the principles set out in section 1 of 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.
February 3,1995 Attachment: Attachment A-Climate Challenge Program MOU and exhibits Attachment B-Demand-side management sample programs
Appliance Recycling Refrigeration and cooling constitute 35 percent of NSP's residential electric sales. NSP has addressed this market by offering rebates to encourage residential customers to purchase energy-efficient appliances. In September 1992, NSP expanded the cooling end-use project offerings by launching the Appliance Recycling project. The Appliance Recycling project offers two key benefits: the energy conserved by pulling secondary appliances out of the market, and the environmental conservation by recycling the gases, components and shells of the units, thereby preserving the environment and conserving costly, scarce landfill space. The Appliance Recycling project encourages residential customers to dispose of their inefficient refrigerators, freezers and room air conditioners by offering free pick up and recycling of working units, in addition to providing them a $50 U.S. savings bond. By encouraging the safe disposal of these appliances, NSP can remove them from operation and conserve energy while protecting the environment from potentially harmful materials. In 1992 the project safely and successfully recycled 11,283 appliances in NSP's service area, exceeding its first-year goal by almost 13 percent. An estimated 9,000 pounds of chlorofluorocarbons (CFCs) were reclaimed and 7,898 pounds of capacitors were disposed of. In addition, approximately 1,100 tons of scrap metal from the appliance shells were taken to a scrap processor for recycling of the metals to preserve landfill space. Initially, the Appliance Recycling project was offered to single family dwellings in the Minneapolis St. Paul metro area. Since then NSP has made several modifications to the project. Early on, NSP expanding the project offering to qualifying renters due to high customer demand. In the first quarter of 1993, the project was expanded to include additional operating regions of Minnesota. In 1995, NSP plans to expand the project to all areas of NSP's Minnesota service area. Motor Efficiency Adjustable Speed Drives Electric motors are the largest users of electric energy in the Commercial and Industrial (C&I) sector. Substantial reductions in energy and operational costs can be achieved through the Motor Efficiency project by offering rebates to C&I customers for the purchase of high-efficiency electric motors and adjustable speed drives (ASDs). The high-efficiency motors portion of this project was started in 1986, the ASD portion started in 1992. Because high-efficiency motors and ASDs are so closely related, they have been combined into one project. ASDs conserve energy by controlling the speed of the AC motor and the driven equipment. By coupling high-efficiency motors with ASDs, the maximum potential electrical energy reduction may be realized. Based on the requirements of a specific application, high-efficiency motors and ASDs can be offered independently or as a combined unit. Combining them into one project will benefit the NSP customer by providing a range of options and will conserve marketing costs. This approach is consistent with NSP's overall efforts to provide more comprehensive energy services. State of Minnesota Retrofit In 1991, Minnesota lawmakers enacted new legislation that provides a framework for funding and administering state conservation efforts. Under this legislation, the state can work with utilities such as Northern States Power Company (NSP) to make energy- efficiency improvements in state-owned or leased buildings. The Energy Conservation Retrofit Plan is a cooperative effort between the State of Minnesota and Northern States Power Company to perform energy-saving retrofits in state buildings. Because it targets existing buildings, the plan complements NSP's Energy Assets project for new construction. NSP provides conservation retrofit services including project management, financing and reporting. To finance retrofit projects, NSP loans participating state facilities the direct costs of installed retrofits. Participants repay the loans through equal month payments added to their NSP utility bills for each building retrofitted. The repayment is based on projected annual savings. Once the loan is repaid, participating facilities benefit from lower energy use and lower electric bills. Facilities are eligible for NSP rebates and cost reduction projects where applicable. The associated dollars and impacts will be credited to this project. Each year NSP provides up to $3 million available for loans. This funding is available for five years. Beginning in 1992, any of the $15 million not loaned during the five years will be "rolled over" to extend the use of the money. State agencies will use monthly savings that result from the retrofits to pay back the amount borrowed. Money paid back to NSP will be loaned to other state agencies for additional state energy improvement projects creating a capital pool that NSP will maintain for 15 years. NSP will provide this capital for energy-efficiency projects in the form of no-interest loans. Payback periods will ensure that NSP recovers its $15 million investment by July 1, 2006. Costs included in this project budget under NSP's Conservation Improvement Program (CIP) are for auditing, engineering, project administration, quality assurance and NSP's financing subsidies. State facilities are eligible for standard rebates where applicable. Rebates are credited to the loan balances of projects. The funding for rebates and their associated impacts to state facilities is in this filing. Lighting Efficiency The Lighting Efficiency project encourages NSP's commercial and industrial (C&I) customers to purchase and install more efficient equipment for existing lighting systems. Rebate incentives are provided to help defray the cost of the new equipment, and are weighted toward more comprehensive, permanent measures.
In 1993, NSP analyzed customer needs and changes in lighting technology, utilizing data from the Lighting Evaluation and project participation. Results from this analysis lead to the following conclusions:
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