Climate Challenge Participation Accord

DOE's Energy Partnerships for a Strong Economy

This Participation Accord describes the commitments that PacifiCorp 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 Program Memorandum of Understanding and exhibits thereto dated April 20, 1994 (the Climate Challenge Program MOU) (see Attachment A to this Participation Accord).

I. Utility Commitments

A.
Consistent with paragraph II.B.1 (a, e and f) of the Climate Challenge Program MOU, PacifiCorp will:

1.

Reduce its emissions rate (in lbs. of CO₂ per MWh) by ten percent between 1990 and 2000. In handling the emissions from the sale and purchase of power, emissions are added to our total when we purchase and subtracted when we sell power. Emissions are assumed, for both sale and purchase, to be from gas resources unless we know specifically otherwise (e.g., purchase from hydroelectric or coal facilities). Emissions rate will change from 2123 lbs/MWh 1911 lbs/Mwh. The company will include the following activities in order to achieve the commitment:

a.

Changes in generation mix - Actions that change the mix of resources used to supply energy to our customers.
b.
Offset activities - Actions that offset generation emissions through forestry projects and non-forestry projects (e.g., coal ash recycling, ethanol production, methane capture, etc.)
2.
Pursue projects to cost-effectively reduce, sequester and avoid CO₂ emissions. Project-by-project descriptions will be provided for projects in the following areas:

a.

Customer demand-side programs
b.
Transmission and distribution efficiencies
c.
Other projects
3.
Participate in the Utility Forest Carbon Management Program.
In order to achieve the commitment under section 1(A)(1):
• Changes in generation mix - PacifiCorp intends to take actions necessary to have 200 MWa of renewable resources on line by 2001, if cost-effective. These actions taken alone will reduce emissions by approximately 600,000 tons of CO₂ in 2000 (when modeled against our "base case" resource selection). The company's rate commitment will primarily be achieved through this aggressive acquisition of renewables as well as the use of gas resources and the retention of existing renewable resources (through relicensing hydroelectric facilities).

• Current forestry projects to sequester emissions - Since 1992, PacifiCorp has initiated a series of pilot-scale greenhouse gas emissions offset projects. To date the company has invested $425,000 in four forestry offset projects. These projects are expected to offset a total of 23,928 in the year 2000 and 638,670 tons of CO₂ over the life of the projects. These ongoing projects are described in detail in attachment B.

• New projects to avoid and sequester C02 -The company intends to spend approximately $1 million on pilot efforts between 1995 and 2000. Based on our current assumptions, this investment must accrue approximately 700,000 tons of CO₂ in 2000 to accomplish our rate reduction goal. This offset requirement calculation may change with variations in the company's integrated resource plan or market changes. These investments represent a long-term effort to sequester and avoid carbon emissions as well as our effort to find sequestration opportunities that may be expanded in the future if the need arises. The company is exploring a wide variety of projects to pursue as pilots including: reductions in the transportation sector, methane capture at wastewater facilities, applications of lower CO₂ technologies at customer locations.

• Coal ash recycling - The company is increasing its effort to recycle coal ash. When used to produce cement, coal ash recycling significantly reduces the amount of energy consumed during cement production and thus results in CO₂ emissions being avoided. PacifiCorp recycled over 390,000 tons of coal ash in the baseline year of 1990. PacifiCorp intends to recycle over 85,000 tons of ash annually (over and above the 1990 baseline amount), so will offset 85,000 tons of CO₂ in the year 2000.
In order to achieve the commitment under section 1(A)(2):
• Customer demand side programs - PacifiCorp has displaced 34.9 MWa of generation between January 1, 1992 and 1994 through demand side programs. Based on the company's resource mix, the company has avoided 240,000 tons of CO₂ emissions during this time. For 1995-2000, the company intends, through investment in cost-effective demand side resources, to displace an additional 211 MWa of generation. This estimate is based on our current assumptions and modeling effort and may change as technologies and assumptions vary. Based on the company 5 resource mix, the company intends to avoid (between 1995- 2000) an additional 1,465,000 tons of CO₂. In the year 2000, our demand-side activities are expected to displace 40.5 MWa and avoid 283,800 tons of CO₂. PacifiCorp is committed to developing a diversified portfolio of DSM programs during 1995 -2000 to achieve this goal such as:

  --

  Commercial FinAnswer Program - Through the Energy FinAnswer program, PacifiCorp provides up-front prime rate financing for cost-effective energy conservation measures installed in new commercial buildings. Measures may include: lighting, insulation, HVAC systems, controls or other measures that save electricity beyond code requirements. Repayment of the loan is added to the customer's electric bill as an Energy Service Charge (ESC). Energy cost savings are greater than the monthly ESC, so most customers experience a positive cash flow.
  --
  Industrial FinAnswer Program - The program offers industrial customers opportunity to decrease their energy consumptions by promoting energy efficient design and providing funding for installation of energy conservation measures. Thus far the program has focused on four major technologies: lighting, motors, air compressors systems, and refrigeration.
  --
  Home Comfort - PacifiCorp's Home Comfort program is a retrofit weatherization effort designed to achieve higher rates of customer participation than are typically achieved. The program offers a free home energy check-up, using high-tech diagnostic equipment and the installation of "instant savings measures."These items include: a low-flow showerhead, water heater wrap, faucet aerators, and fluorescent light bulbs.
  --
  New Residential Buildings - The company influences adoption of Model Conservation Standards (MCS) through capturing cost effective lost opportunities beyond the current code, while working with state and local agencies to promote adoption of MCS.
• Transmission and distribution efficiencies - PacifiCorp intends to avoid transmission and distribution system loss through aggressive development of transmission and distribution (T&D) efficiencies. Between 1991 and the present, the company has accomplished approximately 14 aMW of savings through T&D projects and intends to save an additional 16 aMW through additional efforts. These efforts will offset approximately 205,000 tons of CO₂ in 2000. The company's efficiency efforts include:

  --

  Implementation of conservation voltage reduction (CVR) on specific lines.
  --
  Efficiency improvements at company sub-stations including capacitor installations, use of larger wire on transmission circuits, and conversion of low voltage systems to hire levels.

  --
  Efficiency improvements through the purchase of more expensive transformers, larger conductors and additional capacitors.
• Additional projects - The company is exploring additional projects in the area of forestry on company lands and conversion of fleet vehicles. If these projects are pursued on a larger scale, the company will quantify the relevant 1990 baseline to calculate incremental benefits of these projects. These projects are listed in attachment C.

• Utility Forest Carbon Management Program - PacifiCorp has invested $5,000 in November, 1994 to join the utility carbon management program. We will explore further investment in the program once the cost-effectiveness of this investment has been determined. Any share of our investment that accrues credible and countable carbon benefits in the year 2000 will be counted towards the company's rate commitment in 1(A)(1) and this investment will go towards our $1 million investment in off-system emission reduction programs.
B.
PacifiCorp 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 PacifiCorp prior to its becoming a participant in the Program, expressed on an annual basis to the extent possible.
C.
PacifiCorp will confer with DOE on or before June 30, 1996 to evaluate jointly the progress of the company in achieving its Climate Challenge Program goals and to discuss possible adjustments to its voluntary commitments.
D.
The Climate Challenge Program representative for PacifiCorp will be Tom Imeson, 700 NE Multnomah, Suite 1600 Portland, OR 97232. PacifiCorp agrees to notify DOE prior to or, in any event, no later than 30 days after any change in the contract.

II. DOE Commitments

A.
DOE's commitments to PacifiCorp 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 PacifiCorp 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 PacifiCorp for purposes of addressing Climate Challenge Program issues, it will provide notice to the company.
C.
DOE will provide an annual report to PacifiCorp 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 the company, will be Allan Hoffman, Department of Energy, Room 6B-128 (EE-10), 1000 Independence Avenue SW, Washington DC 20585 (202)586-1786. DOE agrees to notify PacifiCorp prior to or, in any event, no later than 30 days after any change in liaison responsibilities or personnel.

A.
Use of DOE-developed materials by PacifiCorp 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 PacifiCorp 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 activities under the Climate Challenge Program without penalty without being subject to remedies at law or equity.

(Original signed by)
_____________________________________
Secretary of Energy
U.S. Department of Energy

Attachments:

Attachment A - Climate Challenge Program MOU and exhibits

Attachment B - Ongoing Forestry Projects

Attachment C -- Additional Projects

-- Reforestation of privately unforested private lands in cooperation with the Oregon Department of Forestry. This project resulted in over 600 acres planted.

-- Shade tree planting around ten different Utah neighborhoods and individual sites. Conducted in partnership with nonprofit organization TreeUtah.

-- Reforestation effort in eastern Washington to replant privately-owned lands that were devastated by fire. Organized in cooperation with the Upper Columbia Resource Conservation and Development Council.

-- Investment in the Oregon Forest Resource Trust that funds planting on unforested and understocked lands. By combining company's $75,000 investment with state funds, Trust can reforest 5,250 acres in the near term. Long-term goal is to plant 250,000 acres in 15 years.

PacifiCorp will explore proceeding with a variety of other projects. They are as follows:

• Management of Company Lands - The company owns approximately 13,000 acres of forested land managed in association with our hydroelectric facilities. Much of the land is intensively managed through aggressive reforestation and careful land management. These practices yield CO₂ benefits when compared with either natural regeneration or with reforestation practices required under state forest practices acts. Within the next year, the company will develop methods to quantify these carbon benefits. Only post-1992 carbon benefits in excess of those achieved during the 1990 baseline would be counted towards a project-by-project commitment.
• Fleet Conversions - PacifiCorp currently owns three converted electric vehicles and six vehicles fueled by natural gas as part of our fleet Our number of alternative fueled vehicles will be increasing steadily (to approximately 200 vehicles by 2000) and these purchases will accrue CO₂ benefits when compared to internal combustion vehicles. PacifiCorp also is exploring a variety of larger-scale business opportunities that would allow us to have a significant impact on CO₂ emissions through alternative fueled vehicles.

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