1.

DEMAND-SIDE MANAGEMENT ENERGY EFFICIENCY PROGRAMS

In the mid-1980's, WE and WN initiated major DSM efforts to assist their customers in using electrical and natural gas energy more efficiently.

WE's Smart Money Energy Program

WE began its "Smart Money Energy Program" in 1987 to encourage customers to install equipment in their homes or facilities that meets certain energy efficiency requirements. Through 1994, the program consisted of providing free energy audits and financial incentives in the form of rebates or low- or no-interest loans to assist the customer in the purchase of energy-efficient equipment.

In the commercial and industrial market, the types of equipment covered by Smart Money have included energy-efficient lighting, heating, ventilating and air conditioning systems, water heating, refrigeration, process equipment and motors, thermal energy storage, energy management systems and other measures where demand and/or energy efficiency can be documented. Smart Money has addressed both the retrofit and new construction markets. Free energy evaluations and information have been available to all, and used by many, commercial, industrial and farm customers. In addition, WE has offered load management programs such as curtailable rates for commercial and industrial customers.

In the agricultural market, equipment covered by Smart Money has included dairy heat-recovery equipment, energy-free stock waterers, milk pre-coolers, bulk milk coolers and energy-efficient ventilation equipment.

In the residential market, an appliance turn-in initiative was established to remove old, inefficient refrigerators, freezers and room air conditioners. In addition to the energy savings, the refrigerants were recovered and recycled, hence preventing their release. This portion of the program has recovered an estimated 141,000 pounds of refrigerants through 1994. Other types of residential equipment covered by Smart Money have included energy-efficient fluorescent and high pressure sodium lighting fixtures, central air conditioners, weatherization of electrically heated homes, water heaters and energy-saving shower heads. Free timers have been installed for customers with electric water heaters who use the time-of-use rate, and free appliance timers have been provided to customers using a major electric appliance to encourage them to convert to or better utilize time-of-use rates. Also, WE has provided load management options to residential customers in the form of an air-conditioning direct load control program.

WN's Savings Plus and Blueprint for Savings Programs

WN began its DSM programs at approximately the same time as WE. Through 1994, WN offered a "Savings Plus" program for residential customers and a "Blueprint for Savings" program for commercial and industrial customers. These programs offered financial incentives to customers in the form of rebates and financing for the installation of energy-efficient gas equipment or measures that improved the efficiency of such equipment. Types of residential equipment covered by Savings Plus have included high-efficiency space heaters and water heaters, weatherization in natural gas-heated homes, energy-saving shower heads and automatic set-back thermostats.

In the commercial and industrial market, the types of equipment covered by Blueprint for Savings have included energy-efficient heating, ventilating and air conditioning equipment and system improvements, water heating, cooking appliances and weatherization.

The historical CO₂ emission reductions achieved by WE and WN through DSM energy efficiency programs described above are summarized on Table 1, column A.

WE's Commitment to Future DSM Energy Efficiency Efforts

In anticipation of potential changes in the utility industry, WE and WN have determined that prior DSM programs, while effective under past conditions, should be replaced by innovative initiatives that consider market forces and customer choice. WE and WN will continue to offer energy efficiency opportunities to their customers through the following:

• Innovative financing programs for commercial and industrial customers to help them overcome the initial cost barrier to energy efficiency.

• A comprehensive DSM bidding program for residential, farm and small commercial customers that will offer a variety of energy efficiency services and that will be determined based on bids received.

• Continuation of load management programs offered to all customers.

Projected future CO₂ emission reductions from these DSM energy efficiency programs are shown on Table 1, column A. By the year 2000, these programs are expected to reduce annual CO₂ emissions by an estimated 2,411,311 tons, including an estimated 7,142 tons of CO₂ equivalents from recycled chlorofluorocarbons. This reduction represents 8% of all system emissions before any reductions, by the year 2000.

Other Energy Efficiency Initiatives

WE contributes over $1,000,000 per year to the Wisconsin Center for Demand-Side Research (Center), an independent, non-profit organization. The Center's mission is to sponsor and conduct research in efficient use and management of energy, and to develop, demonstrate and transfer the results of that research to Wisconsin's energy service consumers and providers.

Principal activities include:

• Encouraging basic research

• Coordinating, sponsoring and conducting demand-side management research

• Developing and maintaining data bases

• Extending available resources through mutually beneficial relationships with Wisconsin academic institutions

• Becoming the state's expert resource on current demand-side knowledge and practice

• Demonstrating the efficient use of energy through cooperative, multi-utility projects or programs

• Distributing timely demand-side information

• Sponsoring workshops and internships, and supporting visiting fellowships

• Working with national organizations such as EPRI and the Gas Research Institute

Project areas include research in:

• Planning and forecasting

• Demand-side management technology options

• Public policy options

• Consumer and market behavior

• Program evaluation

WE is also a member of the Consortium for Energy Efficiency (CEE), a national, non-profit organization made up of utilities, government agencies, research institutions and public interest groups. Through its various "Golden Carrot"reg. approaches, CEE encourages the development of markets for super-efficient appliances and other new technologies. Membership fees are $10,000 per year, and CEE membership includes utilities serving over 25 million households and businesses.

2. SUPPLY-SIDE ENERGY EFFICIENCY

Heat Rate Efficiency Actions at Coal-Fired Power Plants

Since 1988, numerous energy efficiency projects have been completed at WE's five coal-fired power plants. These projects have provided reductions in heat rates, improving unit efficiency and thereby reducing emissions. Future projects that will improve heat rates at all plants may include:

• Increased unit availability and capacity factor

• Various equipment control upgrades such as distributed control systems, precipitators and turbine controls

• Metering upgrades such as net generation and auxiliary power

• Boiler chemical cleaning

• Feedwater heater improvements

• Reduced condenser air in-leakage

• Reduced thermal losses (steam trap, valve and insulation upgrades)

An improvement in heat rate of 0.5% per year for 1995 through 2000 is expected due to these and other projects.

At our Oak Creek Power Plant, the heat rate improved 3.9%, from 9,802 Btu/kWh in 1990 to 9,424 Btu/kWh in 1994. Projects that contributed to heat rate improvements include variable pressure operation, distributed control system, retractable turbine packing, variable speed drives on the forced and induced draft fans, reduced air in-leakage, feedwater heater replacements, increased availability and capacity factor and precipitator energy management system. Additional projects to improve unit efficiency beyond 1994 may include transformer replacement and retractable turbine packing (on unit 8).

At our Pleasant Prairie Power Plant, the heat rate improved 3.2%, from 11,157 Btu/kWh in 1990 to 10,796 Btu/kWh in 1994. Projects that contributed to heat rate improvements include variable pressure operation, unit and equipment performance monitoring, retractable turbine packing, reduced air in-leakage, increased availability and variable speed drive make-up water pumps. Additional projects beyond 1994 may include operation at lower cooling water tower temperatures to improve condenser vacuum and variable speed drives on boiler fans and other large motors.

At our Port Washington Power Plant, the heat rate improved 11.1%, from 15,410 Btu/kWh in 1990 to 13,697 Btu/kWh in 1994. This heat rate improvement was the result of a major plant renovation project, which included the refurbishment or replacement of most major plant equipment. The result of the project was a restoration of the units to their original capacity, improved efficiency and increased availability.

At our Presque Isle Power Plant, the heat rate improved 4.1%, from 11,565 Btu/kWh in 1990 to 11,089 in 1994. Projects that contributed to heat rate improvements include retractable turbine packing, increased availability and capacity factor, reduced air in-leakage, reduced excess boiler O2, boiler chemical cleaning, CO monitors on the boiler, improved turbine pressure and updated or additional instrumentation. Additional projects beyond 1994 may include more efficient turbine buckets and retractable turbine packing.

At our Valley Power Plant, the heat rate improved 2.3%, from 13,938 Btu/kWh in 1990 to 13,623 Btu/kWh in 1994. Projects that contributed to heat rate improvements include last row turbine blade replacement, retractable turbine packing, variable speed drives for the forced and induced draft fans, superheater surface change, reduced air in-leakage, reduced pulverizer primary air velocity and increased availability and capacity factor.

Hydro Plant Improvements and Additions

WE has recently signed long-term power purchase agreements with three independent hydroelectric owners. These account for approximately 1,455 kW of installed capacity, producing approximately 7,000 MWh/year. This generation offsets generation at coal-fired facilities, thus reducing emissions. Additional generation and efficiency improvement projects planned for WE-owned hydro facilities may create an additional 9 MW of capacity, resulting in the generation of approximately 22,000 MWh/year. However, these projects would occur beyond the year 2000.

Nuclear Plant Improvements

WE will evaluate several initiatives designed to improve output and net capacity at WE's Point Beach Nuclear Plant. Proposed initiatives may include upgrading the turbines to increase net electrical rating, changing to an 18-month fuel cycle in 1997 that should improve the net capacity and investigating changes to the core loading and license to increase the thermal rating of the unit. Realizing these improvements is predicated on obtaining approval to replace Unit 2's steam generators and to build additional spent fuel dry storage facilities beyond those recently approved by the Public Service Commission of Wisconsin. The number of casks recently approved will require WE to seek additional casks in 1998. Lack of approval for either project will result in a foreshortened operating life for Point Beach. This would result in a displacement of load from Point Beach to coal-fired generation facilities, significantly increasing greenhouse gas emissions.

WE's Commitment on Supply-Side Energy Efficiency

Projected future CO₂ emission reductions from these supply-side energy efficiency efforts are shown on Table 1, columns B and C. By the year 2000, these initiatives are expected to reduce annual CO₂ emissions by an estimated 1,271,990 tons.

3. WASTE TO ENERGY

The recovery and beneficial use of methane from landfills act to reduce overall emissions of greenhouse gases. Landfills are the largest anthropogenic source of methane in the United States. In order to increase this important generation source, WE assists landfill gas developers to select appropriate equipment and develop specific contracts. WE currently purchases electricity produced by methane from five landfills, which has offset generation at coal-fired facilities of over 350,000 MWh from 1991 through 1994. In addition, combustion of methane provides the benefit of preventing its direct release into the atmosphere.

WE's Commitment on Waste to Energy

WE will continue to promote and seek cost-effective opportunities to develop energy generation from landfill gas within its service territory. By the year 2000, estimated annual CO₂ emission reductions are expected to reach 611,082 tons, net of the CO₂ produced by methane combustion. Projected future CO₂ emission reductions from landfill gas use are shown on Table 1, column D.

4. FLY ASH UTILIZATION

Manufacturing cement and lime is very energy intensive, using 5 MBTU per tons of produced cement and 4.25 MBTU per tons of produced lime. It is also a large source of CO₂ emissions due to the calcining of carbonate minerals, yielding approximately one ton of CO₂ per ton of portland cement and 1.2 tons of CO₂ per ton of lime produced. WE currently utilizes over 50% of its fly ash, and since 1991 has used almost 1 million tons of fly ash as a cement replacement in concrete products or as a lime substitute for stabilizing municipal waste water sludge. In addition to reducing CO₂ emissions from cement and lime manufacture, these efforts have significantly reduced the amount of fly ash deposited in landfills.

WE is also in the early stages of developing lightweight aggregate production facilities that will use industrial by-products as well as innovative technologies that replace conventional products currently mined and manufactured by energy-intensive processes. Although some of the greenhouse gas reduction value is offset by emissions from production processes (see Table 1, column I), the project will provide net CO₂ reductions.

WE's Commitment on Fly Ash Utilization

WE will continue to expand its ash utilization program, thereby reducing the construction industry's demand for conventionally manufactured materials. By the year 2000, WE plans for maximum utilization of its fly ash, which will reduce annual CO₂ emissions by an estimated 248,400 tons and minimize landfill disposition. Projected future CO₂ emission reductions from fly ash utilization are shown on Table 1, column E.

5. VEHICLE CONVERSIONS TO DUAL FUEL CAPABILITY

Conversion of gasoline-fueled vehicles to dual fuel capability (gasoline and Compressed Natural Gas or CNG) reduces CO₂ emissions while the vehicle is using CNG. Since 1991, WE and WN have converted 164 fleet vehicles to dual fuel capability. WN also has a Vehicle CNG Program in which they provide technical assistance to customers wishing to utilize CNG vehicles. Assistance includes:

• An assessment of how clean fuel legislation and requirements affect the customer's business

• Identification of available technology

• Determination of the suitability of the customer's fleet for conversion

• Calculation of the cost of the conversion

• Determination of operating cost savings

• Determination of fueling station requirements

• Calculation of payback

• Acquisition of bids from conversion equipment vendors

WN will assist in facilitating cooperation between groups who may wish to share the cost of refueling equipment. WN also has a custom spreadsheet to evaluate rebate incentives for larger fleets.

In addition, WN provides incentives to encourage conversion of customers' vehicles and WE/WN employees' personal vehicles to CNG. These incentives include a rebate of $500 or $0.50 per annual therm, whichever is greater, for each vehicle converted up to two vehicles; available financing (at 0% interest for WE/WN employees); and fueling availability at WN fueling stations.

WE's Commitment on Natural Gas Vehicle Conversions

WE will continue the programs described above, under which an estimated 45 company fleet vehicles per year and a minimum of 100 customer vehicles per year are expected to be converted to dual fuel capability. By the year 2000, use of CNG vehicles is expected to reduce annual CO₂ emissions by an estimated 11,307 tons. Projected future CO₂ emission reductions from dual fuel conversion are shown on Table 1, column F.

6. TRANSMISSION AND DISTRIBUTION (T& amp;D) SYSTEM LOSS REDUCTIONS

Reductions in T& amp;D system losses result in reductions in CO₂ emissions since the energy that would have been lost need not be replaced by coal-fired generation.

Transmission System Projects

WE will propose making 13 transmission system additions over the next ten years, which are expected to reduce system losses by an estimated 123,000 MWh per year. Almost 90% of this reduction will be due to the Plains-North Appleton 345 kV line, which should be in service by 1999.

High Voltage Distribution: Conversion and System Renewal Projects

Conversion of existing distribution loads to higher operating voltages is a major part of the distribution system review and renewal plan. Conversion of the distribution system to higher voltages improves system efficiencies and reduces system losses by eliminating certain voltage transformations and, in general, reduces the line currents required to serve the load.

Implementation of a 15-year plan for review and renewal of all distribution facilities began in 1994. WE will establish year-by-year targets for miles of line to be completed, with a total in excess of 4200 miles of distribution lines. The renewal of facilities is an ongoing effort that takes into account various factors such as area load growth, relocation of facilities, age-related deterioration and conversion of distribution loads to higher system voltages.

In 1989, WE established the 25 kV distribution voltage as an efficient and economic means to serve new load growth and reduce energy losses in WE's southeastern Wisconsin service territory, excluding Milwaukee's 13.2 kV area. All new facilities in this area are being constructed to 25 kV standards, although some initially operate at 8 kV. Complete conversion to operation at 25 kV will be done as needed to provide load relief to the 8 kV system caused by load growth. In other areas of WE's service territory (Milwaukee, Fox Valley, Iron Range), existing loads also are being converted to higher voltage levels, as appropriate, in accordance with long-range plans for distribution system growth, renewal and expansion.

Application of Distribution Capacitors

WE will continue the application of capacitors to the distribution system, an ongoing distribution planning activity. Capacitor banks reduce the electrical losses through the system by reducing line currents and by reducing the kVA demand as a result of improved power factor. A total of 183 distribution capacitors were installed from 1991 to 1993.

Conservation Voltage Reduction

Conservation voltage reduction is being investigated at 20 substations, involving approximately 45 substation transformers. Based on earlier studies, the total energy reduction could reach 19,260 MWh per year at these substations. Additional substations may be reviewed on an ongoing basis for future conservation voltage reduction.

Replacement of Electromechanical Load Tap Changer (LTC) Controls

WE is replacing and will continue to replace older, electromechanical LTC voltage regulation controls at substations with electronic controls to improve control of system voltage regulation. When these controls are replaced, their settings can then be reviewed for conservation voltage reduction. This has the potential of reducing system losses by permitting operation at lower average voltage, allowing for finer control and tolerances on voltage regulation. This program is expected to run through the year 2001.

WE's Commitment on T& amp;D System Loss Reduction

By the year 2000, annual CO₂ emissions are expected to be reduced by an estimated 183,049 tons due to transmission and distribution system loss reduction projects. Projected future CO₂ emission reductions from these projects are shown on Table 1, column G.

7. JOINT IMPLEMENTATION

WE fully supports the application of market-based systems for the reduction of emissions. WE also supports the concept of achieving emission reductions for greenhouse gases in the most cost-effective manner, irrespective of location. Accordingly, as part of our overall plan for reducing greenhouse gases, WE has developed, in cooperation with several non-governmental organizations, two Joint Implementation (JI) projects, and on November 4, 1994, submitted project proposals to the U.S. Initiative on Joint Implementation (USIJI) Evaluation Panel for consideration. Greenhouse gas offset credits generated by these projects will be included in annual emissions reporting under 1605(b). Provided below is a brief description of these projects. It should be noted that WE is not seeking rate recovery for expenses associated with these projects.

Decin Project

The Decin Project is located in the City of Decin, in the northwestern corner of Northern Bohemia in the Czech Republic. The project involves the replacement of inefficient, highly polluting coal-fired district heating boilers with new, state-of-the-art, natural gas-fired internal combustion engines, producing both electrical power and warm water through cogeneration for building heat. Improvements in the efficiency of the warm water distribution system also are included in this project. The conversion of this district heating plant is made possible by the purchase of stock by three U.S. utility investors, one of which is WE. The Center for Clean Air Policy is acting as project coordinator. As described in the November 4 application, this conversion and related energy efficiency improvement project will result in a net annual CO₂ emission reduction of 6,594 tons, with 5,130 tons per year of that total reduction assigned to the three utility investors. Accordingly, in return for our $200,000 investment in the project, WE will receive 1,710 tons per year of CO₂ offsets from the Decin District heating utility starting in 1996. It is understood that this transfer will be reflected in the Czech Republic annual emissions report.

Rio Bravo Conservation and Management Area Carbon Sequestration Pilot Project

The Rio Bravo Conservation and Management Area (RBCMA) Pilot Project is located in the northwestern corner of Belize, in Central America. The RBCMA Pilot Project has two components. "Component A" will conclude the purchase of a 6,014 hectare (ha) parcel of endangered forest land that intersects two forested properties now owned by Programme for Belize (PfB). Without intervention, the forest cover and natural habitat it provides will be lost to intensive agricultural use.

"Component B" will develop a sustainable forestry management program designed to increase the total pool of sequestered carbon in a 50,543 ha area of the RBCMA that includes the area of Component A. Sustainable logging will be applied to 25,866 ha. Pine stocking enhancement will be focused on 2,500 ha, and the remainder of the area of Component B will be treated as protection forest. The sustainable logging technologies developed as part of this project will be applied to other areas of Belize and Central America. The two components of the Pilot Project represent distinct, though complementary, greenhouse gas mitigation strategies.

In general, the greenhouse gas offset credits generated by this project will be allocated to the project's financial participants, domestic and foreign, in proportion to their relative financial contribution to the $2.5 million project. At this time, Wisconsin Electric and The Nature Conservancy, partners with the Programme for Belize in this project, are seeking several additional financial participants. Accordingly, the maximum number of greenhouse gas offset credits to be transferred to Wisconsin Electric is estimated to be 9,005 tons per year starting in 1996.

WE's Commitment on JI Projects

WE will continue to participate in JI efforts such as the Decin Project and the Rio Bravo Conservation and Management Area Carbon Sequestration Pilot Project. Beginning in 1996, WE will receive up to 10,715 tons per year of CO₂ offsets from these projects, as shown on Table 1, column H.

8. RENEWABLE ENERGY

WE has recently developed a plan for the addition of new electrical generation facilities including approximately 176 MW of renewable energy resources by the year 2013. Most of the capacity is planned to be installed beyond the year 2000, including wind, solar, biomass and solid waste and, as such, is beyond the immediate scope of this commitment. In addition, WE and other Wisconsin utilities are conducting a long-term monitoring program to determine the sites with the best wind speeds in the state.

WE's Commitment on Renewable Energy

In order to reduce costs and improve operation of wind turbines, WE will provide funding of almost $200,000 to the EPRI Renewables, Storage and Hydro Business Unit to further promote development of wind and other renewable generation technology. WE also is providing over $400,000 in a collaborative effort with EPRI, a wind turbine manufacturer and other utilities to develop a low wind speed wind turbine that will more efficiently capture the low wind speeds found in Wisconsin.

9. FORESTRY MANAGEMENT

WE owns and manages approximately 40,000 acres of land in northeastern Wisconsin and the Upper Peninsula of Michigan. Currently, large portions of those lands are forested. Until recently, there was no overall plan that specified the operating policies and procedures that addressed the administration and management of these lands. Starting in 1990, steps were initiated by WE to obtain the necessary biological data so that comprehensive land management plans could have a sound biological basis. Important aspects receiving prime consideration in these plans are sustainable timber production, wildlife habitat, recreation and aesthetics. Plans for some properties have been finalized while others are being developed. Full land management plan implementation is expected by 1996 for all of the 40,000 acres.

Because greater attention will be paid to silvicultural systems, timber harvesting practices, wildlife management and aesthetics, it is expected that overall forest growth will be more vigorous and stand quality will be higher. Wise forest management is expected to increase both the carbon sequestration rate as well as the total standing crop of carbon.

As part of the management plans, areas currently not forested will be evaluated for tree planting opportunities. In addition, some recent research in Wisconsin indicates that other vegetative cover types, such as restored barrens and grasslands, have even a higher carbon sequestration potential than forested types. Several parcels of WE land where such restoration management opportunities may be possible are believed to exist and will be evaluated.

Smaller, isolated non-forested parcels of land in other portions of WE's service territory also will be investigated to evaluate tree planting opportunities to maximize carbon sequestration potential.

WE's Commitment on Forestry Management

By the year 2000, WE will have implemented a full management plan for all land owned, which is expected to result in increased carbon sequestration rates. The amount of carbon expected to be sequestered will be provided in our next update to this commitment.

10. BENEFICIAL ELECTRIFICATION

WE is developing a pilot program involving certain electrotechnologies that would reduce various emissions at customers' sites, including CO₂ and volatile organic compounds. WE uses a preliminary technology screen to find applicable low CO₂ technologies to solve major emitting customers' environmental challenges, such as infrared drying for printing companies.

WE also sponsors EPRI's "Partnership for Industrial Competitiveness" project, involving utilities working with industries to improve energy efficiency, reduce environmental emissions and increase economic productivity. Since 1992, WE has provided $100,000 of direct funding for consultants to work with industrial partners to identify opportunities for process changes.

WE's Commitment on Beneficial Electrification

WE will continue to support EPRI's "Partnership for Industrial Competitiveness" project. Also, WE will continue to investigate the greenhouse gas emission reduction and economic implications of specific end-use technology projects and programs, and will provide the level of CO₂ emissions reduction associated with this commitment in our next update.

11. GREEN LIGHTS

In June, 1991, WE became a participating member of the EPA's Green Lights Program. Green Lights is a voluntary program that promotes the upgrading of business lighting systems with energy-efficient technologies. WE has adopted the Green Lights commitment of retrofitting existing lighting systems with newer, energy-efficient systems whenever it is proven profitable and where it maintains or improves lighting quality. WE has agreed to complete all feasible lighting upgrades by 1996.

As WE continues to audit and retrofit its facilities, the upgrades have produced the following results through the end of 1994:

• Demand reduction of 469 kW

• Energy reduction of 2,403 MWh

• CO₂ reduction of 1,750 tons

WE's Commitment on Green Lights

We will maintain our commitment to the EPA's Green Lights Program through promoting the benefits of energy-efficient lighting systems to customers and trade allies, and by completing identified, cost-effective retrofits of internal lighting systems by the year 2000.

12. COGENERATION

The Valley Power Plant is a cogeneration, coal-fired facility providing both electrical generation to WE's electrical system and steam to WE's steam distribution network that serves major portions of downtown Milwaukee. WE is actively seeking new steam customers for this system. The conversion of existing oil- and/or gas-fired, customer-owned boilers to steam provided by WE represents a significant source of CO₂ reductions. WE is in the process of quantifying these reductions, and will provide that data and our commitment in our next update.

13. EEI'S INDUSTRY PROGRAMS

Utility Forest Carbon Management Program (UFCMP)

WE is an active member of the UFCMP developed by EEI. The UFCMP is establishing a coordinated electric utility plan to manage CO₂ and other greenhouse gases through different forestry activities. Goals of the UFCMP are to advance the state of knowledge regarding options for managing greenhouse gases via forestry, implement projects to manage greenhouse gases, establish low-cost forestry options to manage greenhouse gases, demonstrate the viability of a voluntary approach to addressing the climate change issue, demonstrate environmental stewardship by the utility industry and recommend utility policy positions.

International Utility Efficiency Partnership Program (IUEPP)

WE has actively participated in the early development of the IUEPP. This initiative is designed to promote U.S. utility involvement in energy efficiency projects, like Decin, in developing countries.

Electrotechnology and Renewable Energy Investment Pool

WE has been reviewing, and will continue to monitor, the development of this initiative and will work with EEI to pursue opportunities that would support WE's efforts in Beneficial Electrification described under #10 above.

WE's Commitment on EEI's Industry Programs

WE will continue to participate in those EEI initiatives that result in identification of cost-effective methodologies for sequestering CO₂ or reducing CO₂ emissions. WE provided $5,000 toward the UFCMP in 1994 with a potential for additional funding this year. Future funding levels for this initiative and funding levels for the IUEPP and Investment Pool initiatives are under discussion with EEI, and our resulting commitment will be provided in our next update.

14. ADDITIONAL INDUSTRY PROGRAMS

WE will evaluate participation in additional industry programs such as Energy Star, Coal Bed Methane Recovery and others.

The projection of future CO₂ emissions is dependent upon assumptions of a number of variables, such as but not limited to future generation mix (coal, hydro, nuclear, renewables), level of electrical load, impacts of utility re-regulation and the success of demand- and supply-side energy efficiency initiatives. Accordingly, projected levels of CO₂ emissions are estimates, and require periodic review and update.

Based on current information on generation system and projected system load requirements, and without considering any possible impacts of utility re-regulation, estimates of CO₂ emissions are provided. If the emission-reducing attributes of demand- and supply-side energy efficiency programs are removed, CO₂ emissions corresponding to meeting projected system energy demand would increase significantly and are provided in column J, and shown graphically as line 1, Figure 1.

In order to represent actual WE emissions, the CO₂ emission-reducing attributes of various activities must be taken into account. Such activities include, but are not limited to, demand- and supply-side energy efficiency programs, waste-to-energy projects, fly ash substitution, CNG conversion, T& amp;D system improvements and Joint Implementation projects.

Accordingly, column K, and line 2, Figure 1, provide WE's projected CO₂ emissions after all emission reduction efforts have been accounted for, and therefore best represents the projection of CO₂ emissions attributed to WE. The difference between columns J and K, and illustrated by lines 1 and 2, represents WE's level of commitment to reduce CO₂ emissions. As shown in column L, by the year 2000 that commitment corresponds to over a 16% reduction in emissions. This reduction in CO₂ emissions is achieved in the face of an almost 16% increase in estimated system electrical load requirements over the same period.