ATTACH. 1: Nissan's Penetration of Technologies to Improve Fuel Economy (Passenger Vehicles) NOTES: Figures in parentheses show penetrations within A/T class. 47.9 47.2 54.5 50.9 55.9 61.6 61.6 ATTACHMENT 3 DATA FROM, OAK RIDGE NATIONAL LABORATORY, Table 16 Sales-Weighted Interior Space of New Domestic and Import Automobiles by Size Class (cubic feet) Large Model Minicompact Subcompact Compact Midsize 'Represents sales for the first six months of model year 1990 (October through March). STATEMENT OF EDWARD W. SHEETS, EXECUTIVE DIRECTOR, NORTHWEST POWER PLANNING COUNCIL Mr. Chairman and members of the subcommittee, my name is Edward W. Sheets, and I am executive director of the Northwest Power Planning Council. The Council was authorized by Congress in 1980 and created as an interstate compact by the states of Idaho, Montana, Oregon and Washington. Its purpose is to develop a 20year regional electric power plan to ensure the Pacific Northwest an adequate supply of power at the lowest possible cost. The plan is designed to ensure that the region only acquires resources it needs and it acquires the least-cost resources first. The Council also was directed to develop a major program to rebuild fish and wildlife resources which have been harmed by hydroelectric development in the Columbia River Basin. First, let me thank you for inviting me to outline the Council's approach to leastcost planning. To conserve time today, I will summarize my more detailed written statement and ask that it be included in the hearing record. I am here on behalf of the Council to report that for ten years we have been running-at the behest of Congress-a kind of experiment in publicly reviewed, leastcost power system planning in the Pacific Northwest, and we're finding that it works! It works so well that we recommend it to you as a possible model for other regions and as a component of a national energy planning effort. Four states in the Pacific Northwest have worked cooperatively since 1981 on regional electricity planning. The lessons learned in the Northwest may be helpful to other states and regions. Since its inception, the Council has been proactive in regional planning and resource development. It has produced state-of-the-art power planning tools, including computer models to aid decision-makers in their analysis of the effects of resource selections. It has pioneered an integrated resource evaluation process that has come to be called integrated resource planning or least-cost planning. And it has carried on its work with remarkable participation from the public. The Council's plan is being implemented by Bonneville and is used as a benchmark by the state utility regulatory commissions as they review individual utility plans. In our experience, we have found that a least-cost planning process carried out with full public involvement can provide the framework for comparing resources, setting priorities and evaluating critical power delivery decisions. We have reviewed all the possible resources we could turn to for our future power needs and found conserved energy-a resource specifically emphasized by Congress in our enabling legislation-to be one of the most cost-effective, reliable and flexible resource we can develop. The region has already spent more than $1 billion on conservation efforts and acquired at least 350 megawatts of electricity at less than half what it would have cost us for the same amount of coal-generated power. Over the next eight years, we will help the region secure 1,500 megawatts of conservation in our homes, farms, businesses and industries, as well as improvements to our power system. This region and the Nation have set in motion new energy-efficient building codes and appliance standards that will save the region as much as 1,300 megawatts more. If the region experiences high load growth over the next 20 years and the need for energy savings is high, we expect to be able to capture another 4,600 megawatts of conserved energy, all at just about half what we'd have paid for electricity from new generating plants. After ten years of experience, we think integrated resource or least-cost planning is a proven approach ready for implementation at all levels of government. At least 30 states in this country and another dozen foreign countries have studied our work and are adopting integrated resource plannning or least-cost planning strategies for their power systems. But let me back up and give you a little Northwest history. This region didn't arrive at the concept of integrated resource planning without first taking some very wrong turns. We turned to least-cost planning after an enormously expensive lesson in what could justifiably be called "most-cost" planning. In the 1970's, a group of Northwest utilities decided to build a series of nuclear power plants because their energy-use forecasters had concluded that future electricity needs in the region would reach a specific high level early in the 1980's. They predicted brownouts and curtailments of supplies to industrial users. These utilities made their decisions without an open process to test their assumptions against other scenarios. Unfortunately, the future turned out very differently than the utilities anticipated. Instead of increasing rapidly, power use in the Northwest declined. As a result, the region spent over $7 billion on power plants that have been mothballed or ter minated, and the wholesale electric rates of the Bonneville Power Administration, our regional power marketing agency, went up over 500 percent. Clearly, a better approach to meeting regional energy needs was needed. The notion that there might be smaller, more cost-effective and more flexible resources to choose among, and other visions of what tomorrow's energy needs might be, had not been seriously considered. Congress provided the impetus for exploring these alternatives when it passed the Northwest Power Act (Public Law 96-501) in December of 1980. One of the most important clauses in that Act was that Congress gave the Bonneville Power Administration the authority to acquire new sources of electric power. A key condition for this increase in Federal authority was the insistence by the governors of the states served by Bonneville that an interstate agency be set up to provide a check and balance on Bonneville's activities. In response to the states' concerns, Congress authorized the creation of the Northwest Power Planning Council. The states of Idaho, Montana, Oregon and Washington formed an interstate compact agency in April, 1981. The states' governors each appoint two members to the Council. The Council was required to develop a 20-year regional power plan that would be implemented by Bonneville. The Council's first plan was released for public review in 1983. Its second was adopted in 1986. A third is now scheduled for final adoption at the end of April. It's true that implementation at the utility level has been slower than the Council would have liked. Utilities have been reluctant to spend money on energy efficiency programs and pilot projects during this region's period of surplus electricity. We have lost some time. But as the surplus has dwindled, utilities have increased their efforts. THE COUNCIL'S FIVE-STEP PLANNING PROCESS "Integrated resource planning," as used by the Council, refers to a process for developing and implementing a resource acquisition strategy that will enable the Northwest to meet its electricity needs reliably and at the lowest cost, taking into account the uncertainty of forecasts, environmental considerations and the compatibility of new resources with the existing power system. The Council begins its planning process with a thorough analysis of the region's demographic trends, economic development potential and existing energy demands. It uses these patterns of use and predicted growth to develop a range of power demand for the next 20 years, rather than the single-point prediction used historically. The Council then compares alternative resources on a consistent basis to determine which ones can most reliably and cost-effectively meet the region's energy needs. The electricity saved through efficiency improvements is considered a resource comparable to any generating resource. The keystone of the Council's planning philosophy is the recognition of the uncertainty surrounding virtually every aspect of energy planning. Instead of fixing on a single-point prediction of the region's energy future, the Council's methodology embraces a range of possible futures. The Council reviews hundreds of scenarios that reflect the inherent uncertainty of both the future demand for electricity and the cost and availability of new conservation and generating resources. The purpose of this analysis is to identify the actions that are necessary to prepare the region to respond to the uncertainty we face. As I mentioned, the Pacific Northwest has made some serious mistakes by underestimating the uncertainty and risks associated with power planning. In the 1970's, the region's utility planners typically produced single-point forecasts, confident that economic growth in the Northwest would continue to increase at one constant and high rate. As recently as 1980, utility forecasters were still predicting brownouts or worse for the region beginning as early as the mid-1980's. To meet this anticipated growth, the region began to plan and construct a total of 10 nuclear plants and 18 coal plants. Based on the region's experience, forecasters figured that if their singlepoint predictions were too high, growth would quickly cover any potential overbuilding. However, growth rates did not continue as they had in the early 1970's, and utilities were left with large investments in generating plants with no place to sell the power. As a consequence, rates rose dramatically. Today, only two of the nuclear plants have been completed, two more are on hold in a partially completed stage, and six have been terminated. More than a dozen coal plants have been completed, and an additional licensed site capable of supporting 1,000 megawatts of coal-fired capacity has been secured. The rest of the coal |