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Conservation Costs
This information was taken from The RED Book: "CONSERVATION RESOURCE ENERGY DATA". Table C contains the total BPA conservation costs.
BPA spent approximately $1.79 billion on conservation efforts from FY 1982 - 2000. Acquisition expenditures were: Residential, $1 Billion; Commercial, $339 million; Industrial, $109 million; Conservation/Modernization of aluminum smelters (Con/Mod), $48 million; Agricultural, $29 million; and Multi-Sector acquisitions, $156 million. Miscellaneous costs make up an additional $107 million.
Notes on Table C
The costs in this table are "accrued" expenditures -- the amount actually invoiced in a given year. The expenditures include all direct costs (measure costs, installation, administrative, and program evaluation costs) related to conservation, indirect costs associated with BPA's Energy Efficiency Program (load forecasting, planning and economic analysis), and a share of other corporate overhead. The costs reported in this table do not include interest expense on conservation borrowing.
Outstanding commitments are for resources acquired through FY 2000 but for which BPA still has contractual commitments to make future payments.
BPA's historical conservation costs have not always been reported consistently. Prior to 1988, costs were allocated to specific sectors and to resource planning. Starting in 1988, some Resource Planning costs were allocated to specific sectors. In addition, two new cost categories were created: multi-sector acquisitions, and miscellaneous costs. Although this change in categories makes it difficult to do a year-by-year comparison of sector costs, it more accurately reflects expenditures. Multi-sector programs include Billing Credits, Competitive Acquisitions, BPA Transmission System Efficiency projects, Third Party Financing, and Flex Agreements. Therefore, Residential, Commercial, Industrial and Agricultural savings were included in this category but not counted in their respective sector. Miscellaneous costs are non-sector specific and consist of resource planning costs through FY 87, RD&D, prior year adjustments, community education programs, and environmental costs relating to conservation. There were no costs broken out to the miscellaneous category for FY 1994, 1995 or 1997. The miscellaneous costs shown in FY1996 are costs related to the new Energy Efficiency organization. In FY 1995, BPA was reorganized and also implemented a new accounting system. This resulted in some changes in how costs were reported and accounted for. Costs were allocated to the correct categories as accurately as possible.
Special Note
To get an estimate of per-unit conservation costs, it is tempting to divide the dollars in Table C by the energy savings in Tables A or B; this would supposedly yield an "average cost per megawatt". This is an inappropriate way to measure resource costs. First, this method of estimation does not take into consideration the varying lifetimes and characteristics of energy resources. For example, 1 aMW of energy savings from a new residential building code program having an expected lifetime of 70 years cannot be equated with 1 aMW of savings from a program having a much shorter life. Secondly, the simple division method is inappropriate because of the following:
- Table A shows only first year savings, and
- Table C shows costs for the full life of the measure
Thus, there is no direct relationship between these tables.
Click here for the 2004 RED Book. Historical savings have been adjusted to account for evaluation results and other reasons as explained in the document, and may not match the historical savings reported in the legacy conservation web pages and tables.
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