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EWEB and customers could continue to partner to conserve energy and offset a large portion of forecasted growth in electricity demand over the next 20 years, according to a preliminary study.

EWEB forecasts that without conservation, customers’ annual energy demand will rise 33% over the next 20 years, largely due to growing population, customers swapping out their gasoline-powered cars for electric vehicles and rising industrial needs. To meet that demand, EWEB will need to build or buy new energy resources – such as wind, solar and natural gas power plants – as well as pursue programs that incentivize customers to limit their energy usage.

Across the Pacific Northwest, energy demand is forecasted to grow almost twice as fast, with demand surging more than 30% in the next 10 years, according to the Pacific Northwest Utilities Conference Committee’s 2024 annual demand forecast.

For the last 15 years, EWEB has offset the low levels of growth in demand by conserving energy. But as demand accelerates in the next 20 years, it will outpace the levels of conservation currently achieved by EWEB’s slate of programs.

All options for meeting this rising demand will entail investing millions of dollars in the years ahead. But the study found that conservation may be the cheapest “resource” in many instances, especially when it comes to reducing peak energy demand.

Offsetting large portions of future demand with conservation will necessitate a fundamental shift in how customers view their own energy usage, with customers actively taking responsibility for when and how they use energy to avoid excessive consumption when demand is highest. 

“In the past, the relationship between EWEB and customers was simple: Customers flip a switch, and the lights come on,” said EWEB Customer Solutions Manager Greg Kelleher. “More and more, our relationship needs to be a partnership. EWEB and customers need to work closely together to find ways to conserve energy and to shift when we use that energy to avoid times when it is especially costly to provide or results in greater carbon emissions.”

Existing and potential programs include rebates for residential customers to install ducted and ductless heat pumps, insulation, heat pump water heaters and smart thermostats. Commercial customers can take advantage of similar programs, as well as incentives to upgrade inefficient lighting and a variety of other equipment in their facilities.

While all efficiency programs save energy, different conservation programs are best suited to deliver additional benefits such as helping customers reduce energy bills, easing demand on the power grid, lowering emissions to support climate goals, and improving affordability by supporting limited-income households The study analyzed how conservation could reduce demand in lieu of building or buying new power plants.

“The potential to conserve energy in a cost-effective way and avoid building new power plants is impressive,” said Kelleher. “But we also need to work with the community to balance the competing objectives of conservation. Is it to cut energy demand? Benefit low-income customers? Reduce carbon emissions? Different programs have different strengths, and no single program can achieve every objective.”

Study sorts conservation and demand response programs by cost-effectiveness

The study found that EWEB could offset nearly all projected growth in energy use by expanding conservation programs to get the maximum potential available – or 85 average megawatts of energy per year by 2045. However, the financial cost of doing so would be astronomical.

So, the study, sorted conservation programs into two categories: those that would cost roughly the same or less than building or buying new power plants, or those that would cost more. The study found that cost-effective conservation could offset about half of the projected growth in energy use over the next 20 years, while buying new power plants would be a cheaper way to meet the other half of increased consumption.

EWEB estimated a threshold of cost-effectiveness of $45 per megawatt-hour. Buying energy from EWEB’s largest supplier, the Bonneville Power Administration, currently costs $39 per megawatt-hour. Other new energy resources could cost around $65 per megawatt hour.

“Some conservation programs cost as little as $17 per megawatt-hour, but some can cost as much as $600 per megawatt-hour. The range is enormous,” said Ben Ulrich, the lead energy resource analyst at EWEB. “And the cost of these programs is vitally important when we’re trying to conserve energy rather than build new power plants or buy more power from the market. We have a duty to our customers to wisely spend the money we collect from them in rates as we respond to overall rising energy demand.”

The study also examined the potential to shift energy usage from peak hours to off-peak hours. Peak hours tend to occur in the morning and early evening when people are using the most energy. At these times, energy is the most expensive for EWEB to procure and it causes the most carbon emissions. “Demand response” programs to shift this energy usage include incentives for customers to charge their electric vehicles at off-peak hours or to temporarily adjust the temperature settings on their thermostats by a couple degrees.

Demand response programs paired with the cost-effective conservation could offset nearly all the expected growth in peak demand over the next 20 years, according to the study. In EWEB’s 2024 customer survey, 81% of respondents said that they would be interested in demand response programs.

“The work is just beginning. The study told us that conservation is a viable option to meet or offset demand growth – at least some of the time,” Ulrich said. “Now we and the community as a whole need to look at our objectives for conservation and design a suite of programs to meet those objectives.”