Voltage optimization, the combination of distribution system efficiency and conservation voltage reduction, is becoming recognized in the electric utility industry as a valued, low-cost resource for energy conservation. In 2007, the Northwest Energy Efficiency Alliance's (NEEA's) Distribution Efficiency Initiative (DEI) study quantified the potential energy savings by performing system improvements and operating in the lower bandwidth of the American National Standards Institute (ANSI) voltage range (see “Distribution Systems Get Efficiency Upgrades” in the February 2010 issue of Transmission & Distribution World).

NEEA envisioned two additional phases after the DEI study. First was implementation of voltage optimization (VO) across multiple utilities: marketplace penetration. Second was recommending regulatory changes to provide VO with incentives similar to that of other energy-efficient programs, such as replacing windows, insulating homes and so forth. Bonneville Power Administration's (BPA's) Energy Smart Utility Efficiency (ESUE) program is helping to fulfill these add-on phases of the DEI study.

BPA's ESUE Program

For the past 15 years, BPA offered utilities incentives for improving the efficiency of the distribution system under the industrial energy-efficiency program. This includes more traditional methods such as reconductoring, high-efficiency distribution transformers, installation of capacitor banks and upgrading the voltage class. The ESUE program adds to BPA's offerings by including VO among more traditional means for improving distribution efficiency.

The Northwest Power and Conservation Council's sixth power plan for the Northwest established energy-efficiency targets based on the assessment of long-term achievable energy-efficiency potential. BPA takes responsibility for achieving the public power share. Its ESUE program and the measures used with VO and distribution efficiency are part of how BPA meets these efficiency potentials. In May 2010, BPA successfully obtained unanimous approval of its simplified VO measurement and verification (M&V) protocols from the Northwest Power Conservation Council's Regional Technical Forum committee. State laws and regulations such as the Energy Independence Act (Revised Code of Washington 19.285) have required large consumer-owned utilities to pursue all cost-effective, reliable and feasible means for energy conservation and reduction.

Typically, a utility must take several steps to implement VO. First, the utility has to conduct a scoping study, which is a high-level analysis and planning effort required for determining the feasibility and costs related to implementing necessary distribution system efficiency improvements and VO. This is outlined in the ESUE program and simplified VO M&V protocols. A scoping study also identifies cost-effective system improvements that will help leverage the potential energy savings that can be achieved by operating the distribution system in the lower-voltage bandwidth. From this scoping study, the utility can determine the benefits and costs, and compare this energy-conservation measure to other programs to make an informed decision on whether to proceed with implementing VO and the associated system improvements.

The next step is to perform a detailed analysis and planning level study that explores additional alternatives, develop detailed work plans and update the potential energy savings and cost estimates. Basically, these additional alternatives answer the question: Is there significant energy savings for slightly increased cost?

Finally, the utility develops a detailed design for constructing the recommendations from the detailed study, including the installation of necessary metering at the substation and ends of the feeder.

Implementation Phase

To quantify the energy savings for incentives after all necessary changes are implemented, base line measurements are recorded for seven days. Then the voltage control settings are adjusted to operate in VO mode, and system parameters are verified to ensure proper operation of the VO system. Data is recorded again for seven days. Based on the DEI study and recent work performed by the Electric Power Research Institute (EPRI), a utility can expect an average of 1% to 3% energy savings annually. BPA's ESUE incentive program pays the utility either US$0.25/kWh saved in the first year or 70% of the project installed costs, whichever is less. The $0.25/kWh saved is a blended rate over several years and is the reason the incentive covers first-year savings.

BPA's ESUE program has a few advantages over other volt/VAR control systems or the practice of conservation voltage regulation (i.e., just lowering the voltage). BPA is concentrating on improving the overall efficiency of the distribution system, which in turn increases the energy-reduction potential from operating the voltage levels in the lower half of the ANSI (or utility) standard. In addition, it accounts for energy savings as a result of the system improvements. The practice of alternating the voltage levels day on/day off cannot fully capture the savings from VAR improvements or phase balancing.

Two public utility districts (PUDs) in southeast Washington, U.S., are among the first utilities to participate in the ESUE program: Clark Public Utilities and Cowlitz PUD.

Clark Public Utilities

Clark Public Utilities' participation in BPA's ESUE program included an evaluation of three substations around Vancouver: Battleground, Harney and Mac Heights. The scoping study, performed by R.W. Beck, an SAIC company, determined that two of the three substations showed very positive results while the third substation required significant capital investments to meet the ESUE M&V protocols.

The load mix served by the three substations is mostly residential, with 80% electric heating and 20% air conditioning, and the heating-cooling zone is 1-2. All of these factors were used to calculate the end-use VO factor based on the findings of NEEA's DEI study. The VO factor describes the relationship in the percent change in energy to a 1% change in voltage. The end-use VO factor at the customer premise was estimated at 0.34 based on the ESUE calculator, and the annual average voltage reduction was determined to be 1.4%. The combined VO factor (end-use and system improvements) at the substation level was calculated to be 0.55.

The scoping study estimates 1600 MWh of energy savings per year — a 0.82% reduction — for the three substations. The breakdown of energy savings showed that 31% was generated from system improvements, 5% from transformer non-load losses and 64% from end-use energy consumption. The total estimated capital investment is estimated at $1,302,000, including the addition of a new feeder using 795 AAC and reconductoring 4000 ft (1219 m) of 2/0 to 397 kcmil. Based on the estimated energy savings and required capital investments, the benefit-to-cost ratio is 0.84 for the total project.

Three main factors limited the total energy savings:

• Clark Public Utilities operates the substation voltage controls using line drop compensation (LDC), operating in the mid- to lower-voltage bandwidth, and maintains a near-unity power factor (average >97% at the substation power transformer).

• The percentage of customers with space and hot water electric heating is approximately 80%, which produces a very low VO factor.

• One Battleground feeder serves 55% of the substation load and was already operating in the acceptable lower-voltage bandwidth, so no additional energy savings were possible because the voltage level could not be reduced. In addition, two of the five load-serving feeders from the Mac Heights substation were heavily loaded so little voltage reduction was achievable there.

Cost estimates were generated based on system improvements necessary to meet the ESUE performance thresholds. This study assumed the following, which were needed: a new substation bay, 2.5 miles (4 km) of double circuit to add a new feeder and 0.6 miles (1 km) of multi-phasing along with other improvements for the Battleground substation. The Harney substation required some phase balancing and metering, and the Mac Heights substation required phase balancing, multi-phasing and feeder extensions to balance loads between the one heavily loaded feeder and two lightly loaded feeders.

Economic analysis was performed for the 15-year life cycle of the project. For the total project, the cost per megawatt-hour saved was 23 Mills for BPA (0.023 $/kWh) and 67 Mills (for Clark Public Utilities. The benefit-to-cost ratio was below 1.0 for the combined substations. The Harney and Mac Heights substations showed positive results with benefit-to-cost ratios of 7.8 and 1.6, respectively.

Clark Public Utilities is evaluating the results of the scoping study and reviewing the proposed system improvements to see if more cost-effective solutions, compared to building a double-circuit feeder and reconductoring portions of another feeder, are available. Because the utility already operates the substation voltage controls using line drop compensation (LDC), the additional benefits that can be achieved are reduced but worth a closer look to see if there are other options that would benefit both BPA and Clark Public Utilities. All energy savings achieved through BPA's ESUE program will be eligible for credit in Washington state's I-937 renewable energy requirements.