The big, white house near Reed College was screaming for an energy upgrade: almost 100 years old, scanty insulation, nearly triple the drafts of a modern home.



Last month, it got one -- with the help of two energy audits, federal tax credits, Energy Trust of Oregon subsidies, and a low-interest, long-term loan through a new Portland program that gave owners John and Leslie McGuigan confidence they were doing the right thing.



That's one upgrade down, about 1.8 million to go.



In August, the Northwest Power and Conservation Council's staff dramatically upped the ante on energy efficiency, detailing what it would take to double electricity conservation during the next two decades in the Northwest. Doing so would not only cut consumers' power bills but virtually eliminate the need to build new carbon-spewing power plants.



The catch: Utilities, businesses and homeowners will have to buy in en masse.



Weatherproofing and insulating old homes was high on the council's conservation list. So was making 5.6 million clothes washers energy-efficient, improving lighting over 2.6 billion square feet of business floor space, and upgrading refrigerators in 1,700 supermarkets and 5,000 convenience stores.



The payoff would be huge: Conservation in Oregon, Washington, Idaho and Montana, the council says, could avoid millions of tons of greenhouse gas emissions and eliminate 85 percent of the expected increase in electricity demand by 2029.

That's the equivalent of 20 new power plants. Better yet, conservation is relatively cheap, despite its upfront costs. By most measures, saving energy is anywhere from 50 to 75 percent cheaper than buying it on the open market or building power plants. Disagreements remain about how much conservation is economical or technically feasible. As the McGuigans' project illustrates, achieving the plan's goals would take a far broader and deeper effort than blanketing the region with compact fluorescent light bulbs. Some utilities worry that the power council's short-term targets may not be achievable. Others, including

Portland General Electric Co

., say they're onboard on board but leery of banking on savings outside their control. Even with conservation savings, PGE says, it will need to invest in two new gas plants and make controversial upgrades to its coal-fired plant to meet customer demand. "We're willing to look at the economics of efficiency and put it into the plan. We know our customers want us to do this stuff," said Dave Robertson, PGE's vice president of public policy. But "we've got this mandate to keep the lights on 24/7."

The Northwest isn't starting from scratch on conservation. Oregon already has a law that sets aside a bit more than 2 percent of revenues from the state's privately owned utilities for conservation work.



The Bonneville Power Administration, which sells energy to more than 140 publicly owned utilities, offers rate credits to customers for conservation gains.



During the past three decades, the region has saved 3,600 average megawatts of electricity -- enough to serve all of Idaho or western Montana's demand -- through energy-efficiency efforts, the council says.



Conservation advocates say the time is ripe for ramping up. The Obama administration has pumped billions in stimulus dollars into the work.



Portland and other local governments are adopting programs that pinpoint the most effective measures in a home, then offer loans whose payments are offset by reductions in utility bills.



Also working in conservation's favor: Energy prices are projected to steadily rise, increasing the conservation payoff. Concerns about global warming put a premium on cutting carbon emissions. And the shaky economy increases the appeal of jobs-rich conservation programs.



The power council revises its 20-year plans every five years. When it comes to conservation, said Tom Eckman, the council's conservation program manager, "This is the first one where we're seeing the stars align politically.



"Public policy and the utilities have finally got it that buying the cheapest and least-risk thing first is a good idea."



Viewing conservation as a reliable resource is a sea change in an industry that profits by building new plants. And while though conservation is relatively cheap, it depends on politically volatile subsidies from ratepayers and taxpayers.



The power council, charged by law with setting power priorities, estimates that the region will have to double or triple its spending on conservation efforts to achieve its target.



The potential for cost-effective savings in homes, apartments and the industrial sector has surged with technological progress, the council says. The electrical draw from consumer electronics can be cut substantially as light-emitting diodes, or LEDs, replace current screens.



In 2008, the region spent an estimated $11.4 billion on electricity generation and distribution, according to council staff. That included $300 million on conservation efforts. The new plan contemplates spending about $1 billion a year on conservation.

That increase would be added to electricity customers' rates.



The alternative is to build power plants to generate the same amount of energy or buy the electricity on the open market. By the power council's estimates, that would cost about twice as much.

Far-and-wide conservation opportunities make for high potential savings, but make achieving the targets more complicated.

In the past five years, nearly a third of the region's conservation gains came from one technology: compact fluorescent light bulbs. There are still some home-run measures in the new plan, including efficiency gains in televisions and new heat-pump water heaters. But it relies more on bundles of smaller upgrades, such as converting 1.6 million exit signs to LED lights. Or installing 5.9 million low-flow shower heads to save on water heating. Replacing thousands of industrial motors. Automatically turning off the lights that shine on 2.3 billion square feet of businesses -- an area 10 times the size of Portland's Forest Park. Some savings will come from tighter government standards for energy used by new homes, appliances and electronic devices. But maximizing savings will require hundreds of thousands of business managers, homeowners and government buyers to side with energy efficiency over the status quo, even though it might cost more initially. That means connecting with machine shops, farmers and other small and rural customers who may not even be aware of the programs. It also means fielding a larger and more sophisticated conservation work force capable of complex tasks such as fine-tuning a large office building's HVAC system -- one of the biggest opportunities identified in the power council's plan.

"Fixing a lot of this stuff is not a matter of changing the lights," said Phil Welker, executive director of the nonprofit energy consultancy Portland Energy Conservation Inc. "You better have some real expertise to get in and find the root problem."



Conservation advocates say they'll have to tailor programs to specific industries. They'll need stable funding from ratepayers and taxpayers to cement long-term relationships with businesses.



And they'll need subsidies and much more outreach to motivate home and business owners, who are notoriously stingy with energy-efficiency upgrades, expecting payback in one to three years.



At Fought & Co., a Tigard-based steel fabricator, buying new power supplies for 48 welding torches meant persuading managers to spend $73,000 in the midst of a recession.



To make that case, the Energy Trust agreed to cover about 60 percent of the tab -- $105,000 out of a $178,000 bill.



The new equipment consumes 94 percent less energy when idling, and 25 percent less under a full welding load. It should save $24,000 a year in power costs, the company figures.



The power council says paper mills and food storage operations, heavy on refrigeration, have some of the most industrial conservation potential.



Haggen Inc. tapped subsidies from the BPA and several utilities to reconfigure its refrigeration systems in 24 regional stores.



Energy consultants identified more than a dozen measures Haggen could take to improve efficiency.



But in an industry with tight profit margins, the company opted for measures that would pay back off in two years.



"We've known these things were out there," said Glen Foresman, Haggen's director of retail support. "The incentive made it more economically feasible."



The power council's draft power plan has its skeptics, not least the council itself.

The eight members, appointed by the governors of four states, delayed releasing the plan twice because of concerns from Montana and Idaho representatives.



The new power plan's conservation goals are "much more aggressive" than those in the last previous plan, said Jim Yost, one of Idaho's council members. "Conservation saves you energy, but it costs you money to save it."



Randall Pozdena, a consultant and economist who negatively critiqued Oregon's plan for greenhouse gas reductions, is wary of claims of big untapped conservation savings.



The energy savings don't take into account the energy used to produce new, energy-efficient gizmos, he says. And industry has a lot of costs sunk into equipment that would go out the door if replaced.



"We've got to be very suspicious of trying to transform a market selling objects that no one wants to buy unless you subsidize them," Pozdena said.



Despite federal stimulus spending on conservation projects, the recession is expected to dampen spending on energy-efficiency retrofits as companies look to cut costs.



Washington utilities, bound by state law to follow make resource choices consistent with the council's plan, aren't sure they can meet its short-term goals.



"The question isn't whether; it's about when and how much," said Scott Corwin, executive director of the Portland-based Public Power Council.



The McGuigans had some timing issues themselves.



A year ago, the couple had their first energy audit. Two contractors followed. They had different ideas, and different prices, for what made sense in the McGuigans' 1912 home.



"I got confused because I just don't have that level of expertise," Leslie McGuigan said. "So we dropped it."



This spring, the couple read about Portland's new conservation program. This time, an Energy Trust official arrived with the contractor, agreeing jointly on what needed to be done. Energy Trust subsidies covered just under a third of the cost.



The McGuigans, one of the first to take advantage of the new program, will pay $7,000 to have insulation laid, sprayed and blown into their attics and exterior walls.



EcoTech, the contractor, also plugged air gaps with caulking and foam and added weatherstripping to cut down on drafts.



The McGuigans will pay about $45 a month on their 20-year loan, less than the expected savings on their utility bill. The work should cut the home's annual carbon emissions by 12,400 pounds.



John McGuigan, a business lawyer, said he thought about environmental benefits -- and the bottom line.



"It was the right thing to do," he said, "at the right cost."



Ted Sickinger: 503-221-8505; tedsickinger@news.oregonian.com

Scott Learn: 503-294-7657; scottlearn@news.oregonian.com