A New View on Energy Efficiency An Introduction for Public Power Utilities

A New View onEnergy EfficiencyAn Introduction for Public Power Utilities

Energy efficiency is a demand-side resource

Energy conservation Load management Demand-side management Integrated resource planning Demand response Peak clipping Load shifting Fuel switching Market transformation Energy efficiency

Demand-side resources: In contrast to supply-side resources, the effective energy (kWh) and capacity (kW) harnessed from changes in customer energy use patterns, including improving energy efficiency, in order to provide long-term, system-wide utility benefits as well as direct benefits to program participants. This definition assumes the demand-side resources chosen also will support net emissions-reduction goals.

Average energy use per person and per $ gdp, 1980-2030 Improvements due to efficiency, industrial shift, and other impacts.

Rate of electricity demandgrowth, 1950-2030Slowing, largely due to ee, load management. 2000-07 average growth: 1.1% per year.

Source: EIA 2009

New electronics and more air conditioning are driving

residential load growth. Source: EIA 2009

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Can more energy efficiency be part of our solution?

* A Comparative Review of a Dozen National Energy Plans, NREL, March 2009.

Burlington Electric Department, VT

Economic growth without load growth

WPPI Energy, WIEquivalent to 20 MW of baseload saved

Waverly Light and Power, IA5000 customers; $1.5 million net saved

In the 1980s, Austin Energy coined the term, “Conservation Power Plant,” to describe the effect of demand-side resources. Since that time:

More than 500 MW in capacity offset to date New goal, EE for 15% of new energy needs by 2020 Also, to meet 30% of new energy needs

with renewable energy To lead in clean energy innovation

River Falls, WI, a city of 14,000, has saved more than 2 million kWh in about 2 years

Utility programs work with market-driven changes (better building materials and equipment) plus policies, such as codes and standards.

Energy Efficiency Affects Resource Needs

Supply Side Resources

Market- and Policy-Driven EE

Utility-Driven EE

Business Case for Demand-Side Resources

Utility View• Reduce marginal costs,

improve net benefits• Beat the compliance clock

• Hedge against risks• Support utility modernization• Primary focus on electricity

Community View• Relief through bill savings• Promote better buildings• Provide economic stimulus• Support sustainability• Serve special groups• Increase comfort & convenience• Cross-cut with regional planning

(water, electricity, natural gas, transportation, food, etc.)

Public power sees both sides

Even strong programs must be assessed for each utility

On average, for every $1 invested in EE home improvements, $2.73 in benefits results: $1.67 in direct savings + $1.06 in community jobs, healthcare savings, pollution reduction, etc.

Source: Intergovernmental Weatherization Program

Information about how customers use energy on- and off-peak will help you to spot opportunities. Here, off-peak energy use at NWPPC, 2008.

Another example from NWPCC 2008

* There’s a difference between a measure and a program!

This chart shows dozens of measures for 2020 that will be cheaper than predicted energy costs. Today’s average cost for EE: 2¢ – 4¢ per kWh saved.

Address Technical Needs

1. Are products and services are locally available?

2. Are trade allies (sales, installation, service) prepared?

3. Are there problems with disposal of old products?

4. What can we do to help?

The Sacramento (SMUD) refrigerated case lighting promotion relied on products that could be hard for buyers to find. Fixing that problem was job #1.

Address Marketing Needs

1. Understand the target audience’s concerns

2. Choose the right tools at the right times:

Targeted outreach

Advertising and PR

Trade ally campaigns

Pricing – Rates

Pricing – Incentives

3. Cover administration detailsWorking with the Chamber of Commerce in Spencer, IA

Source: City of Redding Utilities

Value = net benefits / net costs

Check available data on expected energy and demand savings

Assumptions vary with your point of view – e.g., Utility Cost Perspective, Total Resource Cost Perspective, Societal Perspective, Ratepayer Impact

JAA member? Consider benefits locally and for all JAA members; look for win-win programs

Acknowledge the likelihood of revenue impacts

Count all avoided costs & review revenue requirements

If a rate increase is needed, check the rate structure, too

Focus on bottom-line bill savings

Public power utilities can be lean and strong

Peak without EE Programs

Peak with EE Programs

Waverly Light and Power (IA) improves EE economics by combining programs that save energy and demand.

From Anchorage to Key West, municipal utilities have promoted LED stoplights and other quick-payback improvements.

Other ideas: Generating plant efficiency checkup Reducing distribution line losses Citywide lighting improvements City-building load management Improving water & wastewater operations

Missouri River Energy Services pools member needs for specialized industrial-process energy audits

Low-cost measures and energy audits Load management or demand-response controls Lighting, HVAC, office equipment, motors, processes Whole building design or improvements Saving money = saving jobs

Get best-practices case studies from APPA and CEEP

Work with regional and national programs, like Energy Star

Work with community partners

A sampling of programs from Springfield, IL City Water, Light, and Power

Wind Pioneer Bowling Green, OH, started with energy

efficiency and direct load control programs.

Partnerships with other public power utilities and with the community also help us to build our future.

1. In research:____________________________________________

2. In planning:____________________________________________

3. In marketing:___________________________________________

4. In evaluation:___________________________________________

Turn skeptics into supporters!

Top-level support is the number one predictor of program success. As a utility leader, you can make a difference.

To build more support:

Bring economics home. Energy efficiency saves local dollars and grows jobs.

Focus on bills not rates. Support public participation. Work with your JAA or with neighboring utilities. Look to business programs for big savings, but offer

residential programs, too. Evaluate and measure savings; celebrate success

American Public Power Association Energy Efficiency Resource Central – www.EERCnet.org

Clean and Efficient Energy Program – www.cleanefficientenergy.org

Your Joint Action Agency or

Your Public Power Supplier

New View Guidebooks and other resources are available from APPA, www.appanet.org