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April 16
Noon CDT

Clean Energy Ambassadors (CEA) Lunchtime Webinar Series continues with a free webinar on designing demand-side management (DSM) programs that succeed.

Figuring out what makes a DSM program work can be tricky, to say the least. Different, and sometimes competing interests must be balanced: What goals does the utility have for the program? What do your customers want? What do they need? Learn secrets from utilities that have cracked the code to create innovative and award-winning programs.

Clean Energy Ambassadors presents the webinar series noon to 1 p.m. Central time (11 a.m. to noon Mountain) on the third Tuesday of the month. The webinars are designed to help utilities save money and better serve their customers. Presentations focus on the needs of consumer-owned utilities; and feature specific, candid and informal discussion. Register  for this free webinar and check out the full line-up of CEA services and events. If you have any questions, please contact Anthony Cutler at 406-969-1040.

The difficult task of explaining load management to someone outside the utility industry is one you have to tackle if your utility plans to market a peak-shaving, demand response program to customers. A recent article in Energy Pulse , by Energy Consultant Sarah Battaglia of Energy Curtailment Specialists, Inc.  , makes it a little easier. Battaglia’s list of Top 10 questions about demand response programs speaks to the customer’s concerns, but utilities should pay attention to her answers.

Demand response is a tried-and-true measure to most utility professionals but your customers may not be familiar with it. Before large key accounts enroll in a program, they need to understand how the strategy helps the utility—and helps them—including how their businesses might be affected by brownouts or blackouts. They will want to know when and how often events occur, who will notify the company and how, what kind of hardware they need and who pays for it and installs it. Member services representatives should be prepared to offer customers different ways to curtail their energy use based on the type of business.

Utility programs are more likely to succeed when you look at your services through the customers’ eyes and treat them like partners, rather than passive receivers. This article provides insight into the business owners’ point of view and can help program managers be ready with straightforward explanations that will earn the customer’s participation and trust.

Feb. 21, 12 noon MST

Utility Feed-In Tariff Programs: Are We Getting Things Right?, presented by the Solar Electric Power Association  (SEPA), will feature Resource Planner Jon Abendschein speaking on his experiences with the City of Palo Alto Utilities . The Western customer offers a feed-in tariff (FiT) to encourage consumers to install photovoltaic systems.  

FiT programs, in which utilities buy power from small independent electricity producers, have stimulated growth in solar installations to record levels around the world.  But U.S. utilities are a different breed, and may not be able to meet their local objectives by copying established programs. Join SEPA tomorrow to learn about the challenges utilities are encountering in home-grown FiT challenges and how they address them. 

The webinar will focus on FIT program design and execution to meet end objectives. The material will be of particular interest to strategic planners and renewable program staff, as well as solar industry stakeholders. Presentations will cover:

• Examples of key utility FIT programs and lessons learned
• How to evaluate FIT programs for effectiveness
• How to successfully adapt programs to meet challenges

The cost is $199 for non-members, and free to SEPA members and the media (subject to verification).

The Los Angeles Department of Water And Power’s  (LADWP) new feed-in tariff (FiT) already has more applicants for its first round than were planned for in the whole program.

In the FiT program’s first week of accepting applications, requests represented 107 megawatts (MW) of potential new generating capacity. LADWP is offering only 20 MW’s worth of contracts in the first round. The agreements will run for 20 years, and pay from 17 to 13 cents per kilowatt-hour (kWh).

Some applications may be deemed infeasible, even before the formal proposal review. But LADWP Senior Assistant General Manager Aram Benyamin was pleased with the tremendous response to the program. “We expect that following the project review that will take place over the coming months, the first FiT projects will be on their way toward generating 20 MW of renewable solar energy for Los Angeles,” he said.

The applications cover 97 projects throughout DWP’s service area, with more than half the proposals sited in the San Fernando Valley. The program splits projects into two tiers: smaller projects from 30-150 kilowatts, and larger ones running up to 3 MW in capacity. Only 22 small project applications were submitted, possibly because the relatively low payment of 17 cents per kWh made those projects less economically viable.

Utilities offering feed-in tariffs contract with smaller power generators to pay a premium rate for all the power the system produces. Unlike net metering, the energy producers are not necessarily tied to a metered account, so instead of offsetting their energy use, they receive payment for their power. Governments and power providers use FiTs as an incentive to develop renewable energy systems. Germany and Australia have implemented different types of FiTs with notable success, if different results in both cases. Source: KCET via SEPA News, 2/19/13

Understanding what electricity consumers want, and how they value electricity service has implications for the entire utility industry. Power providers could use the knowledge to design different pricing structures and select feedback technology most likely to induce customers to change their energy use. Such programs could help utilities lower supply costs, increase the value of electricity to customers and boost customer satisfaction.

The Electric Power Research Institute  (EPRI) recently released a new study that attempts to answer fundamental questions that still puzzle program planners after decades of research. Understanding Electric Utility Customers—What We Know and What We Need to Know: A Summary Report  is a technical evaluation of studies on utility behavioral programs. The report focuses on three major areas—pricing, feedback and controls—for the commercial, industrial and residential sectors.

EPRI researchers created readiness scores for behavior change programs that rank the levels of uncertainty about program outcomes. The lower score indicates that more research is needed to determine the cause and effect relationship between the measure and the results.

Utilities should not read the report simply as “What works and what doesn’t,” researchers stress. Rather, it attempts to show where specific results can be linked to programs, and where it is unclear if the program actually produced the results. This information can help program planners determine if a specific measure is likely work with their target audience.

EPRI’s assessment of behavioral program impacts and their general readiness for prime time will be a continual process, to be updated as new evidence becomes available. In conducting an ongoing review, EPRI will suggest ways to fill the understanding gaps through collaborative industry research. Ultimately, this review will accelerate learning across the industry, identifying best practices and mistakes to avoid, while minimizing overall research costs.

On-bill Financing: Options and Obstacles
Tuesday, Jan. 15, noon CST

High up-front costs are one of, if not the biggest barrier preventing customers from making energy-efficiency upgrades to their commercial and residential properties. Over the years, many utilities have tackled this challenge by providing consumers with on-bill financing programs. On-bill Financing: Options and Obstacles will explore examples of successful programs power providers have created to meet their load management goals, while helping consumers save energy and money.

Clean Energy Ambassadors presents its Lunchtime Webinar Series on the third Tuesday of each month from 12-1 pm Central Time. Because the webinars focus on the needs of consumer-owned utilities, discussions are specific, candid and informal. Register  for this free webinar, and check out the full line-up of CEA services and events . Contact Anthony Cutler at 406-969-1040 with any questions.

(Editor’s note: This story originally ran in the December 2012 issue of Energy Services Bulletin.)

Valley Electric Association (VEA) in Pahrump, Nev., is emerging as a leader in the next big trend in demand-side management (DSM) by doing a very old-fashioned thing—listening to its members.

Valley Electric Association CEO Tom Husted accepts a $5,000 check from Nevada State Energy Office Director Stacey Crowley. The state funds will help offset the slightly higher cost of upgrading homes from propane to solar water heating.

“Our members wanted renewable energy, and solar water heating was the most cost-effective way to add renewables to our portfolio,” explained VEA Marketing Manager Tom Polikalas. 

Since the co-op launched its innovative, “no money down, zero percent interest” loan program three years ago, 680 VEA members have installed solar water heaters (SWH) in their homes. Homeowners make the monthly loan payment on their systems with the savings over using either electricity or propane to heat water. The program is a saver for VEA, too, with the systems installed to date now shaving an estimated 340 kilowatts (kW) from the co-op’s peak load.   

Members drive pilot

Polikalas attributes the program’s genesis—and its success—to VEA’s strong relationship with its members. The co-op has an Ambassador Program that boasts more than 200 members. The group works directly with the staff on policies, procedures and programs; enlists member support in shaping policy; and learns how legislation affects the utility and its members. Polikalas, a public power veteran, observed, “I don’t think I’ve seen a membership group this active at other places I’ve worked. It is definitely not something a big investor-owned utility could replicate.”

Yet, initially, VEA’s size, non-profit status and low rates seemed to be a barrier to developing the large renewable energy projects that interested members. The Ambassadors brainstormed ideas with the VEA board, and determined that solar water heating was the renewable technology with the most potential to benefit both members and the co-op.

An 18-month pilot program VEA initiated in 2006, with Cooperative Research Network and 40 participants from the Ambassadors, confirmed that belief. Monitoring SWHs with TWACS (two-way automatic communications system) and Btu (British thermal unit) meters, the study found that each unit reduced coincident peak demand by .5 kW. Installing 1,000 units could shave half a megawatt (MW) off of VEA’s peak.

Homeowners fared well, too, seeing an average 11-percent reduction in their annual electric bill. The system provided 85 percent of their hot water needs, and families using more than 60 gallons daily saved even more money. Those numbers looked good enough that 61 percent of the members who responded to VEA’s   survey about SWHs said they would want a unit within six months. It was time to put together the program.

Assembling the pieces

The Ambassadors’ Conservation Renewable Energy Committee (CREC) played a central role in designing the program, researching business models, equipment and manufacturers, and presenting recommendations to VEA’s board. 

Rheem, a Minnesota-based manufacturer of high-efficiency heating and cooling equipment, was chosen to provide the active solar systems. The program offers a choice of four models—a 65-gallon unit for manufactured homes and three models for site-built homes ranging from 80 to 120 gallons.

Loan financing is coming from the National Rural Utilities Cooperative Finance Corporation. Rural electric utilities formed the financial cooperative in 1969 to raise funds from capital markets to supplement the utilities’ loan programs. “CFC is an extremely valuable resource.  As a co-op, it shares VEA’s values of delivering outstanding service to its members at the lowest possible cost.” Polikalas said.

Homeowners make their loan payments through on-bill financing for energy services. “This is VEA’s first foray into on-bill financing, but utilities across the country are offering it more and more as a way to encourage and support deeper energy-efficiency improvements,” noted Polikalas.

VEA retains the renewable energy credits (RECs) to offset its operating cost. The value of the RECs improves the economics of the program for the co-op itself. Nevada’s Public Utilities Commission (PUC) administers the REC market, which was established as part of Nevada’s Renewable Portfolio Standard

Choose contractors wisely

Encouragement and support notwithstanding, a utility energy-efficiency program needs qualified installers if it is to succeed. VEA CEO Tom Husted took on the task of selecting a general contractor. “The choice can make or break a program, so finding a committed, highly qualified general contractor is absolutely worth the time and attention of a utility’s senior managers,” noted Husted.

That is no overstatement, given that the general contractor functions as the member’s point of contact for the program. Providing the installation estimate, hiring all subcontractors, ensuring that certification and permitting requirements are met, assisting with system design and invoicing VEA are all part of the general contractor’s responsibilities.

The general contractor hires local plumbers who employ certified solar water installers—of which there weren’t many in Pahrump prior to the program. VEA and Great Basin Community College teamed up to change that with a training and certification program. So far, 11 trainees have graduated, and VEA estimates that its SWH program could create 40 to 60 jobs over the next 20 years. “Every single job is important to our community now. Part of a co-op’s mission is local economic development, and we are proud that this program is creating jobs,” said Polikalas.

Big and getting bigger

Jobs are just part of the picture—VEA estimates that the 680 SWHs installed so far eliminate more than 2,000 tons of CO2 emissions annually. The program has kept hundreds of thousands of dollars in sales, payroll and tax revenue in the local economy, and drawn the praise of state and Federal officials, and even Ed Begley Jr.!

State agencies in particular have taken notice. The Nevada PUC asked the co-op to organize a workshop in October. Utility professionals came from as far away as Maryland to learn more about creating a domestic solar water-heating program. VEA is already planning another workshop for next fall.

By that time, even more members will be saving money with SWHs, thanks to a $5,000 grant from the State of Nevada Office of Energy. The funding is specifically for replacing propane water heaters, and should help VEA reach its goal of installing 1,000 residential solar units. “Propane is a little more expensive to convert than conventional electric,” Polikalas explained.

Either way, members, the community, the environment and Valley Electric Association win with solar hot water heaters, and the co-op is more than willing to share what it has learned. Obviously, VEA’s model isn’t going to work for every utility, but it shows that size doesn’t have to stand in the way of developing clean energy. With a little creativity and a lot of member support, even small co-ops and municipalities can become renewable energy leaders.

Utilities that can’t make it to Pahrump, Nev., or can’t wait to learn more about residential and commercial solar hot water programs, should check out Department of Energy’s Utility Solar Water Heating Initiative.

The Shelton Group  sustainability consultants are launching a new energy-efficiency marketing optimization platform called Do 5 Things. 

The idea behind the platform is that Americans who make five or more improvements to their homes are more likely to report their bills went down. On the other hand, people who self-report making three or fewer energy-efficiency improvements also report that their energy consumption and utility costs remain constant or, worse, go up. This phenomenon has resulted in growing apathy toward energy efficiency among consumers, coupled with increasing anger toward power providers. Consumers feel that the energy-saving improvements they made haven’t delivered as promised, and they aren’t interested in investing more time, effort and money in efficiency. 

Do 5 Things combines aspects of market segmentation, behavior change and consumer perceptions to increase rebate redemption and encourage people to adopt energy-conserving behaviors. From years of experience doing consumer segmentation in the energy field, the Shelton Group has gained a thorough understanding of key customer segments, their motivations and their barriers.   

Do 5 Things could provide utilities with a valuable tool for load management. Visit the site and share your thoughts with us in the comment section. Source: The Shelton Group, 10/25/12

According to Research Analyst Jim Lyza at sustainability marketers The Shelton Group , the United States is poised to see a boom in appliance replacement over the next few years.

Housing starts exploded in the mid and late ’90s, and all of those new homes needed refrigerators, washing machines, clothes washers and dryers, ranges and HVAC systems. The lifespan of most appliances is around 13 years, while heating and cooling systems last about 15 to 20 years.

That adds up to a great opportunity to get consumers to upgrade to more efficient appliances—if utilities have a marketing plan. A major challenge to getting energy-efficient products into the home is that consumers buy when the appliance breaks down, instead of planning ahead. And if the contractor doesn’t know about a rebate, or a manufacturer doesn’t have the more efficient model in stock, the consumer is likely to go with the most affordable, most available choice.

Utilities should start working with contractors, manufacturers and retailers NOW to build a plan for the coming boom. Make sure your rebate offerings are as streamlined as possible for both DIY and contractor installs, and encourage retailers to carry the rebated products to reduce initial out-of-pocket costs. Also, keep in mind that the more integrated incentive programs are, the more likely consumers will be to make multiple, pro-active improvements. Source: The Shelton Group, 10/10/12

Valley Electric Association  (VEA), an electric cooperative based in Pahrump, Nev., hosted an Oct. 8 workshop to highlight the history, economics and impacts associated with its nationally-recognized domestic solar water heating program. The event was organized in response to an information request from the Public Utilities Commission of Nevada.

“We’re pleased to share information that can help Nevada and our nation save energy and money,” explained Thomas H. Husted, VEA’s Chief Executive Officer.  “Co-ops work for the sustainable economic development of their communities, and solar water heating offers many communities across the country an effective way to improve both the economy and the environment.”

A National Renewable Energy Laboratory (NREL) study estimated that solar water heating could potentially save Americans more than $8 billion a year in energy costs.

The co-op’s innovative “no money down, zero percent interest” loan program has enabled 680 VEA members to install solar water heating systems in their homes.  The systems save money, whether homeowners previously used electricity or propane to heat water. The homeowner uses the savings to make the monthly loan payment on the solar water heating system.

In his presentation to workshop attendees, VEA’s Chief Operating Officer Rick Eckert explained how the program reduces the co-op’s expenditures on expensive peak power, saves co-op members an average of $243 a year, and helps create local jobs, among other benefits.

The program’s genesis was from the co-op’s members, with many of VEA’s volunteer “Ambassadors” participating in the pilot phase of the effort before the full program was launched in the fall of 2009.

VEA plans to host another domestic solar water heating workshop in the fall of 2013.  Contact Valley Electric Association for dates and more information about future VEA workshops on solar or other energy technologies. Source: Valley Electric Association, 10/10/12