Mr. Kiesner

Eco-Friendly Practices

Electric Company Energy Efficiency Programs-Today and Tomorrow

By Steve Kiesner, Director of National Accounts, Edison Electric Institute

A closer look at some individual electric company incentive programs, and a glimpse at what the future may hold, will give you a better understanding of how to save energy and money in today's, and tomorrow's, energy markets.

Energy - A Variable Cost

As you well know, controlling costs is a key to profitability in the hotel industry. One variable cost that is often overlooked is energy. On average, the cost of energy accounts for three to five percent of a hotel's total operating expenses. The good news is that energy use, with a comprehensive plan, can often be cut by as much as 20 percent without affecting guest comfort or worker productivity. And the great news is that your electric company can be resource for helping you to take control of your energy costs.

Preparation on your part includes building a team that can start laying the groundwork for what you would like to accomplish. You'll also need to develop a specific target that you would like your organization to achieve. And finally, you should contact your electric company to see what types of programs you can take advantage of to make your energy saving plan even easier.

From simple rebates to sophisticated demand response programs, the following electric companies provided descriptions of their energy efficiency programs, and those sponsored by their states, at EEI's Spring National Accounts Workshop. In all likelihood, the electric companies or states where you operate will have similar programs.

Saving Energy in Minnesota

In Minnesota, Xcel Energy is involved in the Conservation Improvement Program. This program is open for both gas and electric customers and offers several methods for participation.

The first of these methods is Energy Design Assistance. This program offers a portfolio of energy conservation strategies for new buildings, additions, or major renovations. Customers can opt for a Plan Review or Custom Consulting.

Under the Plan Review program, a consultant identifies a set of strategies to increase building efficiency by analyzing building plans and specifications. The average energy savings under this plan is typically 20-30 percent. The program is available for most buildings between 25,000 to 75,000 square feet.

For buildings over 75,000 square feet, there is the Custom Consulting plan. Here, a sophisticated computer modeling system is used to simulate energy use. Average energy savings compared to code is typically 20 to 30 percent.

Another program that companies can participate in under the Conservation Improvement Program is an Engineering Assistance Study. The study analyzes savings and return on investment to provide the technical and economic information customers need to begin implementing an energy-saving project. Xcel Energy will pay 50 percent of the cost of the study, up to $15,000. Studies include Cooling System Replacement Study, Refrigeration Study, Custom Efficiency Study, Space/Process Heating, and Recommisioning.

Xcel also offers financing for the purchase of energy efficient equipment from $1,0000 to $500,000. Xcel pays for the up-front cost on qualifying energy efficient equipment and installation without you having to tie up capital. The loans have competitive interest rates, with no down payment required. Payments can be added to your Xcel Energy bill for convenience. Rebates are also available for some equipment such as HVAC, Lighting, Adjustable Speed Drives, and Refrigeration.

Xcel's Saver's Switch for Business is a Demand Response program that discounts a participants bill $3-5 per air conditioner ton. The program is implemented June through September and allows the utility to shut down an air conditioning system during very high peak demand periods.

Saving Energy in New Jersey

In New Jersey, Conectiv and other electric and gas utilities offer customers the statewide energy efficiency program, SmartStart Buildings. The program is open to all New Jersey commercial and industrial electric and gas customers. It was developed for all types of projects, including, new construction, renovations, remodeling, and equipment replacement.

The benefits for larger projects starting in the planning stage, include a pre-design planning session, design simulation and screening, detailed analysis of energy-efficient measures, and equipment incentives.

Smaller projects, or those begun after the design stage, may take advantage of project review and screening, recommendations for energy-efficiency measures, and equipment incentives.

In addition, financial incentives are available for equipment and technology for eligible customers who replace existing equipment or install high-efficiency equipment as part of an approved project.

Some of the technologies approved for incentives include electric or gas chillers, geothermal heat pumps, natural gas heating systems, variable frequency drives for HVAC systems, natural gas water heating, prescriptive lighting and lighting controls.

Saving Energy in California

In California, Southern California Edison (SCE) participates in programs that are sponsored by utilities statewide. They also have their own demand response programs.

The statewide utility sponsored programs include Saving By Design, which helps companies to design energy efficient new construction projects and major renovation or remodeling projects.

For large scale, multiple measure projects, there is the Standard Performance Contract. This provides incentives for customers to install efficient lighting, HVAC and refrigeration, and energy management controls. There is a $500,000 cap per customer site, or $2 million per corporate parent. SCE contributed $8 million in 2002.

For the smaller customer with electrical loads under 500kW, there is Express Efficiency. These customers can receive up to $25,000 in energy efficiency incentives.

SCE's demand response programs have two primary objectives: they offer financial incentive to customers to reduce energy during peak times, and they enable energy users to become responsive to price signals. The incentives for this program are based on the hour ahead market for electricity with a minimum reduction of 100kW. Customers can also choose to participate in the state's Peak Load Reduction Program that provides an incentive of $250 per kW saved. The minimum reduction for participating in this program is 15 kW during summer peak demand.

Saving Energy in the Future

As was stated as one of SCE's objective for load management, energy users need to become more responsive to price signals. Eventually, real-time-pricing for electricity will be more widely available. Real-time-pricing allows you to see the exact price of the electricity you are using at any given moment. This offers great opportunity for companies to take an active roll in reducing energy costs by structuring their heavy energy usage around peak pricing periods. Many electric companies are implementing these programs now to great acceptance from their commercial and industrial customers.

There is also technology available to help hotels take even greater advantage of this type of program. Energy management control systems (EMCs), allow you to automatically program and control energy usage based on cost, time of day, hotel capacity, or other factors that you deem important. These systems can be used to better manage HVAC, fans, pumps, escalators, elevators, and lighting controls.

Steve Kiesner is Director of the Edison Electric Institute’s National Accounts Program. Based in Washington, D.C., Edison Electric Institute (EEI) is the association of United States shareholder-owned electric companies, international affiliates and industry associates worldwide. Our U.S. members serve approximately 90 percent of the ultimate customers in the shareholder-owned segment of the industry, and nearly 70 percent of all electric utility ultimate customers in the nation. They generated almost 70 percent of the electricity generated by U.S. electric utilities. Mr. Kiesner can be contacted at 202-508-5000 or skiesner@eei.org Extended Bio...

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