IIEC Recent News

EXECUTIVE SUMMARY

The City of Austin’s Gas Technologies program is a unique DSM program for a number of reasons. It not only promotes energy efficiency but also accomplishes societal and environmental objectives. The program is made up of five programs that result in saved natural gas and two programs that promote the use of natural gas. While this may seem contradictory, Austin’s dual goals are to promote thermodynamic efficiency of energy consumption by using the most appropriate fuel to fulfill the desired task, and to mitigate emissions using a cradle-to-grave approach from the power plant or well-head to the end-use.

The Gas Technologies program is based on a complicated, but fundamentally effective, organizational design. While the City of Austin has its own municipal electric utility, the investor-owned Southern Union Gas has the franchise to serve natural gas to customers within the City. In 1988 the City allowed Southern Union to slightly raise rates within the City limits to cover the costs of the newly-required Gas Technologies program. Currently the program is administered by the City’s Environmental and Conservation Services Department which provides all DSM services for Austin.

The seven Gas Technologies programs provide a range of gas DSM services for the residential and commercial sectors as well as for the transport sector. The program also offers a range of societal, economic, and environmental benefits. For instance, low income households qualify for free weatherization services including free space heaters if necessary. All residential customers can receive hot water heater wraps and pipe insulation, again at no charge. For customers replacing or planning to install gas furnaces, rebates have been available for high efficiency models and for gas combination heaters.

Conversely, the program features two elements that promote gas use, justified through a full fuel cycle analysis. Prescriptive rebates are promoted for gas engine driven commercial chillers and $1,000 rebates are provided for customers and corporate fleets that convert gasoline-powered cars to natural gas, providing operating cost advantages while concurrently alleviating urban smog and other forms of pollution.

Finally, the Gas Technologies program represents a delicate balance between thermodynamic goals and political realities. While Southern Union Gas is willing to cut peak demand through societally-desirable gas saving measures, it is also keen on building baseload demand through the promotion of gas engine chillers and natural gas vehicles. And while the per customer use of natural gas has decreased over time in Austin, overall consumption has increased, fulfilling both the City’s goal of increased efficiency and Southern Union’s goal of increased use of natural gas. Attaining this delicate balance, ironically in a major oil and gas producing state with among the lowest gas prices in the country, represents a pioneering step in DSM and a model that will likely be carefully analyzed by both single and dual-fueled utilities.

[CLICK HERE TO DOWNLOAD THE ENTIRE 22 PAGE PROFILE IN PDF FILE FORMAT]

This profile was produced by

EXECUTIVE SUMMARY

The City of Austin, Texas has proven that adversity related to power supplies can be fully exploited for advantage. From its investment in the South Texas Nuclear Project and award of $120 million in a lawsuit over the plant, Austin has developed one of the most impressive demand-side management programs in the country. The programs are comprehensive and thorough, ranging from commercial loans to residential direct assistance, from tree planting to thermal energy storage systems. Perhaps most telling is Austin’s Green Builder program, awarded at the Earth Summit in Rio de Janeiro, which factors other resource efficiency aspects into its new construction program. Green Builder may represent a wave of the future, incorporating DSM into a broader context including water management, recycling, and taking a careful look at the embedded energy and environmental costs of building materials.

The structure of demand-side management in Austin is quite unique. The City has an Electric Department, but elected to establish its energy efficiency initiatives under the auspices of the Environmental and Conservation Services Department (ECSD), a separate City agency. The ECSD is autonomous from the Electric Department, allowing it the freedom to implement a wide array of beneficial programs, even working with the local natural gas utility, Southern Union Gas, to implement a range of gas technologies programs. The ECSD and the Electric Department are formally linked in two ways: Most of ECSD’s programs are funded directly by the Electric Department. The two city agencies are working together to develop their first integrated resource plan for future resource requirements.

Another key feature of Austin’s energy efficiency work is the keen focus on social aspects of efficiency and the quality of life. An evaluation of its low income Direct Weatherization program, for instance, found that besides saving money the program’s participants also managed to increase their comfort level closer to the City-wide average. As was expected, these lower-income utility customers kept their homes colder in the winter and hotter in the summer and the program allowed these customers to improve their comfort and save money simultaneously. ECSD has also spent time and resources quantifying the economic impacts of its energy efficiency programs, examining the economic benefits and multipliers of saving money in the community and investing in energy efficiency, boosting employment and product sales in the local economy. The City also developed an externality cost model to quantify the avoided emissions created by its energy efficiency programs, a focus that resulted in Austin being the first municipality in the country to receive sulfur dioxide emissions allowances under the federal Clean Air Act Amendments of 1990.

[CLICK HERE TO DOWNLOAD THE ENTIRE 24 PAGE PROFILE IN PDF FILE FORMAT]

This profile was produced by

EXECUTIVE SUMMARY

Public Service Electric & Gas Company’s Standard Offer program is a revolutionary program for many reasons. First and foremost, rather than paying customers for energy savings either using prescriptive or custom rebates, the Standard Offer pays customers set amounts for actual energy savings at specific periods. Thus savings during summer peak periods for electricity, and during winter peak periods for gas, are rewarded at higher levels than savings during off-peak periods. Essentially, the Standard Offer is uniquely tailored to the needs of PSE&G and its customers.

A second prominent feature of the program is that savings must be verified in order to be eligible for incentives. The New Jersey Board of Public Utilities, along with utilities and other parties in the state, worked together to develop one of the nation’s most comprehensive and rigorous verification protocols. Just as the output of power plants can be measured and verified within one or two basis points plus or minus, demand-side management savings in New Jersey must meet similar criteria, assuring the utility and its ratepayers energy and capacity savings that not only match its load profile but fulfill a similar level of confidence that has become expected on the supply-side.

A third feature of the program relates to its organization and structure. Virtually any customer, energy service company, or third party can earn Standard Offer payments for measured savings. To facilitate this process, PSE&G was allowed by the New Jersey Board of Public Utilities to set up a subsidiary, Public Service Conservation Resources Corporation (PSCRC), to operate with a dual mission. First, PSCRC was created to foster a competitive environment for energy services within PSE&G’s service territory by providing financing for efficiency retrofits. Second, PSCRC was allowed to earn profits through its investments in energy efficiency services -- which in turn flow to the company’s shareholders -- without directly performing retrofits but instead by hiring third parties to do the actual work.

In addition to providing financing for a range of energy service companies, PSCRC aggregates customers too small to apply directly to PSE&G for payments. It also works in hard-to-reach market segments such as schools and multi-tenant commercial situations. Like other participants in the program, PSCRC delivers energy efficiency services to customers and is then paid for savings by PSE&G through the Standard Offer mechanism. PSCRC earns a profit for its parent utility by delivering savings at costs below the Standard Offer prices and competing with private energy service companies in the open market. The result of each of these unique factors has been one of the largest DSM programs in the country, with literally hundreds of millions of dollars on the table.

[CLICK HERE TO DOWNLOAD THE ENTIRE 24 PAGE PROFILE IN PDF FILE FORMAT]

This profile was produced by
 

EXECUTIVE SUMMARY

This profile was produced by