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EXECUTIVE SUMMARY

The City of Phoenix’s Energy Management program for its municipal facilities is one of the best kept efficiency secrets in the United States. Years ago, Phoenix officials became aware of the fact that if the City’s energy bills were treated as a single expense, energy would be the City’s largest budget item after payroll. This provided the initial impetus for efficiency in Phoenix. Now its success story -- 16 years in the making -- has proceeded with little fanfare or accolades, but has provided $18 million in net repayments to the City’s General Fund.

Phoenix has some 300 buildings including an airport, water and waste water treatment plants, downtown office facilities, libraries, fire and police stations, and public works maintenance service centers. To date, nearly 1,000 projects have taken place from small lighting retrofits to the construction of a 600,000 square foot, $84 million New City Hall which embodies state-of-the-art design and which is a showcase of energy-efficient equipment. The Energy Management program has been part of the Public Works Department and thus integrally tied to the City’s Facilities Management department. This, its staff assert, has been a key ingredient to its success as Phoenix has taken a pragmatic orientation to efficiency, tying facilities managers’ functions with energy management and thus providing durable savings through increased awareness of efficiency’s interface with both day-to-day operations and longer-term equipment replacements and capital improvements.

The savings reinvestment mechanism established in Phoenix has also been an important factor in Phoenix’s success. Each year a portion of documented energy savings are reinvested in further energy efficiency improvements, providing a means for leveraging greater and greater energy savings. To date $4.4 million (20% of the total savings) has been reinvested, resulting in direct and accountable savings of $22.8 million. Furthermore, the entire program was bootstrapped with virtually no capital outlays. Early program retrofits employed no- and low-cost measures and provided demonstrable results that laid a solid foundation for ever-more sophisticated efforts.

The core of Phoenix’s success with energy management has been the existence and influence of its Energy Management Team. The team of professionals that has been devoted to the rational use of energy has created an effect in Phoenix well worthy of replication around the world. Through its concentration on energy efficiency -- from routine, relatively simple measures to highly sophisticated measures such as district cooling and direct digital control of buildings -- the focus on energy management has resulted in both direct and indirect savings that bolster Phoenix’s overall resource efficiency and exemplary city management.

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EXECUTIVE SUMMARY

The focus of this profile is the largest compact fluorescent lightbulb leasing effort ever undertaken by a utility, Operation LBC (Lampe Basse Consommation which means low consumption bulb). Implemented jointly by Electricité de France (EDF) and ADEME (Agencie de l’Environment et de la Maîtrise de l’Energie or the French Environment and Energy Management Agency), Operation LBC sought to lower evening peak demand on the Caribbean islands of Guadeloupe and Martinique by cutting the demand for lighting. The programs’s success caught both EDF and ADEME by surprise.

In the late 1980s Guadeloupe’s oil-fired power plant was nearing maximum capacity due to an increase in tourism. Environmental concerns caused ADEME to consider alternatives to building either a new plant or adding capacity to the existing one. ADEME then analyzed electric usage on the island and determined that a significant share of the evening peak demand was a result of lighting provided by incandescent lamps. A market survey was conducted which showed that compact fluorescent lamps (CFLs) could flatten the peak but that customers knew very little about them. ADEME went to EDF to see if the utility would be interested in raising awareness about the benefits of CFLs and financing a CFL leasing program. They were and planning began. Then in September of 1989, just as the effort was gearing up, Hurricane Hugo hit Guadeloupe leaving 12,000 people homeless and many businesses destroyed, delaying the project as the island concentrated on rebuilding.

In May of 1992 EDF and ADEME launched Operation LBC on Guadeloupe. After an extensive television, radio, and print awareness-building campaign, EDF sent every customer on Guadeloupe a coupon good for up to 10 compact fluorescent lamps at no initial cost. Lease payments were designed to be the same as, or even less than, the projected monthly energy and bill savings, creating a revenue-neutral or even positive cash flow situation for participants. Initially 100,000 lamps were placed in 80 retail stores. The response was so overwhelming that 12,000 households snatched them all up in one and a half days, with an additional 32,000 households placing orders for 250,000 more. Ultimately 34% of all households redeemed their coupons for an average uptake of 7.8 CFLs each.

The success on Guadeloupe prompted EDF and ADEME to implement Operation LBC in 1993 on the island of Martinique where a startling 345,000 compact fluorescents were distributed in just a few months. The programs resulted in 7 MW of peak demand savings on each island, plus 29-33 GWh of annual electricity savings, while providing residents with a powerful means to reduce their bills.

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EXECUTIVE SUMMARY


Southwestern Electric Cooperative (SWEC or the Co-op) is a small distribution company located in Illinois that like many other cooperatives has been losing market share for residential space heating to natural gas, a situation that has resulted in revenue loss for the Co-op. While gas is thermodynamically more efficient than resistance electric heating, SWEC devised a clever means of providing its members with a win-win solution by promoting ground source heat pumps, an even more efficient technology than gas from a source-BTU standpoint. By doing so, SWEC has been able to save its members money while maintaining its market share and thus revenue stream to keep its rates low and level of service high.

Ground source heat pumps tap a renewable energy form, the heat available in the earth. By compressing this previously unusable heat, heat pumps can provide low-cost heating without expending depletable energy forms like gas and oil. While heat pumps cost less to operate than systems that combust non-renewable resources, they do face a fundamental drawback today: high first cost. Despite their attractive lifecycle economics they have been underutilized because they typically cost $2,000-5,000 more than a comparable conventional heating system. SWEC’s GeoLease program addresses this head on, providing below-market loans for the heat exchange loops that are buried in the ground and leases for the "balance of plant."

GeoLease also has another strategic program design feature: In order for homes to qualify for the program’s special electricity rates they must meet specific efficiency criteria. For instance, homes must have a minimum of R-38 insulation in ceilings. Qualifying customers’ hot water heaters must also be part of the Co-op’s radio-controlled load management program. By qualifying, the program assures homeowners that despite paying a higher electricity rate (which covers the cost of the lease) that they can have a positive cash flow compared to what they would have spent on an alternative system.

While SWEC has been promoting heat pumps since 1985, relatively few systems were installed between 1985 and 1993. In late 1993 the program design was fundamentally changed such that rather than providing $1,000-2,000 rebates -- reducing but not eliminating the first-cost barrier -- SWEC refashioned its program so that participants no longer have to put any money down. This has created a dramatic surge in participation and a doubling of the program’s effect. Now a 120-home subdivision within SWEC’s service territory is being considered for the nation’s first completely geothermally heated subdivision. By trenching and installing loops at the time of other excavation, the costs of the systems can be lowered further, making their application that much more attractive.

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EXECUTIVE SUMMARY

The City of Austin, Texas is home to one of the most progressive efficiency programs in the world. The Green Builder program pushes the envelope of energy efficiency program designs to encompass parallel emphases on water efficiency, waste management, and use of "green" building materials. Using a clever market-pull mechanism to foster an integrated resource management approach to new residential construction, Austin has not only begun to transform its own "shelter industry" but has been internationally acclaimed as a model for sustainable development.

Green Builder’s roots were in the Energy Star program, an early home energy rating program that was based on a point system (see Profile #11). The better the efficiency of the home, the better its rating, thus the more saleable the home. As community awareness in Energy Star grew the building community began to respond by "going green," recognizing that efficiency had become a feature of home buyers’ decisions in Austin. When the program was expanded beyond energy efficiency, it "took off like a rocket!" Austin had tapped a vein of public interest and Green Builder quickly became prominent in Austin, the United States, and around the world.

As with other voluntary programs, effectively marketing the program to home buyers and to the shelter industry has been key to its success. The City has employed a range of strategies from renting a prominent billboard to hosting an acclaimed conference on green building. Collaborating with Habitat for Humanity and the American Institute for Learning (AIL) further raised the program’s profile. Along with the City, AIL was instrumental in developing a green building, job training program for at-risk youths. Then the greatest program leap occurred when a production home developer developed a large residential community in line with the program. Another developer further validated the program by building affordable housing to a Three Star rating, proving that green building can be socially responsible while affordable.

Perhaps Austin’s most important contribution has been its detailed assessment of building materials. To rate homes based on their materials, program staff not only had to get its arms around a vast and growing body of information related to green building, but also had to translate these values to the building community in Austin. The Sustainable Building Sourcebook represents a major effort in substantiating green building, providing builders, architects, developers, and others with comprehensive information on building materials and practices that can foster a path to sustainability. This arduous and pioneering work not only benefits Austin, but serves as a solid foundation for green building efforts around the world.

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