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EXECUTIVE SUMMARY

In the mid-1980s, as the Bonneville Power Administration began to ramp up its commercial and industrial demand-side management activities, it recognized the need for a central source for detailed information on energy-efficient technologies. It sought to create a clearinghouse and after a competitive bid awarded the job to the Washington State Energy Office (WSEO). In 1990 WSEO established the Electric Ideas Clearinghouse (EIC, now known as the Energy Ideas Clearinghouse), a free information source for commercial and industrial energy projects in the Northwest.

The EIC has two primary services for utilities, engineers, designers, architects, and other energy professionals, as well as general energy consumers: a telephone/FAX hotline and a computer bulletin board (BBS). For the hotline (which is toll-free in the Northwest), WSEO’s initial response time to requests is typically under eight hours. To provide responses, WSEO staff, a network of engineers, librarians, energy specialists, and communication specialists, access an assortment of reference materials. The EIC (in combination with the WSEO library) has the largest energy library in the Northwest, and maintains seven consulting firms on a retainer basis.

The bulletin board is also toll-free in the Northwest and has recently extended its toll-free range thanks to new funding sources. Up to 28 people can access the system simultaneously and it is also linked with the Internet so that the EIC’s information can be accessed around the world. The BBS provides users with several services including E-mail, calendars of energy-related events, software libraries, discussion forums (some of which are private), job and resume listings, commercial energy codes, and other pertinent state and federal legislation. Currently new users are being added at a rate of 15-20 per day.

The Energy Ideas Clearinghouse provides an invaluable service in the Northwest and for the western states. While quantifying its effect is impossible, the Clearinghouse stands at the nexus of two concurrent revolutions: First, EIC is squarely positioned in the information revolution. Consumers in New York, for example, could just as easily access the Hotline and BBS as utility customers in Seattle. Second, EIC is clearly in line with the changing demand-side management paradigm. As utilities attempt to revamp their DSM programs -- shifting from direct customer incentives to a greater reliance on information -- the role of EIC and its importance in promoting customer-driven energy efficiency initiatives, will likely increase.

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EXECUTIVE SUMMARY

The City of Palo Alto operates a combined municipal utility that serves electricity, gas, and water. Several factors make this relatively small utility an interesting case study for energy efficiency: First, Palo Alto is a highly-educated community. Second, the City has among the lowest electricity rates in California. Third, since its service territory is adjacent to Pacific Gas & Electric, one of the nation’s leading DSM utilities, residents of Palo Alto have come to expect progressive energy efficiency programs.

Since 1976 Palo Alto has had a colorful history of energy efficiency innovation. Currently the City offers a range of programs including financing for solar hot water heaters, supplements for school curricula, and bill analysis. While California’s prolonged drought caused the utility to focus on water efficiency nearly exclusively from 1990-1992, in 1993 Palo Alto introduced a number of new programs including an innovative pilot program to promote compact fluorescent lamps, the focus of this profile.

Many larger utilities are exploring their opportunity to provide incentives directly to manufacturers rather than customers. By doing so, manufacturers will not only promote lower-cost, energy-efficient products, but downstream markups will be minimized. Palo Alto wanted to develop a manufacturer rebate program for compact fluorescent lamps (CFLs), but was unable to do so because of its relatively small size. Therefore staff elected to experiment with a vendor-based approach for a one-month long pilot program.

The ensuing program was quite simple: The City bought CFLs in bulk and provided them to local hardware stores for resale. Then vouchers were sent to residential customers. While the City bought CFLs for approximately $12 each, customers with vouchers could purchase up to 2 lamps for $9 apiece, resulting in a small utility subsidy for each lamp put in service. Interestingly, the vendors, the City’s four hardware stores, did not directly profit from the sales of the lamps, but were pleased with increased foot traffic and ancillary sales of lamps and other goods.

Palo Alto’s experiment achieved higher participation than expected and also higher penetration than expected. Not only were all the lamps that were initially purchased sold, but the utility had to purchase more lamps to fulfill demand. Customers also bought additional compact fluorescent lamps at their full list price, proving to the hardware store owners that consumer demand for CFLs warrants stocking the lamps and giving them adequate display space. Furthermore, a survey of program participants revealed that participants were satisfied with the lamps’ life, light quality, and brightness, and fully 85% of survey respondents claimed they will purchase the lamps again at a discounted price.

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EXECUTIVE SUMMARY

The Process Improvements program offered by B.C. Hydro Power Smart is administered by Willis Energy Services Limited. It is an excellent model of a program designed to promote and financially support innovation in the pursuit of energy efficiency for large industrial customers. The program has proven that sophisticated retrofits in the industrial sector can be catalyzed and bought at a low cost from a utility perspective.

Process Improvements is based on the engineering expertise of its administrator whose staff provide a wealth of experience related to the program’s prime target: the pulp and paper industry. Staff including B.C. Hydro staff, identify opportunities for energy and dollar savings in industries, some of which require utility incentives to shorten customer payback periods. In other cases, this engineering support has resulted in retrofits where customers are not eligible for program incentives yet elect to pursue retrofits on their own due to exceptionally short payback periods of the measures identified. Thus the program effectively pushes the marketplace with incentives, and pulls the marketplace by working with customers to help them identify cost effective retrofit opportunities.

Process Improvements has evolved in a number of ways: Incentive levels have been downwardly adjusted and select technologies have been moved out of the program to B.C. Hydro's more prescriptive programs. In terms of financing, smaller retrofits are generally based upon a set formula while the incentives for larger projects are negotiated on a case-by-case basis, underscoring the basic objective of engaging energy efficiency retrofits at the least cost while remaining sensitive to the needs and financial resources of customers.

To date marketing the program has been focused on B.C. Hydro’s 590 largest industrial customers with peak demands of greater than 1 MW. In fact special emphasis has been placed upon the approximately 85 very large "transmission voltage" customers who account for over 90% of the energy sales to the large customer group. The program has served as a powerful customer service for these important customers, helping them retrofit their facilities with gear reducers, synchronous belts, efficient refrigeration equipment, and other retrofit projects such as large mechanical debarkers used in the pulp and paper industries, turbo generators, compressed air equipment, and pulpers. By working closely with these customers, Process Improvements has engaged process changes in industries that will not only save money and reduce power consumption, but which will also support the economic viability of the province of British Columbia.

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EXECUTIVE SUMMARY

Washington Electric Cooperative, Inc. (WEC) is a rural electric cooperative located in middle-eastern Vermont and has a service area density of 6.3 customers per mile of line. WEC began its DSM efforts in 1992 and now implements an impressive roster of seven DSM programs. WEC’s total DSM expenditure for 1993 was equal to nearly 6% of its gross revenues and its DSM budget for 1994 represents 10% of projected gross revenues, a commitment and level of investment unparalleled by most other utilities.

The key driver for WEC’s aggressive DSM stance was Vermont Public Service Board Docket 5270 which required gas, electric, and combined utilities to file integrated resource plans every three years and also removed many of the financial disincentives to investing in energy efficiency. In turn, WEC’s Board of Trustees recommended that the Co-op aggressively pursue DSM. The fact that WEC has high avoided costs has made DSM a viable option for the Co-op; the Co-op’s high electricity rates, in turn, have boosted program participation.

As a central component of its DSM roster, WEC introduced a direct installation program in which the utility pays 100% of the equipment and installation costs for lighting and water heating retrofit measures. The program, which is the subject of this profile, relies on customer inquiries and telemarketing to identify and schedule retrofits. The program’s contractor, Vermont Energy Investment Corporation, arranges installations based on geographic proximity. Then at the time of site visits, retrofit opportunities are identified, and cost effective replacement options are selected by energy specialists guided by a unique lighting protocol and approved by customers. WEC offers an assortment of dozens of varieties of lighting products and literally stocks hundreds of lamps and fixtures on the truck, and both lighting and water heating efficiency measures are implemented on the spot.

The success of the program can be measured in a number of ways. First, the program has resulted in a very high level of measure persistence, with fully 95% of the lamps installed still in place. Second, the program has garnered a very high customer satisfaction level thanks in large part to the flexibility provided to customers in terms of their selection of lamps to be installed. Third, the program has already achieved high levels of participation within its target universe. Fully 26% of WEC’s eligible customers have already participated in the 2.5-year old program Fourth, the program is on target in meeting its goals as energy savings in 1993 almost tripled projected savings.

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