Tips: Talking about Energy Efficiency
September 2, 2008
Latest installment in the CEP Tips series. For a .pdf of this material, click here.
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Energy efficiency means using technology to maintain comfort and convenience while reducing energy use and bills. It is a powerful yet largely untapped resource.
Think of it as a virtual power plant – for every megawatt of energy efficiency that a utility creates, that equals one less megawatt it has to generate.
Energy efficiency programs are crucial to a clean, affordable, and reliable electricity supply for Kansas.
Energy efficiency is the most cost-effective, immediate solution for utilities facing rising fuel and construction costs, aging infrastructures, and looming carbon regulation.
The more energy we save, then the more money we save, and the fewer new power plants we have to build – which means less impact on our environment.
THE BENEFITS
Ready NOW. Affordable energy efficient products and technologies are available today.
Reduces monthly bills. According to the EPA, energy efficiency decreases utility bills by 2-9% over a ten year period.
Provides local jobs. Installing HVAC systems, windows, insulation – these are local jobs that can’t be exported.
Helps our economy. By reducing demand, energy efficiency lowers fuel prices.
Cheap. Utilities can offer energy efficiency programs for 3 cents per kilowatt hour. New generation costs 9-10 cents per kilowatt hour.
Lifetime savings. The upfront costs of energy efficiency improvements (like buying an EnergyStar appliance) are much less than their lifetime savings in dollars.
Reduces pollution. Energy efficiency produces no particulate, mercury, or carbon dioxide pollution.
THE OBSTACLE
As a study commissioned by the Kansas Energy Council recently discovered, Kansas is not reaching its potential for saving energy. Other Midwestern states – like Iowa and Minnesota – are reducing demand by about 1% per year.
According to DOE, Kansas electricity consumption is disproportionately large compared to the rest of the nation. We match the nation’s growth rate in electricity consumption – but our population is growing at only half the national average.
THE SOLUTIONS
Energy Efficiency Resource Standards (EERS)
Requires utilities to get 1% of increased demand from energy efficiency to keep bills low and forestall need for new generation.
Decoupling Incentives
“Decouple” means to break the link between a utility’s profits and their sales volume. Making this break is necessary for utilities who want to help their customers save energy, rather than use more and more. A state public utility commission (such as the Kansas Corporation Commission) can establish new rate structures for a utility’s energy efficiency expenditures, which are often known as decoupling incentives.
Weatherization for low-income homes
The most affordable home is an energy efficient home. Over time, weatherizing low-income housing stock once makes more sense than subsidizing payment of heating bills every year.
Energy efficient building codes
Minimum standards for new construction will help protect consumers and businesses from excessive energy bills in the future.
SUCCESSFUL DEMAND REDUCTION PROGRAMS
Whole house: replacing incandescent lightbulbs with recyclable CFLs, providing home energy calculators, installing programmable thermostats, facilitating energy audits and weatherization.
Working with customers: New utility bill formats that emphasize conservation and savings, allowing energy conservation costs to be placed on consumer bill and paid off over time.
Interruptible service for commercial and farm customers - ie, for irrigation, or cyclable air-conditioning that keeps buildings cool but reduces use during certain peak hours.
Real-time pricing means that residential customers, as well as commercial and industrial customers, can see when energy prices are high or low. This allows them to consume electricity during low price times of the day, and keep their bills down.
Consumer education is the key to success for all programs.
HELPFUL TERMINOLOGY
Peak load – The highest point of demand on the grid. Usually occurs during summer months.
Demand response – The grid’s ability to respond to demand safely and reliably.
Demand Side Management (DSM) – Managing consumer demand to reduce peak load and load growth.
Supply Side Management – When utilities update their generation infrastructure (turbines, pipes and cooling systems, transmission, distribution, etc.) for more efficient electricity production.
Smart meters – Advanced Metering Infrastructure (AMI) – Regular meters with various computer components added that provide two way communications between ratepayer and utility. Tool for managing demand response and reducing consumption during peak hours.
Smart grid – Smart meters are the backbone of a smart grid – an electrical grid that depends on two-way communication to manage load and demand more safely, reliably, and efficiently.
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