Participants in the morning’s Executive Panel agreed that gaining acceptance for EE programs and ideas faces formidable challenges, North Dakota Public Service Commissioner Tony Clark, currently serving a one-year term as president of the National Association of Regulatory Utility Commissioners, points out that most utilities, whether they deal in water, natural gas or electricity, will have rising cost structures over the next few years. “It seems like all the big utilities are hitting their big investment needs at the same time,” he said.
A few high-profile accidents has increased public concern over things like pipeline safety while simultaneously, electricity providers need to spend hundreds of billions in needed infrastructure improvements to the grid. In addition, roughly $300-$500 billion will eventually be needed to design and build a smart grid. “You add all this up and it gets to be a staggering number,” Clark said.
Although Clark has no doubt that a focus on EE can lower overall costs in the long run, he’s worried that as they confront the variety and scale of future infrastructure demands state commissioners will lose sight of valuable programs that promote efficiency.
What commissioners will look for in the next few years is “a very rigorous cost/benefit analysis” whenever EE proposals arise, and said all interest groups “need to focus on the hard science.” Furthermore, the earlier interest groups can develop consensus the better, he added. Most commissioners have only been in office for a few years and will just get confused if confronted with a bunch of pet projects or strategies.
Officials who head state energy departments will likewise look for harder data than they have in the past. Interest in EE is growing and grants will get more competitive, said Amy Butler, a former top adviser to the National Association of State Energy Officials. And even though the federal Recovery Act is sputtering out, the host of projects it funded will generate a lot of information on what does and does not work. An organization like MEEA is well-positioned to act as an information clearinghouse by analyzing the data and disseminating the results to all the regional players, she added. “We need to share with one another and go after these opportunities.”
But most importantly, Butler said interested groups need to remember that state officials face tight budgets and skeptical legislators. They will have limited funds and are more likely to favor projects that provide consumer benefits long after the government grant has run out. “How have you leveraged private investment?” will be one of the most asked questions.
Private companies are also learning about the need for better analytics. “You can lure yourself to sleep [just passing out] CFLs” to customers, said Trevor Lauer, vice president of marketing for DTE Energy, a Detroit-based diversified energy company. DTE has learned how to better administer pilot programs that attempt to get customers into the habit of using more efficient products. Consumers can be segmented into types of users, such as independent adopters, showing not just the overall use, but what type of customer has started using a particular product and where there are holes in participation. “I want every independent program broken down” and understood, he said.
Promoters of energy-efficient products will need to create financial incentives to move people in that direction, said Barry Young, the commercial utility program coordinator for MaxLite, a New Jersey based global manufacturer and marketer of energy efficient lighting. Offering simple rebates won’t change anything, he said, since customers and contractors will just accept the price cut and not learn anything. Incentives, however, will make efficient use part of their thought process. Young hopes a tipping point is reached and customer demand will have more companies elbowing into the market. “I hate being the only guy showing good LEDs to contractors,” he said. If they saw five guys, “they’d know and appreciate the value I’m bringing to them.”
Many of the afternoon discussions also focused on the need to bring a new level of rigor to any analysis of energy efficiency programs. For example, even though MEEA wants to update its Best Practice/Policy Statements, there is currently no robust, consistent methodology accepted across the region on how to measure energy reduction that comes from EE policies or products. Issac Elnecav, a senior policy manager with MEEA, pointed out that such a thing has already been done in California, and it’s time to get a similar framework for the Midwest. However, it won’t be easy, since California “spent a lot of time and money developing a baseline” and has been working at this since the 1970’s.
The codes and standards used by California are generally a lot more stringent than used elsewhere, and this means the measurements they devised have only a limited applicability to what needs to be done in our region, Elnecav added. “I want to emphasize that this is the beginning of the conversation.”
Stacey Paradis, the deputy executive director, said devising a set of Best Practice/Policy Statements is also long-term project and members will be consulted throughout the year. She said the organization’s Policy Committee, which currently has 12 members, may expand as all of these things get debated. It’s also possible that MEEA will set a webinar to help communicate what’s discussed. “I expect this will go back and forth for a while. We want to make sure we fully represent our membership.”