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2013 Midwest Energy Solutions Conference Recap: Wednesday, Jan 16th

PLENARY SESSION: Are Energy Efficiency Goals Achievable?

Utilities have so far been able to mostly hit the energy efficiency standards mandated by dozens of states. But some experts worry they’ve done it by picking the “low-hanging fruit,” and the next few years might get more difficult. The conference’s plenary session brought together several experts and utility officials who were by turns both pessimistic and optimistic.

Tim Duff of the Charlotte, N.C.-based utility Duke Energy wondered whether it is time to soften efficiency mandates in favor of something more flexible. In Ohio, one of the six states where Duke operates, the utility has far surpassed the energy savings called for since the program began in 2009 but it’s gotten “extra daunting very quickly.” After saving 85 million KwH in the first year, they managed to boost savings to 310 million in 2010. But that huge jump was due to a successful CFL program and in the past two years the savings have shrunk below 300 million KwH.

And Duff worries that as mandates get stricter in the coming years, they won’t take into account important changes in the economy such as the collapse of natural gas prices which makes customers less likely to participate in efficiency programs. Therefore, just as utilities try to lure customers into efficiency programs with incentives, states could perhaps replace mandates with incentives for utilities like Duke that remain committed to energy efficiency.

Patrick Michalkiewicz, the manager of energy efficiency at Illinois-based Peoples Gas & North Shore Gas echoed Duff’s concerns. “I’m not sure we can make it,” he said of his state’s increasingly strict efficiency mandates. As in many states, budgets remain tight, and for the next few years efficiency programs will have to hit higher targets without more funding.

Other challenges loom. The fragile economy has caused many customers to regard energy efficiency with skepticism. “They just don’t have the capital for [efficiency] improvements.” Furthermore, many of the local governments and nonprofits that do pursue efficiency sometimes do it on their own, making it very difficult for utilities to properly lay claim to all of the savings occurring throughout their energy grid. Fortunately, his utility has begun to reach out to such groups so that instead of competing with one another, they cooperate to find out where energy gets wasted. “They’re more than willing to come to the table.”      

“I see [these challenges] as a very positive thing because it will make us better,” said Janine Migden-Ostrander, the principal of the Vermont-based Regulatory Assistance Project. She began making the case for optimism by pointing out that most utilities have hit and even surpassed their efficiency goals in the past few years. And the fears about the lack of any more “low-hanging fruit” might prove unfounded. “What we consider the most efficient [technology] today might not be the most efficient a few years from now.” Essentially, technological advances might create new low-hanging fruit. For example, the transition from CFLs may net utilities even greater savings than anticipated as LED technology continues to improve. And most importantly, she added, all types of energy consumers will increase their use of renewable energy, and since energy efficiency remains far cheaper than any other option including wind and solar energy, the case for efficiency, and hitting those targets, remains powerful. “We can do it and we should do it.”

Michalkiewicz said it’s possible that states may eventually need to lower the higher targets set to hit in the future. Still, that would take new legislation, a slow and uncertain process. He also considers simply lowering the existing goals “the easy solution” and “that just doesn’t sit well with me. We’re only in our second year. We’re going to have to face the music before that ever happens.” Likewise, Duff said “any change in the legislation should be the last alternative.”

 

AFTERNOON SESSIONS: Where is the Next CFL of Electric Programs?

The afternoon sessions continued the conversation about how, and with what technology, the industry might continue to hit future energy efficiency goals. Liesal Whitney-Schulte from the Wisconsin-based Franklin Energy Services believes LED lighting can provide the needed boost, and industry stakeholders can learn how to ease consumers’ transition to the new technology by examining the mistakes made during the introduction of CFLs.

CFLs have been put on a pedestal, she said, because they can burn 75% less energy, last up to 12,000 hours and yet remain convenient and easy to obtain. “You can get them at the grocery store; you can get them at the dollar store.” But even though they eventually caused a sea change in behavior by getting millions to stop using the formally-ubiquitous incandescent bulb, CFLs initially turned off many customers. “They didn’t come without issues,” Whitney-Schulte said. Introduced in 1979, in 1992 a CFL bulb could still cost $20, and dull, uninformative packaging led many buyers to install them incorrectly. In the past decade, however, the prices dropped, and suppliers learned to use attractive packaging which provides clear information in colorful graphics. “They’ve really become much more educational,” and there’s no reason suppliers should not use the same strategies with LEDs, ensuring they meet with quicker acceptance.

“Consumers are much happier with the way [CFLs] perform,” and they will continue to purchase them in large numbers, but LEDs have several advantages. In addition to matching CFLs in ease of use and light output, LEDs last much longer and have better color quality. Perhaps most importantly, however, experts say LEDs will greatly improve in the next few years and CFLs will remain largely static. In 2010, for example, LEDs typically provided 37 lumens per watt, and will triple that output by 2015. As industry stakeholders look for the next big thing, “LED is starting to look like a no-brainer.”