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America's Public Power Utilities-Maximizing Efficiency

Public Power: Good for the Bottom Line

Steve Stackhouse-Kaelble (Dec/Jan 09)
(page 2 of 3)
It Starts with Lower Rates
As the name implies, public power utilities are owned by the public, the communities they serve. They're a part of municipal government, operated locally by local officials who answer to the public. They exist for one reason, and it's not to make money - it's to serve customers, provide for the needs of the community, and help the local economy thrive.

 Little surprise, then, that public power rates tend to be low. According to the most recent statistics from the American Public Power Association (APPA), residential customers of public power utilities pay an average of 9.2 cents per kilowatt-hour. Those writing checks to investor-owned utilities pay an average of 10.5 cents per kilowatt-hour. Commercial rates are lower as well, 8.5 cents versus 9.3 cents.

Public power utilities also support the mission of local governments, and they frequently do so with in-lieu-of-tax payments. In fact, those payments average 15 percent more than the state and local taxes that private power companies pay. That support helps keep taxes as low as possible in public power communities.

Uncovering Efficiencies
They may sell power, but America's public power utilities go to a lot of trouble helping their customers buy less of it. "One of the most important ways we can help customers keep their utility bills down is with aggressive energy efficiency and conservation programs," says Jake Oelke, assistant vice president of energy services for WPPI Energy in Wisconsin.

Mills offers an example from Springfield. He says City Water, Light & Power's (CWLP) commercial technical assistance program offers walkthrough reviews of buildings, combined with studies of a facility's electrical usage data and interviews with the facility manager regarding building operation practices. Services might also include metering of appliances and consultations with the facility manager recommending changes in appliance and building operations.

For especially complex operations, services may include an engineering review of major systems, including load analysis for individual, high-energy circuits. CWLP will typically deliver a written report recommending energy-efficiency options and the projected paybacks. Lighting audits are another way businesses of all sizes can cut energy costs, with the help of utilities such as CWLP.

Danville Utilities connects business customers with a Best Practices program that pulls in expertise from North Carolina State University. "They bring a professor as well as a team of graduate engineering students and run a free energy assessment of the facility," says Martin. The result is a 50- to 100-page report full of recommendations and return-on-investment projections. "It's very useful to industries." Industrial and commercial customers most often will adopt recommendations that promise to pay for themselves through savings in two years or less. Some recommendations, he says, have payback estimates as short as a month, and many ideas will save more than they cost within six months.

Existing facilities offer all kinds of opportunities for energy-efficiency upgrades, but the most ideal situation is to have a facility designed to maximize efficiencies from the start. The New Construction Design Assistance Program from WPPI Energy has that in mind.

"Some of the best opportunities for energy efficiency and other high-performance strategies exist during the design of a new building," says Oelke. "Typically, energy cost savings of up to 40 percent can be achieved with minimal incremental investment. Our program works with design teams to identify these opportunities." The program provides financial incentives for boosting energy efficiency, improving systems performance, and reducing peak loads. Its incentives can trim costs from the construction project and ultimately reduce operating costs for the long haul.

WPPI Energy has a long list of other programs and services for helping businesses customers minimize energy use and maximize profits. Examples include backup generation service, cogeneration evaluation service, efficiency improvement incentives, energy management services, interruptible load credits, market-based pricing and other initiatives.

Technical assistance may begin with energy-related issues, but it doesn't always stop there. Martin says his Virginia utility connects industrial users with manufacturing extension partnership services that help improve the efficiency and profitability of operations. "They focus more in-depth on lean, Six Sigma, and the manufacturing processes," Martin says. One local manufacturer had such good results that its parent company has sent representatives in from other locations to have a look at the new practices.

Letting the world know about best practices is the goal of Silicon Valley Power's Energy Innovator Awards, which single out businesses that have found creative ways to conserve. Five businesses were honored last summer for ideas that collectively saved 500,000 kilowatt-hours of power and prevented the release of more than 6,700 tons of carbon dioxide into the atmosphere.

Santa Clara University, for example, built a 338-panel solar energy system. Echelon Corp. replaced old fluorescent fixtures and antiquated plant heating equipment. Sierra Meat Co. boosted its bottom line with state-of-the-art refrigeration controls and monitoring systems that cut energy costs by $15,000. PDM Steel Services Center is now saving about 90,000 kilowatt-hours a year with better lighting equipment. And Applied Materials was honored for its purchase of green power, which has prevented the annual release of nearly 3,300 tons of carbon dioxide.

The future is filled with innovative ideas for saving energy and boosting profits, and public power utilities are preparing to bring them to customers. Already, many customers are offered rate credits in exchange for giving their utilities the ability to remotely control certain power-hogging equipment such as air-conditioning compressors. The idea is that during peak load times, the power company switches off the outside unit for short periods of time, long enough to collectively make a difference in the overall system load, but short enough that the customer doesn't even notice the difference.

It's the beginning of what is sometimes called the "smart grid," a sophisticated network of controls through which utilities will assert more control over their peak loads - thus improving system reliability and reducing the need to add costly new generation capacity. One recent Seattle-area test had a small group of subjects try out appliances, such as water heaters and clothes dryers, that could automatically change their settings in response to signals sent over the power grid by the utility. For example, the smart grid would intermittently power down the heat in electric dryers at times when the overall power grid was experiencing peak use. The end result: Customers saved as much as 10 percent without much noticeable impact, while strain on the power grid was eased.
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