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Best Practices of Efficiency

Ben Gilbert
Con.Web, June 26, 2003

Best Efficiency Programs Share Common Traits, Abound in Northwest,
ACEEE Report Finds

There may be no single best way to achieve energy savings, but the best efficiency programs share common traits, according to a recent report by the American Council for an Energy-Efficient Economy.

Ingredients for success include focusing on specific residential technologies, changing commercial and industrial practices, comprehensive approaches, partnerships, customized services and establishing value beyond energy efficiency, according to America’s Best: Profiles of America’s Leading Energy Efficiency Programs."

This April report covers 63 initiatives, nine of which hail from the Northwest.

A particularly large proportion of the programs in the running came from three regions--the Northwest, the Northeast and California, with strong showing from the Midwest and Texas. ACEEE attributes this dispersion to the presence of established market transformation organizations--such as the Northwest Energy Efficiency Alliance and the Northeast Energy Efficiency Partnership--and extensive utility and public programs in California supported by public-purposes funding.

These results mirror another ACEEE study, released in February, showing that public spending on energy efficiency programs is highest, relative to the size of the regional market, in Northeast, Northwest and Midwest states, with strong showing from California and Florida.

"America’s Best" found that while the market transformation model of promoting energy efficiency has grown and found success, financial incentives and resource acquisition programs remain important.

Resource Acquisition, Market Transformation Resource acquisition programs were especially effective in cutting demand during power shortages in the summer of 2001 in California and the Northeast, the report said, and financial incentives remain an important marketing tool for a variety of programs. Increasingly, though, efficiency programs are awarding incentives to market participants such as retailers or homebuilders rather than customers.

Market transformation programs, meanwhile, are incorporating incentive and resource acquisition techniques, and finding increasing success boosting market share for specific targets like new homes or efficient appliances. The Alliance’s Energy Star Residential Windows programs, for instance, was recognized for increasing the market penetration of Energy Star windows from 12 percent in 1998 to 75 percent in mid-2002 by building product image and brand association.

While the best residential market transformation programs focus on specific technologies, the best commercial and industrial programs aim to change practices, like building operations, maintenance and design, production processes and compressed air management. Portland General Electric’s existing building commissioning program, for example, received an honorable mention for a process to systematically identify and resolve building performance problems. PGE covers the cost of commissioning consultants to evaluate a building’s efficiency gaps and recommend strategies with paybacks of less than two years.

This program is being phased out, however. The investor-owned utility stopped accepting projects at the end of January, at which point it had signed up nearly 50 new projects PGE will have to complete by the end of 2004. At a cost of less than $300 per kilowatt of reduced average energy consumption, senior project engineer Janice Peterson told Con.WEB this was a very cost-effective efficiency program.

The Energy Trust of Oregon, which now operates efficiency programs in PGE territory with the state’s public-purposes funding, plans to include commissioning in its program for new commercial buildings, under which field projects are expected to begin in August. In late fall, the Energy Trust plans to implement a building operations and re-commissioning program for retrofits on existing buildings.

Comprehensiveness, Partnerships, Program Adminstration, Value Comprehensive programs--examining entire buildings, processes or systems with technologies that function together--were among the most successful, yielding synergies of energy savings at lower relative cost, ACEEE reported. This approach has long been recognized for commercial and industrial ventures, but more progress was seen in residential, commercial new construction, agricultural and small commercial programs. As a caveat, a few of the most successful programs targeted individual technologies, such as residential lighting or commercial HVAC, but used comprehensive, integrated marketing strategies.

One increasing trend is the formation of non-utility entities, such as the Energy Trust, to manage efficiency programs, the report found, although utilities remain the major administrator of energy efficiency services. Some of the best programs relied on partnerships between utilities and different organizations with common interests in the same market results, such as increased residential lighting sales or building operator training, according to the report.

Some argue there is an inherent conflict of interest for utilities administering conservation funds, when they profit from energy sales. Utilities often retort that their familiarity with their own system allows them to most effectively target efficiency programs.

This depends on the particular utility and regulatory climate, report co-author Martin Kushler told Con.WEB. Extensive research and multiple ACEEE studies have shown there is no universal best mechanism to administer energy efficiency programs. When utilities want that role and operate in states with sufficient regulatory oversight and/or incentives, it works well. In other states an independent party functions better.

Many of the best programs also showed a commitment to customized services, with targeted marketing and well-trained technical and support service staff to follow up with customers.

By the same token, offering value beyond energy efficiency has proven effective. Strategies providing comfort, increased home value, convenience, superior product performance and cost savings made strides in the residential market, according to ACEEE. Projects improving productivity, operations and maintenance processes, reliability, aesthetics and comfort created extra value in the commercial and industrial sectors.

Finally, the Energy Star program played a prominent role in most of the nominated programs because of its well-established standards and widely recognized brand name.

Recognition, Reproducibility The ACEEE report sought to recognize excellent programs, and to identify and publish recurrent elements of successful programs to make them easily reproducible (the report includes Web links to programs).

ACEEE sought nominations from regulators, utilities, program administrators, state organizations, industry professionals and national experts, and judged them on six factors: direct energy savings; market-transforming effects; evaluation methodology; qualitative aspects such as implementation and participant satisfaction; innovation; and replicability.

Other Northwest programs receiving honorable or exemplary mentions: the Alliance’s Energy Star Residential Lighting and Energy Star Home Products programs; the Energy Trust’s manufactured home duct-sealing and green light-emitting diode (LED) traffic light replacement programs; Avista Utilities’ rooftop HVAC maintenance program; Seattle City Light’s comprehensive energy efficiency program; and Building Operator Certification programs offered by the Alliance and the Northwest Energy Efficiency Council.

After a steep decline in energy efficiency spending from the 1993 high of $1.6 billion to a low of $900 million in 1997, state and utility funding has rebounded somewhat, reaching $1.1 billion in 2000 and $1.45 billion this year, according to recently available data from separate ACEEE studies. But ACEEE continues to call for a greater energy efficiency commitment from the federal government.

More Information:
"America’s Best: Profiles of America’s Leading Energy Efficiency Programs"(includes links to profiled programs)

Ben Gilbert
Best Practices of Efficiency
Con.Web - June 26, 2003

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