Smart Energy Use

Not your father's energy efficiency: Utility programs adapt to the modern customer

It has been more than 40 years since a solemn President Jimmy Carter warned Americans that we were facing a new energy dilemma: a supply that was limited and a “shortage that is permanent.” 

Whether or not Carter’s televised address was politically wise or scientifically accurate has been widely debated, but it did display the thinking at the time that gave birth to an idea that has been with us since: energy efficiency.

Initially, in the late 1970s, “energy efficiency” meant more attention to measures familiar to any thrifty business or homeowner, such as turning off lights or turning down thermostats. But it grew to be a popular mantra and became a big part of a concerted effort in the public and among electric utilities to conserve energy, trim costs, and reduce emissions.

Energy efficiency led utilities to incentivize efficient light bulbs and appliances and remotely regulate heating and air conditioning during peaks. Now we’re in a new era with high-tech systems to coordinate multiple devices, appliances, and equipment — even window coverings — and cut a home’s energy use with a few taps on a cellphone.

“Fundamental end uses now don’t really change too much — things like the building envelope, lighting, and heating or air conditioning equipment. There are improvements, but they are incremental,” said John Phelan, energy services manager at Fort Collins Utilities, a public power utility serving about 70,500 customers in Colorado. “Where we see significant change is in how we deliver programs. Our role is shifting to delivering a package of equipment and services that provide efficiencies and make it very easy for customers to say yes.”

Fort Collins has offered customers an array of more traditional products and services to help meet the city’s aggressive energy and water conservation goals, including financing for upgrades, audits, and rebates on everything from insulation and smart thermostats to LED bulbs.

In 2017, Fort Collins Utilities received the American Public Power Association’s Energy Innovator Award for its Efficiency Works program, which tested a new model for comprehensive home performance contracting that reached more customers and was easier for customers to participate in.

Now, the utility is moving on to finding new ways to help businesses and customers cut use during coincident peak periods. One way is using a new application that lets the user configure a customized system for automating energy use adjustments to save money and energy.

Sue Coakley, executive director of the Northeast Energy Efficiency Partnership, one of six regional efficiency organizations supported by the federal government, has traced the history of efficiency measures and said efforts like Fort Collins’ are part of a new crop of “intelligent efficiencies” that “broaden and deepen the reach and impact of efficiency programs.”

Home energy management systems, building controls, and software as a solution (SaaS) systems now harness the power of machine learning, data analytics, social networking, and cloud computing to provide customer-specific dashboards of actionable information,” she said. “This has spawned a new generation of behavioral programs designed to increase efficiency and reduce peak demand through customer-managed energy use.”

Encouraging incremental change

Randy Corbin, assistant vice president for energy policy and sustainability at American Municipal Power, a joint action agency that supplies electricity and services to more than 130 public power utilities in nine states, argues that while dramatic technological advances are important, incremental change is necessary and can create surprising results.

AMP offers its members a comprehensive Efficiency Smart package of services (or a la carte choices) that it guarantees will deliver specific levels of efficiencies. In 2017, the program resulted in 17,129 residential and 182 business upgrades and 15,503 megawatt-hours of savings by member customers. The program is offered through a contract with the Vermont Energy Investment Corporation.

One of the most successful programs provides LED bulbs at a discounted price through local retailers. Some 14,500 customers purchased more than 58,000 LED bulbs in 2017, up 5,000 from 2016. Corbin says its program offers rebates for energy-efficient residential and business equipment and products and free removal of old and inefficient refrigerators and freezers. The program also offers technical assistance, account management services, and customized financial incentives for large business customers.

Corbin notes that while AMP is always looking for significant technological developments, major reductions in load can often be obtained with advances in existing equipment, such as heat pumps that now can function at significantly lower temperatures than the previous standard, when they were ineffective below 30 degrees, and light bulbs, which became dramatically more efficient with the introduction of compact fluorescent bulbs and, later, LEDs.

“Some of these products or services aren’t as sexy as other things that we hear about, but they are often where we can get the biggest efficiencies,” Corbin said. “Staying current with information about the best, most efficient products that businesses and homeowners use each day is critical.”

AMP promotes the Efficiency Smart program as an economic development tool, Corbin said, because there is strong evidence that savings for its members’ commercial and industrial accounts will attract new businesses and help existing ones thrive.

“The potential for economic development is a key element that energy efficiency programs don’t give enough attention to,” he said.

As part of this revised focus, AMP recently upgraded its website, helped members develop new ways to get the message out about the program, and, after careful review, moved to emphasize demand reduction rather than energy savings. It is changing its business rebates to make them easier for small businesses to use and providing services to low-income residents and others in need.

Convenience over cost

At Shakopee Public Utilities Commission in Minnesota, officials also wanted to make changes and add new technology, but they wanted to test carefully first. The utility already had a comprehensive energy efficiency effort, including rebates on nearly a dozen products, and a home energy report service that allowed customers to compare their use with that of about 100 nearby homes, eventually resulting in significant customer efficiency measures.

John Crooks, utilities manager at Shakopee, said that the utility was interested in a carefully studied approach to smart homes.

“We wanted to give residential customers the opportunity to have control over the electricity they use in their homes with new technologies — beyond an on-off switch. We wanted to see if such a program would provide energy saving benefits,” he said.

About 125 homeowners agreed to be considered for the project, from which utility experts chose eight customers with various types of homes of different ages and who themselves were different demographically. The customers were equipped with efficient lighting, timed lighting controls, real-time energy monitoring, a “phantom kill switch” near the garage door, remote air conditioning control, and upgrades to their electrical systems — all controllable from a computer, smartphone, or tablet.

Crooks said energy use did not decline dramatically, but the utility did find that customers liked the convenience of the system, and he believes it could be fine-tuned to offer significant savings, particularly in an area where energy costs are higher.

“The fact that participants haven’t requested removal of the equipment demonstrates that for a certain customer base, the devices become a convenience where the energy savings is a secondary concern. It becomes second nature to just hit the button for the phantom kill switch, as opposed to going around the house shutting things off.”

Putting customers in control

Fort Collins Utilities is taking steps to make it easier for its customers to link to and communicate with energy saving devices, through a program initially designed to help commercial customers navigate its coincident peak rate structure.

“We wanted a robust, agile system that could help us handle the crucial peak periods but also branch out and provide customers with other tools,” said Philip Tucker, key accounts representative at Fort Collins Utilities.

The utility started by finding ways to notify city facilities about peak periods, which saved recreation facilities a considerable amount by not using lights and dryers when those higher rates were in effect.

Then, the utility provided users an “if this, then that,” or IFTTT, application in September that allows customers to create custom methods to adjust their usage, typically with a device as simple as a cellphone.

“The channel allows end users to easily create custom conditional programs to automate actions and responses based on utility-defined triggers,” Tucker said. In its limited use so far, it has been very popular.

“I have people stopping by my desk saying, ‘I want that application.’ Once they understand what it is and what it is capable of, they see the advantages and the control that is in their hands,” he added.

In October, the utility also began using time of day pricing with its residential customers, setting different rates for peak periods that vary by season. That will be followed by a residential IFTTT application, which the utility plans to release in November.

In Florida, Gainesville Regional Utilities offers commercial customers insight into what’s using up peak energy. 

“Customers always want to have more data, and as soon as possible,” said Michael McCabe, business efficiency program coordinator at GRU. “We’re able to gather the data from the meter, but we don’t have the ability to put it all together in a user-friendly form. This is where Automated Energy comes in.”

The utility conducts audits for commercial customers and offers a subscription service provided through Automated Energy, which allows customers to see detailed information from the previous day about when their peak demand is set and how much energy they used at different times. McCabe says this has helped some of GRU’s larger customers detect anomalies and identify areas where they can cut back on or shift energy use throughout the day.

“Initially, they just want to see what their profile looks like for an average workday. From there, they are experimenting and tailoring,” he said, noting that most customers see a decline in demand within the first month of using the service. McCabe said that it can also be helpful when a building’s controls are reset — after a storm, for example — to see if the service report shows higher than expected use that customers can adjust before they get the monthly bill.

Estimating costs, anticipating updates

Corbin noted that energy efficiency efforts might seem to be win-win, as they are good for a utility’s image, can save customers money, and help the utility manage peak periods and supply. However, there are challenges, and such efforts require planning and thought.

He said that utilities can easily overlook costs or staffing for the program or handling products in areas other than those they traditionally offer.

At Fort Collins, Pablo Bauleo, chief engineer, said that a number of considerations with technology are often overlooked.

“Standing up one of these systems tends to be more expensive than we expect,” he said, noting that data-handling equipment and trained staff needs are often underestimated.

Bauleo said utilities must consider the fact that technology and players in the tech industry change. For instance, when one Wi-Fi provider updated its routers, it made sure phones and other devices were also upgraded, but neglected thermostats, which required the utility to make hundreds of service calls.

Phelan added that energy-efficient equipment can become outdated quickly. “Look at the thermostat. Previously, the one in most homes could have been there for decades. Now, they may be outdated in three to five years.”

Education is key

Barbara Andrews, public engagement specialist at Fort Collins, said energy efficiency programs have to be sold inside and outside of the utility and not just as an afterthought. She emphasized that education about energy efficiency measures must be aggressive and well-conceived.

Andrews developed an educational process for commercial customers that focused on the people actually operating equipment. They needed the information — either directly or from facility managers trained to provide accurate instruction. Easy-to-read materials about response to peak periods were provided that could be posted near the equipment.

Fort Collins is making information about time-of-day pricing a priority, including a website description that clearly outlines the structure.

Corbin noted that energy efficiency programs also must be examined in the context of customer relations. “[An energy efficiency] program represents a very public-facing, and sometimes a first, direct interaction between your utility and potentially a high number of customers,” he explained. “Delving deeply and directly into this customer service phase of the utility business requires proper diligence but can pay off.”

Phelan noted that Fort Collins collects sophisticated data about customers indicating who might have the most interest in new developments and be the most likely to use them comfortably. In its smart home project, Shakopee used such data when it chose the homes for the project and collected data afterward to see how the systems were used by different demographic groups and in homes of different styles and ages.