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Natural gas utilities tend to howl about making EE goals because it is much more difficult to capture savings for natural gas than it is for electricity.  With one giant exception, lighting, this isn’t really true and I do not agree.  Lighting retrofit/replacement is indeed easy for a number of reasons:

  1. Utility DSM product managers and account managers understand it.
  2. Customers understand it.
  3. Lighting upgrades improve lighting brightness and color rendering.
  4. Some level of investigative analytical study is NOT required.
  5. With the exception of early T8 electronic ballast technologies, maintenance is reduced, at minimum because the customer has new equipment after implementation.
  6. Design services are not needed.
  7. Impacts are relatively easy to quantify.
  8. Evaluation-verified savings generally result in high realization rates.
  9. Everyone else is doing it so why don’t we, from the customer perspective.

Now consider custom efficiency, where huge potential exists; potential that is far greater than lighting in commercial and industrial facilities.  Let’s apply the characteristics above to custom efficiency.

  1. No.
  2. No.
  3. If done right, which is too often not the case, custom measures can improve comfort.
  4. Yes, investigation/analysis is required.
  5. If done right, which is too often not the case.
  6. Yes, design should occur for success.
  7. Not for the typical program implementer.
  8. Not typically.
  9. No.

A few weeks ago the post was It’s Knowledge, Stupid! A GREAT deal of knowledge is required for custom efficiency projects.  This is a ginormous barrier.  Risk aversion is another huge barrier and that’s what I’ll get to in this rant.  Lack of capital is another barrier but probably not in the way you are thinking exactly.

Implementing custom efficiency is a bit like skydiving, which I’ve never done.  The risk-plus-hassle to reward ratio for that doesn’t pass my test.  But anyway, everyone agrees that jumping off a concrete block is less risky than jumping off the back of a pickup truck, right?  (yes – just work with me)  As jumping height increases, risk of injury obviously increases.  Then there is a huge range of heights that are off limits because it’s too high without parachute, but not high enough for parachute deployment and sufficient deceleration prior to getting your feet on the ground.

Customers that implement custom efficiency measures are scared of heights and typically don’t want to pay for an instructor, or a guy to jump in tandem with (which is what I would do), and they don’t want to pay for an extra few minutes and another couple gallons of fuel to fly to a safe altitude over an open field.  The result is a twisted ankle and a bad experience at best, broken bones, death, or possibly worse – completely incapacitated vegetation.  Yes.  This is the range of possibilities for how a custom EE project could turn out.  Many programs lack the airplane to even get off the ground.

Customers think they know what they want at the outset but when the rubber hits the road it’s with the brakes locked or heavily depressed.  Sometimes customers will invest in the energy assessment with their own money, wanting to cut energy costs by 15% or some other aggressive target (more than one can get by janitors being vigilant about turning lights out in unoccupied spaces at cleaning time).  They are presented with the information that gives them just what they asked for:  more than 15% savings from measures with return on investment they require.  Now they are frozen because they actually have something to act on.  They can’t decide what to do next because… I’m not sure.  Fear of the unknown?  Risk aversion?  They agree, we gave them exactly what they wanted.  These people are like taking the ground course for skydiving but can’t get on the plane.  They paid for the class but they are looking at more cost for the flight (design) and then actually doing something (jumping = implementation).  So they strand the funds invested in the energy assessments.

The next type of customer doesn’t want to pay for anything; ANYTHING.  They think since they pay the utility gobs of money, the utility should just invest their own capital to erode the return on the utility’s capital and give them everything, including the cost of implementation.  They agree to have an investigative analysis of their facility to identify and evaluate measures available in their facility.  The study includes the cost to do everything right – design, budget cost estimates from a contractor, and post-implementation functional testing the measures to ensure measure integrity.  Once the study is completed and it’s time for decision making they start recoiling because it isn’t lighting replacement they are used to.  Even though ALL the costs to do it right are rolled into the cost-effective measures, they want to start carving stuff out and chopping the measure list down and neutering the ones they sheepishly move forward with.  We identify 20% energy cost savings with a 2 year payback and they end up retrofitting some lighting and adding a few points to their energy management system for savings of 4% – because they don’t want to pay for a damn thing, even though all the costs to do it right are in the measures that meet their criteria.  These guys get their skydiving ground course paid for by the utility then they ride the plane to the end of the runway takeoff and jump out there and stub their toe – go through the motions and do as little as possible.

These guys who jump out at the end of the runway are the most frustrating.  They have enormous opportunity but don’t want to pay for anything.  They don’t pay for independent design firms to design their systems either.  They have contractors do everything each in their own bubble.  The HVAC vendor is told to provide a rooftop unit for 60,000 square feet of sales floor but this a grocery store.  The vendor looks up 60,000 square feet in their table for, say Syracuse, NY and it says they need 150 tons of cooling and 1.2 million Btu/hour.  Ok.  Give me one of those.  Wait a minute!  You have 80 tons of cold in the store in the form of refrigeration.  What about that?  There is no integration whatsoever in the facility design and as a result this customer type pays way too much initially, they have a system that performs like crap because it’s way oversized, and it’s an energy hog.  Penny “wise” and brick of gold bullion foolish.

Then there is the miracle customer that does things right.  They pay for the study almost entirely out of their pocket because their utility has minimal EE funding.  The report indicates 30% saving potential from measures meeting their financial criteria.  The board, lead by the district administrator discusses how to free up capital to do the project.  They don’t have cash lying around or a huge endowment to tap.  Creatively on one month’s time they carve out the capital they need to do the project and they are ready to go.  The board approves moving forward with the measures, including paying for decent design documents.  Measures are implemented and then tested per the initial study scope and cost.  Wouldn’t you know it – they end up with 40% savings and a 2.7 year payback rather than the study-predicted 3.7 year payback.  Serious, decisive, creative, bold, confident, and fully committed result in huge savings that exceed huge expectations, all in a timeframe of barely 7 months from start of study to final implementation test.  These guys take their skydiving class, fly to 4,000 feet, jump in tandem and have a blast.  Next step: Everest.


A couple weeks ago in It’s Knowledge, Stupid!, I was ripping the EPA a new one for paving over a farm field 20 miles from Kansas City for their new facility, leaving their old one which was in the urban center where they tell us to live and work.  Do as I say but don’t expect us to follow.  I mentioned some ridiculous costly regulations they are in the process of rolling out.  Well Touché.  Such regs would cause Nebraska Public Power District with a million people served a billion dollars, a thousand dollars per head served.  Yeow!  I’ll have to study risk mitigation by the reduced emissions versus cost for a future rant.

Lastly, don’t look now but the goofy right wingers may have a point about the price of CFLs soaring after incandescent lamps are taken off the market.  Wow.  That would cause a massive backlash which would be very damaging to the EE industry.  Be careful what you wish for.

Jeff Ihnen

Author Jeff Ihnen

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