A Zondits Interview: The Role of Energy Efficiency at Silicon Valley Power

Valerie Eacret, ERS, for Zondits

Zondits spoke with Mary Medeiros McEnroe, Silicon Valley Power’s (SVP’s) Public Benefits Program Manager, about what role energy efficiency plays in SVP’s operations. Mary has been in this role for 9 years and had been with the utility for almost 22 years. As Public Benefits Program Manager, she is responsible for the program design and management of all of the energy efficiency, renewable energy, low income, and research and development (R&D) programs for SVP, as well as the customer outreach for these programs. She is also responsible for overseeing the annual evaluation, measurement & verification (EM&V) of the energy efficiency programs and state-mandated energy efficiency reporting. SVP is one of over 30 public utilities in California, where most of the state is served by much larger, investor-owned utilities.
What is the goal of SVP’s energy efficiency programs?
SVP’s energy efficiency programs were first developed in response to California Assembly Bill 1890, which mandated the addition of a Public Goods or Public Benefits charge on all electric utility bills to fund programs in the areas of energy efficiency, renewable energy, low income, and R&D. In the early stages, programs were designed based on feedback from customers and our goal was simply to help the customers improve the efficiency of their homes or businesses and utilize the funds we were collecting under this charge. As time went on, the State mandated that each utility perform a potential study and adopt energy efficiency goals to help achieve its overall target of reducing energy consumption and avoiding building new power plants. SVP adopts ten-year targets based on the market potential determined in the potential study, and the goals are updated through a new study every 4 years.
In addition to these targets, SVP’s goal is to work with customers to achieve actual energy savings on their utility bills. Some of the educational outreach we do, especially on the residential side, recommends behavior modifications. We do not “claim” energy savings from these efforts, but we can have an impact on our customers’ utility bills. This is especially true for programs serving our low-income communities. Some of the energy efficiency measures we have provided achieve almost no claimable energy savings because we do not claim savings below energy code, but they can have a large impact on the customer’s bill.
What are the different public benefits SVP provides to customers, and how do you prioritize them?
Under the Public Benefits Program funds, we provide programs for customers in the areas of energy efficiency, renewable energy, low income, and R&D. When the Public Benefits Charge was initially implemented, City Council mandated that the funds would be spent in the customer class in which they are collected. This means that residential funds are allocated to residential programs and non-residential funds are allocated to our commercial and industrial customer programs. The largest portion of the funds goes to energy efficiency programs, although a significant portion also went to solar rebates over the past 10 years, due to state legislation mandating the offering of rebates for PV systems. We budget for customer-installed R&D projects each year and have invested in some research studies, as well as membership in organizations such as the California Lighting Technology Center, the Super-Efficient Dryer Initiative, and the American Public Power Association’s Demonstration of Energy & Efficiency Developments Program. However, we do not see as many R&D projects from customers as we would like, and we are always looking for ways to engage customers in adopting new technologies. The smallest portion of our budget is for low-income programs, as this is a small portion of our population and residential energy sales amount to only 7.5% of SVP’s total electric sales.
Under our programs, we offer incentives for installing energy efficient equipment and provide free energy audits for interested customers. We also provide a variety of educational materials and have sponsored trainings, such as the Building Operator Certification Training, for our customers. We offer rebates for the installation of PV systems as well. For customers who are not able to install PV on their home, apartment, or business but still want to support renewable energy, we offer the Santa Clara Green Power program. This program is over 10 years old and allows customers to purchase 100% of their energy from renewable sources.
For our low-income customers, we provide a 25% discount off the electric portion of their utility bill. We have also offered direct install programs to provide free efficiency upgrades, such as attic and wall insulation, new appliances, and energy efficient lighting, among others.
What considerations does SVP take into account when creating an energy efficiency program?
When considering creating an energy efficiency program, we take into account our customer base and how much market potential we believe there to be for the program. We try to offer programs that would be relevant to all customer segments and also provide programs that target specific, hard-to-reach market segments, or segments with significant energy savings opportunities. We design our programs to bring customer energy efficiency beyond the California energy code, and we try to include new technologies when they are viable. We also work toward market transformation. For instance, with our residential LED rebate program, we now only provide incentives for specialty bulbs or those over 1,000 lumens because those bulbs are still hard to find on store shelves and costs are high. If we (in conjunction with other utilities) can buy down the price and more bulbs are sold, eventually the costs will come down. We do the same with most of our commercial lighting programs, where we require a CRI of at least 85 for most lighting types. We are trying to transform the market to offer better-quality light to customers.
We typically set incentive levels to cover the incremental cost of the energy savings, but we also try to align them with our surrounding Investor Owned Utility programs to avoid confusion on the part of local contractors. We look at the amount of energy savings we can claim for our state-mandated energy efficiency reporting, as well as the cost-effectiveness of a program. However, we have learned over the years that residential energy efficiency programs aren’t cost-effective, and so we have to look at the overall program portfolio and not just a single program. Finally, if we find that the majority of customers will install a measure without incentives from the utilities, we remove these programs from our portfolio due to the high level of free ridership.
As a public utility, what does SVP provide its customers that it a private utility could not?
I think the biggest difference is that our local governing body (in our case it’s the City Council) has the authority to approve the programs that we offer, and the money we collect is kept locally and spent on programs for our customers. We still need to comply with rules and regulations set by the California Energy Commission, but we have more flexibility in ensuring the programs are specific to the market potential in our community and that they target the types of businesses we have here. For example, we have a significant number of data centers, so we can focus more effort and funding in this area due to the significant energy efficiency potential.
Do you do any studies related to energy efficiency?
As a small municipal electric utility, we do not have the research and development staff to do many studies regarding energy efficiency, but we have partnered with others for several studies. In 2014 SVP received a grant from the American Public Power Association’s (APPA’s) Demonstration of Energy & Efficiency Developments (DEED) Program to fund an intern to conduct a study on tier II advanced power strips (APSs). At the time, they were relatively new to the market and the only energy savings claims were from a study that the manufacturer, Embertec, had performed in Australia. To consider the Tier II APS for our programs we needed independent verification of the energy savings, and we also wanted customer feedback on the product to ensure their satisfaction and that the savings would be persistent. We brought on an intern to perform the study and worked with Embertec to utilize their Savings Verification System, which simulated energy savings based on the usage habits in the household and interaction with the TV remote control. Embertec then donated devices to our participating customers so that we were able to get customer feedback about the devices. ERS engineer Mathew Gard assisted the intern with data validation from the Savings Verification System. At the end of the study we determined an energy savings number significantly less than what Embertec reported from its Australia study, but the baseline usage was also significantly less. We both ended up with approximately 50% savings over baseline.
We’ve also partnered with the Pacific Northwest National Laboratory (PNNL) on several studies, each partially funded through the APPA DEED Grant Program and through SVP’s R&D funds. Our first project was a study called The Potential Effects of Increasing Use of Solid State Lighting with Lighting Controls. This was not focused on energy efficiency but on the impacts that dimmable solid state lighting may have on the electric grid. Because we were beginning to heavily push LEDs through our programs and information was being presented at conferences about potential impacts, we wanted to address this. The study resulted in findings that the impacts were less than those of incandescent lamps.
Our second project with PNNL is underway and will be a Field Demonstration and Performance Validation of a CO₂ Heat Pump Water Heater/Space Heater Combination System. The measurements will begin this winter. This project is also partially funded through the APPA DEED Grant program.
We also recently were awarded two additional APPA DEED grants to partially fund two more research projects. The first will build on work that PNNL did for Bonneville Power Administration in determining energy savings for new high efficient residential window coverings. Our study will focus on Calibrated Modeling of Energy Savings of New High-Efficient Residential Window Coverings, which will model the energy savings for the various climate zones to see if these new window coverings can be added to energy efficiency programs here in California.
The second grant that was recently awarded is for work with the University of Washington on Energy Efficient Air Management in Small Data Centers through the Use of Liquid Cooling in Servers. I can’t say much about this project yet, as they are working on a new technology that is patent-pending, but since we have so many data centers here in Santa Clara, they approached us and we were interested in working with them.
Where does the funding come from for efficiency programs? Is all of this money spent every year on the programs?
As a part of California Assembly Bill 1890, all electric utilities in California were required to add a “public goods” or “public benefits” charge to their customers’ electric bills, which was a minimum of 2.85% of electric charges. These funds were to be spent in four categories: energy efficiency, renewable energy, low income, and research and development. Energy efficiency has historically made up the largest portion of the Public Benefits Program budget for SVP.
The goal is to spend all budgeted money each program year, but true spending depends on the number of customers who take advantage of our energy efficiency programs. We also have several performance incentive programs, such as our Controls Program and our Data Center Efficiency Program, where incentives are paid for actual energy savings performance over multiple years. Because of this, we need to accrue those funds in an account set aside to pay those incentive commitments as the savings are achieved. The same is true for our Performance Based Incentive for photovoltaic projects over 50 kW on commercial facilities. Those payments are made over 5 years. If there are unspent funds not allocated to future performance payments, those can be used for other energy efficiency projects, such as the retrofit of street lighting in the city to LEDs. Projects like this benefit all of the residents and businesses in our community.
What do you think the future of energy efficiency might look like (types of programs, other avenues for achieving savings, etc.)?
In California, the energy efficiency codes and standards have been getting significantly stricter, leaving utilities with increasingly less that can be “claimed” in regards to energy savings toward meeting energy efficiency goals. In addition, many of us have already captured the majority of the low-hanging fruit and we need to look deeper, but these areas are often more expensive. In the residential and small business sectors, I think behavior change programs will continue to achieve energy savings, but I don’t think home energy report programs are going to do that for us. Many customers don’t open the reports, and the tips provided aren’t always relevant or provide enough information to really change a customer’s behavior.
We need to find a better way to educate customers, and we need to start early. Educating children is one way to do this. They bring what they learn home from school and teach their parents. Parents supportive of this take action and we see energy savings achieved. These children also become future employees and business owners or managers. The habits they learn early and the values they hold regarding energy efficiency will carry through into their adult lives and careers.
Investing in our business customers to educate them is also important. We’ve invested in providing Building Operator Certification training for some of our commercial and industrial customers, which makes them better facility operators, teaches them about efficient operations and maintenance, and provides an added benefit of improving their skills for their own personal career development. It’s a great partnership. We’re also now working with the Food Service Technology Center to offer online training to some of our food service customers to educate them on efficient operation of their facilities. We hope that, as a result, when it is time to replace their equipment they will choose an energy-efficient option based on what they learn in this training. The modules do a great job of selling efficient equipment not on energy savings alone, but also on the many non-energy benefits important to food service customers.
Looking to the future, we see programs that take a whole-building approach over the long term, rather than a widget-based approach. We are looking at a Strategic Energy Management (SEM) program for our larger customers. There are some challenges with these programs, and we need to obtain the right level of management support and involvement at the company for them to be successful, as these programs span multiple years and will require an investment of time and money. They aren’t sold on a simple payback like most energy efficiency upgrades. However, we see significant future opportunities for energy savings, as well as improving our partnership with our customers through the ongoing involvement in a SEM program.
Finally, we need to continue to look toward new technologies. We need to support R&D efforts through funding studies or hosting trials, and we need to provide incentives for new technologies as they reach the market. Having utilities support R&D efforts, even if they are not guaranteed to be successful, is important in bringing new technologies to our programs and to our customers.