Building on the Momentum

5 min read

a

a

Highly successful Efficiency Smart program aims to achieve even greater energy savings in next phase.

October 2013

AMP’s Efficiency Smart® program, as with AMP itself, clearly has momentum. Among its many key accomplishments, it surpassed its three-year megawatt-hour (MWh) savings goal in May 2013 – more than six months ahead of schedule. Plus, the program has been extended for three more years in July through a newly signed contract.

“Efficiency Smart has exceeded all expectations,” said Kristyn Wilder, executive director of Efficiency Smart. “We are focused on meeting the unique and individual needs of communities by providing solutions that are customized rather than cookie cutter. We have used our resources in innovative ways to maximize our budget. Efficiency Smart is viable and it is exceeding the performance of similar programs provided by investor-owned utilities.”

Established by AMP and launched in January 2011, Efficiency Smart provides a broad range of energy efficiency services for AMP member utilities. It is considered a valuable component of participants’ power supply portfolios with the goal of encouraging residential, business and industrial retail customers to adopt cost-effective energy efficiency services that provide reliable, verifiable cost savings. In addition to lowering customers’ energy bills through rebates and incentives for efficient products, Efficiency Smart provides technical and professional resources to participating communities, stimulates local economies and establishes a platform for sustainable growth.

The internationally recognized Vermont Energy Investment Corporation (VEIC) implemented and administers the program under a performance-based contract that originally covered 2011 through 2013. In July, AMP and VEIC executed a new contract that will continue the operation of Efficiency Smart beyond its initial three-year contract term. The new contract runs from January 2014 through December 2016.

“We plan to build on the momentum of our first contract to achieve even greater energy savings for our participating members in 2014 and beyond, Wilder said. “We also look forward to continuing to make a lasting impact in each of our communities, not just through energy savings, but also through workforce, economic and community development.”

That momentum includes exceeding the 81,000 megawatt-hours (MWh) the program was designed to save participants over the original three-year service period, which ends Dec. 31, 2013.

A series of case studies compellingly portrays the effort behind that achievement in Efficiency Smart’s 2012 Annual Report, “Energizing the Future.” It is found on the websites of both AMP (in the For Customers tab under Efficiency Smart) and Efficiency Smart (www.efficiencysmart.org).

Commercial, industrial sectors drive gains

Bolstered by an impressive 2012 performance in the industrial and commercial customer segments, which at the end of two years had achieved 86.1 percent and 102 percent, respectively, of their total three-year MWh goals, Efficiency Smart surpassed its total three-year savings target in May 2013.

As of Sept. 15, Efficiency Smart had reached an estimated savings of 96,171 MWh, or 119 percent of its three-year target. With an estimated 20,172 MWh in the pipeline, the program has the potential to reach 116,343 MWh in savings – which would be 144 percent of the three-year target – by the end of 2013.

As the first contract period draws to a close, Efficiency Smart is now focused on achieving individual savings targets for each of its 49 participating AMP member communities in Ohio, Pennsylvania and Michigan. To date, 44 participating communities have reached at least 70 percent of their energy savings goal for the first contract period, and of these communities, 32 have already exceeded 100 percent of their savings target.

One of those communities exceeding its savings target is Bowling Green, which has seen the program deliver substantial benefits to customers as well as the community.

“One of the biggest benefits of participation in Efficiency Smart has been the cost savings realized by our customers who have taken advantage of the program,” said Brian O’Connell, PE, utilities director, City of Bowling Green. “They have reduced operating costs, which makes them more competitive and keeps money in the local economy. Also, the entire community benefits when our overall supply costs are reduced. Like many of the other resources in our energy portfolio, Efficiency Smart is a good, long-term investment.”

Wilder, Randy Corbin, AMP assistant vice president for energy policy & sustainability, and Jolene Thompson, AMP senior vice president of member services & external affairs, who supervises Efficiency Smart for AMP, have been conducting member meetings and council/board presentations to review the results of the 2011-2013 program and the program structure for 2014-2016.

New agreement adds more benefits

The new agreement does include a number of changes to the existing contract that further benefit participants. It:

• Reduces the participation cost from the current $1.50 per MWh of the municipality’s annual retail sales to $1.40 per MWh and retains the level of services participants receive.
• Allows AMP to bid MWh savings into the available capacity market.
• Offers the potential for energy-efficiency grants to communities that subscribe before Dec. 31, 2013.

Most of the provisions will remain the same during the next service period, including:

• Participating AMP communities still receive a 70 MWh savings guarantee
• VEIC fees will still be at-risk through a performance guarantee in the contract
• Savings will continue to be independently verified by a third-party hired by AMP

“In 2014, Efficiency Smart will focus on existing programs, focusing on quality and offering a fresh and innovative approach to gold standard energy initiatives,” Wilder said. “ Each year, we have added initiatives and services, and although there will continue to be additions, our primary goal is to work to perfect our current programs, processes and have a greater community and industry presence. We value our partners in our community and very much want to be seen as an extension of the utility and the community.”

Wilder gives a lot of credit for Efficiency Smart’s achievements and its edge over similar programs offered by investor-owned utilities to the technical expertise of the staff. Because their engineers work with multiple businesses across a broad spectrum of industries, she said, they gain invaluable insight and experience that they are able to apply as they develop innovative efficiency strategies for customers.

Efficiency Smart is also getting a lot more community based in its approaches, Wilder pointed out. They are expanding their efforts to build relationships with organizations that will help them maximize resources and strengthen their relationships with participating communities. That includes, for example, developing an energy efficiency curriculum for K-12 with the Ohio Dept. of Education and seeking grants on behalf of member communities to help them offset costs for educating their children about energy efficiency.

“Our work is just beginning,” Wilder said. “With our staff being on the cutting edge we will continue to expand into additional markets and expand the resources we will provide. We’re not just going after the low-hanging fruit. We’re working at making our Efficiency Smart participants’ goals more attainable by putting all the fruit in reach.”

The Efficiency Smart program is…

• Full-service, innovative and turnkey
• Effective in helping AMP members meet customer expectations
• Flexible, local and embedded in the communities it serves
• Competitive with services offered by investor-owned utilities
• A primary business retention and attraction tool
• The lowest-cost, least-risk new power supply resource available

The benefits communities gain by participating in the program include:

• Tailored strategies to meet the needs and resources of the municipality and its utility customers
• Savings guaranteed at the municipal level
• Independent third-part measurement, verification and evaluation
• Recognized technical expertise, including consultative services and product specifications
• Economies of scale, with operating costs spread across several communities
• Cost-effective services for all customer classes
• Quality control and assurance practices

For more information on the program and its benefits, contact Steve Dupee, assistant vice president of energy efficiency and programs, at [email protected].