Friday, December 01, 2006

Canadian Utilities: Champions for Energy Management

I spoke yesterday at the Pulp & Paper Energy Efficiency Conference sponsored by BC Hydro in Vancouver. You will appreciate the timeliness of this conference when you realize that British Columbia is a net importer of electricity—despite the province’s massive investment in hydro power generation in decades past. To meet future electricity demand, the province has three basic choices: import power, generate power, and offset consumption through reduction of consumers’ energy waste. The latter tactic is the focus of BC Hydro’s well-funded “Power Smart” campaign.

By “campaign,” we’re not talking about placing stickers on switches that remind you to turn lights off when leaving the room. Instead, this is outreach to each sector of the electricity-consuming economy—residential, commercial, and industrial—with a communications and assistance agenda that is proportioned according to the size and importance of each sector. This strategy is in stark contrast to the U.S., where energy policy and woefully-funded outreach almost ignore the industrial sector, which represents one-third of national energy consumption.

BC Hydro’s Power Smart for industry provides cost-shared, plant-wide energy audits and studies for specific systems. But here’s the real eye-opener: the utility is paying for up to 75 percent of the fully-loaded cost of placing a full-time energy manager on-site at most of the huge, energy-dependent paper mills in the province. Why? Because the scale of industrial energy use allows a handful of well-placed individuals to make a massive difference in energy waste, and by consequence, reduce the energy market price spikes that impact all consumers, not just the industrials.

On the other side of the country is Enbridge Gas Distribution of southern Ontario, which sponsors energy audits for its large customers. Their “Steam Saver” program has compiled about 100 such audits since 1997. A report describing this effort identifies about 13 percent potential energy savings across the total portfolio of participating organizations. These are savings that facilities can accomplish by simply changing the way they use energy. Enbridge’s Steam Saver program exists because an innovative tariff actually rewards the utility for avoiding natural gas deliveries above a certain threshold. It’s just good, old fashioned commerce at work. In the U.S., there is growing interest in “decoupling” utility revenues from the volume of energy they deliver. Decoupling allows utilities to either “make or buy” the energy needed in their service territory. In other words, they can acquire energy for distribution to customers, or work with customers to reduce energy waste—a two-pronged strategy to ultimately meet energy needs.



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