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November 2007  
Charged for Change
by Cameron Walker

A host of initiatives help West Coast utilities improve efficiency without adding infrastructure

The Heathman Hotel has gone through many changes since it opened its doors in downtown Portland in 1927. At its debut, it was proclaimed the city’s most modern hotel. During the 1950s and ’60s, an exodus from downtown Portland took with it the hotel’s glory days; in the 1980s, an extensive restoration turned the hotel into a National Historic Landmark, which has award-winning cuisine, luxurious beds and walls lined with contemporary art.

Now, the Heathman is undergoing another transformation: It’s becoming energy efficient. Already, the hotel has invested $125,000 to make its heating, ventilation and air conditioning more efficient in the hotel’s public spaces. The Energy Trust of Oregon, which runs energy efficiency programs for several Oregon utilities, offered $23,000 in rebates and incentives for the initial work.

The Heathman is one of many businesses across the West that are taking advantage of incentive programs designed to help customers install energy-efficient technologies and slash utility bills. In addition to state and federal rebate programs, many local utilities offer their customers rebates, grants and technical support to improve energy efficiency. Several factors are pushing energy efficiency to the forefront. For one, energy is getting expensive. “In the last five years in particular, utilities have seen a major shift, in that energy prices have left the era of cheap energy,” says Bill Prindle, deputy director of the American Council for an Energy-Efficient Economy.

Meanwhile, utilities are facing rising demand for energy, and growing concern over greenhouse-gas emissions and carbon footprints. “Carbon is becoming a bigger and bigger deal,” says Joe Barra, the director of customer energy resources for Portland General Electric. And customers want utilities to pursue energy-efficiency measures, too. In addition to evaluating cost efficiency, volatility of fuel costs, and carbon risk for its most recent resource plan, Portland General Electric surveyed its customers last year to assess their priorities for the utility. What the utility learned was that, given the choice, customers would like energy efficiency measures to be put in place before renewable energy.

For utility companies, energy-efficiency measures—from energy-saving technology to innovative design solutions—are becoming more than just a program, they’re becoming a resource similar to renewable energy, such as wind farms and power plants. “If you are a utility and you’re making investments, then a kilowatt saved is a kilowatt we do not have to acquire,” says Kimberly Harris, executive vice president and chief resource officer for Puget Sound Energy. Instead of pouring money into a new power plant—an average fossil-fuel power plant can cost hundreds of millions of dollars while still emitting greenhouse gases—utilities (and, as a result, their customers) can save money when the energy isn’t needed in the first place.

Many Western states are also establishing requirements for utilities to use more renewable energy and improve energy efficiency. Last November, Washington voters passed Initiative 937, requiring large utilities to adopt all cost-effective measures that promote energy conservation as well as, by 2020, obtain 15 percent of their electricity from renewable resources. Nevada has a Renewable Portfolio Standard that requires its two investor-owned utilities—Sierra Pacific and Nevada Power—to derive 20 percent of the electricity they sell from renewable sources by 2015; the utilities can earn credits toward meeting these standards by adopting energy-efficiency measures. And this September the California Public Utilities Commission, which regulates investor-owned utilities, approved an innovative program that provides incentives for utilities that meet or exceed energy-efficiency goals, and penalizes those that fall behind.

In turn, many utilities are using incentives to encourage customers to help them meet these goals, though funding for many rebates is built into most customer’s—business or residential— rate fees. So when you—or your neighbor—get a refund for a new refrigerator, some portion of your monthly bill has likely gone to create the incentive. “Even if you don’t buy that energy-efficient refrigerator,” says Irene Stillings, executive director of the California Center for Sustainable Energy, “the policy reasoning is that the whole system will benefit from energy efficiency because when you aggregate all these savings, you may not have to build another power plant.”

Whether they’re looking to save kilowatts to help their own bottom line, be better stewards of the environment, or respond to state or voter mandates, utilities around the West Coast have instituted an array of programs—from rebates for energy-efficient lighting to money and expertise to help businesses as they construct new buildings—designed to help commercial customers improve energy efficiency and cut energy costs.

To read the rest of the story, please contact Cameron.

copyright 2007, Cameron Walker.