Energy efficiency and conservation are no longer corporate buzz words but strategic operational initiatives that can position your business favorably in the marketplace. Now is the time to initiate strategies for organizational energy efficiency and conservation. An important first step to managing your organization's energy consumption is to start thinking about your energy use. Sounds simple doesn't it? But realistically, when was the last time someone in your organization thought about how your business operates and how you use energy. Now is the time to devote some strategic thinking to your operations; get ready, get the facts, understand the regulations, and make smart choices for operations. Now is the time for an overall energy efficiency and conservation plan for the organization.

The facts of the matter. Over the next 14 months Pennsylvania will see the final phase of electricity deregulation and the end of electric rate caps. The rate caps have already expired in Western Pennsylvania and will expire on December 31, 2009 for PPL and on December 31, 2010 for Met-Ed, Pennsylvania Electric, and PECO. The current prediction is that the removal of the rate caps will cause the cost for generation to increase by 35 percent.

Understand the legislation. On October 15, 2008 Governor Rendell signed HB 2200 into law as Act 129 of 2008, with an effective date of November 14, 2008. The Act imposes new requirements on electric distribution companies, with the overall goal of reducing energy consumption and demand. The Act aims to ease the financial burden related to the upcoming increases to the cost for electric generation by requiring the largest Utilities to reduce their consumption of electricity by 1% by 2011, 3% by 2013, and to reduce their peak demand 4.5% by 2013. Subsequent phases of the Act 129 implementation process will address smart meter technology; time-of-use rates; real-time pricing plans; default service procurement; and alternative energy sources.

For the company energy manager Act 129 provides opportunities for incentives and shifts in thinking.
• In response to Act 129 the Utilities are offering incentives to their users in the form of rebates for the installation of energy efficient equipment and conservation programs. Some of the rebates the utilities offer are for the installation of compact fluorescent lights to replace increscent, the installation of ENERGY STAR high-efficient appliances and equipment to replace older inefficient equipment, the use of variable frequency drives and high efficiency motors, and for the installation of conservation devices such as occupancy sensors and timers to turn lights and equipment off when not required.
• The Utilities have been mandated to replace the standard electric meters with smart meters. Smart meters monitor energy consumption to help customers be more energy efficient. The meter provides information to the customer about the Utility's hourly costs to generate electricity and provides the means for the customer to schedule the operation of high energy usage devices when electric generation costs are at their lowest. The smart meter can also be associated with smart billing, with electric costs tied to the cost for generation at the time of usage.

Making smart choices. A subtle effect of Act 129 will be the change in outlook for the electric energy user. This shift in thinking is caused by awareness. Energy-use decisions will be based on balancing need and operating costs. Operations must focus on efficient energy usage and life cycle costs, examine all methods and ways to increase efficient use of energy, all means to conserve, and explore opportunities to load shift to off-peak times. Implementing these concepts will result in a reduction of the facility's electric costs. Consider the options. In addition to implementing energy efficient equipment and conservation programs, organizations should consider the use of renewable alternative energy sources to offset the utility power purchases.

Strategic thinking about energy efficiency and conservation should include an understanding of current conditions. The Department of Energy's ENERGY STAR rating system provides a benchmark for the facility's energy use and can be used as a comparison of the facility's energy usage to similar facilities. The rating system provides a rough idea of the quantity of energy efficiency and conservation savings that may be available within the facility. Low Ratings are an indicator for the energy manager that an Energy Audit may be the best option for making significant changes in energy consumption. Incentive: in the PPL territory, there is an added benefit if the audit is performed by a qualified firm - 50% of the cost of the study that deals with energy efficiency qualifies for a rebate under their customer incentive program.

What is an Energy Audit? An energy audit is a quantification of how much energy is used from all sources (electricity, oil, gas, etc.) followed by comparison analysis of the amount of energy per square foot used by the facility against others in the same geographic region of the country with a similar use. The objective is to compare where you are with where you could be and quantify what it costs you to be where you are. Armed with that knowledge, the effect on the bottom line is clear, and the decision to reduce your energy consumption is apparent.

Energy Efficiency is good for the bottom line. ENERGY STAR Service Providers (like SSM) have the experience and tools to identify energy-efficient strategies for your facility. An ENERGY STAR Service Provider can assist you in collecting and entering the information into DOE's Portfolio Manager to obtain the rating of your facility. Then, as part of an overall energy audit the provider can help you to identify, prioritize, and implement projects to reduce energy use, and verify that you receive the proper incentives from your electric utility being offered in response to Act 129 all of which will help improve your bottom line.


For more information
Ralph Nevel, PE, RCDD- ralph.nevel@ssmgroup.com
Mr. Nevel has more than 30 years of electrical engineering experience in the consulting engineering field. As the Senior Technical Director for Electrical Engineering at Spotts, Stevens and McCoy, Inc. he manages the technical aspects of the firm's electrical engineering services.