Fuel Fights

One of the hot issues 64 years ago was fuel rationing. It wasn't an issue of high energy prices as Americans tend to view it today, but one of scarcity of fuel due to its priority use in World War II.

"During World War II many consumer goods were rationed for civilians in order to supply more goods for both American and Allied troops. Among the items rationed were sugar, red meat, gas, oil, coffee, and rubber. In October 1942 fuel oil was rationed. During the especially cold winter of 1942-43 this brought numerous protests from citizens. A temperature of 65 degrees was set as the standard for homes, by the federal government." (Source)

65 degrees is still a reasonable standard. If everyone used that benchmark, we probably wouldn't need fuel from the Mideast where we are now in a protracted war that has caused over 3200 American soldier deaths and 23,417 casulties.

Both posters were originally published by the United States Government Printing Office.

Is An Energy Service Company In your Future?

In a recent post I mentioned Energy Service Companies (ESCos) – the use of which is one option that cities like Carbondale can employ to reduce city-wide energy expenses.

What is an ESCo? An ESCo is a “business that develops, installs, and finances projects designed to improve the energy efficiency and maintenance costs for facilities over a seven to 10 year time period. ESCOs generally act as project developers for a wide range of tasks and assume the technical and performance risk associated with the project. Typically, they offer the following services:

• develop, design, and finance energy efficiency projects;
• install and maintain the energy efficient equipment involved;
• measure, monitor, and verify the project's energy savings; and
• assume the risk that the project will save the amount of energy guaranteed.

These services are bundled into the project's cost and are repaid through the dollar savings generated.” {read more}

The great advantage of using ESCos is the avoidance of risk by the customer. It is up to the vendor to properly manage their technology decisions. If they fail to save energy/money, they make no profit. This is “performance-based contracting.”

ESCos tend to specialize in particular areas of expertise in either the demand or the supply side of the energy saving equation.

A company doesn’t have to be a large ESCo or be a member of the National Association of Energy Service Companies to make a difference for a community. There are hundreds of smaller businesses with technology innovations that can help communities build there way to energy self-reliance and sustainability. They have expertise in energy conservation, wind, solar, and other cost-effective renewable energy solutions.

Demand-side solutions from any number of sources do work. In this report, “Power To Save – An Alternative Path to Meet Electric Needs in Texas, their study found that:

“a comprehensive effort to promote efficiency and other cost-saving demand reduction measures can meet Texas’ electricity needs more reliably, at a lower cost and at a tremendous net economic benefit compared to building a new fleet of expensive and heavily polluting power plants. Over the next 15 years, boosting markets for more efficient products, lighting, cooling, heating and industrial processes can eliminate over 80% of forecast growth in electricity demand, while lowering consumer’s energy bills. With additional measures to further reduce electricity demand and enhance reliability, Texas can completely eliminate its “load growth,” resulting in a gradual decline in total electricity demand to more than 9% below current levels by 2021.”

Our local politicians don’t seem to be considering ESCos or conservation and renewables as part of their response to the disastrous Ameren rate increase. I wonder why that is. If anyone knows about a local politician decisively working on alternative solutions, please let me know.

The Utility Formerly Known as CIPS

In my last post I started to describe the history and role of planning/management of electric utilities. Using the tool of energy utilities, only two proposals for southern Illinois appear to be publicly under consideration.

1) Carbondale, IL is proposing to acquire Ameren’s local distribution infrastructure (poles, wiring, substations, building meters, etc. and buy power from the ‘competitive’ market.

2) A group of municipal mayors is looking into forming a power purchase company to attempt to get power at a lower bulk rate.

The legislation for option #2 is what legislators call the “Southern Illinois Aggregate for Viable Energy Solutions.” Now there’s a warm and fuzzy name if I ever heard one! Do we call it “SIAFLVES” or maybe “The Utility Formerly Known as CIPS?”

Marketing aside, the two options leave far too much to be desired. Mayor Cole proposes to acquire Ameren assets through eminent domain. This would put the City under obligation to maintain that infrastructure. Carbondale could bid it out to private vendors to manage, or the City could do the work with city employees. They would need to be trained. This is certainly possible. The City already operates sophisticated drinking and wastewater treatment plants.

What would either proposal gain the city and its taxpayers? Under the new electric rate structure from Ameren a theoretical $100 a month electric bill looks like this:

Customer Charge $6.24 6.2%
Meter Charge $3.62 3.6%
Distribution $16.42 16.4%
Supply $67.47 67.5%
Subtotal $93.74
Tax $ 6.28 ~6.3%
TOTAL $100.02

That $100 bill provides the customer approximately 848 Kwh. About 10% represents fixed costs of serving a residence. Distribution (the portion Mayor Cole wants to acquire) constitutes 16.4% and the biggest portion of the bill is for the actual electric power supplied the consumer (67.7%). Taxes are about 6.3%.

I suspect there is little room for cost savings in the distribution portion of the bill. Its only about 2 cents per Kwh delivered. Acquiring the distribution system would be very expensive, fraught with problems with fair valuation, and legality. Yet, it is possibly a prerequisite to forming a truly independent local municipal utility.

The real money potential is in the supply portion of the bill. Ameren’s residential customers are now paying slightly under eight cents per Kwh. One year ago it was only about seven cents per Kwh. All-electric customers were paying even less.

For every one-cent decrease in the energy supply charge, a customer saves over 17% on their bill.

Acquiring cheaper energy has the greatest potential for saving money, or at least reducing future increases. There are three possible ways to lower the cost of electricity. Either engage either supply-side solutions or demand-side solutions. The first two are supply side:

1) Buy it in the open market from suppliers with excess capacity that can sell power cheaper than Ameren.
2) Build your own energy production system using the cheapest long-term fuel source that has the least negative impacts upon the environment. That cheap source is probably not coal and it more likely to be wind, biomass and solar.
3) Implement demand-side energy conservation measures that lessen the need for off-site energy delivery.

In any utility network, reducing the need for one unit of power is the same as producing one. If the utility can recover the cost of conserving power and do so cheaper then producing it, then it is in the best financial interest of the utility and consumers to pursue that option.

What are the ingredients of a demand-side solution? Building insulation, high efficiency windows, radiant barriers, energy efficiency building codes, high efficiency lighting such as LEDs and compact fluorescents, high efficiency heating and cooling systems, and lifestyle adjustments. No rocket science required!

One has to wonder why our political leaders aren't giving more attention to demand side solutions.

Learn to Take Control of Your Electric Bill

Presented by the
ASSOCIATION OF PROFESSIONAL ENERGY CONSULTANTS
Southern Illinois Chapter

When: Wednesday, February 7th, 5:00 PM - 7:00 PM
Where: Carbondale Civic Center, 200 S. Illinois Ave.
Cost: Free

Understanding Your AmerenCIPS Electric Bill
• How we got here – a brief history of electric deregulation in Illinois
• Where we are now – an overview of the current electric rate structure
• How to read your bill – understanding the line item charges
Ameren’s Customer Assistance Programs
• Customer Elect Plan
• Dollar More
• Warm Neighbors
• Budget Billing
Low-Income Assistance from Western Egyptian Economic Opportunity Council
• Low-Income Home Energy Assistance Program (LIHEAP)
• Illinois Home Weatherization Assistance Program (IHWAP)
• Home Inspection and Home Energy Audits
Illinois DCEO Programs
• Keep Warm Illinois
• Small Business $mart Energy (SB$E)
• Illinois Energy Conservation Code for Commercial Buildings
• Federal Tax Incentives for Energy Efficiency – Residential & Commercial
• Energy Efficiency Tips – Learn ways to cut your bills down to size.

The first 35 people to sign in will receive a FREE Compact Fluorescent Light bulb (CFL) from BLI Lighting and Murdale True Value. Limit one CFL per household.