Industrial Energy Efficiency - A Midwestern Report

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This presentation was given to the Industrial Energy Efficiency Work Group of the Midwestern Governors Association on September 1, 2011. It provides an overview of industrial energy consumption in the 13 states that make up MEEA's footprint, and details current industrial energy efficiency policies and program activities within each state.

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Industrial Energy Efficiency - A Midwestern Report

  1. 1. Industrial Energy Efficiency A Midwestern Report Midwestern Governors Association Industrial Energy Efficiency Work Group September 1, 2011
  2. 2. Regional Industrial Overview Total Use: 6,179.70 Trillion BTU
  3. 3. Regional Industrial Activities• Key Industries – Food manufacturing – Machinery manufacturing – Transportation equipment manufacturing – Fabricated metal product manufacturing – Chemical manufacturing – Computer and electronic product manufacturing
  4. 4. Midwestern Governors after 2010 Elections Party Change Jack Dalrymple* No Change Mark Dayton No Election ScottDennis Daugaard** Walker Rick * ND Lt. Gov assumed Governor’s office on 12/7 Terry Snyder ** New Governor, Same Party Branstad Dave Heineman John Mitch Kasich Pat Daniels Quinn Jay Sam Brownback Nixon Steve Beshear
  5. 5. Midwestern State Senates Ratios are Majority: Minority (vacant) Previous Majority * Changed After * 2011 Recall Election(Republican)
  6. 6. Midwestern State Houses after 2010 Elections Ratios are Majority:Minority (:Independent) Previous MajorityNo State House
  7. 7. Regional EE Statute OverviewState Rate-Payer Efficiency Amount, % of kWh sales Program?Illinois Yes 0.8%, 2011Indiana YesIowa Yes 1.5%, year 2008- not required for all utilities, opt inKansas NoMichigan Yes 0.3%, 2009 to 1% by 2012Minnesota Yes 1.5%, 1% from EE, 2010Missouri YesNebraska NoNorth Dakota NoOhio Yes 0.3%, 2009, 1% 2014South Dakota NoWisconsin Yes 0.75%, 2011 to 1.5% in 2014
  8. 8. Industrial Self-Direct/Opt Out• YES • NO – Illinois – Iowa – Michigan – Indiana – Minnesota – Missouri • N/A – Ohio – Nebraska – Wisconsin – North Dakota – South Dakota
  9. 9. Regional Industrial Energy Efficiency Programs• Characteristics of Utility Funded Rebate Programs, varied across utilities – Common Prescriptive Incentives • Lighting, Refrigeration, HVAC, Variable Speed Drives, Sensors, and Weatherization among others – Program Cost Rebates • Utilities fund 25%-75% of project costs, under a certain threshold, often $50,000, but can be more – Energy Audits • To guide management in adopting EE technology
  10. 10. State by State Breakdown Industrial, Statute, Self- Direct/Opt Out, and EE Program Overviews
  11. 11. Illinois Industrial Overview• Total Industrial Energy Consumption, 2008 – 1,236.9 trillion BTU – Ranked 7th• Top Industries – Chemical manufacturing, food manufacturing, and Source machinery manufacturing
  12. 12. Illinois Political Climate• In the November 2010 elections there were no majority party switches in the state House, Senate, or Governor – Also there is the same majority of when the energy policy was adopted – Generally positive climate for energy efficiency. Considering Illinoiss high ranking in industrial energy use there is potential for continued legislative efforts in industrial EE.
  13. 13. Illinois Statute Overview• Energy Efficiency Resource Standards – Public Act 96- 0033 (2007), Source – Electric Sales Reduction- 2.0% reduction of 2008 energy sales (GWh) by 2015 • Annual percentage escalator (0.2% / 0.4%) – Electric Peak Demand Reduction- 1.1% reduction of 2008 peak load demand (GW) by 2018 • Annual percentage escalator (0.1%) – Natural Gas Sales Reduction- 1.5% annual natural gas savings by 2019, 8.6% cumulative savings by 2020 • Annual percentage escalator
  14. 14. Industrial Self-Direct Language• Public Act 96- 0033 (2007), Source – (m) Subsections (a) through (k) of this Section do not apply to customers of a natural gas utility that have … annual usage in the aggregate of 4 million therms or more within the service territory of the affected gas utility or with aggregate usage of 8 million therms or more in this State – Customers described in this subsection … shall apply, on a form approved on or before October 1, 2009 by the Department, to the Department to be designated as a self-directing customer ("SDC") or as an exempt customer using natural gas as a feedstock from which other products are made
  15. 15. Illinois Industrial EE Program Overview• State Rebate Program – DCEO - Large-Customer Energy Analysis Program (LEAP) • Works with large energy users to manage and reduce energy costs
  16. 16. Utility Funded Program Examples• Ameren Illinois Act on Energy – Custom, HVAC, and Motor Business Efficiency Incentives• ComEd Smart Ideas – Rebates for many lighting, refrigeration, HVAC, and VSD efficiency improvements• IMEA Energy Efficiency Program – Rebate up to 75% of the project cost for qualified efficiency projects
  17. 17. Iowa Industrial Overview• Total Industrial Energy Consumption, 2008 – 654.1 trillion BTU – Ranked 13th• Top Industries – Food manufacturing, machinery Source manufacturing, and chemical manufacturing
  18. 18. Iowa Political Climate• Following the November 2010 elections the Iowa Governor and House of Representatives switched majorities, from Democratic to Republican, State Senate still has Democrat majority• Governor Branstad has since opted to close the Iowa Office of Energy Independence and transition the work to a new Economic Development agency
  19. 19. Iowa Statute Overview• Energy Efficiency Resource Standards – Utility Opt In, voluntary but binding after set • Electric: Varies by utility, energy efficiency savings targets of 1-1.5% annually by 2013 • Natural Gas: Varies by utility, energy efficiency savings targets of 0.74-1.2% annually by 2013 – Since standards are opt-in, there is no self- direct language in statute or code – Iowa Code § 476 – Senate Bill 2386, May 2008
  20. 20. Iowa Industrial EE Program Overview• Utility Funded Program Examples – MidAmerican Energy Advantage Program • Incentives combined with curtailment program, paid if industrials reduce electricity use by 250 kW during peak periods – Cedar Falls Utilities, Commercial EE Program • Rebates vary by technology and must meet specified energy efficiency requirements – Black Hills Energy Commercial Rebates • Incentives and audits, but must be less than 25,000 square foot facility
  21. 21. Michigan Industrial Overview• Total Industrial Energy Consumption, 2008 – 756.0 trillion BTU – Ranked 11th• Top Industries – Transportation equipment, machinery Source manufacturing, and fabricated metal product manufacturing
  22. 22. Michigan Political Climate• Following the 2010 November elections, the House and Governor switched majorities from Democrat to Republican – Senate maintained a Republican majority• State Energy Office split into two departments. The Michigan Energy Office with a smaller plate of work is under the Michigan Economic Development Corporation
  23. 23. Michigan Statute Overview• Energy Efficiency Resource Standards – Public Act 295 of 2008, Source • Electric utilities to achieve 0.3% savings in 2009; 0.5% in 2010; 0.75% in 2011; and 1.0% in 2012 and each year thereafter. – Percentages are savings relative to the prior year’s total retail electricity sales • Natural gas utilities to achieve 0.1% savings in 2009; 0.25% in 2010; 0.5% in 2011; and 0.75% in 2012 and each year thereafter. – Percentages are of the prior year’s total annual retail natural gas sales in dekatherms or equivalent MCFs
  24. 24. Industrial Self-Direct Language• 460.1093: Self-directed energy optimization plan – An electric customer is not eligible unless it is a commercial or industrial electric customer and meets all of the following requirements: • In 2011, 2012, or 2013, the customer or customers must have had an annual peak demand in the preceding year of at least 1 megawatt at each site or 5 megawatts in the aggregate at all sites to be covered by the plan • In 2014 or any year thereafter, the customer or customers must have had an annual peak demand in the preceding year of at least 1 megawatt in the aggregate at all sites to be covered by the self- directed plan
  25. 25. Michigan Industrial EE Program Overview• Utility Funded EE Programs – Consumers Energy Commercial EE Program • Largest program in state, both gas and electric, payback needs to be within 1-10 years – Efficiency United and Energy Optimization • Provide EE services to small utilities, Industrial custom program additionally – Energy Smart Rebate Program (21 municipal utilities participate) • Prescriptive rebates in general EE technology
  26. 26. Minnesota Industrial Overview• Total Industrial Energy Consumption, 2008 – 615.1 trillion BTU – Ranked 16th• Top Industries – Food manufacturing, computer and electronic product Source manufacturing, and petroleum and coal products manufacturing
  27. 27. Minnesota Political Climate• After the 2010 November elections – Both the House and Senate changed Democratic to Republican majorities – The Governorship changed from Republican to Democrat with the election of Mark Dayton• Government shutdown recently ended, due to prolonged budget impasse – Energy efficiency retrofits new priority
  28. 28. Minnesota Statute Overview• Energy Efficiency Resource Standards – Next Generation Energy Act, Minnesota Statutes 2008 § 216B.241 – Electric: 1.5% annual savings in retail sales beginning in 2010 – Natural Gas: 0.75% annual savings in retail sales from 2010-2012; 1.5% annual savings in 2013
  29. 29. Industrial Self-Direct Language• Less structured self-direct program – 216B.241 Energy Conservation Improvement – The owner of a large electric customer facility may petition the commissioner to exempt both electric and gas utilities serving the large energy customer facility from the investment and expenditure requirements with respect to retail revenues attributable to the facility.
  30. 30. Definition for Exemption• H.F. No. 1189, Amended 216B.2401 – "Large energy customer " means a customer facility or facilities that impose a peak electrical demand on an electric utilitys system of not less than 10,000 kilowatts – Or a customer with a facility or facilities that consume a peak gas demand on a gas utilitys system of not less than 500,000 dekatherms annual consumption.
  31. 31. Minnesota Industrial EE Program Overview• Utility Funded Industrial Program Examples – Otter Tail C&I EE Rebate Programs • Installation of high-efficiency equipment upgrades – Xcel Energy Business EE Rebate Programs • Prescriptive Incentives, curtailment options, custom designs – MMPA – C&I Energy Efficiency Program • 8 communities participate, typical prescriptive rebates for energy efficiency technology – Many other municipal programs
  32. 32. North Dakota Industrial Overview• Total Industrial Energy Consumption, 2008 – 213.7 trillion BTU – Ranked 37th• Top Industries – Machinery manufacturing, food manufacturing, and computer and electronic Source product manufacturing
  33. 33. North Dakota Political Climate• There are no party majority changes after the November 2010 elections, they are Republican – Governor Dalrymple is planning to open an Office of Energy under North Dakota Department of Commerce – PU-06-290, PU-07-641 – In 2007 the Commission investigated, but did not adopt, certain energy efficiency and other electric utility standards
  34. 34. North Dakota Statute Overview• There currently are no Energy Efficiency Resource Standards in the State, for either electricity or gas, or other energy policy• Due to North Dakota’s low price of electricity, energy efficiency is a hard sell – As prices increase, energy efficiency “will become common sense”; according to Duane Hafner of the Nodak Electric Cooperative. “Can’t support mandates at this time”
  35. 35. North Dakota Industrial EE Program Overview• Utility Funded Industrial EE Programs – North Dakota Utility Rebate Program • Funded by ARRA, highly successful, for co-op members, rebates and audits – Xcel Energy - Commercial EE Rebate Program • Savers Switch program gives business owners a bill credit during the summer months in exchange for agreeing to have their air conditioning systems cycled during peak energy demand periods.
  36. 36. Ohio Industrial Overview• Total Industrial Energy Consumption, 2008 – 1,341.0 trillion BTU – Ranked 4th• Top Industries – Transportation equipment, fabricated metal product Source manufacturing, and chemical manufacturing
  37. 37. Ohio Political Climate• After the 2010 November elections, the Governor and House switched parties from Democrat to Republican – Senate remained Republican• State Energy Office remains under Ohio Department of Development• New Chair of PUCO is focused on Economic Development and has been quoted as his role is the Chief ED Officer
  38. 38. Ohio Statute Overview• Energy Efficiency Resource Standards• 22% by 2025 (0.3% annual savings in 2009, ramping up to 1% in 2014 and 2% in 2019)- no Natural Gas EERS – Senate Bill 221, signed into law May 1, 2008, included both an Energy Efficiency Portfolio Standard (EEPS), and Alternative Energy Portfolio Standard (RPS), among other provisions. Also see Ohio Code 4928.66
  39. 39. Industrial Self-Direct Language• Senate Bill 221• Any mechanism designed to recover the cost of energy efficiency and peak demand reduction programs … may exempt mercantile customers that commit their demand-response or other customer-sited capabilities
  40. 40. Definition for Exemption• "Mercantile customer" – commercial or industrial customer if the electricity consumed is for nonresidential use and the customer consumes more than seven hundred thousand kilowatt hours per year or is part of a national account involving multiple facilities in one or more states. • Source
  41. 41. Ohio Industrial EE Program Overview• Utility Funded Industrial EE Programs – Duke Energy Industrial EE Program • Wide range of equipment rebates, also 50% cost recovery on projects – AEP Ohio Multiple Industrial EE Programs • Many options, custom projects, self-direct, audits and prescriptive rebates – Dayton Power and Light Business EE Program • Prescriptive rebates, along with custom projects
  42. 42. South Dakota Industrial Overview• Total Industrial Energy Consumption, 2008 – 129.9 trillion BTU – Ranked 44th• Top Industries – Food, machinery, and computer and electronic product Source manufacturing
  43. 43. South Dakota Political Climate• There are no party majority changes after the November 2010 elections• Republicans hold majority in the House, Senate, and Governorship
  44. 44. South Dakota Statute Review• Energy Efficiency Resource Standards – There is currently no EERS in place• Energy Efficiency as a Resource – There is currently no policy in place that treats energy efficiency as a resource
  45. 45. South Dakota Industrial EE Program Overview• Utility Funded Industrial EE Programs – Otter Tail Commercial EE Rebate Program • Rebates are available for geothermal as well as other more common technology upgrades – Black Hills Power - Commercial Energy Efficiency Programs • 15 year program, great results, rebates, technical assistance, retrofits and audits
  46. 46. Wisconsin Industrial Overview• Total Industrial Energy Consumption, 2008 – 619.0 trillion BTU – Ranked 15th• Top Industries – Food manufacturing, transportation equipment manufacturing, and Source machinery manufacturing
  47. 47. Wisconsin Political Climate• After the 2010 November elections there were party switches in the Senate, House and Governorship from Democrat to Republican majorities• Recall elections decreased Republican majority to 17-16 from 19-14, but Republicans still control Senate• Due to budget impasse, Focus on Energy’s 2012 Budget cut $20 million
  48. 48. Wisconsin Statute Overview• Electricity and natural gas savings goals – Utilities to spend 1.2% of revenues• Focus on Energy – Achieved .7% Electric savings in 2009 – Achieved .4% Natural Gas savings in 2009
  49. 49. Industrial Self-Direct Language• 2005 Wisconsin Act 141• Large energy customer may administer and fund its own energy efficiency programs if the customer satisfies the definition of a large energy customer for any month in the 12 months preceding the date of the customer’s request for approval
  50. 50. Definition for Exemption• 2005 Wisconsin Act 141 – Customer of an energy utility that has an energy demand of at least 1,000 kilowatts of electricity per month or of at least 10,000 decatherms of natural gas per month and that, in a month, is billed at least $60,000 for electric service, natural gas service, or both, for all of the facilities of the customer within the energy utility’s service territory
  51. 51. Wisconsin Industrial EE Program Overview• State Funded Programs – Focus on Energy - Commercial/Industrial Efficiency in Existing Buildings • Prescriptive incentives for variety of technologies, $250,000 per project and $500,000 for all FOE programs per customer per year – Focus on Energy - Commercial/Industrial Efficiency in New Construction • Coordinate throughout the design process, Review plans to identify energy-saving opportunities, Analyze energy savings
  52. 52. Contact Stacey Paradis Deputy Director 312.784.7267sparadis@mwalliance.org

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