2. Great River Energy
• Not for profit generation &
transmission cooperative
providing wholesale
electricity to 28 distribution
cooperatives in Minnesota
and into Wisconsin.
• Second largest utility in
Minnesota, our member
cooperatives distribute
electricity to families,
farms and businesses
servings almost 1.7 million
people.
2
3. CIP Impact on the Utility Business
Model
• Regulatory compact
• We are granted monopoly rights…
• In exchange for:
• Regulation by governing body (Board or PUC)
• Obligation to serve
• Now Obligation to Conserve
3
4. CIP Impact on the Utility Business
Purpose
• Before:
We are in the business to sell electricity, not
reduce sales.
• Now:
We are in the business to help members
manage their electric bill.
“We exist as an advocate for our members”
4
5. GRE’s end-use members
Small
Commercial
16%
Large
Commercial Residential
21% 57%
57% of GRE’s end-use
member energy sales are
residential
6. 2011 Portfolio Top Ten
Energy Savings Percent of Total
Program Demand Savings (kW)
(kWh) Energy Savings
Com Retrofit Lighting 4,225 17,523,312 15.4%
Com Custom 1,732 14,206,816 12.5%
Residential Measurable
0* 13,995,636 12.3%
Behavior Modification
Res Geothermal 3,789 11,927,650 10.5%
Res Lighting 751 9,073,142 8.0%
Com Motors and Drives 572 8,690,063 7.6%
Res ASHP 738 5,799,114 5.1%
Com GSHP 247 5,467,392 4.8%
Com New Const.
1,062 4,473,149 3.9%
Lighting
ES Appliance 660 3,951,203 3.5%
Total 13,776 95,107,477 83.6%
6
7. 2011 GRE Coop CIP Spending
(Conservation & Load Management)
Total 2011 Spending
$22,699,002
7
9. Total GRE CIP Cost per kWh Saved
(First year kWh)
Average portfolio cost per
first year kWh saved
$0.139/kWh
9
10. Energy Efficiency is a Long-Term
Utility Resource Investment
• Average portfolio lifetime is 12 years
• Utilities spend money only in the first year,
representing a fraction of the total project cost.
• This investment continues to provide benefits for
the duration of the measures lifetime.
– 2011 CIP Portfolio, $0.139/kWh_1st yr,
~$0.0116/kWh_lifetime
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11. MISO Costs Compared to CIP Costs
MINN.HUB MISO Prices
2012 YTD Averages
($/MWH):
– 7 x 24 | $24.11
– 5 x 16 | $29.40
– 2 x 24 & 5 x 8 | $19.33
Average May – July
– 5 x 16 | $36.13
2011 Portfolio Average
$13.86/Lifetime kWh – 2 x 24 & 5 x 8 | $22.40
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12. The Pro’s & Con’s of CIP
• Pro’s
• Helps members manage energy costs in times of
rising prices
• Comments from many Business Owners
You need to help me find ways to save on my energy costs
• Wholesale Cost Avoidance (WCA)
• Con’s
• Reduces energy sales (aka billing units)
• Rate Impact, especially when sales are flat
13. Monthly Residential Energy Use
Monthly Residential Energy Use • Residential energy use is
980
960
flattening…
940 – Economy
– Efficiency improvements
Monthly Usage
920
900
– Appliance standards
880
– Popularity of conservation
860
840
– Better informed consumers
820
– Emergence of substitute
800 energy systems
780
14. Natural Transformation to
Greater Efficiency | Refrigerators
Age of Most-Used Refrigerator
West North Central Census Division |2009 RECS
1.4
Number of Households (Millions)
1.2
1.0
0.8
1.3
0.6
0.9 0.9
0.4
0.2 0.4
0.3
0.2
0.0
Less than 2 2 to 4 Years 5 to 9 Years 10 to 14 Years 15 to 19 Years 20 Years or
Years More
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15. An Energy Efficient System
• Realizing an efficient energy supply system
requires looking at all aspects of generation and
consumption:
– Energy Efficiency at Supply & Demand
– Load Management
– Conservation
– Renewables
– Complementary Technologies
15
20. July
Billing peak
July 2nd
Member Load
-Temp -DA LMP
Est. Control
21. Financials
• Member savings
– Monthly demand charges
• GRE
– Market Energy
– Market capacity 200MW
– Long term avoided capacity cost
22. Redefine Advanced Technologies
• Managing variable system
resources, e.g. wind, will become
a key characteristic of utility
operations.
• Identifying technologies that are
complementary to a utilities
generation resources can help to
drive down the overall system
costs, and the costs to the end
user.
22
23. Thank you!
Jeff Haase
jhaase@grenergy.com | 763.445.6106
