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.

1. Industrial Energy Efficiency
A Midwestern Report
Midwestern Governors Association
Industrial Energy Efficiency Work Group
September 1, 2011

2. Regional Industrial Overview
Total Use: 6,179.70 Trillion BTU

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. Midwestern Governors
after 2010 Elections
Party Change
Jack Dalrymple*
No Change
Mark
Dayton
No Election
Scott
Dennis 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. Midwestern State Senates
Ratios are
Majority: Minority
(vacant)
Previous Majority
*
Changed After
*
2011 Recall
Election
(Republican)

6. Midwestern State Houses
after 2010 Elections
Ratios are
Majority:Minority
(:Independent)
Previous Majority
No State
House

7. Regional EE Statute Overview
State Rate-Payer Efficiency Amount, % of kWh sales
Program?
Illinois Yes 0.8%, 2011
Indiana Yes
Iowa Yes 1.5%, year 2008- not required for
all utilities, opt in
Kansas No
Michigan Yes 0.3%, 2009 to 1% by 2012
Minnesota Yes 1.5%, 1% from EE, 2010
Missouri Yes
Nebraska No
North Dakota No
Ohio Yes 0.3%, 2009, 1% 2014
South Dakota No
Wisconsin Yes 0.75%, 2011 to 1.5% in 2014

8. Industrial Self-Direct/Opt Out
• YES • NO
– Illinois – Iowa
– Michigan – Indiana
– Minnesota
– Missouri • N/A
– Ohio – Nebraska
– Wisconsin – North Dakota
– South Dakota

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. State by State Breakdown
Industrial, Statute, Self-
Direct/Opt Out, and EE Program
Overviews

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. 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 Illinois's high ranking
in industrial energy use there is potential for
continued legislative efforts in industrial EE.

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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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 utility's
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
utility's system of not less than 500,000
dekatherms annual consumption.

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. 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. 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. 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. 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
• Saver's 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Contact
Stacey Paradis
Deputy Director
312.784.7267
sparadis@mwalliance.org