Energy Efficiency Prospects: What to Watch

Events unfolding in two U.S. Northeast states – New York and Massachusetts – signal increased business opportunity for energy efficiency companies, green architects, lighting contractors, smart grid innovators and others in the business of saving energy.

First, the energy efficiency world should keep an eye on debate over the possible shutdown of the Indian Point nuclear power plant in New York.

New York regulators recently tasked Consolidated Edison, New York City’s utility, with figuring out how to make up for the loss of the 2,040-MW Indian Point. Federal licenses for the plant expire by the end of 2015. And while the plant seeks relicensing, it faces some potent opposition. So the state wants to be prepared.

The back-up plan, drafted by Con Edison with the New York Power Authority, focuses largely on power plants and other energy infrastructure. But it also calls for 100 MW of energy efficiency that the utility would seek in addition to programs it already has underway.

The utility envisions much of the 100 MW of peak demand reduction coming from large buildings through LED lighting, advanced energy control systems, steam air conditioning, advanced heating, ventilation and cooling, and energy storage systems.

Time is short – if Indian Point does close in 2015 New York needs to start ramping up its energy efficiency backup now, says Con Edison. To that end, the utility has asked the New York Public Service Commission to approve $300 million for the efficiency program in April.

Given the time constraint, it’s also important to create an incentive package “that rapidly encourages interest and participation by customers,” Con Edison said. Specifically, Con Ed wats to see customers receive payback in 12 months or less for the energy efficiency investments.

Meanwhile, smaller cities in New York also are broadening their pursuit of energy efficiency – for other reasons. NYPA, the nation’s largest state electric utility, recently issued a solicitation seeking consultants to develop and manage energy master plans for five cities: Albany, Buffalo, Rochester, Syracuse and Yonkers.

The authority says that it plans to significantly expand “the nature and scope of its traditional energy efficiency programs approach,” which tend to focus on lighting, motors, boilers, and HVAC systems in public and government buildings. While the new plans will consider these things, they also will enlist the private sector and focus on:

• Energy planning and coordination
• Energy delivery infrastructure
• Transportation energy efficiency
• Energy efficiency in buildings

The plans will focus on not only reducing energy demand but also creating jobs, reducing dependence on imported oil, and cleaning up the environment.  NYPA envisions the plans encompassing a range of resources and considerations -- electricity, natural gas, steam infrastructure, renewable energy, clean vehicles, zoning and traffic patterns, energy use in city buildings, etc.

In nearby Massachusetts, a major efficiency undertaking also is in the works. State regulators approved the final details of the 2013-2015 utility plans last week that call for $2.01 billion in energy efficiency programs. This keeps Massachusetts in the top spot nationally for energy efficiency investment per capita. The utilities expect the plans to save 3.7 million MWh of electricity, enough to power more than 500,000 households for one year, and deliver $8.9 billion in economic benefits.

"With this decision, Massachusetts has renewed its commitment to investing in energy efficiency, the cleanest, lowest cost energy resource available. Efficiency will deliver important economic and environmental dividends," said Jeremy McDiarmid, Massachusetts director for Environment Northeast, a key efficiency advocate in the region.

In approving the plans, the Massachusetts Department of Public Utilities (DPU) says that for every dollar utilities will invest in energy efficiency, ratepayers will receive over three dollars in return in energy savings. More specifically, homeowners who install energy efficient lighting, insulation, and take advantage of other programs offered will save  as much as $24/month on electricity and $39/month on natural gas.

The DPU order goes into far greater detail – 180 pages worth – which you can find here.

If you want to track other opportunities for energy efficiency businesses, see the ‘RFP’ section of Energy Efficiency Markets Newsletter at RealEnergyWriters.com. (It’s free.)

Elisa Wood is a long-time energy writer whose blog originates weekly at RealEnergyWriters.com