In a 1977 speech, President Jimmy Carter, clad in a sweater and speaking in somber tones, suggested Americans should set thermostats at 65 degrees Fahrenheit during the day and 55 degrees at night to help the U.S. get through a bruising energy shortage. He wasn’t widely praised.
Since the 1970s, however, energy efficiency has become a much more familiar concept. Today, sophisticated software can not only delicately fine-tune thermostat settings but also can manage huge loads at large commercial facilities and make subtle shifts in nearly any home appliance. For over four decades, public power utilities have made efficiency a priority, and now they are trying to determine what works to earn the energy efficiency gains made possible by the latest technology.
Awareness and Alternatives
“We are always looking for new opportunities and programs to increase energy efficiency,” said Aneta Badalian, acting public benefits charge marketing manager for Glendale Water and Power in California. “Public power customers are interested in efficiency for a number of reasons, as are we. It cuts costs, reduces loads at critical times, and can lessen the impact on the environment. We just have to find what is most effective and cost efficient.”
The public power utility, serving about 90,000 electric customers, has had success with a wide range of measures from shade-tree planting to home energy reports that show a customer’s success with energy usage (even compared to similar sized-homes), along with alerts and reports about usage between bills.
Badalian said those methods of informing customers about their usage have been a priority for the utility, as has customer education overall. The utility’s website is packed with residential energy-saving programs and tips.
The think tank Resources for the Future describes an “energy efficiency gap” that may be critical to increasing efficiency. The gap often is caused by a lack of information along with societal and personal preferences. Resources for the Future suggests that labeling products with certifications like Energy Star, offering subsidies, and setting performance requirements work best, along with messaging “nudges,” such as those Glendale has used effectively. Electric bills, for example, can include information about a comparative home’s energy use, or alerts can warn customers about higher usage.
“Customers respond to being reminded if their usage has gone up or how they compare to similar-sized homes,” Badalian said.
The utility estimates that customers acting on personalized home energy reports comprised almost 40% of its energy efficiency savings, trimming 7,255,612 kilowatt-hours during the fiscal year. Its online platform, created with Opower (now a product line under Oracle), has generated 148,000 visits since it was implemented in 2009 and has undergone several advancements.
Even though consumers can often save money by investing in energy-efficient devices, research by experts at Harvard suggests that consumers leave many apparent cost-saving investments unused. Those researchers cited market failures and behavioral tendencies as two of the primary reasons for the gap. The behavioral explanations include inattentiveness, short-sightedness, and making irrational decisions rather than smart economic ones because they don’t have enough information or can’t comprehend the choice.
Matt Hein, energy services manager at Cedar Falls Utilities in Iowa, said public power utilities may have to look for new alternatives in energy efficiency programs.
“Within the residential efficiency sector, energy savings from equipment efficiency is dwindling because baseline equipment is so efficient,” he said. “Future programs will need to encourage beneficial customer behavior, like charging electric vehicles during off-peak times. Educating and incentivizing customers on the benefits of using power differently is increasingly important.”
He said that educating customers in fundamentals is important, as are some incentives. The public power utility, with about 19,000 electric customers, has had success on the residential side with an effort to replace electric resistance heating with heat pumps and Wi-Fi-enabled thermostats. This program includes incentives from CFU and generous federal incentives. Wi-Fi-enabled thermostats improve efficiency now and could pave the way for more demand response initiatives later.
“We have really been focused on education, and we are trying to talk less about electricity as a nebulous thing and make the distinction between energy and power. When it comes to energy, we don’t have many concerns. Helping our customers understand power has been a major focus for us.”
Public power utilities are often educating customers while also offering a wide range of energy efficiency measures. The American Public Power Association recognizes utilities putting in this work with a Smart Energy Provider designation, which nearly 100 members now hold, including Glendale and Cedar Falls. The program assesses utility commitment and practices across four disciplines: smart energy program planning, energy efficiency and distributed energy resources, environmental and sustainability programs, and customer communication and education. Applicants describe their practices, such as “how they communicate smart energy policy, procedures, and programs with customers and how they evaluate customer satisfaction with smart energy programs.” The 2024 application, which is open through April 30, also asks about any training a utility offers to customer service representatives to provide better customer experience in these programs.
Finding What Works
The Department of Energy reported that overall, homes use 37% more energy today than they did about 40 years ago, although energy conservation standards and technology have prevented that use from being even higher. While the total number of households has grown, along with the number of devices in them, the average household usage has gone down about 10%.
The American Council for an Energy-Efficient Economy reported that utility-sector energy efficiency programs accounted for 2.7% of a 20% overall decline in energy use in 2017. Other areas comprising the decline included energy savings from appliance and equipment efficiency standards (6%) and adoption of Energy Star-certified appliances (4.2%).
In Cedar Falls, the utility is focused on replacing electric resistance heating with more efficient and cost-effective options because of Iowa’s heating-dominant climate. Dual-fuel systems are particularly valuable because the highly efficient air-source heat pump operates most of the time and can switch to CFU’s reliable natural gas when temperatures drop below the heat pump’s cut-off temperature (about 25 degrees Fahrenheit).
Hein noted that it is difficult to gauge the appropriateness of energy efficiency measures since they can have a range of benefits and cost utilities varying amounts of time and money. CFU uses a societal benefit-cost ratio to evaluate the effectiveness of the portfolio of programs each year.
When asked for specifics about which programs are best, “I have a very hard time saying anything beyond, ‘It depends,’” Hein said, “because what works for CFU and our community may not work for others.”
Energy audits, for instance, increase customer awareness of opportunities to save energy and are a public relations boost for the utility. But it is hard to pinpoint and weigh how much they increase efficiency.
“It is something we promote, which we then hope, of course, leads to customer awareness about inefficiencies of their system or the need to upgrade — and then we offer solutions,” he said.
Both utilities promote use of energy-saving lighting, but Hein noted that CFU no longer incentivizes efficient lightbulbs for residential customers since they are typically now the only option for consumers. But for commercial customers it can make a big difference, he said, and may be the easiest program to undertake with visible improvements to building lighting and utility bills.
Glendale is planning on launching an HVAC early-retirement pilot program, which will include an energy assessment and incentives ranging from $1,200 to $3,000 for installation of more efficient HVAC or electric heat pump units. This is distinct from a Home Energy and Water Upgrade Program, which last year saved 1,439,539 kWh. Over the life of the program, it has had a significant impact, saving 19,444,594 kWh over 17 years. Another rebate program for more efficient home appliances saved Glendale 67,001 kWh during the 2022–23 fiscal year.
There is still value in offering lower-impact programs that are relatively easy to implement and favored among customers. As an example, Badalian said a shade tree-planting program is popular in the community.
“Our Tree Power program, which provides up to three free shade trees and arborist services, has been around for 20 years. It’s a low-lift program, with substantial lifetime savings at a minimal cost. Also, our In-School Energy and Water Conservation Education program, which is aimed at behavior changes along with minor retrofits, was also easy to launch, and the deemed savings are significant when compared to the program cost.”
During the 2022–23 fiscal year, the tree program resulted in 53,732 kWh in savings, and the education conservation program resulted in an estimated reduction of 1,039,247 kWh in the last fiscal year, which made up about 6% of the total from energy efficiency measures.
Glendale also has a Conservation Voltage Reduction program in its portfolio that yields significant savings, Badalian said. “The purpose of the CVR program is to produce energy savings by keeping the voltage on GWP substation transformers and thus our customer meter panels at a minimum permissible level.” During the last fiscal year, that program saved 5,175,430 kWh.
Creating Comfort
A residential and commercial peak saving program at Glendale, which offers a $100 incentive towards the purchase of a new thermostat and $50 annual incentive to residential customers for enrollment in the program, saved an estimated 160,863 kWh in the last fiscal year. Commercial customers are incentivized at the rate of $50 to $75 per kW per year, for their participation in the program.
Meanwhile, Hein said CFU is “seeding” the community with smart thermostats and hopes to make them more prevalent so that a future residential demand-response program will have the hardware needed to run successfully.
“CFU was very early to thermostat-control programs and found our customers were not ready for this type of program,” he said, noting that he believes that ease of participation is more important than the amount of financial incentive and is more likely to create buy-in. He is optimistic that customers will find future programs more appealing. Over 1,300 Wi-Fi-enabled thermostats have been incentivized in the last five years, with an estimated annual savings over 350,000 kWh per year and 100-kW reduction.
He said that apart from managing home energy usage, the smart thermostats will allow more opportunities for peak shaving by the utility. “With over 50 years of energy efficiency programs at CFU, demand response and behavior programs are our primary focus for adding future programs,” he said.
With commercial customers, educating them and offering an incentive to replace lighting has generally been easy, with a big impact. Demand response has also paid off significantly, with a current focus on a few very big customers.
CFU is working with four large commercial customers with a demand response system that involves text messaging between the utility and the companies, the largest of which is a crypto-mining operation. In 2023, CFU’s demand response resources exceeded 22 MW (18% of peak load).
Glendale’s Business Energy Solutions program, for businesses with a monthly electric bill of more than $3,000, offers qualified customers up to $100,000 in incentives per fiscal year for all types of energy-saving retrofit projects that are cost effective from both the customer’s and the utility’s perspective. The program saved 720,506 kWh in fiscal year 2022–23 (about 3.8% of the total savings from efficiency measures) and has saved 72,220,279 kWh over the 24-year life of the program.
Those efforts come as efficiency has steadily improved in the commercial sector. A 2022 Commercial Building Energy Consumption Survey by the U.S. Energy Information Administration noted that commercial buildings overall were consuming 12% less energy in 2018 compared to 2012.
It reports that food service, food sales, and inpatient health care buildings were the most energy intensive, while vacant, warehouse and storage, and religious worship buildings were the least. Electricity was consumed most for cooling, ventilation, lighting, and other end uses at commercial properties. It also found that large buildings (over 100,000 square feet) make up 2% of total commercial structures but consume over one-third of the total energy used by commercial buildings.
