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Resources, information for going green | EnerNOC's demand response program pays businesses for their willingness to flip a switch
Photo/David A. Rodgers
Elmer Alcott, controller at Nappi Distributors in Gorham, says the company earns about $3,000 a year through EnerNOC's demand response program
Stimulus funds and carbon credits grab all the headlines these days, but not all the resources to help companies become more energy efficient reside in the public domain. Since 2004, Boston-based power broker EnerNOC has offered a demand response program that eases the strain on New England’s power grid and its clients’ energy costs.
EnerNOC pays commercial energy users to be on call in case of a peak demand event on ISO-New England, the power grid that serves most of Maine. EnerNOC clients agree to shut down their operations to lessen electrical demand during a peak, and in return, get a quarterly stipend for agreeing to participate in the program and an additional payment each time they get called to go offline. For EnerNOC, the largest demand response broker in New England, the shutdowns typically occur twice a year and last less than four hours. But the return, for EnerNOC and its customers, can be substantial.
“The typical customer for EnerNOC is a 500-kilowatt site, so if they go offline, it’s a reduction of 500 kilowatts off of the grid,” explains Gregg Dixon, senior vice president of sales for EnerNOC. “That 500 kilowatts is worth roughly about $20,000 a year in revenue in the ISO-New England market. We split that with the customer. About 55% of that value goes to our customers, who typically see $10,000 to $15,000 a year for a 500-kilowatt site,” he says. “That’s very little pain for a lot of gain.”
Elmer Alcott, controller at Nappi Distributors in Gorham, agrees. His beer and wine distribution company has been an EnerNOC customer since 2007 and, so far, earns about $3,000 a year by participating in the demand response program, typically earning between $700 and $800 a quarter. The 155,000-square-foot facility has only had to turn off its power two or three times, says Alcott, recalling one day last August when temperatures were in the 90s and Nappi got the call from EnerNOC.
“We took down the power for the most three hours,” says Alcott, adding that Nappi has a generator that can keep the facility operating if necessary. “The warehouse and cooler can be down for a period of time without worry because the kegs keep things cool.
“The way I see it, it’s a way for one less coal-fired power plant that needs to be built,” he says.
Moose River Lumber in Jackman built a sawdust-fed biomass boiler two years ago and eliminated about 600,000 gallons of fossil fuel from its energy mix, says Sales Manager Steve Banahan. Ultimately, it wants to build a co-generation plant and be completely energy independent. For the past three years, it’s been with EnerNOC, an arrangement that shaves thousands from its $800,000-a-year electric bill.
“Typically it’s an 85- or 90-degree day in the summer and the guys in the mill are sweltering anyway, so no one minds (shutting down), “ says Banahan. The crews make up the lost time by working a Saturday or a second shift.
Demand response companies have typically targeted large electricity users like mills, but EnerNOC has broadened its market to include smaller users, says Dixon. In Maine, EnerNOC manages about a 2,000-megawatt load from its 50 or so customers.
He expects EnerNOC, which brokers power throughout the United States and Canada, will continue to grow. In 2004, it reported revenue of just over $1 million, growing to $51 million in 2007 and $106 million last year.
The demand response program has acted as a gateway to other programs geared toward business customers, says Dixon. One allows business clients to see their real-time energy use for free and manage it proactively, rather than wait for a utility bill to arrive in the mail a month after the energy was consumed. Dixon says once commercial customers have a database of their energy use, they can reduce their energy costs even further.
“Some customers have saved three times what they made in demand response payments,” he says of the energy management program.
The company is seeing a spike in new customers (it doesn’t disclose specific client information, but lists paper companies and ski resorts among its Maine clientele) that Dixon attributes to the sour economy.
“People are looking to save money and energy is a very volatile commodity,” he says.
Carol Coultas
Efficiency Maine, the granddad of green
Efficiency Maine, the 6-year-old state program that gives financial incentives to convert to more energy-efficient systems, was heavily recruiting business customers in 2006, lamenting in its 2007 annual report that of Maine’s 50,000 businesses only 1,000 had participated in its programs. Now, that number stands at more than 1,600, saving Maine businesses 34,000 megawatts and $54.3 million in avoided electrical costs annually, according to the agency’s 2008 annual report.
In the pipeline: More options to help Maine businesses go green, thanks to February’s stimulus act and the auction of carbon credits. More than $25 million over the next two years will be administered by Efficiency Maine for business efficiencies.
“There will be incredible opportunities for new programs with the influx of stimulus funds,” says Elizabeth Crabtree, director of Efficiency Maine’s business program.
Started in 2003, Efficiency Maine provides free advice and cash to get businesses to adopt energy efficiencies. The program was launched to help Maine businesses lower their energy costs, which are among the highest in the country. The Milken Institute’s 2007 annual cost-of-doing-business ranking (the latest available) showed that Maine’s electrical costs were 43% higher than the national average.
Efficiency Maine is funded primarily through a .000145 cent per kilowatt hour charge on most Maine electric bills. The state’s largest electrical customers — those receiving 34.5 kilovolts service or greater — don’t pay the surcharge, nor are they eligible to participate in Efficiency Maine programs funded through the surcharge. By law, Efficiency Maine must dedicate a minimum of 20% of its total program funds to businesses with 50 or fewer employees, or less than $50 million in annual sales
The cash incentives — up to $100,000 per calendar year — are available to all non-residential customers, including businesses, nonprofit organizations, schools and municipal governments. They’re available under three programs:
Incentives. Efficiency Maine will pay a fixed amount for certain types of equipment. The cash can cover energy upgrades for lighting, HVAC equipment, energy-efficient motors and drives, commercial refrigeration and agricultural equipment. In 2008, small businesses accounted for 76% of the program’s participants and received 33% of the $3.2 million in incentives paid out. The program also offers free audits for businesses with fewer than 50 employees or revenues under $50 million.
Low-cost loans. Loans of up to $250,000, currently at 1% interest, to small businesses to pay for energy conservation measures. Repayment terms vary, but closing costs are capped at $500.
Grants. Beginning last September, four separate auctions in the Regional Green House Gas Initiative netted Maine $11.6 million in the cap-and-trade program. According to Jean Guzzetti, coordinator of the Maine Public Utilities Commission RGGI program, 40% of that money will be funneled to existing Efficiency Maine programs expected to start next month. Over the past year, $2.3 million from the carbon credit auctions have gone to Efficiency Maine business programs. Grants for companies and entrepreneurs pursuing the development of energy-efficient technologies can get seed money and research and development funding through Maine Technology Institute (www.mainetechnology.org), an Efficiency Maine partner.
Other Efficiency Maine resources include an alliance of more than 800 vendors, suppliers, contractors and other professionals who can help businesses with the application process and understand the incentives. The program also offers case studies, technical sheets, articles and other information.
Regional Green House Gas Initiative
A large custom project program is in the works for industrial customers, funded through RGGI. About 25% of the auction money will be awarded as competitive grants for large energy-efficiency and conservation projects, ranging from $10,000 to $1 million. The $3 million fund will be split between companies trying to reduce their use of fossil fuels and those trying to reduce their overall electricity costs. The large custom project program is separate from Efficiency Maine, but falls under the PUC umbrella. An announcement outlining the bid process is expected by summer’s end.
Carol Coultas and Susan Breyer
Mainebiz web partners
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