Utility Incentives: Starting the Conversation

By Brian Griffith  
OTHER PARTS OF THIS ARTICLEPt. 1: Utility Incentives and Rebates: Smart Planning, Big SavingsPt. 2: This PagePt. 3: Beyond the Basics of Utility RebatesPt. 4: Understanding Prescriptive Utility Incentives

The next step in taking full advantage of utility companies' incentive programs is to engage the utility. Utilities typically break down institutional and commercial facilities by geography, organization type, building type, and size. Based on these filters, the utility then assigns a case officer, who serves as a manager's point of contact through the decision-making process, helps determine the most appropriate course of action for the organization, and assists it through the entire process. The process generally unfolds in these steps:

  • Engage the utility company to get the project into the cue by providing basic information on size, cost, program and ownership.
  • Develop an initial list of energy conservation measures (ECM), and review each of them with the utility's case officer.
  • Perform energy modeling or calculations on agreed-upon measures.
  • Review the paperwork with the local representative to review and determine expected rebates.
  • All parties sign a contract and implement the agreed-upon measures.
  • The case officer verifies the measures were installed as proposed and are operating correctly.
  • The utility company issues a check to the appropriate party based on the results of the measure.

Many utilities also offer funding for energy-modeling services. This funding is separate from any rebates and typically involves a contract with the energy-modeling provider — either an internal provider or outside consultant — where agreed-upon efforts are broken down either on an ECM basis or as a lump sum for whole-building modeling. Most programs have a modeling reimbursement cap of $20,000-$25,000. Managers can check with the local provider for specific details.

Once managers have provided basic data on the facility and the project, the next step is to come up with a plan that outlines the process from start to finish. Many custom-incentive programs require an energy plan with dates and deliverables, but even if a project does not require this, identifying dates and deliverables early in the process can be a good way to plan the activities the organization needs to coordinate to remain on target.

It also is essential for managers to involve key disciplines and stakeholders within their organizations in the process, as appropriate. Also, custom incentives require some form of cost estimating and energy-savings calculations, so managers also will have to decide early in the process about the need for an outside consultant. Typically, most organizations can apply for prescriptive incentives on their own, but custom incentives and whole building energy modeling are likely to require the help of an outside consultant.

Managers will need to choose a firm that is familiar with the process, deals regularly with the local utility company and has experienced energy modelers on staff. Whether the project is a new building, a renovation, or an equipment replacement, qualified engineering and contracting firms can help craft a set of ECMs or equipment specifications that best suit the project.

Managers also need to pay close attention to the timing of financial requirements. The process just described can act as an outline for when the organizations need to commit dollars to the process. Most rebate programs do not offer up-front dollars for projects.

Also, rebates might not go directly back to the project but instead can end up in a general fund, depending upon the project's governance. But early in the process, managers can develop an estimate of expected rebates that will allow the organization to understand the way rebate dollars, including those for energy-modeling services, compare to project costs.

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  posted on 10/15/2012   Article Use Policy

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