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CPS Energy‘s Save for Tomorrow Energy Plan (STEP) has plucked almost all of the “low hanging fruit” in terms of energy conservation in San Antonio by way of its 20 different energy efficiency incentive programs, utility officials said. To reach higher, CPS Energy board members unanimously approved two contracts worth a total of $120 million on Monday with national companies to take over some of the outreach and operations of 13 STEP programs.
Wisconsin-based Franklin Energy will take over residential incentives and weatherization programs for $89 million and Austin-based CLEAResult will take over commercial programs for $31 million. CPS Energy leaders hope the three-year contracts will bring the goal of the $849 million STEP program to fruition: save 771 megawatts (MW) of electricity by 2020.
“We expect the road from here to be a bit steeper,” said Rick Luna, CPS Energy’s senior manager of product development. “We’ve got the low hanging fruit … (and have had) success with the early adopters,” now it’s a matter of reaching the “harder to engage” segment of the population.
That’s where Franklin and CLEAResult come in: to enhance the existing programing and reach more CPS Energy customers that may take more digging to find and/or more convincing to take advantage of home audits, rebates on HVAC systems and other energy efficient appliances, and more.
Since it started in 2009, STEP has saved 411 MW with $361 million worth of rebates and other costs associated with the program including staffing and development, Luna told the CPS Energy board. But the efficiency returns per dollar spent are leveling out – existing CPS Energy staff can only do so much while Franklin and CLEAResult specialize in such programming technology and have already created efficient systems.
“They’re more streamlined,” CPS Energy Interim President & CEO Paula Gold-Williams said. “They’ve got that process down. … We’re better off and still save money under this scenario.”
The two companies were selected out of 18 other companies that replied to a request for proposal.
“Would we spend $120 (million) internally to do this ourselves?” asked CPS Energy board Chair Ed Kelley.
CPS Energy hired Navigant Consulting to start a review of the STEP program and implementation in November 2015, Luna said, and its report found that outsourcing actually lowers the total cost as well as the risk.
In other words, to answer Kelley’s question, CPS Energy would spend more if it tried to achieve 771 MW on its own.
“If we don’t go down this path there is more risk (for) not achieving the 771 (MW goal),” said CPS Energy Vice President of Generation and Strategy Cris Eugster, adding that other cities large and small have outsourced their efficiency programming with great success.
“What this allows us to do is to be a lot more sophisticated with our customers as energy advisors,” Eugster said. “We’re bringing national players to partnership with us – it’ll still be under the CPS Energy brand. We have to change the slope of that curve to make the 771 MW.”
A representative from Franklin Energy was present during the meeting and said the company plans to hire 32 people locally and open two office locations on the Northside.
The contracts do not turn over administration of all STEP programmings. The SolarHost, community solar, and solar panel rebate programs, for instance, will still be maintained by CPS Energy and its partners. Franklin and CLEAResults will prioritize the relationships with manufacturers and retailers that CPS Energy has been working with in an attempt to maintain contract continuity, Luna said. CPS Energy also remains in control of its demand and response programming.
Demand response initiatives, which curtail peak load uses by commercial and residential customers, accounts for a majority, 193 MW, of the electricity savings through STEP so far. About 100 MW has been saved through commercial rebates, 62 MW through residential rebates, 28 MW through weatherization efforts and 27 MW through solar installations.
CPS Energy’s solar rebate program is in a “transitioning” phase that’s meant to ween the local industry off of local subsidies, Eugster said.
By the end of the summer, CPS Energy expects to have used $10 million of a $30 million boost to the rebate program that went into effect in February. The new pricing structure dictated that first $10 million worth of solar rebates at $1.20 per watt, the next $10 million at $1 per watt, and the last $10 million at $0.80 per watt.
“The original intent was to have this be a transition to the market itself,” Eugster said. “Solar is getting cheaper.”
If the rebate is used up too fast, he added, CPS Energy will reanalyze the rebate program. The rebate extension came from the reallocation of STEP funds from other programming.
The board on Monday also discussed plans to add another substation on the far Eastside at Loop 1604 and IH-10 East in order to keep up with the energy demands of rapid population and development growth in the area. CPS Energy has not yet contacted the property owner, opting to wait until the board gives final approval of the plan, but City Council will likely vote on a measure to approve the use of eminent domain (if needed) this summer to acquire the six-acres necessary for the project.
The site was selected out of seven other options.
Utility officials expect to complete the project by June 2018. Another public meeting on the matter is not required, though could be convened at the board’s request.
“I tend to think that it’s better to go ahead and provide the opportunity to the public,” said board member John Steen, who represents the northeast quadrant.
Top image: CPS Energy’s Justin Fisher explains how the free Home Manager program works to a curious customer during an informational session in 2014. Photo by Iris Dimmick.