Energy Service Programs By: Michael Volker & Brian Dreiling
Services Provided • Blower Door* • Establish a minimum ventilation guideline • Combustion Safety • Energy Rating • Energy discloser • Load Calculations • IR Scans • General Walk Through Energy Audits • *Required on all new houses in the City of Hays.
Background • 1995 • Safety issues in a high profile house • Building Codes on Combustion Safety • Buildings of “Ordinary Tightness” • Air from inside the building • Building of “Unusually Tight Construction” • Air from external source • Building Codes on Ventilation Air • Minimum ventilation guideline (MVG)
Evolution of the Program • Over 400 Energy Ratings in the City of Hays • Improved Combustion Zone Procedures • Isolation of the combustion appliances • Sealed combustion appliances • Ventilation Guidelines • Use of whole house heat exchanger ventilators • Improved Energy Construction Techniques • Reduction in air leakage • Higher insulation levels • Low Income Assistance Program • Surplus franchise fees • 140 Basic energy audits in 2006
Why Do This??? • Questions: • Does offering Energy Services provide benefit to Midwest Energy? • Does offering Energy Services provide benefit to our customers? • Answers: • 2004 Energy Service Study
Utility Costs & Benefits • Energy Services Evaluation • Internal Cost Study • $.10 per residential customer per month (2003) • $.15 per residential customer per month (2006) • Plus lost utility revenues. • External Value Study • $.37 per residential customer per month
Energy Services Survey Value of Energy Services What Is It Worth to Provide Energy Services? Conservative Average = $0.37 per month per bill Average value is based on the percent of customers times the monthly value.
Energy Services Survey The Importance of Energy Services The Importance of Offering Energy Services Customers who have used services place higher importance on MWE offering them. Customers who say each service is important (8-10 ratings)
Energy Services Survey Overall Satisfaction and Value Perception Adjusted Satisfaction and Value Perception Customers who have used services feel they receive greater value and have much higher satisfaction with MWE Customers responding somewhat or very high (8-10 ratings)
Energy Services Evaluation Key Survey Conclusions • Customer awareness is low; approximately 20%. • Midwest Residential customers feel the services are worth $0.37 per month per bill. • Overall customer satisfaction and value perception improve with awareness or use of energy services. • Energy service users are candidates for other services.
Why Utilities Do Not Like Conservation Programs • Customer Rates • Customer Charge ($8/Mo.) • Base Rate ($1.50/MMBtu) • Average Monthly Bill: • $8.00 (Monthly Cust. Charge) • + $12.00($1.50/MMBtu x 8MMBtu’s • $20.00 Total Utility Bill • Utility Costs • Fixed Costs ($20/Mo.) • Variable Costs ($0/MMBtu) • Average Utility Costs: • $20.00 (Fixed Costs) • + $0.00(Variable Costs) • $20.00 Total Utility Costs What happens to the Utility if volumes decline?
Challenges: Lost Utility Revenue • Volume Erosion………. • M System Residential – Down 3.1% per year. • K System Residential – Down 2.3% per year. • …….Equals Profitability Erosion • Over 50% of Utility Margins are Volumetric. • Almost 100% of Utility Costs are Fixed.
The Good Safety-Comfort-Affordability • Safety • Combustion zone safety • Indoor ventilation • Comfort • Even temperatures throughout • Correctly sized equipment • Correctly designed ducts • Sealed distribution system • Affordability • Controlled air leakage • Reduced energy consumption.
The Bad • Safety > Building Codes • Comfort > Builder (HVAC Contractor) • Affordability > Utility
The Ugly Can’t be Fixed • Owner’s Problem • Legal Actions