energy efficiency programs - Western Regional Air Partnership

Reducing Energy Consumption and
Improving Air Quality through Energy
Efficiency in Indian Country:
Recommendations to Tribal Leaders
from the Western Regional Air
Partnership
Prepared for
Western Regional Air Partnership
Air Pollution Prevention Forum
Prepared by
Northern Arizona University
July 2003
PREFACE
The primary purpose of this report is to assist tribes in implementing energy efficiency measures
and programs in order to meet air quality and visibility goals established by the United States
Environmental Protection Agency. The report, however, will also help tribal leaders identify
opportunities to use these energy efficiency to achieve economic development and energy related
goals as well as other tribal priorities.
This report was written under the direction of the Sustainable Energy Solutions Group at
Northern Arizona University under contract with the Western Governor’s Association, for the Air
Pollution Prevention Forum of the Western Regional Air Partnership (WRAP). It is a companion
to other WRAP reports on renewable energy and energy efficiency (visit
http://www.wrapair.org/tribal/index.htm).
The contributing authors to this report were:
Thomas L. Acker, Associate Professor, Mechanical Engineering
William M. Auberle, Professor, Civil and Environmental Engineering
John D. Eastwood, Lecturer, College of Business Administration
David R. LaRoche, Program Director, Center for Sustainable Environments
Amanda S. Ormond, Principal, The Ormond Group
Robert P. Slack, Graduate Research Assistant, Mechanical Engineering
Dean H. Smith, Associate Professor, Economics and Applied Indigenous Studies
Northern Arizona University
P.O. Box 15600
Flagstaff, Arizona USA 86011-5600
The authors would like to acknowle dge the following groups for valuable contributions of ideas,
references, and resources: the Tribal Issues Working Group of the WRAP Air Pollution
Prevention Forum, the Institute for Tribal Environmental Professional (ITEP), the Native
American Renewable Energy Education Project (NAREEP), and the many individuals who took
the time to review the draft report and provide critical feedback. A special thanks goes to the
Pascua Yaqui Tribe, the Confederated Salish & Kootenai Tribes of the Flathead Reservation, and
the Yurok Tribe, for each hosting a visit of NAU researchers, and for sharing their experiences
concerning energy and energy efficiency.
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TABLE OF CONTENTS
Preface..................................................................................................................................ii
Table of Contents................................................................................................................iii
Executive Summary............................................................................................................iv
How To Use This Report ....................................................................................................ix
I. Background Information...................................................................................................1
Statutory and Regulatory History ............................................................................1
Regional Haze Rule .................................................................................................4
II. Baseline Information.......................................................................................................5
What is Energy Efficiency? .....................................................................................5
Potential Cost Savings Impact of Energy Efficiency...............................................7
Benefits of Energy Efficiency................................................................................10
III. Identification and Implementation of Potential Energy Efficiency Programs .............16
How to Implement an Energy Efficiency Program................................................16
Tribal Characteristics Effecting Energy Efficiency...............................................19
Energy Sectors: Organization of Energy Uses and Measures ...............................21
Financial Resources ...............................................................................................22
New Technology....................................................................................................25
Energy Saving Products.........................................................................................25
Energy Efficiency Programs and Policies..............................................................27
Energy Education Programs ...................................................................................27
Tribal Energy Policies............................................................................................31
IV. Tribal Case Studies: Economic Analysis of Energy Efficiency Measures .................32
Economic Analysis of Energy Efficiency Measures..............................................32
Results of Tribal Case Studies ...............................................................................36
V. Recommendations of the Western Regional Air Partnership’s Air Pollution Prevention
Forum ............................................................................................................................48
Tribal Sponsored Programs....................................................................................48
Collaborative Opportunities for Tribal Energy Conservation ...............................50
Tribal Leadership Beyond Tribal Lands ................................................................51
References ..........................................................................................................................52
Glossary .............................................................................................................................54
Appendix A: Energy Efficiency Resources .......................................................................56
Appendix B: Case Study Details........................................................................................64
Appendix C: Summary of Efficiency Measures and Policies Considered for Analysis by
the WRAP Air Pollution Prevention Forum..................................................................94
Appendix D: Summary of U.S. Department of Energy – State Efficiency Programs .....103
iii
REDUCING ENERGY C ONSUMPTION AND IMPROVING A IR
QUALITY THROUGH ENERGY EFFICIENCY IN INDIAN COUNTRY:
RECOMMENDATIONS TO TRIBAL L EADERS FROM THE WESTERN
REGIONAL A IR P ARTNERSHIP
EXECUTIVE SUMMARY
This report is the product of the Western Regional Air Partnership’s Air Pollution
Prevention Forum. The report is part of a decade-long effort to characterize the sources
of visibility impairment in the national parks and wilderness areas of the West and to
develop pollution control and prevention strategies to improve visibility throughout the
region.
Introduction
magnitude of these savings will increase
significantly if other energy end- uses
such as commercial and government
entities are included. Furthermore, EE
can go hand- in-hand with new
electrification, providing a cost-effective
means to decrease operating costs while
improving the performance of newly
electrified homes and other buildings.
Energy efficiency is maximizing the
effective utilization of energy while
minimizing the costs of that energy.
Implementation of energy efficiency
(EE) programs by a tribe can have many
positive impacts. These include the
reduction of energy costs and the
associated freeing of significant financial
resources for other important uses,
improving electrical service, increased
energy independence, improved air
quality, reduction in environmental
impacts, and others. Foremost amongst
these benefits may be the potential for
reduced energy costs. By employing EE
measures, it is easily possible to save 10
percent on energy costs and the potential
exists to save in excess of 50 percent.
Thus, if a tribe spends $100,000
annually on energy, it can expect a
minimum energy cost savings of
$10,000 annually, and perhaps
significantly more. In 1997, U.S. Indian
households spent $757 million on energy
supplies (see figure on next page). Thus
if only 10 percent of that cost were
eliminated via EE, then $76 million
would be available for other purposes on
Indian lands instead of energy. The
Energy-efficiency programs have a large
potential to reduce costs to tribal
governments and reservation residents.
Some 10 percent of Indian households
spend at least 20% of their income on
electricity, so cost savings can be very
important to these households.
Additionally, many tribal buildings are
rather old and were not built according
to energy-efficient building codes or
with any focus on energy usage. Because
of this, energy efficiency programs for
administrative and school buildings may
lead to substantial savings. Furthermore,
half of the Indian reservations paying the
highest electricity prices are in the
WRAP region.
This report has been written with two
audiences in mind. First, information
has been provided to demonstrate to
iv
1997 data on energy consumption and expenditure for major energy sources in Indian
households.
tribal leaders that an energy efficiency
program can positively impact tribal
objectives of sovereignty, energy
independence, and economic
development, and warrants serious
consideration by the tribe. Second,
detailed information describing how to
assess and implement EE measures has
been provided to inform tribal staff how
to evaluate potential EE measures for
their effectiveness and cost savings, and
as a reference for tribal leaders wishing
to know more details about how to
implement EE. A table of cost-effective,
specific EE measures has been provided
in this report to assist tribal staff in
selecting EE programs of greatest
benefit to the tribe, along with
information describing how to start an
EE program. Beyond this detailed
information, however, the main
recommendations of this report are
written to tribal leaders suggesting
potential actions the tribe may take in
order to establish an EE program in
alignment with other goals and
objectives of the tribe.
The Western Regional Air
Partnership – Motivation for this
Report
The Clean Air Act establishes a national
goal of restoring visibility in National
Parks and Wilderness Areas to “natural”
conditions by reducing levels of
manmade air pollution that affect
visibility over the next six decades. One
of the strategies identified to reduce
these pollutants is through pollution
prevention. The Western Regional Air
Partnership, through its Pollution
Prevention Forum, has commissioned a
series of studies to assess how pollution
from fossil- fueled powered power plants
may be reduced through alternative
electricity generation strategies (e.g.,
renewable energy resources such as
wind energy, solar energy, etc.) and
through increased energy efficiency.
One of these studies resulted in the
report “Recommendations of the
Western Regional Air Partnership’s Air
Pollution Prevention Forum to Increase
the Generation of Electricity from
Renewable Resources on Native
American Lands.” This report was
v
released earlier and is a companion to
this report. The present report focuses on
how tribes can employ energy efficiency
to reduce the pollution generated during
electricity generation.
programs. The fifth and final section of
the report provides a set of
recommended actions for tribal leaders
to consider, as will be summarized
below. Four appendices are also supplied
that include information that may be
useful to tribal staff intending to
implement an EE program.
Content of Report
This report begins by providing
background on the Western Regional Air
Partnership, the Regional Haze Rule,
and the regulatory process that has arisen
to address the issue of regional haze. It
then proceeds to provide baseline
information about energy efficiency, its
potential cost savings impact, and other
benefit such as its ability to reduce hazecausing pollutants emitted from
electrical generating stations in the west.
This third section discusses
identification and implementation of
potential energy efficiency programs,
including some approaches that tribal
governments might adopt to begin
implementing an EE program. In the
next section, a method of evaluating the
economic benefits of EE projects is
presented, with some specific EE
examples based on tribal case studies,
The tribal case studies were made during
visits to three tribes: the Pasqua Yaqui
Tribe in Arizona, the Yurok Tribe in
northern California, and the
Confederated Salish and Kootenai Tribes
in Montana. These case studies present
three practical applications of EE. They
are representative of the philosophy
followed in creating this report: learn
from tribal experiences the nature of
tribal energy needs and how tribes can
best employ EE to address these needs.
Indeed the recommendations presented
in this report blend current tribal energy
perspectives and infrastructure related to
energy with state-of-the-art methods of
implementing and evaluating EE
Recommendations of the Western
Regional Air Partnership’s Air
Pollution Prevention Forum
The report presents a number of
recommendations to tribal leaders on
actions for developing and implementing
EE programs. Because of the great
diversity of tribes in the west, the
recommendations are organized into
three groups such that tribes may pickand-choose the appropriate actions from
the list presented. The recommendations
are grouped as follows: tribal sponsored
programs that tribal governments may
implement on their own; those that
Significant agriculture takes place on
the Flathead Reservation of the
Confederated Salish and Kootenai
Tribes. Irrigation systems on this
reservation hold the opportunity for
cost-effective energy efficiency
measures.
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might be appropriate for a collaboration
of a number of tribes to implement; and
those initiatives for which tribes can
support and provide leadership to
improve energy efficiency regionally
and nationally.
Tribal Implementation Plan. Consider
developing a Tribal Implementation Plan
under the provisions of the Regional
Haze Rule and the Tribal Authority Rule
that includes EE. Such a plan would be a
good step toward tribal energy
conservation.
Tribal Sponsored Programs
Adopt Energy Efficient Building Codes.
As tribes grow in population and
develop economically, there will be an
ever-growing need for electricity. There
is opportunity for large energy savings
by employing energy efficiency in new
construction, building renovations, and
in new electrification of previously
unelectrified areas. In rural areas tribal
customers may pay a large percentage of
their monthly income for energy
expenditures, and in these cases costeffective, energy efficient appliances can
be economically employed. Thus it is
recommended that tribes consider
adopting the International Energy
Conservation Code.
Adopt a Tribal Energy Plan.
Establishing an energy plan is the first
necessary step in gaining control over
the energy use and costs incurred by a
tribe. The plan needs support from the
highest levels within the tribe, and
among other things should set down
goals for energy efficiency.
Establish a Tribal Energy Authority.
For tribes without an energy (utility)
authority, it is recommended that these
tribes consider establishing such an
entity. Perhaps the most important
recommendation in this report is that of
designing a tribal energy plan that is
managed by an energy manager within a
tribal energy authority. When the
electricity provider is someone other
than a tribal entity, then the energy
authority will have the capacity to be an
advocate for tribal electricity customers,
possibly negotiating lower electricity
rates and improving the reliability of the
service. An energy authority will also
create jobs, build tribal expertise in
energy, and help prevent some of the
money expended on energy from
flowing off the reservation. A tribal
energy authority may also advance tribal
self-determination.
The Ke’pel Head Start Building on the
Yurok Reservation. Facilities such as
this that are not connected to the
electrical grid typically have higher
energy costs, and are good candidates
energy efficiency retrofits
Hire a Tribal Energy Manager. An
energy manager develops, implements
and maintains a program focusing on
tribal energy use, including those related
to energy efficiency.
vii
Initiate Education Programs for tribal
members, leadership, facility managers,
tribal staff and contractors, that will
enhance understanding energy usage and
of the benefits of conserving energy.
Education can make the difference
between an effective, successful,
comprehensive energy management
program and an unsuccessful program.
America Program. Tribes may also
consider requesting funding for
efficiency programs from the federal
government via several existing statutes,
most notably the Energy Policy Act of
1992 and its amendments.
Collaborative Program Improvements
in Tribal Energy Conservation
Demand Side Management Initiatives.
Demand side management programs that
encourage and reward electricity users to
be efficient can yield direct financial
benefits to a tribe as well as contribute to
mitigating regional haze. A tribe can
show leadership in DSM programs by
supporting system benefit charges that
will be used to support DSM programs.
Tribal Leadership Beyond Tribal
Lands
Form Inter-Tribal Collaborations. For
tribes that lack the resources to establish
their own energy authority or even to
hire their own energy manager, it may be
beneficial to initiate partnerships with
other tribes to establish an energy
authority or to hire an energy manager.
Tribes could also work collaboratively to
encourage the federal government, under
its trust responsibility, to fund energy
efficiency programs (including
education programs and rebate
programs) and to provide funding to
tribes for energy management.
National Energy Efficiency Policies
and Standards. National energy
efficiency policies and standards can
significantly impact regional air quality
as well as energy supply reliability, cost,
availability, and security. Tribes can
provide leadership through support of
national policies promoting energy
efficiency.
Federal Facilities on Tribal Lands.
There are numerous federal facilities on
tribal lands, and these facilities consume
an appreciable fraction of the electrical
energy on tribal lands. The forum
recommends that tribes consider
adopting energy conservation policies
that require federal facilities on tribal
lands to meet modern energy efficiency
codes.
Federally Sponsored Programs. The
forum recommends that tribes consider,
as part of their overall energy plan,
participating in existing federally
sponsored programs related to energy
efficiency such as the Weatherization
Assistance Programs and the Rebuild
Similar to many public facilities, the
Pascua Yaqui new Head Start facility
may be a good candidate for a motiondetector lighting system to reduce
electricity consumption.
viii
HOW TO USE THIS REPORT
A wide variety of information related to energy efficiency has been assembled and
presented in this report. As such, it could be a lengthy task to sit down and read it from
cover-to-cover. Because it is expected that the readers of this report will have
backgrounds varying from tribal leadership and management, to air quality management,
to energy or utility expertise, to interested individual, each reader may want to pick and
choose among the sections of the report. While there is continuity among the sections of
this report, it has been written in a manner that each section can be read independently of
the other sections. For example, a tribal leader may wish to read the Executive Summary
and then skip to the Section V of the report “Recommendations of the Western Regional
Air Partnership’s Air Pollution Prevention Forum.” Alternatively, a project manager for
the tribe may wish to learn more about energy efficiency programs and how to assess the
economic merits of an efficiency measure, and would focus on reading Sections III and
IV and Appendix B. To assist in the process of selecting the relevant portions of the
report to read, a brief description of each major section of the report is listed below:
I. Background Information
•
Describes the background of the Western Regional Air Partnership, and its
motivation in creating this report.
•
Presents the most relevant statutory and regulatory provisions that apply to
controlling visibility impairing sources of air pollution, and highlights the role of
tribal governments in implementing those statutory and regulatory provisions.
•
Summarizes previous steps states, tribes, and others have taken to identify and
control these sources of air pollution.
II. Baseline Information
•
Defines energy efficiency and where one might look to make energy efficiency
improvements
•
Describes the potential benefits of energy efficiency in the context of tribal issues.
•
Provides an idea of the potential magnitude of energy and electricity cost savings
that can be achieved via energy efficiency.
III. Identification and Implementation of Potential Energy Efficiency Programs
•
Describes steps a tribe might take in establishing an energy efficiency program.
•
Discusses the various tribal characteristics that could have an impact on the types
of efficiency programs and measures a tribe may select for implementation.
•
Provides a discussion of the relevant energy sectors in which efficiency
improvements may be sought.
•
Presents options for financing energy efficiency programs.
ix
•
Describes how to evaluate new energy efficiency technologies, where to learn
about energy saving products, and a summary of energy efficiency measures and
policies that tribes may consider implementing.
•
Provides suggested educational programs that support energy efficiency as well as
some potential tribal policies.
IV. Tribal Case Studies: Economic Analysis of Energy Efficiency Measures
•
Provides a discussion of how to assess the economic merit of a potential energy
efficiency measure.
•
Summarizes the results of three tribal case studies where potential energy
efficiency measures were evaluated.
IV. Recommendations of the Western Regional Air Partnership’s Air Pollution
Prevention Forum
•
Identifies potential actions tribes may take either individually or in collaboration
for others, in order to implement energy efficiency measures and programs.
Appendix A: Energy Efficiency Resources
•
A list of numerous programs and resources related to energy and energy
efficiency.
Appendix B: Tribal Case Studies
•
Presents a general method of evaluating and selecting energy efficiency projects
•
Provides details of the economic calculations for the energy efficiency measures
considered in each of the three tribal case studies.
Appendix C: Summary of Efficiency Measures and Policies Considered for Analysis by
the WRAP Air Pollution Prevention Forum
•
Presents energy efficiency measures identified by the Air Pollution Prevention
Forum as potentially effective in reducing energy use. This material is intended to
provide tribes with a more through understanding of energy efficiency measure to
help determine if such measures may be applicable for their tribe
Appendix D: Summary of U.S. Department of Energy – State Efficiency Programs
•
Provides a list of the variety of existing state efficiency programs and projects to
reduce energy use and increase energy efficiency.
x
I. BACKGROUND INFORMATION
The Air Pollution Prevention Forum of the Western Regional Air Partnership plays a
major role in the analysis and development of strategies to reduce regional haze and to
improve visibility. This introduction provides a summary of the legal, regulatory, and
procedural contexts for exploring energy-efficiency opportunities on tribal lands. Key
topics include the following:
The missions of the Western Regional Air Partnership and its predecessor
organization, the Grand Canyon Visibility Transport Commission, including the
role of tribes in each.
The regional haze rule as promulgated by EPA, and the potential for reducing
emissions through energy efficiency.
Regulatory processes for implementing energy-efficiency measures through state
and tribal implementation plans (SIPs and TIPs).
STATUTORY AND REGULATORY HISTORY
The Clean Air Act of 1977 and its amendments in 1990 require the protection of
important vistas at the nation’s National Parks, Monuments, and Wilderness Areas.
Further, where regional haze currently impairs visibility in these areas, the EPA must
develop and implement plans to eliminate man-made sources of air pollution responsible
for such impacts. The 1990 statute calls specific attention to the importance of protecting
visibility at Grand Canyon National Park through the creation of the Grand Canyon
Visibility Transport Commission (GCVTC).
Grand Canyon Visibility Transport Commission
Once created by the Clean Air Act Amendments of 1990, the GCVTC quickly and
importantly agreed to address regional haze problems at 15 national parks, monuments,
and wilderness areas on the Colorado Plateau in addition to Grand Canyon National Park.
Initial members of the GCVTC were state governors and leaders of federal land
management agencies. By 1994, however, at the request of tribes the EPA expanded
GCVTC membership through the addition of leaders from fo ur tribal governments, plus
the chair of the Columbia River Intertribal Fish Commission as an ex officio member.
From its inception through 1996, the GCVTC carried out extensive studies of the causes
of regional haze on the Colorado Plateau, evaluated many options for mitigating existing
and potential future impacts, and developed a broad set of recommendations for
“remedying existing and preventing future” man-made causes of regional haze affecting
the targeted National Parks, Monuments, and Wilderness Areas. Its concluding report,
1
Recommendations for Improving Western Vistas, was submitted to the EPA in June of
1996. The report includes nine broad recommendations plus many specific ones. Two of
these recommendations are directly relevant to this report. One recommendation
advocates “policies based on energy conservation, increased energy efficiency and
promotion of renewable resources for energy production” (emphasis added). A second
recommendation proposes “an entity like the Commission to oversee, promote, and
support many of the recommendations.” This latter recommendation led to the creation of
the Western Regional Air Partnership.
Western Regional Air Partnership
Soon after the final report of the GCVTC, most participants in that process chose to
develop “an entity like the Commission.” The Western Regional Air Partnership (WRAP)
was established to implement the recommendations of the GCVTC and to address
broader air quality issues that affect the West. The expanded mission of the WRAP has
attracted an expanded membership. Thirteen states, a similar number of tribes, plus three
federal agencies now comprise the WRAP board of directors. The WRAP has created
committees and forums to conduct much of the partnership’s work, staffed by many
stakeholders and parties interested in the activities of the WRAP. One such entity is the
Air Pollution Prevention Forum (AP2 Forum).
Air Pollution Prevention Forum
The charge of the AP2 Forum is, in part, “to examine barriers to use of renewable energy
and energy efficient technologies, identify actions to overcome such barriers, and
recommend potential renewable energy and energy efficiency programs and policies that
could result in a reduction of air emissions from energy reduction and energy end- use
sectors in the Grand Canyon Visibility Transport Region.” Membership in the forum is
representative of the membership in WRAP, plus representatives from a wide range of
interests. See the forum Web site at www.wrapair.org.
The initial focus of the forum was to explore the potential for increased utilization of
renewable energy sources, followed by an examination of potential areas for
improvement in energy efficiency. In both contexts, renewable energy and energy
efficiency, the primary focus is electricity supply and demand. More specifically the AP2
Forum has been asked by the WRAP “to identify and recommend legislative actions,
economic incentives and regulatory policies that states and tribes can adopt to increase
use of renewable energy and energy efficiency and reduce haze causing emissions in the
region.”
Tribal Governments
With the development of the Western Regional Air Partnership in 1997, tribal
governments were recognized as full partners in the development of strategies to address
the problem of regional haze in the West. This role was not achieved quickly or easily. A
brief examination of key steps to full partnership follows:
2
The major federal air pollution statutes of 1963, 1967, 1970, and 1977 were largely silent
on the roles and responsibilities of tribal governments in the federal scheme of
implementing these laws. However, much attention was given to federal and state
relationships. Air-quality management on tribal lands was assumed by state governments,
the federal EPA, or more commonly, not at all! This oversight of failing to include tribes
became increasingly apparent and problematic as various air-quality concerns were
recognized as being common over large regions of the nation, including tribal lands. With
the Clean Air Act Amendments of 1990 Congress added three new provisions: (1) The
EPA Administrator was authorized to treat tribes as states for the purpose of
implementing the Act, (2) The eligibility criteria for tribes to obtain such treatment were
defined, and (3) The EPA administrator was directed to promulgate regulations laying out
those provisions of the Act for which it is appropriate to treat tribes as states.
More than 7 years later, in February of 1998, the EPA administrator promulgated
regulations to establish the basic framework authorizing eligible tribal governments to
implement Clean Air Act programs. These regulations have become known as the “tribal
authority rule” (TAR) and are codified at 40 CFR Part 49. The following key provisions
of this rule are particularly relevant to the WRAP and to potential energy efficiency
opportunities.
(1) Eligible tribes may implement Clean Air Act programs to protect air resources
“within the exterior boundaries of the reservation or other areas within the tribe’s
jurisdiction.” Such tribes thus have authority to regulate all sources of air pollution within
the exterior boundaries of the reservation, including those on non-Indian owned fee land
within the reservation.
(2) Tribes have a great deal of flexibility when developing their air-quality management
programs. The Act does not require any action on the part of tribes, unlike state
governments, to implement any provision of that law. To encourage tribes to develop airquality management programs, however, the TAR authorizes a modular approach to
tribal programs; that is, tribes can build their technical and management capacity at the
same time they begin to address concerns specific to their priorities. This modular
approach provides several opportunities:
•
Tribes can pick and choose among Clean Air Act provisions to craft a program
that addresses the tribe’s specific air-quality concerns.
•
The EPA can approve these modular programs provided that they do not depend
on any other program element for enforceability.
•
To encourage tribes to develop air quality management programs, grants are
available from the EPA pursuant to Sections 103 and 105 of the Clean Air Act.
3
REGIONAL HAZE RULE
In 1999 the EPA administrator promulgated the regional haze rule (RHR), codified at 40
CFR Part 51.300–309. The RHR has provisions that apply to all states and tribes in the
United States. One specific provision of the RHR embraces the recommendations of the
GCVTC and offers western states and tribes options for complying with RHR
requirements. States must develop regional haze implementation plans (SIPs), but can
choose between the general federal requirements (Section 308) or the specific elements of
the GCVTC (Section 309). The RHR sets forth specific timelines for these State
Implementation Plans. A useful fact sheet published by the EPA explaining the RHR and
state requirements is provided as Appendix A.
The requirements of the RHR are among the air-quality program elements that can be
implemented by tribal governments. Under the Clean Air Act, tribes eligible to
implement Section 309 (GCVTC) plans are those located in the states of Arizona,
California, Colorado, Idaho, Nevada, New Mexico, Oregon, Utah, and Wyoming. These
tribes may seek approval from the EPA to implement the RHR through Tribal
Implementation Plans (TIPs). The deadlines imposed on states do not apply to tribes, but
tribes may choose, and are encouraged, to implement programs. Thus tribes may elect to
develop a regional haze program pursuant to either Section 308 or 309 of the RHR. For
any tribal lands where the tribal government elects not to take on this responsibility, the
EPA must assure air-quality protection. Regional haze program requirements on some
tribal lands may therefore be implemented via Federal Implementation Plans (FIPs).
Energy-efficiency measures are specifically recognized in Section 309 of the RHR.
Economic costs and benefits—both direct and indirect—are to be identified and
described. This report fulfills, in part, that requirement with respect to tribal lands,
governments and programs in the region.
4
II. BASELINE INFORMATION
One of the goals of this report is to provide tribal decision makers with a background in
energy efficiency (EE) sufficient to determine whether EE programs offer enough benefit
to the tribe to warrant in-depth consideration and investigation by tribal staff. To aid
tribes in this determination, the following topics are discussed in this section:
•
•
•
What is Energy Efficiency?
Benefits of Energy Efficiency
Potential Cost Savings Impact of Energy Efficiency
WHAT IS ENERGY EFFICIENCY?
In this report, energy efficiency is broadly interpreted as being synonymous with energy
management. The intent of energy management is to implement strategies that maximize
the effective utilization of energy while minimizing the costs of that energy. The EE
measures and programs discussed in this report are specific projects or policies that when
implemented will reduce the consumption of energy and energy costs. Although the
energy source could be natural gas, propane, electricity, wood, etc., the focus of this
report is on reducing the consumption of electricity and the associated haze-causing
pollutants emitted at the power plant. The methods used to evaluate the princip al EE
measures considered here, those related to electricity use, apply equally well for other
energy sources.
When considering reduction of electricity consumption, a good place to start is with
identifying of the main uses of electricity. From the perspective of a tribal administrator,
the biggest uses of electricity may best be divided into the following categories or
“sectors:” residential, commercial (which includes tribal and federal government facilities
as well as gaming and recreation facilities), industrial, and agricultural. For most tribes, a
significant portion of the electricity budget is consumed by residential and commercial
building loads. However, the amount consumed within other sectors, if any, varies
significantly for each tribe. Thus the EE programs adopted by various tribes may bear
similarity in the residential and governmental sectors, but will vary widely in other
sectors depending upon the circumstances of each tribe.
The next level of consideration of electricity use is from the perspective of a person
responsible for tracking and understanding the electricity consumption (e.g., an energy
manager). This person will be interested in knowing the actual uses of electricity so as to
determine the opportunities for EE and the associated cost savings. From this perspective,
electricity use is typically divided within each sector into categories such as lighting,
space heating, space cooling, refrigeration, hot water, office equipment, pumps, fans,
motors, and possibly others. A good source of information for identifying how much
energy and electricity is used within these categories in each of the various sectors is the
5
U.S. Energy Information Administration (EIA). As an example, consider the pie charts in
Figures 1 and 2, which depict the uses of electricity in commercial and residential
buildings. This information can be useful in determining where opportunities for EE
improvements exist. For example, in a typical commercial building about 46% of the
electricity is used for lighting, so improving the effectiveness of lighting in a building can
generate significant savings in the electric bill.
An important consideration when evaluating any potential EE measure is the required
functionality of the system being considered; it is crucial that the EE measure not
compromise functionality. For example, consider an EE measure that reduces the
electricity consumption by an office building cooling system. After implemented, it is
very important that the building still be cooled to an acceptable level so that employees in
that building are comfortable and productive. Otherwise, the economic gain made in the
energy cost savings may be lost in decreased worker productivity. Fortunately, when
implemented, many EE measures not only decrease electricity consumption but also
improve energy system effectiveness (and therefore avoid adverse effects such as
decreased worker productivity).
The field of energy efficiency has matured over the last 30 years, with many excellent
resources now available to assis t an energy manager in choosing, evaluating, and
implementing specific EE programs. A listing of some of these resources is presented in
Appendix A. One particularly good reference that introduces and describes many of the
important aspects of EE is the book Guide to Energy Management by Capehart, Turner,
and Kennedy (1997).
1995 Commercial Electric Consumption by End-Use
Space Heating
4%
Water Heating
2%
Cooking
1%
Ventilation
6%
Refrigeration
7%
Lighting
46%
Other
8%
Office
Equipment
13%
Cooling
13%
Figure 1 – Average percentage use of electricity in commercial buildings in 1995
(http://www.eia.doe.gov/emeu/cbecs/ce95/toc_ce.html).
6
1997 Residential Electric Consumption by End-Use
Water Heating
11%
Air
Conditioning
6%
Space Heating
14%
Appliances
(including
refrigetators
and lighting)
69%
Figure 2 – Average percentage use of electricity in residential buildings in the West in
1997 (http://www.eia.doe.gov/emeu/cbecs/ce97/toc_re.html).
POTENTIAL COST SAVINGS IMPACT OF ENERGY EFFICIENCY
Tribal Household Electricity Use
Energy efficiency has the potential to significantly impact electricity consumption and
related electricity costs. Considering that $454 million was spent on electricity in all
Indian households in the United States in 1997 (see Figure 3), a decrease of only 10
percent in consumption of electricity due to EE programs could produce savings on the
order of $45 million. Given the fact that Indian populations are rapidly increasing and
that tribes are actively engaged in economic development, the amount of resources spent
on energy will only increase. If consumption of other energy resources besides electricity
are considered for EE improvements, such as natural gas, the potential for savings could
double (see Figure 3; electricity accounts for about half of the money spent on energy
resources).
A report by Elliott (1998), “Lowering Energy Bills in American Indian Households: A
Case Study of the Rosebud Sioux Tribe,” supports these findings. Elliott showed that
Native American households generally carry a substantial burden in household energy
bills. For the case of the Rosebud Sioux, EE measures were shown to offer the potential
for savings on the order of 25 percent (e.g., retrofitting exterior lights with compact
7
Figure 3 – 1997 data on energy consumption and expenditures for major energy sources
in Indian households in the United States. The chart on the left indicates energy
consumed by source (electricity, natural gas, and other) and the chart on the right
indicates the percentage and amount of money spent in consuming each of these energy
sources (Energy Information Administration 2000).
fluorescent bulbs, installing low- flow showerheads, using a water-heater insulation
blanket, switching to a higher efficiency refrigerator, etc.), and some measures offered
potential savings on the order of 65 percent (e.g., comprehensive weatherization using
advanced techniques, and fuel switching space- and water- heating systems from electric
to propane).
WRAP Total Energy Consumption by Sector and by State
To identify energy-efficiency opportunities it is necessary to understand energy usage
patterns. The following figures were prepared using data from the Energy Information
Administration’s (EIA) state energy data for 1997, the most current year available. Figure
4 gives EIA data organized by energy consumption sectors: residential, commercial,
industrial, and transportation. Note the commercial sector includes service businesses,
such as retail and wholesale stores, hotels and motels, restaurants, and hospitals, as well
as a wide range of buildings that would not be considered “commercial” in a traditional
economic sense, such as public schools, correctional institutions, and religious and
fraternal organizations. Excluded from the commercial sector are the goods-producing
industries: manufacturing, agriculture, mining, forestry and fisheries, and construction.
Specific EE measures applicable in each sector are discussed in Sec. III of this report.
Figure 5 shows energy consumption information for each WRAP state. The bars in this
figure also indicated the relative amount of energy consumed by each sector. These
figures provide an indication of the magnitude of energy consumed and therefore the
potential for energy savings, and the relative amount of energy use in each sector.
8
Energy Consumption by Sector
WRAP States 1997
Industrial
32%
Transportation
34%
Commercial
16%
Residential
18%
Figure 4 – Energy consumption by sector in WRAP states during 1997.
Energy Consumption in the WRAP States
1997
8000
7000
Trillion BTUs
6000
5000
4000
Trans
Ind
Com
Res
3000
2000
1000
0
AZ CA CO ID MT ND NV NM OR UT WA WY
Figure 5 – Energy consumption by states in the WRAP region during 1997 (Trans =
Transportation, Ind = Industry, Com = Commercial, Res = Residential).
9
BENEFITS OF ENERGY EFFICIENCY
Benefits of a Tribal Energy Authority
Perhaps the most important recommendation in this report is that of designing a tribal
energy plan that is coordinated by an energy manager within a Tribal Energy Authority.
When the electricity provider is someone other than a tribal entity, the energy authority
will be an advocate for tribal electricity customers. This liaison capacity may be used, for
example, to create rebate programs to decommission older appliances. Or the energy
manager can negotiate with off- reservation power producers to improve reliability; in
some cases, reservation power lines are at the end of the electrical grid, which can result
in unreliable delivery. If the tribal energy authority has the ability to negotiate for all
customers as a block, then a better resolution may be arranged. The energy authority can
make decisions and implement plans that lead to a future based on the tribe’s vision. And
it follows that a tribal energy authority will also create jobs. Some tribes may be too
small to fund a fully operational energy authority; in these cases it may be beneficial to
form a consortium of tribes to create a single such entity. Each tribe would design an
individual action plan, but they would share personnel and capital resources.
Economic Benefits of Energy Efficiency
The primary benefit of improvements in energy efficiency is, of course, the cost savings.
Often a moderate expenditure today will result in substantial future savings. Indeed, after
an energy management program is initiated, energy cost savings up to 15 percent can be
easily realized with little capital investment. Eventually, savings on the order of 30
percent are routinely obtained, and sometimes savings of as high as 50 to70 percent can
be achieved (Capehart et al. 1997). These savings free financial resources for better use
elsewhere, often regardless of the sector that implements the efficiency improvement. A
few examples may help to illustrate this general concept: A family may choose to insulate
their home to permanently reduce the heating or cooling cost; money is spent the first
year, but money is saved every year afterward. The money saved can be applied to
whatever that family perceives as its next greatest need. A business may, for example,
install new light fixtures that provide the same illumination benefits at a lower cost.
There is an initial outlay of cash, but then these reduced costs last for the lifetime of the
new fixtures, raising the incomes of the business and perhaps its employees. A
governmental entity may have similar opportunities to implement efficiency measures.
Such measures will free budgetary resources, allowing that entity to better accomplish its
mission.
In addition to decreasing the energy-related costs in a household, business, or government
office, efficiency improvements may also further the economic development of a region,
or may change its pattern of economic activity by freeing resources for other, more
productive tasks. Jobs are created for local workers to repair or weatherize buildings, and
if some of the materials used are locally produced or processed, work is generated in
those sectors as well.
10
Money saved through efficiency improvements will eventually be spent on other goods
and services, some of which are available on the reservation. A family with lower utility
bills may now spend more on locally produced services such as dining, entertainment,
daycare, or preventative medical care. As activity in these sectors increases, employment
and incomes will increase as well. As this additional income is spent, it circulates
throughout the economy, further increasing employment and incomes through a
phenomenon known as the multiplier effect. Not all money saved through EE return to
the local economy, but will continue to flow off the reservation through the purchase of
non-local goods and services, such as when purchasing new appliances. There are also
indirect economic benefits of EE programs. However, these are more difficult to
calculate, in part because spending of the cost savings is reallocated among sectors.
Energy-efficiency programs have a large potential to reduce costs to tribal governments
and reservation residents. Some 10 percent of Indian households spend at least 20% of
their income on electricity, so cost savings can be very important to these households
(Energy Information Administration 2000). Additionally, many tribal buildings are rather
old and were not built according to energy-efficient building codes or with any focus on
energy usage. Instead, federal funds were used to provide least-cost structures. Because
of this, weatherization (energy efficiency) programs for administrative and school
buildings may lead to substantial savings. According to a report by the Energy
Information Administratio n (2000, pg. 10), half of the Indian reservations paying the
highest electricity prices are in the WRAP region.
Secondary Benefits of Energy Efficiency
Several secondary benefits may accompany EE improvements. First and possibly
foremost, energy conserva tion can contribute to energy independence and improved tribal
sovereignty. The money saved may also allow a tribe to address other pressing needs,
such as improved health care on the reservation. EE measures also frequently improve the
performance and longevity of existing energy systems, which can improve the comfort of
working and living spaces and may increase productivity of workers. Benefits such as
these may be difficult to quantify but are certainly worth considering.
Electrical System Reliability and Avoiding Power Outages
Improved EE can also help curtail brownouts and service interruptions. At least for the
next few years and until significant new electricity generation comes on line, the general
ability of the electric power system in the WRAP region to meet peak demand is at risk.
The ability to meet the demand for electricity in this region will likely depend largely on
weather (i.e., its effect on electricity demand through heating and cooling) and
hydroelectric conditions (i.e., the availability of hydroelectricity as related to reservoir
levels and the higher priority functions of the reservoirs such as irrigation and flood
control). Thus possibly the most effective means of avoiding brownouts and service
interruptions may be to manage the demand side of the market place. This could include
initiating demand-side management programs that encourage energy efficiency, or
possibly even altering the electricity rate schedule so that consumers pay real- time prices
11
for electricity (higher cost during the mid-day and afternoon when the demand for
electricity is highest, and lower cost in the evenings and through the night).
Benefits of EE in New Electrification
Energy efficiency opportunities exist with all new electrification projects that tribes
undertake. More than 14 percent of Indian households in the United States lack
electricity, as opposed to 1.4 percent of all U.S. households. Furthermore, eight of the
twelve tribes with the greatest need (by percentage of households) for electrification are
located in the WRAP region (Energy Information Administration 2000, pgs. xi, xiv). It is
estimated that 18,000 homes on the Navajo Reservation do not have electricity available
(Bain 2002). The Native American population throughout the country is rapid ly
increasing and will require additional housing in the future. As reservation economies
develop, new commercial and industrial buildings will also be developed. This
combination of existing need and expected growth makes the need for energy-efficient
designs ever more important. Efficiency can be improved at many points along the
electricity production-consumption pathway. Some ideas include improved technology in
the development of new electricity production sites, improved electrical transmission and
distribution systems, the siting of buildings in clusters to reduce transmission distances,
and the adoption of energy-efficient building codes.
Economic Development Benefits
Many tribes face two major needs: employment and economic development. Perhaps
tribal economic development could avoid the conventional model where pure profits are
the main consideration. Although profits must still be a consideration, culture and
traditions could also play an operative role in blending successful commerce with
traditional lifeways. Economic security can help lead to cultural self-preservation. Energy
efficiency is an ideal way to help achieve such security because it does not depend solely
on scarce resources in danger of being depleted. Instead it can help protect them for
future generations. Becoming more energy efficient can lead not only to direct
opportunities for people in education and employment through its economic benefits, but
also to a myriad of secondary reservation-based opportunities. This can all be done in a
way that does not detract from the culture, but rather helps to preserve it. Economic
development occurs when diverse activities and businesses are given the opportunity to
prosper and flourish within a stable political background. Such development is a process
that weaves through the social system; it can assist sustaining tribal character.
Jacobs (2000, pg. 19) has noted that “Development … operates as a web of
interdependent co-developments.” EE programs can enhance such co-developments,
which incorporate multiple members of the community and bring vital improvements to
its economic structure. According to a study done on the Navajo Reservation (Yazzie
1989), approximately 87 cents of each dollar earned was spent off the reservation in
border towns, where goods and services were purchased. As the economic development
12
process continues and a more diverse selection of goods and services is offered on the
reservation, people will spend more money on the reservation rather than in border
towns. The term for this is import replacement, and it is a vital part of the economic
development process. Although major efforts have been made to increase retail
opportunities on reservations in the last decade, additional expansion can be stimulated
by providing affordable renewable energy and by encouraging the creative and
entrepreneurial spirit of community members. By introducing energy efficiency programs
to the reservation, the tribe will be refueling itself.
In order to replace imports with domestically produced goods and services, the whole
reservation economy must participate in development, which spreads work opportunities
throughout the community. The goal is to seek diversification rather than mere expansion
of existing goods and services. When energy efficiency is realized, the cost of doing
business is lowered, and the economic landscape will become correspondingly more
fertile, producing business opportunities such as sales of more efficient appliances, light
fixtures, bulbs, and accessories. Combining the energy efficiency programs with a
program for increased electrification creates a potential for both retail and manufacturing
expansion. There will be a new found need for items like refrigerators, fans, extension
cords, and computers, which could be sold on the reservation. Leakage of money off the
reservation will decrease, and the tribe will profit from increases in both reservation
business activity and employment opportunities.
As the technicians working for the energy businesses begin to deve lop their skills
installing and implementing the new, efficient systems, spontaneous entrepreneurial ideas
could arise. Perhaps small components of the systems could be produced locally.
Alternatively, new and better designs for components may result from the creativity of
the tribe’s entrepreneurs. Native American tribes could move ahead of the rest of the
world by inventing specialized tools desired by the rest of the planet. This is Jacobs’s
(2000) “web of co-developments.” There is no way of foretelling the future, but the
strong entrepreneurial nature of the indigenous cultures almost assures development of
new opportunities, products, and services.
Some of the benefits of implementing efficient energy programs on reservations will be
social. The lack of jobs and insufficient income, two of the most pressing issues on
reservations (Smith, 2000, pg. 95), tend to create a downward spiral in quality of life
because people see no opportunity for improvement. The result is often substance abuse,
domestic unrest, and attrition of people to places where jobs can be found. Those who
seek highly specialized jobs tend to leave the reservation in search of such work; a brain
drain takes away the most talented members of the population. However, appropriate
economic development will likely ameliorate such social ills. The brain drain effect will
decrease because there will be more opportunities for people to use their talents on the
reservation. The experience of earning a steady income will give hope for improvement,
as well as providing successful role models for others. This increase in activity will also
likely reduce substance abuse. Individuals will begin to see opportunities to enrich their
lives rather than feeling hopeless.
13
The energy business itself will bring immediate employment opportunities that will likely
continue to exist into the future. Tribal colleges are perfect locations at which to hold
classes to teach people about how the energy-efficient applications work. With this
highly specialized niche of the local economy filled by tribal members, business is
developed and skills are refined that provide opportunities to export products and services
off the reservation. There is much to be gained by becoming experts in the art of energy
efficiency, as the United States and other nations struggle to make more efficient use of
fossil fuels. Tribes could be ahead of the game with their more comprehensive
understanding of the systems and their uses. This is a perfect opportunity to turn the tide,
to begin to export skills and services, and subsequently to import dollars.
Air Quality Benefits
The basic idea advanced by the Grand Canyon Visibility Transport Commission
(GCVTC) was that by reducing electricity consumption through EE, the amount of
electricity required from central station power plants would be reduced. If the power
plants that supply a tribe’s electricity burn coal, then energy efficiency would result in
less sulfur dioxide pollution emitted and a consequent reduction in haze (coal contains
sulfur, and when the coal is burned some of the sulfur will combine with oxygen to
produce sulfur dioxide, which is known to cause haze and reduce visibility). Lacking
specific power plant information for tribal supplies, an estimate of the savings in sulfur
dioxide emissions can be estimated from the average sulfur dioxide emissions for the
state(s) within which the tribe is located (Table 1). Note this table presents the amount of
sulfur dioxide produced per megawatt-hour (MWh) of energy produced. As an exa mple,
a typical power plant might have an electrical generating capacity of 1000 MW. If
running at full capacity for one hour, the plant would produce 1000 MWh of electrical
energy. Using Table 1, if the plant were located in Arizona, on average it would have
emitted 344 lbs of sulfur dioxide into the atmosphere during that hour (1000 MWh ´
0.344 lbs/MWwh = 344 lbs).
Other air pollutants are also emitted from power plants that burn hydrocarbons (such as
coal and natural gas), and energy efficiency is a tool that can be used to reduce all types
of air emissions. In particular, large amounts of carbon dioxide are created during
combustion, and it is the primary greenhouse gas in global warming. Low levels of
nitrogen oxides are also released during combustion, and these can lead to regional haze,
photochemical smog and acid rain. Efficiency actions could be included in Tribal
Implementation Plans as a way to reduce the emissions inventory baseline and as control
measures for criteria pollutants (criteria pollutants are those which impact air quality and
should be addressed in an implementation plan). A longer-term potential justification for
energy efficiency is its capability to reduce greenhouse gases (those pollutants that lead
to global warming, such as carbon dioxide). Should greenhouse gas emission reductions
be mandated, energy efficiency would likely be the most significant tool for achieving
such reductions.
14
Table 1 – Average sulfur dioxide emissions from power plants located in the 13-state
WRAP region, reported in pounds of sulfur dioxide emitted per megawatt-hour of
electricity produced (source: Energy Information Administration 2001).
Sulfur Dioxide (lbs/MWh)
Alaska
0.344
Arizona
1.524
California
0.000
Colorado
4.352
Idaho
0.000
Montana
1.080
New Mexico
3.438
North Dakota
9.866
Oregon
0.494
South Dakota
4.358
Utah
1.522
Washington
1.246
Wyoming
3.896
Mean
Standard Deviation
15
2.471
2.748
III. IDENTIFICATION AND IMPLEMENTATION OF POTENTIAL ENERGY
EFFICIENCY PROGRAMS
Tribal members spend anywhere between 1 percent and 20 percent of their incomes on
basic energy services (Energy Information Administration 2000). Depending on the type
and sector (e.g., commercial, residential, etc.) of an energy efficiency (EE) project,
successful implementation of the project can be of significant impact due to the
potentially large percentage of income expended on energy. However, for these benefits
to be realized, the EE project must be successfully implemented. Because EE measures
vary from simple behavioral changes to complex technological applications, a proper
understanding of how to implement an energy efficiency program and how to select
appropriate EE measures is crucial to achieving successful implementation. Toward this
end, it is important to understand the demographics and different market segments in
order to focus efforts in areas that will create the greatest yield in energy cost savings and
other benefits. Furthermore, if a tribe has not previously undertaken any energy
efficiency projects, it is likely that there are ample opportunities to achieve substantial
savings by implementing a variety of EE measures, including “low tech” projects. The
purpose of the material presented in this section is to describe how to establish a
successful energy efficiency program as well as suggest potential EE measures. Thus the
subsections to follow are:
•
•
•
•
•
•
•
•
•
How to Implement an Energy Efficiency Program – describes steps a tribe might
take in establishing an energy efficiency program.
Tribal Characteristics Effecting Energy Efficiency – a discussion of the factors
that will have an impact on the types of EE programs and measures chosen by a
tribe for implementation.
Energy Sectors: Organization of Energy Uses and Measures – a discussion of the
relevant energy sectors in which efficiency improvements may be sought.
Financial Resources – options for financing EE programs
New Technology – how to evaluate new EE technologies
Energy Saving Products – where to learn about energy saving products
Energy Efficiency Programs and Policies – a summary of EE measures and
policies that tribes may consider implementing
Energy Education Programs – suggested educational programs that support EE
Tribal Energy Policies – suggested tribal policies that pertain to EE
HOW TO IMPLEMENT AN ENERGY EFFICIENCY PROGRAM
With a more competitive electric power market and the advent of retail competition in
half of the WRAP states, utility-operated energy-efficiency programs (called demandside management programs) have largely disappeared. New structures for delivering
energy are emerging that may create new opportunities for promoting energy efficiency.
16
Many state utility commissions have instituted system benefit charges (SBCs) that
become part of the bill paid by all electricity customers. Funds from an SBC are set aside
for purposes such as energy-efficiency educational programs. Energy service companies
(ESCOs) now exist that contract with customers to provide energy-related services. One
typical service is identifying and implementing energy-efficiency measures for the
customer. Often these services are set up with a performance contract where the ESCO
receives payment out of the monthly energy savings.
Regardless of whether a tribe chooses to pursue energy efficiency using interna l
resources or contracting externally, it is important that the tribe has a person or office
assigned with the responsibility of tribal energy issues. A person in this position typically
would have the title of Energy Manager.
The Energy Manager
Hiring a person or assigning to a person the duties of an energy manager is a key step in
implementing EE programs. It is important that the responsibility for energy issues and
EE be assumed by a single person or office within an organization, and that this person or
office have support and commitment from the highest levels of the organization
(Capehart et al. 1997). The task of the energy manager is to develop, implement, and
maintain a plan focused on tribal energy use. This plan should include, but not be limited
to the following: identify and track energy uses, recommend energy-efficiency programs
and equipment, and conduct education and/or rebate programs. When implementing EE
measures and programs it is generally best to begin by setting some goals, and then
implement low-costest, highest-return projects first.
Designing an Energy Program
The energy manager will have the ability to create and manage efficiency and
conservation plans through development of an Action Plan, especially if given the full
support of the tribal leadership. To form a viable and dynamic Action Plan it is first
important to understand the “initial community vision” as presented by the tribal leaders.
Formation meetings can be held that include speakers who address the community’s “hot
topics,” and to ensure that the end results of the Action Plan benefit the people. When an
Action Plan is complete, the energy manager will continue to update and meet with the
tribal leadership on the plan. As needs are identified, it is important to determine who in
the community should be invited to participate in the implementation.
The Rebuild America Program
The Rebuild America Program run through the U.S. Department of Energy contains a
wealth of material to assist in the process of creating and carrying-out an Action Plan (see
http://www.rebuild.org/aboutus/pf.html). The Action Plan should include, at a minimum,
the following elements (see the Rebuild America Web site for more details):
1. Determine baseline data on energy consumption
17
a. Be as specific as possible (on a building-to-building basis). The
assessment can begin by identifying all meters that monitor electricity
consumption and by tracking usage information. Typically usage
information may be available from the tribal department that is responsible
for paying the electricity bills (if any). As part of an initial assessment the
number of electric meters should be compared to the number of meters for
which the tribe is being billed. Although this task may seem unnecessary,
it is common for entities to be billed for meters that have long-since been
modified or removed.
b. Tracking of utility information can be performed by putting the monthly
billing information from each meter into a spreadsheet or database system
or other computer software program. This will allow identification of
which buildings (or other energy end-uses) are using the most energy. In
addition, collection of this monthly information will allow personnel to
spot high-usage anomalies that may be indicative of problems.
c. When data are unavailable, determine a strategy for collecting detailed and
accurate data. Information and software from the Rebuild America
Program is available to tribes, free of charge, which facilitates utility
tracking (http://www.rebuild.org/SolutionCenter/productservices.asp).
This is a good starting point for tribes who are interested in beginning the
process of understanding their usage patterns.
2. Decide which energy efficiency improvements are important
a. Are there capital or operating and maintenance improvements that are
needed in your buildings?
b. Are there upgrades that will help your organization better meet its mission
or its “political” priorities?
c. How likely are those improvements to result in cost savings, better
occupant safety, productivity, comfort, and cultural compatibility?
d. What mix of improvements above will be the most compelling drivers and
incentives for action?
e. Perform an economic evaluation of proposed EE measures by calculating
net present value using life-cycle costs (see Sec. IV and Appendix B for
more information about this type of economic evaluation).
3. Understand the decision-making process:
a. Understand the process the tribe follows to consider and approve capital
improvements in buildings.
b. Assess the availability of internal funding and technical expertise for the
project(s) under consideration.
c. Research any policy and/or statutory provisions that may affect your
procurement of services, equipment, and financing.
d. Identify and involve key persons who must approve policy, legal,
operating, and financial decisions.
4. Determine your project development approach
18
a. Examine what internal resources and external options are available to
conduct the general improvements.
b. Decide what mix of internal and external resources are needed to plan and
implement the project(s).
c. Determine and get approval for an initial project target, development
approach, and team.
d. Decide who must be included in regular communications as the project
develops, and how communications will occur.
5. Develop an education program for all facets of energy use on the reservation with
a particular emphasis on energy efficiency.
Another federal program that is specifically aimed at the rehabilitation of existing
buildings is the Housing and Community Development Act of 1992. This program is
designed to offer home ownership, property rehabilitation, and new construction
opportunities for eligible tribes, Indian Housing Authorities and Native Americans
seeking to own a home on their native lands. The Program is designed for fee simple land
within the operating area of an Indian Housing Authority or Tribe, Tribal Trust land, or
on individually allotted land on reservations.
(http://www.hud.gov/offices/pih/ih/homeownership/184/index.cfm)
Once an EE program has been established within a tribe, or by a group of collaborating
tribes, the next step to identify good candidate EE measures. The material to follow
addresses the factors effecting which EE measures and policies might be most beneficial,
as well as suggesting numerous measures and policies.
TRIBAL CHARACTERISTICS EFFECTING ENERGY EFFICIENCY
Some of the primary characteristics of a tribe that will influence the type of EE measures
and programs that might be employed are as follows:
•
•
•
•
•
•
Heating climate vs. cooling climate
Rural vs. urban
Large vs. small energy consumer
Level of economic activity
Political infrastructure related to energy and electricity (i.e., was there a tribal
utility authority or similar organization that handles energy/electricity issues for
the tribe?)
Electrification of areas not previously served by electricity
Each of these characteristics are discussed in more detail below.
Energy use is greatly affected by climatic conditions. There are two basic climatic
categories in energy – cooling climates and heating climates. A cooling climate is
dominated by warm weather and the need for cooling indoor space, although a cooling
19
climate may also have heating needs. Conversely, a heating climate is dominated by cold
weather, which requires heating. Climatic conditions therefore dictate which energyefficiency measures should be used. For example, installing shading structures on homes
in a hot climate may be beneficial by limiting heat gain, but in a heating climate may
limit beneficial heat gained during the winter months.
The urbanization of an area may also affect which measures are available and
appropriate. In the WRAP region, tribes are located in highly urbanized areas as well as
in remote rural areas. The availability of energy services, equipment, and supplies is
generally more limited in a rural area. Tribes may need to consider whether an energyefficiency measure can be supported with local resources, or if resources are needed that
are not available in the local area, which would cost more. If a rural tribe is considering
installing energy efficient equipment that will require maintenance that cannot be
performed by tribal employees (e.g. an advanced cooling system on a commercial
building), the cost and availability of service technicians needs to be factored into the
decision about the equipment. At the same time, this lack of a technician provides an
opportunity for a new local job.
The resources available to a tribe, and its magnitude of energy consumption, will also
affect energy-efficiency choices. If the tribal facilities (residential, commercial, etc.)
consume a relatively small amount energy (e.g., if there are not many energy consumers,
or the facilities require little energy for operation, etc.) then the tribe may benefit mostly
from low-cost measures that are easy to implement. The tribe with a small energy use
may not have the resources, the staff, or the need to consider the more complicated or
costly programs. In this case it may be beneficial for a group of tribes to collaborate in
establishing and energy program, or in hiring an energy manager. If the tribe has a large
energy use, or substantial resources available within a sizable tribal government, staff
members may already be available to dedicate to energy projects, or it may be possible to
hire a dedicated energy manager.
The potential for energy efficiency is typically tied to the level of the tribe’s economic
activity because economically prosperous tribes generally use a greater amount of
electricity and other energy sources than tribes with smaller amounts of economic
activity. Similarly, tribes who have diverse business activities may have a wider range of
energy-efficiency measures to choose from. If a tribe has commercial, industrial, and
residential buildings as well as agriculture, the tribe will have more EE applications to
consider than a tribe with only commercial buildings. Determining which is the the
highest energy-use sector would be a logical first step in choosing the most effective EE
measures.
Tribal structure also has an effect on the type and diversity of EE measures that could be
implemented. If the tribe has an energy authority, then efficiency efforts can be led by
that organization (which already has the responsibility for providing energy services).
Having or establishing an energy authority can be the most effective method to
improving energy usage because its mission is dedicated to energy issues. Such an
authority would have information on energy use throughout the tribe and could
20
implement efficiency measures in various sectors. A tribal energy manager could
likewise collaborate with various departments within an energy authority or within the
tribal government to implement appropriate energy-efficiency projects.
Another factor affecting choice of energy measures is previous energy activities. If a tribe
has never undertaken any EE programs, it may have a greater variety of programs to
choose from than a more experienced tribe. For those tribes with little experience it may
be logical to start with projects that are easy to implement and that have a known
demonstrated benefit, to gain experience and confidence. Tribes that have already
implemented a variety of EE projects may be comfortable in trying complicated or highly
technical projects that have a longer-term payback.
ENERGY SECTORS: ORGANIZATION OF ENERGY USES AND MEASURES
Energy end- uses are typically grouped by market sector: transportation, residential,
commercial, and industrial. Data on energy use is typically reported in these broad
categories, as was mentioned in Section II and presented in Figures 4 and 5. Within each
of these sectors are subgroups that further define the energy-use market. For instance, it
may be useful for tribes to subdivide the commercial sector into typical commercial
applications (retail stores, office buildings, etc.), tribal and governmental buildings, and
gaming and recreation. Depending on the tribe, an appropriate subcategory of the
industrial sector to consider could be agriculture. Within each end- use sector, EE
measures are frequently grouped by the type of measure, such as lighting, heating,
cooling, or building envelope (insulation and windows), etc. See Figures 1 and 2 in
Section II.
Next to residential, perhaps commercial buildings are the most common on tribal lands,
including retail stores, office buildings, hospitals, warehouses, schools and government
buildings. Because of the great diversity of uses for these buildings, their equipment and
their building envelopes (the materials from which the building is constructed) can vary
widely. For example, the amount of energy consumed and the equipment necessary to
operate a grocery store will be substantially different than that of an office building, and
will thus require different efficiency measures. Regardless of the specific purpose of a
particular building, however, all commercial buildings will likely have energy
expenditures associated with heating and cooling equipment, lighting fixtures, and the
building envelope. Thus grouping buildings by sector, and EE measure by end-use (such
as heating, cooling, etc.) may assist in choosing the most effective EE projects.
A subgroup of commercial buildings common on tribal lands is the tribal or other
government buildings. In many cases government buildings represent a substantial
portion of the total commercial building stock. Government buildings will have
opportunities for efficiency in the heating and cooling equipment, air distribution system,
boilers and chillers, windows, and lighting.
21
Another subset of commercial buildings that may be present on tribal lands is recreational
and gaming facilities. These building will have the same type of efficiency opportunities
as government buildings but magnified due to the high energy use common in most
gaming facilities. For example there may be substantial “plug loads” from gaming
machines as well as significant air handling loads that could be improved. Increasing the
energy efficiency of these facilities hold s the opportunity of increasing their profitability.
Residential buildings include single- family homes, apartment buildings, and any type of
group housing facility. Tribes and tribal members expend substantial resources on
housing, so investment in energy-efficiency measures for residences will have a positive
impact on tribal members by lowering their energy costs. Residential opportunities
include heating and cooling equipment, building envelopes (e.g. insulation, windows), air
duct systems, and shading and landscaping. Residential programs typically start with
education. Educational programs that inform residents about how energy is consumed in
the household, how that relates to energy costs, and the related opportunities for energy
savings through simple actions (such as simple behavioral changes like turning off the
lights or equipment changes such as using compact fluorescent light bulbs instead of
incandescent light bulbs), can be very beneficial.
In some parts of the WRAP region agriculture is an important energy end- use. For
example, large amounts of electricity may be used for water pumping if irrigation is
necessary. Substantial efficiency gains can be made in the motors that pump water, as
well as in the irrigation systems themselves.
Water and wastewater treatment facilities, fabrication plants, manufacturing facilities,
lumber mills, and mining operations are examples of industrial applications. Energyefficiency measures for the industrial sector include many of the measures applicable for
commercial buildings but also some specific to large energy consuming boilers, motors,
pumps, and fans.
FINANCIAL RESOURCES
The key to any project is to identify an available and reliable funding source. Although
most energy-efficiency measures will result in cost savings over time, it can be difficult
to come up with the initial money to pay for the project. Several methods can be used to
identify or establish a funding source.
Revolving Fund for Energy Efficiency Project
There are energy-efficiency measures, identified throughout this report, that have a
known payback. For example, replacing older fluorescent lighting with new energyefficiency lighting typically has a payback period of 2 to 3 years. This means that the
entire cost of the retrofit will be recovered in reduced energy bills after 2 to 3 years, and
the project will continue to offer savings for the lifetime of the equipment.
22
A revolving fund can be created that allows dollars saved from the implementation of
energy measures to be earmarked for other energy-saving projects. This can be
accomplished using a direct accounting method that monitors the utility bills on a yearto-year basis and allocates any savings to a separate energy-efficiency fund to be used for
future projects. The advantage of this direct accounting method is that the tribe will spend
no more on energy efficiency than it saves, after its initial investment. A disadvantage of
the direct accounting method is the time and effort required to verify savings. Because
utility bills normally fluctuate each year depending on the severity of the winter or
summer, however, utility bills that would have been lower as a result of an energy-saving
measure may not actually be lower if there has been a colder winter or hotter summer
then the previous year. This would result in funds not being available for projects.
Numerous publications provide methods of verifying energy savings; for example, see
Hunn (1997), Turner (1997), and Bersbach (2000).
Alternatively, instead of using verified savings for EE projects, estimates of electricity
savings could be allocated to the energy-efficiency fund. Because actual savings may
vary from estimated savings, a tribe could choose to earmark a percentage of the
estimated savings for the energy-efficienc y fund. For example, consider an energy
efficiency retrofit that results in savings of $5,000 per year after a 3- year payback. Each
year after the initial payback period the tribe could allocate all $5,000 or a percentage of
the $5,000 to the energy-efficiency fund for new projects. As more projects are
implemented the savings amount would grow and so would the energy-efficiency fund.
One benefit of this estimating method is that energy management planners would have a
predictable amount of funds for future energy-efficiency projects.
One key to establishing a revolving fund using project savings is to identify and
implement the energy-saving projects with the greatest savings and shortest payback first.
A lighting retrofit is an example of a project with a short payback. This will allow funds
to build up for use later in the more expensive projects with a longer payback period. As
mentioned above, lighting retrofits in buildings are one of the most cost-effective
changes. In addition to providing substantia l energy savings, it is a relatively simple
retrofit that can be performed without highly trained staff.
Maintenance Budget
Any entity that is responsible for operating a building has a building operation and
maintenance (O & M) budget. These budgets are used to make repairs, upgrade existing
building systems, and maintain operation of the building. To create a revolving fund, a
tribe could allocate a portion of their O & M budgets to energy-efficiency projects.
Having such a revolving fund could pay for retrofits such as lighting but it could also be
tapped to pay for the additional cost of energy-efficient equipment such as motors and
heating and cooling system upgrades that result in saved energy.
Performance Contracting
23
Performance contracting is a comprehensive method of implementing energy-efficiency
measures in buildings. In this method an energy service provider (commonly referred to
an ESCO) is hired to handle all aspects of the retrofit, including financing. Typically a
provider will evaluate energy measures, provide engineering, install the new equipment,
and in some cases provide ongoing operations and maintenance service. Performance
contractors use the cost savings resulting from the installation of energy-saving measures
to pay for the cost of the improvements. Performance contracts typically provide for a
comprehensive retrofit of buildings. This allows more expensive, longer payback
measures to be blended with more cost-effective, shorter payback measures, to make the
overall project financially viable. One caution when entering into a performance contract
is to ensure that the energy savings are verified, and that the contractor is paid out of
actual savings accrued.
An attractive feature of many performance contracts is the shared saving agreements
between the provider and the building owner. Depending on the facility and the
opportunity for EE upgrades, many performance contracts are written so that the building
owners receive a portion of project savings. Performance contracts can also be
advantageous because a third party typically completes all of the work and no tribal
expertise in energy is required. Service providers can, in most cases, provide financing
for the project so tribes do not have to come up with money for retrofits. This approach
may be particularly attractive to smaller tribes.
Contracts can also be negotiated to provide guaranteed savings. However, performance
contracts are complex documents that must be crafted carefully to ensure a benefit to the
tribe, especially if a shared savings or savings guarantee is included. These types of
arrangements also allow the tribe to begin implementing EE measures prior to developing
its own in-house expertise.
Utility and State Rebate Programs
Rebates have been a common tool in the energy industry to encourage consumers to
purchase energy-efficient products. As part of demand-side management programs,
utilities offer rebates to residential and commercial business on a variety of products such
as compact fluorescent light bulbs, high-SEER (SEER = seasonal energy efficiency
rating) air conditioners, and efficient motors. Rebates provide cash incentives or credit on
utility bills, and ultimately lower the cost of the goods being purchased. The past decade
has seen a reduction in demand-side management programs offered by regulated utilities,
as well as a reduction in the variety of rebates. However, in states with electricity supply
problems, rebate programs may still be offered in an effort to decrease peak load.
Grant Programs
Grants are another possible source of funds for EE projects. A variety of federal, state,
and private foundations offer funding. However, competition for grants can be strong and
a substantial amount of time and effort is usually required to submit a grant application.
Depending on the source of the funding, grants may be offered for project design,
24
equipment, and installation. Usually a certain amount of matching funds are required for
grants. It is also sometimes difficult to find funding for personnel costs that may be
associated with the project. For a list of sources of technical and financial assistance,
refer to Appendix A.
NEW TECHNOLOGY
The U.S. economy is obsessed with and driven by technology. Advances in technology in
the energy field have allowed us to continue to do more work with the same or smaller
amounts of energy. New energy technologies and advances to save energy, or use energy
more efficiently, are continually being made. Although it is important to keep abreast of
new technology, it may be more effective for tribes to rely on products and equipment
that have been widely used and offer proven performance.
The role of the energy manager is critical in the deployment of energy technology.
Having a designated energy manager in the tribe, or as part of a consortium of tribes, or
as part of an energy authority would allow one individual to become familiar with all
tribal facilities. The energy manager could be provided with training so they would be
capable of evaluating technology. That knowledge combined with a familiarity of tribal
facilities would ensure a proper technological match.
An issue that arises with energy equipment is nameplate ratings versus actual operation.
Energy-equipment products, such as motors, are tested and given an energy-efficiency
rating (name plate rating). However, in actual operating conditions the equipment may
not perform up to the rating. As is true with any product, it is wise to research product or
system claims carefully. New energy technology offers great potential for use by tribes to
conserve energy. However, energy managers should resist the temptation to invest in
new, unproven technology when there are a myriad of products available with proven
performance. For more information about new energy-saving products and a guide to EE
technology, see the Federal Energy Management Program (FEMP) Web site at
http://www.eren.doe.gov/femp/prodtech.html.
ENERGY SAVING PRODUCTS
Companies, entrepreneurs, and research laboratories are continually developing new
energy-saving products. Frequently an energy manager is barraged with sales pitches to
try a new energy-saving gadget. There are hundreds of legitimate energy-saving products
on the market, so energy managers should be wary of products making extraordinary
claims. Many energy-consuming products are provided with an EnergyStar rating by the
federal EPA, which provides information about the energy use that can be useful in
evaluating how well a product uses energy. For more details visit
http://www.energystar.go v/default.shtml. The FEMP also has a considerable amount of
information available about energy-efficient products (see
http://www.eren.doe.gov/femp/procurement/).
25
Other good sources of information for energy products is are state energy offices, which
may be aware of both reputable and non-reputable products and product vendors. These
offices have expertise in deploying energy conservation and efficiency programs and can
offer technical advice. The National Association of State Energy Officials Web site gives
a list of state energy office contacts (www.naseo.org/members/states.htm).
The federal government plays a large part in the development and deployment of new
energy technologies. The national laboratories are tasked with researching and testing
new energy products and systems, and federal agencies are used to deploy and test those
products. One source of information to keep up-to-date on emerging technologies is the
Department of Energy’s Office of Building Technology, State and Community Programs.
This office provides information about efficient products and where to get them. The
Emerging Technology Web site provides a review of products and sources for purchasing
efficient products
(http://www.eren.doe.gov/buildings/emergingtech/printable/index.html).
Energy Demonstrations
The Federal Energy Management Program (FEMP), an arm of the Department of Energy,
is tasked with controlling energy usage in federal facilities. In addition to other functions,
the FEMP operates the New Technology Demonstration Program. The demonstration
program introduces and deploys new energy-efficient technologies in the federal sector.
This program can assist tribes because they post information on demonstration projects
and technology assessments; many technologies used for federal facilities are directly
transferable to tribal facilities. For information on technology demonstrations go to
www.eren.doe.gov/femp/prodtech/tech_d.html. For technology assessments go to Federal
Technology Alerts (www.eren.doe.gov/femp/prodtech/fed_techalert.html).
Additional Sources of Technology Information
The American Council for an Energy Efficient Economy (ACEEE) produces a variety of
reports that analyze energy efficiency and conservation technologies. The ACEEE is
nationally recognized for its advocacy and research. It partners with various organizations
to monitor emerging technologies in the building and industrial sectors. For a list of
publications and their costs visit www.aceee.org.
The most comprehensive Web site for energy-efficiency information belongs to the
Energy Efficiency and Renewable Energy Network (EREN). In addition to information
on all of Department of Energy’s energy-efficiency and renewable energy programs, the
site provides links to 600 other energy sites. An extraordinary amount of information can
be accessed using the search engine available on this site (www.eren.doe.gov).
26
ENERGY EFFICIENCY PROGRAMS AND POLICIES
Energy Efficiency Measures
Table 2 provides a list of specific energy-efficiency measures, divided into sectors to
provide easy reference. This table is provided to give the reader a quick reference guide
to the types of energy-efficiency measures available to tribes. More detailed descriptions
of many of these measures are provided in Appendix C. Many excellent publications for
evaluating EE measures can be purchased, including the Energy Management Handbook
by Turner (1997), the Energy Efficiency Manual by Wulfinghoff (1999), Fundamentals
of Building Energy Dynamics by Hunn (1996), and Introduction to Energy Management
by Capehart et al. (1997). The Rebuild America Program Website
(http://www.rebuild.org/index.asp) also contains suggestions of numerous good EE
measures. For the energy manager who is choosing and implementing EE measures,
these resources as well as those listed in Appendix A are valuable tools.
Tribal Energy Authority
As discussed in Section II of this report (Baseline Information), there are many
significant benefits to establishing a tribal energy (utility) authority. It is an excellent
center within a tribe in which to develop expertise about energy and energy efficiency, it
is a central entity that can represent the energy needs of the tribe and negotiate lower
energy rates on behalf of the tribe, it provides jobs for tribal members, and it can enhance
tribal sovereignty and energy independence. Regardless of whether a tribe (or a
collaborating group of tribes) forms an energy authority, establishing an energy manager
position is crucial. Such a person can improve the tribe’s overall energy situation, reduce
the amount paid for energy, and implement EE programs. Whether assigning the duties of
an energy manager to an existing staff member within the tribe or within an energy
authority, or establishing a new position of energy manager, establishing such a position
is a critical step in reaping the potential benefits of EE.
ENERGY EDUCATION PROGRAMS
Education can make the difference between an effective, successful, comprehensive
energy management program and a fragmented program with little support. As described
previously, there are numerous reasons to conduct energy-efficiency programs, not the
least of which is to save money. Educating tribal members, leaders, facility managers,
staff members, and contractors about the benefits of monitoring and conserving energy
will build support for an energy program. Although many may think of energy efficiency
and conservation programs as simply installing new or better technology, education is
also a very effective method for conserving energy because it encourages people to
change their behavior.
Train Tribal Staff and Employees
27
Table 2 – Energy efficiency measures categorized by sector, and rated for cost, maintenance, ease of implementation and energy savings
potential.
Sector
Measure
Cost
Maintenance
Ease of
Energy saving
Implementation
potential
Residential
Lighting retrofit with compact fluorescent (CFL) bulbs
New Construction CFL Fixtures (Indoors & Outdoors)
Heating and Cooling – New and Replacement
Evaporative Cooling
Heating and Cooling-Duct Testing and Sealing
Heating and Cooling Service and repair
Purchase energy star equipment (clothes washers, etc.)
Purchase efficient equipment (high SEER CAC, heat
pumps and AC window units)
Retire old refrigerators
Weatherization-style program
Shading and Landscaping
Commercial (including Government, Gaming, and Recreation)
Purchasing high efficiency gas boilers space heat
Gas boiler fuel switching
Install LED exit signs
Install LED traffic signals
Fluorescent lighting
Heating and cooling, low cost measures
Heating and cooling, high cost measures
Ground-source heat pump
Gas air conditioning
Building commissioning and retro-commissioning
Low
Low
Moderate
Low
Low
Moderate
Easy
Moderate
Easy
Low to Mod
Low to Mod
High
Moderate
Moderate
Low to Mod
Moderate
Low
Moderate
Low
Low
Difficult
Moderate
Easy
Easy
High
Moderate
Moderate
Moderate
Moderate
Low to High
Low to Mod
Low
Low
Moderate
Easy
Difficult
Moderate
Moderate
High
Low
Moderate
High
Low
Low
Moderate
Low
High
High
High
Moderate
Moderate
Moderate
Low
Low
Low
Moderate
Moderate
Moderate
High
High
Easy
Moderate
Easy
Easy
Easy
Moderate
Moderate
Difficult
Moderate
Difficult
Moderate
Low
Low
Low
High
Moderate
Moderate
High
Moderate
High
28
Table 2 – Energy efficiency measures categorized by sector, and rated for cost, maintenance, ease of implementation and energy savings
potential.
Sector
Measure
Cost
Maintenance
Ease of
Energy saving
Implementation
potential
Commercial (including Government, Gaming, and Recreation) – continued
Building load controls
Moderate
Building envelop enhancements
Moderate
Building training programs
Moderate
Efficient trans formers
High
Cooling tower variable speed drives
Moderate
Water heating heat-pump unit
High
Industrial
Fan systems measures
Moderate
Air compressor system measures
Moderate
Combined Heat and Power
High
Motor downsizing
Low
Premium motors
Moderate
Policy
Tribal procurement policy
Low
Green energy purchasing
Moderate
Energy education
Moderate
Rebate purchasing incentives
Moderate
Tribal mandates
Low
Tribal energy policy
Low
Public benefits fund
Mod to High
Support federal mandates
Low
Designate energy person
Mod to High
IECC or other building codes
Low
29
High
Low
High
Low
Moderate
Moderate
Moderate
Moderate
Difficult
Low
Moderate
Moderate
High
Moderate
High
Low
Moderate
Moderate
Moderate
Moderate
High
Low
Moderate
Moderate
Moderate
Difficult
Easy
Easy
Moderate
Moderate
High
Moderate
Moderate
Low
Low
High
Moderate
Low
Low
Moderate
Moderate
-Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Difficult
Easy
Moderate
Moderate
High
Low
High
Moderate
Moderate
High
Moderate
Low
High
Moderate
A trained staff is necessary to design, implement, and maintain energy-efficiency
programs. Staff members can be contractors who are hired because of their knowledge, or
tribal staff who have been provided with enough training to become knowledgeable about
energy issues. The latter method builds capacity within the tribe; trained tribal members
will set an example for others, with everyone helping to reduce reliance on outside
resources. Tribal employees who are educated about turning off the lights and computer
equipment will contribute to lower electricity bills because lighting is a substantial cost of
operating a building. Employees can also be encouraged to find ways to conserve energy
so they are able to contribute to the economic health of the tribe.
Educate Residents
Energy is consumed in all sectors of the economy, so education is important for the
people who work in all sectors. Tribal energy personnel can work within each sector to
provide an understanding of energy usage and the options for using energy more
effectively, and therefore using less. Residential consumers use energy to heat and cool
their homes, store and prepare food, wash clothes and dishes, light their residences, and
run electrical equipment and home appliances. As mentioned previously, Tribal members
typically spend between 1 percent and 20 percent of their incomes on basic energy
services (Energy Information Administration 2000). These electricity customers would
benefit from education programs about the cost and amount of energy consumed by the
equipment in their homes. Residents can also be educated on the economic and
environmental benefits of turning off lights, only running clothes dryer when they are
full, and using more effective space conditioning (heating and cooling). In addition,
residents can be informed about energy-efficient equipment (such as EnergyStar-rated
products) so that they can make informed decisions when purchasing energy-consuming
equipment. A primary benefit of conserving energy for residents is that spending less on
utility bills will free financial resources for other needs.
Attend or Host Technical Training
Outreach efforts can also be undertaken to educate the commercial, agricultural, and
industrial sectors about energy-saving opportunities. Education can be as simple as
providing information on available training or sharing information on what has been
learned from tribal projects. Or, if there is substantial opportunity for savings, the tribe
may wish to offer its own training, which can be specialized. A number of professional
organizations provide energy training. For example, the American Society of Heating,
Refrigerating and Air Conditioning Engineers (ASHRAE) offers a variety of basic and
advanced courses. Tribal personnel and staff from the various energy sectors can attend
courses specific to their work areas, or if there is enough interest, the ASHRAE will
provide on-site training. Training improves the skill of those attending and many times
the cost of the training will be recovered in implemented energy-saving techniques that
are learned in the training.
Educate the Children
30
Another facet of an education program is to include curricula on energy in the primary
and secondary schools. Creating an effective education program for students can provide
benefits that are long lived. Students need the tools to make informed energy decisions
throughout their lives. A wide variety of educational materials can be made available for
teachers; to ensure a successful program, they should be provided with training on the use
of such materials, and the materials should fit into the core classes.
The U.S. Department of Energy, in collaboration with many western states, offers a
variety of educational programs as well as other energy-efficiency programs. Appendix D
presents a summary of these programs for western states, in which tribes may be
interested in participating.
TRIBAL ENERGY POLICIES
Creating a comprehensive and effective tribal energy policy or plan is a significant
undertaking that requires involvement of tribal officials, staff, and members. For tribes
that have no established energy plan or policy, it may be beneficial to review the process
and resulting policies developed by other tribes. A good example of an energy policy has
been created by the Navajo Nation can be found at the following web site:
http://www.navajonationenergypolicy.com/.
Elements of a tribal energy policy that a tribe may consider adopting are:
• Create a policy that calls for establishment of a tribal energy plan.
• Support energy efficiency within all sectors of tribal energy use.
• Adopt a tribal policy that requires adherence to an energy code, such as the IECC
(formerly the Model Energy Code, now the International Energy Conservation
Code), for all new buildings within the reservation boundaries.
• Incorporate energy efficiency into new tribal housing projects.
• Establish a policy recommending that life cycle cost methods be used in
evaluating and selecting all new energy-related projects (either new construction
or renovation).
31
IV. TRIBAL CASE STUDIES: ECONOMIC ANALYSIS OF ENERGY
EFFICIENCY MEASURES
Many tribes from throughout the WRAP region were consulted as part of the process of
devising a set of recommended actions for tribes to consider related to energy efficiency
(see Section V) as well as in determining what type of information would be most useful
in this report. During the spring of 2002, three of these tribes were also visited with the
intention of developing case studies related to specific EE measures, and to have in-depth
conversations with tribal officials concerning many aspects of tribal energy. The three
tribes visited were:
•
•
•
The Confederated Salish and Kootenai Tribes of the Flathead Reservation
The Pascua Yaqui Tribe
The Yurok Tribe
These three tribes each possess a different set of the tribal characteristics that influence
the suitability of a potential EE measures and programs (these characteristics are
discussed in Section III). Thus, a diverse variety of energy perspectives, constraints, and
opportunities were revealed during these visits that helped develop the information
presented here.
The purpose of this section is to present the results of the case studies. The primary
metrics used in evaluating the worthiness of the EE projects proposed in the case studies
are the economics indicators net present value, internal rate of return, and simple payback
period. These indicators tell whether or not and efficiency project is a good investment
(e.g., will it pay for itself?). Thus, the project economics will be the focus of this
presentation, with the following topics discussed:
•
•
Economic Analysis of Energy Efficiency Measures
Results of Tribal Case Studies
Beyond the project economics, however, there may be other important factors to consider
when making the decision whether or not to go forward with an EE project. For example,
availability of capital and the impact of the project on the community are two such
factors. These other considerations will be unique to each tribe and evaluated on a tribaland project-specific basis. In many cases, the final decision concerning whether or not to
implement an EE project may be determined by answering the following question: “Is
this project good for the people?”
ECONOMIC ANALYSIS OF ENERGY EFFICIENCY MEASURES
When performing an economic analysis of a proposed energy-efficiency measure, the
basic idea is to compare the costs with the estimated savings. The costs of a measure can
32
include the initial cost of the equipment, labor for installation, training, maintenance,
replacement parts, and more. Savings can be realized from a reduction in consumption of
energy, decreased maintenance needs, and less system downtime. It is the responsibility
of the person in charge of evaluating the EE measure to correctly identify all of the
associated costs and savings, and to determine the appropriate lifetime of an EE measure.
Identifying and comparing all of the costs and savings over the life of a measure is called
life-cycle costing.
Three methods of assessing whether or not an EE measure is economically viable were
used for the case study examples. The first method, called the simple payback period
(SPP), essentially answers the question: Will the EE measure pay for itself in savings,
and if so, how long will it take? This method is fairly straightforward to implement, but
does not account for the time- value of money and often does not include all of the lifecycle costs. The second and third methods employed are the net present value (NPV) and
the internal rate of return (IRR). Both of these techniques include the time-value of
money in their calculations as well as all of the estimated life-cycle costs. Because all
three of these economic measures are commonly used to assess proposed EE projects
(though it is not necessary to use all three), they have each been applied in the case
studies to follow, and the fundamental concepts of each are presented below.
Perhaps the easiest way to describe the underlying concepts of the SPP, the NPV, and the
IRR is in the context of a simple example. For the discussion to follow, let’s assume that
an EE measure with an initial cost of $1,200 is implemented, requiring an annual
maintenance costing $50. As a result of the measure an annual savings in energy cost of
$400 is realized. The life of the measure is expected to be five years.
Simple Payback Period (SPP)
The simple payback period is calculated by dividing the initial cost of an EE measure by
the annual savings:
SPP =
Initial cos t
Annual savings
For this example,
SPP =
$1,200
= 3 years
$400
Since the SPP is 3 years, and the life of the project is more than that (5 years in this case),
the project will pay for itself in three years.
Net Present Value (NPV)
The net present value compares the economic value of implementing a proposed EE
measure to not implementing the measure. This comparison includes all of the life-cycle
33
costs and accounts for the time-value of money. The time-value of money is simply
recognition that the value of a dollar changes over time due its potential to earn income
through investment and other effects such as inflation. Thus a dollar today is worth more
to you now than at some point in the future, because today’s dollar can increase its value
through investment.
The idea behind the NPV method is to compare all of the costs of two alternative projects
(i.e., implementing an EE measure vs. not implementing) in today’s dollars. This
provides a consistent basis to compare two different cash flow streams (revenues and
costs) that occur at different times. For our simple example posed above, one alternative
cash flow stream is based on not implementing the EE measure, which requires no initial
investment and paying the normal annual energy costs. The other alternative is
implementing the EE measure, which has a cash flow stream requiring an initial
investment of $1,200 and generating an annual net energy savings of $350 (the $400 in
annual energy savings less the $50 annual maintenance cost). The purpose of computing
the NPV is to compare these two different cash flow streams on an equal basis, in terms
of today’s dollars.
In order to compute the NPV it is necessary to have an accurate prediction of the cash
flow streams for each proposed alternative. This is frequently the most labor- intensive
activity in evaluating the NPV and needs to be as accurate as possible. One must also
know the expected life of the EE measure and the minimum attractive rate of return
(MARR). The MARR is essentially a rate of return on investment that the tribal
management feels is necessary in order to justify the investment. Determining the MARR
is frequently a policy issue and is set by the top management in an organization (Sullivan
et al. 2000). For example, the MARR could be determined by knowing the rate of return
that could be earned by placing the money in a safe (low risk) investment, instead of
investing it in the proposed EE measure Another way of determining the MARR could be
to use the interest rate that would be paid on money borrowed to finance the EE project.
However the MARR is determined, it is used to reduce the value of all future cash flows
at the MARR so they are represented in today’s dollars. This technique of reducing
future cash flows is also called discounting (for this reason, the MARR is also called the
discount rate). In essence, there is an opportunity cost incurred by investing in an EE
project instead of some other safe interest-bearing investment. The interest that could
otherwise be earned by an investment is lost when the money is used for an EE project.
It is precisely the amount of lost interest that the NPV method discounts out of all future
cash flows.
Returning to our simple example, at a net savings in energy each year of $350, the total
saving over the five year life of the project is $1,750. This amount is $550 greater than
the initial cost of the project ($1,200). However, since the cash flows due to energy
savings all occur in the future, the value of these dollars is not as great as the initial
investment. Assuming the MARR is 5% in this example and discounting all future cash
flows at this rate, the savings over the five year life valued in today’s dollars is $1,515.
Comparing this to the initial investment of $1,200, you would still be better off by $315
dollars. Thus the net present value of the project is $315. Since the NPV is positive, this
34
is a project worth considering. If the NPV was negative, then the project should be
rejected (you would be better off putting your money in an investment at the MARR). If
the NPV were zero, then investment in the EE measure would yield the same return as if
the money were invested at the MARR. Details describing how to compute the NPV are
provided in the Case Study Details presented in Appendix B.
Internal Rate of Return (IRR)
The internal rate of return is a popular method to rate investment opportunities. In
essence, the IRR is the rate of return that if used as the MARR in determining the NPV,
will yield an NPV of zero. One must be a little careful when using the IRR to evaluate a
potential EE project due to a potential problem of incorrectly ranking the economic value
of multiple projects (see the discussion on the “inconsistent ranking problem” in Chapter
5 of Sullivan et al. 2000), but if done correctly this technique works fine. For the simple
example used in discussing the SPP and NPV, the IRR of this project would be 14%.
Since the IRR is greater than the MARR of 5%, this EE project is attractive. If the IRR
were less than 5%, one would decline the project, and if it were equal to the MARR then
the project will yield the same return as investing at the MARR.
Sensitivity and Risk Analysis
There are numerous assumptions in performing SPP, NPV, and IRR analyses, and
estimated future cash flows are never a certainty. Because these assumptions will effect
the decision of whether or not to pursue an EE measure, it might be wise to perform an
analysis to assess how sensitive the final values of the SPP, NPV or IRR are to the
assumptions. Systematically changing the assumptions in question and repeating
calculation of the SPP, NPV, or IRR is a useful method of assessing the sensitivity. For
instance, if the net cost savings in our simple example were actually $300 each year
instead of $350, what would be the values of the SPP, NPV, and IRR? Performing the
calculations in this new scenario, the SPP increases to four years, the NPV shrinks to $99
and IRR becomes 8%. In this instance, these values all suggest that this is still a viable
project but at what point does the project become unattractive? By choosing several
possible values of the ne t energy savings, a sensitivity graph can be created by plotting
the NPV or IRR versus the energy cost savings. A sensitivity graph such as this provides
an easy, visual way to assess how rapidly the results of an analysis vary with the
assumptions (an example will be provided in the case studies to follow).
Where to go for more details
A typical EE project may have a many factors the complicate the economic calculations
beyond what was presented in our simple example. For instance, it may be necessary to
include the effects of inflation, taxes, and depreciation of equipment to name a few. If
tasked with the duty of evaluating an EE project, and if not familiar with how to account
for these various factors, it may be wise to consult one of many good references that
describe project economic analysis (for example see Sullivan et al. 2000, Turner 1997,
Capehart et al. 1997, or Pratt 1997).
35
RESULTS OF TRIBAL CASE STUDIES
In order to obtain a better understanding of the types of EE programs and policies that
tribes may be interested in, and that would be successful, three case studies were
conducted through visiting the three tribes mentioned at the beginning of this section. The
goal was to gain a first- hand understanding of each tribes experiences with electricity
supply, services, EE programs and policies, and to learn about the types of EE measures
in which these tribes were interested. Initially, several tribes were identified that possess
a diverse variety of the tribal characteristics that influence the EE, as described in Section
III and summarized below:
•
•
•
•
•
•
Heating climate vs. cooling climate
Rural vs. urban
Large vs. small energy consumer
Level of economic activity
Political infrastructure related to energy and electricity (i.e., was there a tribal
utility authority or similar organization that handles energy/electricity issues for
the tribe?)
Electrification of areas not previously served by electricity
Of the tribes identified, the following three graciously agreed to host a visit by a team of
researchers from NAU: the Pasqua Yaqui tribe in southern Arizona, the Yurok tribe in
northern California, and the Confederated Salish and Kootenai Tribes of the Flathead
Reservation in western Montana. The visits were successful in underscoring the
challenges to enacting EE programs, as well as the opportunities available. The tribes
shared their experiences with electricity service and EE, as well as their views about what
would be useful information to present in this report.
One aspect of each tribal visit was to learn about a specific EE measure that each tribe
would be interested in having evaluated for its economic merit. Thus the case study
examples presented here provide the economic evaluations each of these proposed EE
measures of interest. Background information is provided for each tribe, followed by
summaries of each measure. Full details of the economic calculations for each case study
are provided in Appendix B.
Case Study One: The Yurok Tribe – Lighting Retrofit at the Ke’pel Head Start Facility
Background Information
The Yurok Tribe is the largest tribe in California, located in northern part of the state
along the Klamath River. Reservation land includes about a 45 mile stretch of the lower
Klamath River and one mile on either side of the river. Within the external boundaries of
the reservation are 55,000 acres, however, the tribe only owns approximately 11,000 of
these acres. Private parties or the federal government holds the remainder of land within
the reservation. The tribe has 4,300 members, 1,000 of those members live on the
36
reservation and a majority of all members live within 60 miles of tribal lands. The
Klamath River and its waters are of utmost importance to the tribe both culturally and
economically. Tribal land is largely unimproved with electricity, telecommunications,
and roads that are available only in the upper and lower ends of the reservation. The tribe
has commercial electric loads including a fishery, a tribal court and police force, a
historic preservation office that serves the tribe and two counties, retail stores, a
recreational vehicle park, and other commercial ventures. Within the reservation there are
also the industrial loads of a timber operation and mill.
A council, made up of representatives from seven districts, governs the Yurok. A
Chairman and Vice Chairman are chosen from among the council members. A
constitution for the tribe was established in 1993. Since 1993 the tribe has concentrated
on building a competent and respected tribal government.
The tribal government is developing a comprehensive land use plan to guide future
development. The plan includes the development and delivery of a full set of services to
new homes as they are built. Services include but are not limited to water, sewer,
telephone, and electricity. There are approximately 90 Yurok homes within the
reservation. An aggressive housing program is underway to build 70 to150 houses,
largely on the reservation. Thus, a focus of the tribe is to develop infrastructure and
housing for the benefit of tribal members. In addition to residential housing, a new
30,000 square foot building is being constructed to house the tribal government. This
office will consolidate some of six tribal offices locations.
The tribe has evaluated the potential for energy production on the 30 tributaries of the
Klamath River. In addition the tribe has several small photovoltaic installations. The
tribe is considering efficiency measures for the new tribal and residential buildings. For
this case study, an off- grid Head Start facility was identified as a candidate site for an EE
measure.
Lighting Retrofit
Buildings with off- grid electricity generation (not supplied by utility company electricity
from the electrical grid), such as the Yurok Tribe’s Ke’pel Head Start facility, can offer
opportunities for modest to tremendous savings in electricity costs due to the many
factors affecting the price of electricity. The price paid for electricity is often quite high
in these buildings with a significant portion of this cost paid up- front when the electrical
generating equipment is purchased. Consequently, for off- grid systems the opportunity
for savings is greatest at the time of construction when energy efficiency can be
incorporated into the design. Regardless, there may still be many economically feasible
efficiency improvements possible even after the generation equipment is paid for (and
therefore it cost does not factor into the economic calculations). A walk-through of the
Head Start facility revealed that the fluorescent lights could be retrofitted with more
efficient fixtures and tubes.
A photograph of the Ke’pel Head Start facility is provided in Figure 6. At this facility
electricity is supplied by a 12-kilowatt propane generator, 600 watts of photovoltaic cells,
37
batteries, and a Trace 4024 inverter (the inverter turns the electricity output of the
batteries and photovoltaics into a form useable in the building). The proposed lighting
retrofit would replace old T12 fluorescent light bulbs and ballasts within the building
with T8 fluorescent bulbs and ballasts (note it is easy to tell whether you have T12 or T8
bulbs: a T12 bulb is 1.33 inches in diameter, versus a T8 bulb that is 1.0 inches in
diameter). Retrofitting the entire facility would cost $579 including labor. The cost of
electricity delivered by the generator was determined to be 8.2 cents per kilowatt-hour.
Since the cost of the existing generation equipment is sunk (already spent), it does not
factor into this cost of electricity, which is based on fuel costs only. It was also assumed
that maintenance costs of the generator would be the same whether or not the retrofit is
carried out (although this assumption is likely to be a conservative one). Using this costof-electricity, the higher efficiency lighting fixtures would save nearly one-third of the
energy used, with an annual net savings on fuel costs of $77. Assuming a 10-year life
cycle and a discount rate (MARR) of 5%, the simple payback period is seven-and-a-half
years, the net present value is $76, and the internal rate of return is 7.5% (see Appendix B
for details about how these numbers were obtained). Thus the lighting retrofit appears to
be a good investment. It is worth noting that this example did not account for the effects
of inflation. If a modest annual inflation rate of 2% is included in the calculations, then
the NPV would be $150, and the internal rate of return is 9.7%, and the investment would
appear even more favorable.
This example demonstrates how an EE measure at a reasonably new facility using offgrid electricity is attractive and would be recommended on its economic merit. Since
on-grid facilities may pay a higher rate for their electricity than stated here, this EE
measure would be recommended at virtually any facility using old T12 fluorescent light
fixtures (Indian households on average pay 8.7 cents per kilowatt-hour for electricity, see
Energy Information Administration 2000). Had the choice been made to use T8 lighting
fixtures instead of T12 at the time the building was designed and constructed, the savings
could have been much larger since the size and cost of the electrical generation
Figure 6 – The Ke’pel Head Start Facility on the Yurok Reservation in northern California.
38
$400.00
Net Present Value (NPV) ($)
$300.00
NPV =$0 if the net annual fuel
savings decreases by 20%
from $76 to $67
$200.00
NPV =$76 for the best estimate
of net annual fuel savings
$100.00
$0.00
-$100.00
-$200.00
-$300.00
-$400.00
$0
$25
$50
$75
$100
$125
$150
Net Annual Fuel Savings ($)
Figure 7 – Sensitivity plot of net present value versus net annual fuel savings for the
Ke’pel Head Start Facility lighting retrofit.
equipment could possibly have been reduced (the cost of electricity at an off- grid facility
can easily exceed 20 cents per kilowatt hour when the cost of the generating equipment is
included along with the fuel costs). In performing the economic analysis for this lighting
retrofit, the most difficult cash flow to estimate was the net annual fuel savings of $77.
This was due to uncertainty in determining the actual electrical energy usage at the
facility, since it is off- grid and no electric bills were available (see Appendix B for more
details). To gain a better understanding of how this uncertainty affects the NPV, a
sensitivity plot was created by graphing the NPV versus percent change in the annual fuel
savings, as shown in Fig. 7. As evident from the figure, the NPV goes to zero if the
annual fuel savings decreases by 20% from $77 to $67. It is the job of the person
responsible for overseeing this lighting retrofit to determine how likely it is that the fuel
savings will decrease by 20% or more; in other words, to assess the risk. If there is
sufficient risk, it would be necessary to either revisit the determination of the net energy
savings to see if a more certain estimate can be obtained, or possibly to decide not to fund
the project. Note the economic indicators are not the only pieces of information that
would be considered in making the decision to implement the project. Environmental
benefits (for example, as related to the regional haze rule), system reliability benefits,
etc., should be factored into the decision. Implementing the retrofit could also be used in
the educational programs directed toward the children at the Head Start facility.
39
Case Study Two: Confederated Salish and Kootenai Tribes –Irrigation System
Improvements for Agriculture
Background Information
The Confederated Salish and Kootenai tribes live on the 1.2 million-acre Flathead Indian
Reservation in Western Montana. The Reservation, with its combination of valley floor
and towering mountains, is located north of Missoula and south of Kalispell in the
western part of Montana. A major geological feature of the reservation is Flathead Lake,
the largest freshwater lake in the West.
The tribes on the Flathead Reservation are a combination of the Salish, Pend d’Oreilles,
and Kootenai. There are approximately 6,800 enrolled tribal members and approximately
3,700 members live on or near the reservation. The Confederated Salish and Kootenai are
prosperous tribes that have a diversified local economy. The Tribes harvest timber and
own Plum Creek Lumber Company, receive revenues from a hydro generating facility,
the Kerr Dam, own an electronics manufacturing facility, two gasoline service stations, a
Dairy Queen and a Best Western resort hotel located on Flathead Lake.
Within the Reservation are parts of four counties and ten incorporated towns. The Tribe
makes up less than one third of the population on the reservation. Throughout the
reservation there is homestead land that creates a checkerboard of land ownership. A
tribal council, made up of 10 members elected at large, governs the tribe. The council
oversees all operations of the tribe. Some of the departments within the tribal
government are governed by their own boards, with those boards reporting to the tribal
council. This is the case with the housing authority and the utility authority.
Mission Valley Power (MVP) is the tribal utility authority that provides all electrical
power on the Reservation. MVP has a unique structure for several reasons. First, MVP
provides power to both tribal and non-tribal customers on the Reservation. Second, the
utility board reports to the tribal council yet the tribe earns no profit from MVP. MVP is
an outgrowth of the Bureau of Indian Affairs and became a stand-alone entity in 1990. A
utility board of directors, made up of five member appointees by the tribal council,
controls MVP. A Consumer Council works with customers, fields complaints, and
presents consumer view to the board.
Approximately 70 percent of the power supplied to the area by MVP comes from the
Bonneville Power Administration (BPA) through their hydro generating facilities. The
Consolidated Salish and Kootenai have a guaranteed price for electric power until 2011.
For changes in rates MVP must obtain federal approval. MVP has over 16,000 accounts
that were supplied with approximately 330 million kWh of electricity in 2001. Power is
offered at the low rate of 4.79 cents per kWh for residential, 3.12 cents per kWh for
commercial customers, and 3.63 cents per kWh for irrigation customers.
MVP has a sophisticated, effective and well- funded energy conservation program. In the
2001 annual report MVP states that their program is the “most aggressive conservation
40
program in the Northwest” offering 16 different programs. Utility account credits,
incentive payments, energy information, weatherization services, and some energy
efficient equipment are offered to customers. Between October 2001 and March 2002 a
total of 17 million kWh were saved through conservation programs. This translates to
saving approximately 10 percent in energy use. Funding for conservation programs is
provided by BPA and fluctuates depending on BPA’s budget and allocation to their
conservation programs.
The Confederated Salish and Kootenai Housing Authority (SKHA) is responsible for
construction of housing for tribal members. The SKHA builds energy efficient “Super
Good Cents” all- electric homes. There are approximately 440 rental units managed by
SKHA and about 200 units owned by residents. In rental units, the utility bills are
included in the rental. Neither natural gas nor propane is used in most units because of its
lack of availability, expense, or for safety reasons.
Overall, these tribes have a very favorable energy situation. The council and
departmental staff recognize the benefits of and are supportive of energy efficiency
efforts. Electrical service is available throughout the reservation and the price for
electricity for all customer classes is low. There is an established tribal utility authority
that offers residential, small commercial, and some industrial conservation programs.
The Kerr Dam produces electrical power on the reservation and will eventually be owned
by the Tribe.
In terms of the tribal characteristics that can influence which EE programs and measures
to consider, the Confederated Salish and Kootenai tribes live in a rural setting, in a
heating climate, have a large land base with a substantial energy consumption, have a
significant level of economic activity, and un-served electrical loads are not an issue.
Their utility authority, MVP, is a dynamic organization and in many senses a model
organization. During the visit with the MVP staff, about the only EE opportunity that
could be identified was related to improving irrigation systems (this is because MVP has
done such a good job with its many EE programs serving the residential, commercial, and
industrial sectors). A summary of the details of a proposed irrigation system
improvement will be presented next.
Irrigation System Efficiency Measure
The external boundaries of Flathead Reservation encompass 1.2 million acres, including
thousands of acres are farmland. Some of this land is tribal land and some of it is
privately held. MVP provides electrical service to all of the farms. During the summer
months many of the farms use irrigation. A picture of a typical irrigation system is shown
in Fig. 8, and a picture of the large electric water pumps that might supply such a system
are shown in Fig. 9. Large water pumps that run on electricity are required to draw water
from an irrigation canal and feed these irrigation systems. During fiscal year 2001,
irrigation customers accounted for approximately 8 percent or the electricity sold by
MVP, and MVP is interested in exploring the potential for energy savings through
irrigation system improvements.
41
Figure 8 – A typical irrigation system on farmland within the Flathead Reservation in
Montana. The haze above the field has been caused by dust blown up from a
dirt road, one of the primary sources of haze within the reservation.
Figure 9 – Large electric water pumps used to draw water from a nearby irrigation ditch
and supply irrigation equipment.
42
Low Energy Precision Application (LEPA) irrigation systems are modifications of
standard pivot irrigation systems that deliver water directly to the soil. These systems
save both energy and water, and are one possible irrigation system improvement. Instead
of nozzles that shoot water high into the air, LEPA systems employ drop tubes and
sprinkler heads that deliver water directly to the soil around crops. This modification
allows for lower system pressures and smaller electric motors, and cuts evaporative
losses of water reducing the amount of water required to irrigate a given field. For a
typical initial cost of $3,000, a farmer can convert an existing medium- or high-pressure
pivot system to a LEPA system. Electricity for irrigation provided by MVP costs $0.0363
per kWh plus $11.05 per hp of the pump motor per season. Using these rates, the
estimated cost savings in electricity is estimated to $476 per year (per LEPA modified
pivot system). While water costs would typically be included in the analysis of the NPV
and IRR, water for irrigation on the Flathead reservation is charged per acre independent
of how much water is actually used (therefore water savings by a LEPA system will not
impact the cost of water, though there will probably be a benefit to the water district due
to the water saved). Based upon the costs for electricity, using a project lifetime of 20
years and a MARR of 5%, investment in a LEPA system would pay for itself in just over
six years (SPP), have a NPV of $2,932, and an IRR of 14.9%. Clearly, this type of
project seems advisable from an economic standpoint. Table 3 summarizes the economic
indicators considering different assumptions about the future price of electricity.
It is worth noting that the price of electricity delivered by MVP is quite inexpensive.
Thus, for farmers on other reservations that pay a higher price of electricity, or are billed
per acre- foot of water, that investment in a LEPA system will be even more economically
attractive.
Case Study Three: Pascua Yaqui Tribe – Automatic Lighting Sensors
Background Information
The Pascua Yaqui tribe located primarily in southern Arizona, with five communities in
the state, four of which are located in and around Tucson. It is the newest federally
recognized tribe in the United States. The Pascua Yaqui received 202 acres of land in
Table 3 – The simple payback period, net present value, and internal rate of return for
investment in installation of a LEPA irrigation system.
Electricity/Water
Inflation Rate
-4%
-2%
0%
2%
4%
Net
Present
Value
$1,232
$1,987
$2,932
$4,120
$5,623
43
Internal
Rate of
Return
10.3%
12.6%
14.9%
17.2%
19.5%
1964, and acquired another 690 acres in 1982. The tribe gained federal recognition in
1978, and adopted a constitution in 1988. Governance of the tribe is by an 11 member
Tribal Council who are elected at large every four years. A Chairman and Vice
Chairman are chosen from among the Council.
The Pascua Yaqui tribe operates two casinos, an amphitheater, a smoke and gift shop and
has a third casino under construction. The tribe has approximately 13,000 members and is
growing. The tribe provides public safety, social services, housing and vocational training
to its members on the reservation and provides limited service to those members located
in the four other communities.
The tribe is undergoing a tremendous amount of change driven by the increase in tribal
membership and an increase in revenues. Housing issues were identified by the tribe as
one of the most pressing issues at this time. However, growth is affecting all aspects of
tribal development.
The tribal government is made up of 11 departments. The department directors report to
the tribal council on matters of policy. Energy issues are handled by the Development
Services Department, which is also responsible for land acquisition and land use
planning, planning and attracting or creating economic development opportunities,
infrastructure such as roads and parks, providing assistance to the four Yaqui
communities not located on the reservation, and non- housing community development.
At the time of the case study visit, the tribe did not have an energy department or
employee dedicated to energy efficiency or conservation. However, the tribe has since
hired an energy manager.
Development Services staff were interviewed to assess the knowledge of and interest in
energy conservation and efficiency and were found to have a wo rking knowledge about
the potential benefits of and strategies to implement energy conservation and efficiency
programs. Further, the Department has a particular interest in developing renewable
energy resources for the economic development potential and to gain a measure of energy
independence.
In terms of the tribal characteristics that may influence which EE programs and measures
to consider, the Pascua Yaqui live in an urban, cooling climate, have a small land base, a
significant level of economic activity, and un-served electrical loads are not an issue.
They are in the process of developing an organizational infrastructure to handle energy
issues. During the case study visit with the Development Services staff, motion sensors
for lighting in a new Head Start facility were identified as a potential EE measure of
interest. A summary of the details of this measure will be presented next.
Lighting Motion Sensors Retrofit
There are two basic ways to save electricity through lighting. One of these is to upgrade
existing lights with fixtures that consume less energy when on. Another method is to
44
install motion sensors to prevent existing fixtures from being left on when unused,
reducing the overall time of use of the fixtures.
The Pascua Yaqui Tribe is building a new Head Start facility (see Fig. 10). They are
using efficient lighting fixtures throughout the building, but are also considering the use
of motion sensors in the building as a way to further reduce energy consumption. There
are six large classrooms in the Head Start facility that could be outfitted with the motion
sensors. Of interest to the tribe is determining if the motio n sensors are worth the
investment. Because motion sensors are fairly simple and inexpensive to install in a
retrofit scenario, it is not necessary to install them at the time of construction. The
advantage of delaying installation is that the usage patterns for the classrooms can be
determined in the first several months of operation of the facility, allowing for a more
accurate prediction of the potential for cost savings. The purpose of the economic
analysis presented here is to identify the energy cost savings at several different levels of
classroom lighting use, in order to provide guidance in determining whether or not to
install lighting sensors at a later time.
To fully retrofit the Head Start facility with lighting motion-sensors, the Pascua Yaqui
would need to purchase 12 light switches and pay someone (tribal member or otherwise)
to install them. If wall mounted motion sensor switches manufactured by espEnergy are
employed at $90 each, the equipment cost would be $1,080 for parts and about $108 for
installation. Electricity is supplied to the facility by the local coop (Trico Electric
Cooperative) at a cost of $0.11 per kWh. In performing the energy and economic
calculations for this retrofit, it was assumed that under a business as usual scenario that
the classroom lights would be operated eight hours per day on average for 220 days out
of the year. There are 90 lighting fixtures in the six classrooms, each rated at 90 W. Thus
Figure 10 – A new Head Start facility under construction on the Pascua Yaqui
reservation in southern Arizona.
45
the energy cost associated with running the lights over the course of a year is $1,570. The
purpose of a lighting sensor is to reduce the amount of time the lights are used by turning
them off when a room is not in use. If, for instance, the lighting sensors turn the lights
off 10% of the time (about 50 minutes per day) then there would be an annual savings in
the electricity bill of $157. Until the usage patterns of the Head Start facility are
established, it is difficult to determine the potential for energy savings each year. In
order to handle this uncertainty, the SPP, NPV and IRR will be computed for several
scenarios of reduced electricity consumption. Then, once the usage patterns of the
building are known, a staff person can consult the results presented below to determine if
retrofitting with the motions sensors is worthwhile. For the results to follow, a MARR of
4% was assumed along with a project life cycle of 20 years and an inflation rate of 0%.
Figures 11 presents plots of the IRR, SPP, and NPV versus percent energy savings
(which corresponds directly to percent of time the lights are turned off by the motion
sensors). In general, if there is at least a 5% reduction in the amount of time the lights are
on due to the sensors, then the NPV is positive and the project looks acceptable.
Furthermore, the project becomes very attractive as the percent of energy savings
increases. For example, if the building usage pattern were to indicate an opportunity to
save 20% on the energy costs, then the SPP would be 4 years, the NPV would be $3,100,
and the IRR would be about 26%, each indicating that this is a very worthwhile project.
IRR
SPP
NPV
100
$10,000
For the retrofit scenario
providing 10% energy savings:
NPV = $960, IRR=12% and
SPP = 7.5 years
60
$8,000
$6,000
40
$4,000
20
$2,000
0
Net Present Value (NPV) ($)
IRR (%) and SPP (years)
80
$0
The NPV = 0 when the percent energy savings is 5.5%
-20
0%
10%
20%
30%
40%
50%
($2,000)
60%
Percent Energy Savings due to Lighting Sensors (%)
Figure 11 – Plot of the simple payback period versus percent energy savings for the
installation of lighting motion sensors at the Pascua Yaqui new Head Start
facility. Four lines are shown corresponding to electricity price inflation rates
of –2%, 0%, 2% and 4%.
46
Note the effect of inflation is analyzed in the details of this case study shown in Appendix
B, with the general result that inflation in the price of electricity universally improves the
value of the NPV, IRR and SPP.
47
V. RECOMMENDATIONS OF THE WESTERN REGIONAL AIR PARTNERSHIP’S
AIR POLLUTION PREVENTION FORUM
Western tribes have the potential to implement and, in some cases, to lead innovative
programs that improve energy efficiency. This research recognizes the great diversity of
tribal lands in the region and the inherent need for tribal governments to selectively
pursue energy-efficiency opportunities. For example, some tribes place a high priority on
the need to provide basic reliable electric service to their residents and businesses; there
are innovative opportunities for energy conservation measures in the design and
development of these services. Other tribes fully served with reliable electricity may want
to concentrate on improving the efficiency of electricity applications. Virtually every
tribe may be interested in the economic benefits offered by energy-efficiency programs as
well as the related social and cultural benefits. With potential cost savings on electricity
expenditures (as well as other energy sources) on the order of 10 percent to 50 percent,
energy-efficiency programs and policies could have a significant positive impact that
extends beyond economics to tribal sovereignty, energy independence, and increased
health care opportunities.
The following recommendations offer a broad selection of options from which tribes in
the WRAP region and their many collaborators can choose according to their specific
circumstances. The energy-efficiency recommendations are presented in three broad
categories:
•
Opportunities that can be implemented by individual tribes with little or no
involvement by other external entities.
•
Strategies for on-reservation programs that are best pursued in collaboration with
others, including tribes, states, federal agencies, and energy providers.
•
Initiatives for which tribes can support and lead programs to improve energy
efficiency regionally and nationally.
TRIBAL SPONSORED PROGRAMS
Development of an Energy Plan
For tribes that do not have one, it is recommended that tribes consider developing an
energy plan or policy. To be effective, this plan needs support from the highest levels
within the tribe, and among other things should set down goals for energy efficiency.
Establishing an energy plan is the first necessary step in gaining control over the
48
energy use and costs incurred by a tribe. The plan can enhance tribal sovereignty and
energy independence.
Tribal Energy Manager
It is recommended that tribes without an energy manager (or similar position)
consider establishing such a position. The task of an energy manager is to develop,
implement, and maintain a program focused on tribal energy use. An energy manager
within an energy authority can direct and manage energy programs including those
related to energy efficiency. As such, the energy manager is a logical choice for
assuming the responsibility of selecting, evaluating, and implementing appropriate
EE programs for the tribe. The energy manager can also recommend policies for
consideration by the tribal council. For tribes without an energy authority, an energy
manager position can be created elsewhere within the tribal government.
Tribal Energy Authority
Tribes without an energy (utility) authority might consider establishing such an entity
(either individually or in collaboration with other tribes). Perhaps the most important
recommendation in this report is that of designing a tribal energy plan that is managed
by an energy manager within a Tribal Energy Authority. The energy authority will be
an advocate for tribal electricity (and energy) customers, possibly negotiating lower
rates from outside sources and improving the reliability of the service. An energy
authority will also create jobs, build tribal expertise in energy, and help retain some of
the money expended on energy on the reservation. A tribal energy authority also
holds promise to advance tribal self-determination. The energy authority will make
decisions and implement plans that lead to a more successful future based on the
tribal vision.
Tribal Implementation Plan
A Tribal Implementation Plan under the provisions of the Regional Haze Rule and the
Tribal Authority Rule would commit the tribe to developing an energy plan and to
employing energy efficiency as a method to reduce electricity consumption. Such a
plan would be a good step toward tribal energy conservation.
Adopt Energy Efficient Building Codes
As Native American tribes grow in population and develop economically, there will
be an ever-growing need for electricity. As new buildings are constructed and older
buildings are renovated, there is a great opportunity for energy savings by employing
energy-efficiency methods. Tribes can adopt energy-efficient building codes such as
the International Energy Conservation Code (IECC), and establish a plan to
periodically “commission” buildings and ensure that the energy systems within a
building are operating as they should be. It is also recommended that EE be integrated
49
into housing plans, and that life cycle cost methods be used when evaluating the
energy systems within buildings.
Electrification Expansions
With new electrification comes the opportunity to implement EE. New customers in
rural areas may spend a large fraction of their monthly income on energy, in some
cases as much as 20 percent (Energy Information Administration 2000). In these
cases it is critical that cost-effective, energy-efficient appliances and building
materials be employed. Thus it is recommended that tribes consider integrating EE
with plans for new electrification.
Education Programs
Education can make the difference between an effective, successful, comprehensive
energy management program and a fragmented program with little support. Educating
tribal members, leaders, facility managers, staff members, contractors, and children in
school about understanding energy usage and the benefits of conserving energy will
build support for an energy program and will lead to significant savings in energy
costs. Tribes, therefore, might consider initiating education programs about energy
efficiency and energy conservation for all tribal users.
COLLABORATIVE OPPORTUNITIES FOR TRIBAL ENERGY CONSERVATION
Intertribal Collaborations
Many tribes may lack the resources to establish their own energy authority or even to
hire their own energy manager. In these cases it may be beneficial to initiate
partnerships with other tribes for that purpose. This could allow tribes to combine
their electrical loads, and potentially allow for the possibility of a lower electricity
rate to be negotiated with the energy service provider. Beyond this, tribes could work
collaboratively to encourage the federal government, through its trust responsibility,
to fund energy-efficiency programs (including education programs and rebate
programs) and to provide funding to tribes for energy management.
Federal Facilities
There are numerous federal facilities on tribal lands, and these facilities consume an
appreciable amount of electrical energy. Tribes could adopt energy conservation
codes or policies that require federal facilities on tribal lands to meet modern energyefficiency codes such as the IECC.
Federally Sponsored Programs
50
There are numerous federally sponsored programs in which tribes may participate to
implement energy efficiency. These programs include the Weatherization Assistance
Programs (WAP) and the DOE Rebuild America Program. The forum recommends
that tribes, as part of their overall energy plan, participate in existing federally
sponsored programs related to energy efficiency such as the Rebuild America
Program and the Weatherization Assistance Program. Tribes may also consider
requesting funding for efficiency programs from the federal government via several
existing statutes, most notably the Energy Policy Act of 1992 and its amendments.
Tribal leaders and collaborators could formally request adequate appropriations from
the U.S. Congress and appropriate agencies to implement the energy conservation and
renewable energy development provisions of these laws. This should include funding
of training programs for tribal energy professionals related to renewable energy and
energy efficiency.
TRIBAL LEADERSHIP BEYOND TRIBAL LANDS
Demand- Side Management Initiatives
Demand-side management (DSM) programs run by electric utilities have been
disappearing over the past several years with the advent of deregulation. However,
effective demand side management can yield direct financial benefits to a tribe in the
form of energy cost savings. The forum recommends that tribes support DSM
programs that encourage and reward efficient electricity users. Tribes can also show
leadership in this area by supporting system benefit charges that will be used to fund
such programs.
National Energy Efficiency Policies and Standards
National energy efficiency policies and standards can potentially significantly impact
regional air quality in addition to energy supply reliability, cost, availablility, and
security.. The mitigation of haze throughout the West will depend upon all users of
electricity and other energy forms that impact haze. Tribes can provide leadership
through support of national policies promoting energy efficiency.
51
REFERENCES
Bain, C., Ballentine, C., DeSouza, A., Majure, L., Smith, D.H., and Turek, J. 2002.
Economic and Social Development Stemming from the Electrification of the Housing
Stock on the Navajo Nation, Northern Arizona University College of Business
Administration Working Paper Series 02-34.
Bersbach, C. 2000. Verification of Building Energy Savings due to Energy Efficiency
Retrofits, Master’s Project Report, Northern Arizona University Mechanical
Engineering Department.
Capehart, B.L., Turner, W.C., and Kennedy, W.J. 1997. Guide to Energy Management,
2nd ed. Fairmont Press Inc., Lilburn, Georgia.
Elliot, J.D. 1998. Lowering Energy Bills in American Indian Households: A Case Study
of the Rosebud Sioux Tribe. Master’s Project Report, University of California at
Berkeley.
Energy Information Administration. 1995. Energy Consumption and Renewable Energy
Development Potential on Indian Lands. Office of Coal, Nuclear, Electric and
Alternate Fuels, U.S. Department of Energy, April 2000
(www.eia.doe.gov/cneaf/solar.renewables/page/pubs.html).
Energy Information Administration. 1997. Energy Consumption and Renewable Energy
Development Potential on Indian Lands. Office of Coal, Nuclear, Electric and
Alternate Fuels, U.S. Department of Energy. April 2000
(www.eia.doe.gov/cneaf/solar.renewables/page/pubs.html).
Energy Information Administration. 2000. Energy Consumption and Renewable Energy
Development Potential on Indian Lands. Office of Coal, Nuclear, Electric and
Alternate Fuels, U.S. Department of Energy. April 2000
(www.eia.doe.gov/cneaf/solar.renewables/page/pubs.html).
Energy Information Administration. 2001. Updated State- level Greenhouse Gas Emission
Factors for Electricity Generation. Office of Integrated Analysis and Forecasting,
U.S. Department of Energy.
Hunn, B.D. 1996. Fundamentals of Building Energy Dynamics. MIT Press, Cambridge,
Massachusetts.
Jacobs, J. 2000. The Nature of Economies. Modern Library, New York.
Pratt, D.B. 1997. Life Cycle Costing for Building Energy Analysis, Student Manual.
Association of Energy Engineers, Atlanta, Georgia.
52
Smith, D. H. 2000. Modern Tribal Development: Paths to Self-Sufficiency and Cultural
Integrity in Indian Country. Altamira Press, Walnut Creek, California.
Sullivan, W.G., Bontadelli, J.A., and Wicks, E.M. 2000. Engineering Economy, 11th ed.
Prentice Hall, Upper Saddle River, New Jersey.
Texas A&M Ag Program 2003. Success Stories: Precision Agriculture, retrieved July 3,
2003, from http://agprogram.tamu.edu/programs/successes/impacts99/mpct99_1b.htm
Turner, W.C. 1997. Energy Management Handbook, 3rd ed. Fairmont Press, Inc.,
Lilburn, Georgia.
Western Area Power Administration, 1992. Pump Testing and Irrigation Efficiency
Profile #40.
Wulfinghoff, D.R. 1999. Energy Efficiency Manual. Energy Institute Press, Wheaton,
Maryland.
Yazzie 1989. Convenience Stores: The Third Wave Of Navajo Retail Outlets, Navajo
Nation Economic Development Forum, #1, November-December 1989.
53
GLOSSARY
ACEEE
American Council for an Energy Efficient Economy
AP2
Air Pollution Prevention Forum of the WRAP
ASHRAE
American Society of Heating Refrigeration and Air Conditioning Engineers
CHP
Combined heat and power; refers to highly efficient energy systems in
buildings that generate power (typically electrical power) and uses the waste
heat from this process for a useful application (such as space heating)
Discount Rate
Rate-of-return or interest rate that is used in an economic evaluation that
considers the time- value of money (e.g., when calculating the net present
value)
DOE
U.S. Department of Energy
DSM
Demand-side management; refers to energy management programs that are
focused on the end- use of energy (the uses that demand energy)
EE
Energy efficiency
EPA
U.S. Environmental Protection Agency
EIA
U.S. Energy Information Administration
EREN
Energy Efficiency and Renewable Energy Network (part of the U.S.
Department of Energy)
ESCO
Energy service company
FEMP
Federal Energy Management Program
FIP
Federal Implementation Plan
GCVTC
Grand Canyon Visibility Transport Commission
IECC
International Energy Conservation Code
ITEP
Institute for Tribal Environmental Professionals
54
IRR
Internal Rate of Return
Life cycle
The planning period over which all of the costs of a particular energy
efficiency measure are considered
MARR
Minimum Attractive Rate of Return; the interest rate or discount rate used in
the economic analysis of energy-efficiency measures
NPV
Net present value; a standard method of comparing the economic merits of
two possible investments that accounts for the time-value of money
O&M
Operations and maintenance
RHR
Regional Haze Rule
SBC
System Benefit Charge
SIP
State Implementation Plan
SPP
Simple payback period; a simple method determining the approximate length
of time required for the energy savings from a EE measure to pay for the
initial investment. May not consider all of the costs associated with a project
and does not account for the time- value of money
TAR
Tribal Authority Rule
TIP
Tribal Implementation Plan
WGA
Western Governor’s Association
WRAP
Western Regional Air Partnership
55
APPENDIX A
ENERGY EFFICIENCY RESOURCES
56
List of Programs and Resources for Tribal Governments – Updated January 2003
The DOE Rebuild America program focuses on energy solutions as community solutions.
Rebuild America “partners” with small towns, large metropolitan areas and Native
American tribes, creating a large network of peers. Rebuild America supports
communities with access to DOE Regional offices, state energy offices, national
laboratories, utilities, colleges and universities, and non-profit agencies. Competitive
annual grants are offered to program partners.
http://www.rebuild.org/aboutus/aboutus.asp
The Tribal Environmental and Natural Resource Assistance Handbook developed by the
U.S. Environmental Protection Agency (EPA) is a comprehensive listing of federal
sources of technician and financial resources for tribes. Program information listed
below with an asterisk (*) are taken from this handbook.
http://www.epa.gov/indian/tribhand.htm
The U.S. Dept. of Housing and Urban Development maintains a website entitled The
Public Housing Energy Conservation Clearinghouse (PHECC). The PHECC assists
public housing authorities in managing utility operations and reducing utility costs. The
Clearinghouse can be used to learn more about topics such as water- and energy-saving
technologies, effective approaches for managing utilities, and electricity deregulation. It
also maintains many resources and links, as well as lists many related conferences and
workshops. http://www.phaenergy.org/
The U. S. Department of Commerce Economic Development Administration* provides
annual financial assistants to tribes to create full- time permanent jobs for unemployed
and underemployed residents. http://www.doc.gov.
The EPA Office of Air and Radiation Technology Transfer Network (TTN)* offers
technical assistance on air pollution science, technology, regulation, measurement, and
prevention. TTN also serves as a public forum for the exchange of technical information
and ideas among participants and EPA staff. Users can find tools to estimate air pollutant
emissions, download computer code for regulatory air models, download Office of Air
and Radiation Policy and Guidance documents, or request technical support in
implementing an air pollution control program. The TTN is maintained by the
Information Transfer Group, Information Transfer and Program Integration Division,
Office of Air Quality Planning and Standards, Office of Air and Radiation.
http://www.epa.gov/ttn
The EPA, Office of Air and Radiation, Air Pollution Project Grants (CAA Section 103
Grants)* are offered to tribes annually to support research, investigations, experiments,
demonstrations, surveys, and studies, as well as training, related to air pollution. Most
regions use this grant authority to support Tribes for hiring and training staff, assessing
air quality issues, and planning future monitoring or regulatory development. These
grants are project grants with limited term and do not provide continued financial
support. http://www.epa.gov/indian/overcat.htm
57
The EPA, Office of Air and Radiation, Air Pollution Control Program Grants (CAA
Section 105 Grants)* are offered annually to tribes, that are eligible under section 301(d)
of the Clean Air Act. Funding is for planning, developing, establishing, improving, and
maintaining programs that prevent and control air pollution or that implement national
primary and secondary air quality standards. http://www.epa.gov/indian/overcat.htm
The EPA, Office of Pollution Prevention and Toxics offers Pollution Prevention
Incentives for States Grants* which are available for tribes to promote the development
of tribal pollution prevention programs, information exchanges, technical assistance to
businesses, and training. Tribes are required to contribute 50% of the cost of the project.
http://www.epa.gov/p2/grants/ppis/ppis.htm
The EPA, American Indian Environmental Office, Indian Environmental General
Assistance Program* provides grants and technical assistance for tribes to plan, develop
and establish the capability to implement environmental programs. These program grants
are used by EPA to help Tribes build environmental program infrastructure such as hiring
staff with appropriate technical training. http://www.epa.gov/indian.
The EPA maintains a website describing EnergyStar products that are energy efficient.
See http://www.energystar.gov/default.shtml.
The DOE Office of Environmental Management works with Native American
communities that have or are near to sites that were once part of the Nation’s nuc lear
weapons complex. “Consistent with the Department's American Indian Policy, the
Environmental Management program maintains cooperative agreements with Tribal
nations to enhance their involvement in cleanup decisions."
http://www.em.doe.gov/public/trinat.html
The Native eDGE - Economic Development Guidance and Empowerment is an
interagency initiative of the federal government to facilitate sustainable economic
development within American Indian and Alaska Native communities. eDGE includes a
telephone call center, a publication clearinghouse, a web site, and a technical assistance
information center. The web site links seventeen federal agencies, educational
institutions, and organizations through a single portal so that tribes, Native Americans,
lending institutions, and private businesses can collaborate to promote economic growth.
Native eDGE serves as a one-stop shop for access to information, federal and non-federal
grants, loans, loan guarantees, and technical assistance for American Indians and Alaska
Native organizations and individuals. http://nativeedge.hud.gov/reference/whatisedge.asp
The Council of Energy Resource Tribes (CERT) mission is to “support member
Tribes as they develop their management capabilities and use their energy resources
as the foundation for building stable, balanced self- governing economies.” CERT
Services include:
58
§
§
§
§
Strategic Planning - CERT provides Tribes with specially designed methods
for strategic planning and evaluation that takes into account the values and
aspirations of the specific Tribal community being served.
Public Policy and Advocacy - CERT is a vocal point for developing Tribal
consensus on national concern, communicating Tribal views to government
decision makers, engaging in dialogue on pertinent issues, and monitoring
national initiatives.
Energy Marketing - To bring greater value to Tribal energy production, CERT
operates a self-supporting natural gas marketing program.
Communications and Publications - CERT serves as a communication and
information resource. http://www.certredearth.com/
The DOE, Weatherization Assistance Program (WAP) is administered to assist
income-eligible households reduce fuel or electricity required for space heating, space
cooling, and water heating and to improve the health and safety of the dwelling.
Annual WAP funding is provided to state energy offices, or in some cases, directly to
Tribes. http://www.eren.doe.gov/buildings/weatherization_assistance/overview.html
Petroluem Viololation Escrow funds, better known as Oil Overcharge Funds, are
court settlement funds provided to state and some tribal entities to conduct energy
efficiency, conservation and renewable energy work. Although the majority of
settlements were allocated in the 1980’s small settlement monies may still be
received. The DOE administers and tracks expenditure of these funds.
http://www.eren.doe.gov/buildings/state_energy/pdfs/manappa.pdf
Northern Arizona University hosts the Center for American Indian Economic
Development (NAU CAIED) which is an “information and resource center for
Arizona's twenty-one tribal nations and communities.” CAIED provides technical
assistance, hosts educational and training workshops and business consulting services
to encourage individual and tribal entrepreneurship The Center also provides a
resource library with current information on Arizona tribes, Indian Economic
development, and general development issues on Indian Country.
http://www.cba.nau.edu/caied/pages/Background.htm
The National Tribal Environmental Council (NTEC) was formed in 1991 as a
membership organization dedicated to working with and assisting Tribes in the
protection and preservation of the reservation environment. The council provides
technical assistance, training, information and resources and education to all federally
recognized tribes. http://www.ntec.org
59
List of DOE Energy Efficiency Programs 1 :
U.S. Department of Energy, Energy Efficiency and Renewable Energy Network
http://www.eren.doe.gov/
U.S. Department of Enegy, Building Energy Codes; http://www.energycodes.gov/
The Federal Energy Management Program (FEMP) provides federal agencies with
information, expertise, technical assistance, project financing vehicles, policy guidance,
and interagency coordination that help agencies achieve energy and cost savings in their
facilities. In the WRAP region, DOE funds have been allocated for FEMP programs in
Arizona, California, Colorado, New Mexico and Washington.
DOE’s Building Research and Standards Program provides financial and technical
assistance to states and establishes community partnerships for improving the energy
efficiency of buildings and for encouraging the sustainability of building design and
operation. The program is currently underway in each of the WRAP states, and includes
a variety of initiatives, including: 1) the Building America Program, which partners with
industry to develop and deploy energy efficient housing technologies and practices; 2) the
Residential Buildings Integration Program; 3) the Commercial Buildings Integration
Program; and 4) the Equipment, Materials & Tools Program, which focuses on building
components such as lighting design, advanced space conditioning and refrigeration, fuel
cells, and new appliance designs.
DOE’s Building Technology Assistance Program provides grants to states to improve
standards and efficiency in buildings. The program is currently underway in each of the
WRAP states, and is divided into four sections: 1) the State Energy Program, which
provides grants to states for energy efficiency programs; 2) the Weatherization
Assistance Program for low income families; 3) the Community Partnerships Program;
and 4) the Energy Star Program, which is designed to educate the public on the energy
use of appliances, equipment and buildings.
DOE’s Electric Energy Systems and Storage Program is divided into three sub-programs:
1) transmission reliability; 2) high- temperature superconducting research and
development; and 3) energy storage systems. Each of these three programs is aimed at
producing energy savings and air emission reductions. The transmission reliability
program is charged with developing technologies and policy options to maintain and
improve the reliability of the nation’s electricity delivery systems through the
development of technologies that increase efficiency and lower cost. The hightemperature superconducting R&D program is focused on creating designs of superefficient electrical systems such as motors, transmission cables, generators, and
transformers. The program is also focused on solving the problems associated with
manufacturing electrical wires using brittle ceramic superconducting materials. The
1
Information on federal energy efficiency program currently underway in the WRAP region was derived
by the Center for Applied Research in January 2000 from DOE’s Quality metrics(QM) database. The QM
database provides a listing of all renewable energy and efficiency programs funded by DOE nationwide.
60
energy storage system program is charged with performing research that can enhance
power quality, reliability and efficiency for electricity users and providers and that can
create increased value for renewable power systems.
The Industries of the Future Program develops new process-related energy efficiency
technologies with industry and other organizations. The program targets energy- and
waste- intensive industries such as steel, aluminum, glass, metalcasting, forest products,
chemicals, petroleum, agriculture and mining. DOE’s Office of Industry Technologies
attempts to draw together industry with the national laboratories and other interested
parties to pool risk, investment, and know-how in developing new technologies. The
program expects to improve energy efficiency in the industrial sector by over 3
quadrillion BTUs by 2020.
The Industries of the Future Program has a second goal of improving the resource
efficiency of energy- and waste- intensive industries by developing “crosscutting”
technologies, practices, and materials which can lower raw material and depletable
energy use per unit produced and reduce the generation of waste. This program
encompasses numerous DOE programs, including: Inventions and Innovations, NICE3,
Combined Heat & Power, Motors, Steam, Compressed Air, and DOE’s Industrial
Assessment Centers.
The Vehicle Technologies Research and Development program is targeted at developing
technologies to improve the fuel economy of automobiles and trucks.
The Materials Technology program has two major goals, including: 1) development of
lightweight materials to reduce weight by 40 percent for cars and 30 percent for trucks by
2004; and 2) developme nt of propulsion materials technologies for advanced car and
truck propulsion systems.
Department Of Energy Tribal Contacts
•
•
•
•
•
http://www.eere.energy.gov/power/tech_access/tribalenergy/
Thomas Sacco (202) 586-0759; [email protected]; Director, Office of
Weatherization and Intergovernmental Program.
Lizana Pierce (303) 275-4727; [email protected]; U.S. Department of
Energy Golden Field Office.
Roger Taylor (303) 384-7389; [email protected]; National Renewable
Energy Laboratory.
Sandra Begay-Campbell (505) 844-5418; [email protected]; Sandia National
Laboraotries.
Environmental Protection Agency Regional Tribal Program
Managers/Coordinators
•
Region 8 (CO, MT, ND, SD, UT, WY) – Sadie Hoskie, (303) 312-6343, Tribal
Manager
61
•
•
Region 9 (AZ, CA, HI, NV, Am. Samoa, Guam) – Clancy Tenley, (415) 7441604, Tribal Program Manager
Region 10 (AK, ID, OR, WA) – Scott Sufficool, (206) 553-6220,Tribal Office
Director
Laws and Regulations
•
•
•
Clean Air Act: 42 U.S.C. §§7401 et. seq.
http://www.epa.gov/oar/caa/contents.html
Tribal Authority Rule:
Rule: 63 Federal Register 7253-7274 (February 12, 1998)
http://www.epa.gov/fedrgstr/EPA-AIR/1998/February/Day-12/a3451.htm
Fact Sheet: http://www.epa.gov/oar/tribal/factsht.html
Regional Haze Rule:
Rule: 64 Federal Register 35714-35774;
http://www.wrapair.org/WRAP/Reports/rhfedreg.pdf
Fact Sheet: http://www.wrapair.org/WRAP/Reports/Haze- fs.htm
TIP Guidance
•
•
•
•
EPA Office of Air and Radiation Tribal Air Web Site:
http://www.epa.gov/oar/tribal/
EPA Partners and Contacts: http://www.epa.gov/air/tribal/partners.html
EPA Draft TIP Guidance: http://www.epa.gov/air/tribal/tip.pdf
Tribal Activities and Contacts: http://www.epa.gov/oar/tribal/tribetotribe.html
Western Regional Air Partnership
•
•
Western Regional Partnership (WRAP) Web Site: http://www.wrapair.org
The WRAP is staffed by the Western Governors’ Association and the National
Tribal Environmental Council. You can contact WRAP by contacting:
Patrick Cummins
Email: [email protected]
Western Governors’ Association
1515 Cleveland Place, Suite 200
Denver, CO 80202
Phone: (303) 623-9378
Fax: (303) 534-7309
•
•
•
Bill Grantham
Email: [email protected]
National Tribal Environmental Council
2501 Rio Grande Blvd, NW
Suite A
Albuquerque, NM 87104
Phone: (505) 242-2175
Fax: (505) 242-2654
WRAP Fact Sheet: http:// www.wrapair.org/facts.htm
WRAP Charter: http://www.wrapair.org/WRAP/rcharter.html
The Grand Canyon Visibility Transport Commission Report:
http://www.wrapair.org/WRAP/Reports/GCVTCFinal.PDF
62
•
Air Pollution Prevention Forum:
http://www.wrapair.org/forums/Ap2/PREVENT.HTM
“Recommendations of Air Pollution Prevention Forum to Increase the Generation
of Electricity from Renewable Resources” (State Report):
http://www.wrapair.org/forums/Ap2/group_reports/FinalDraftRR.pdf
“Recommendations of the Air Pollution Prevention Forum to Increase the
Generation of Electricity from Renewable Resources on Native American Lands”:
http://www.wrapair.org/
•
Market Trading Forum: http:// www.wrapair.org/forums/MTF/MTF.htm
Annex to the Report of the Grand Canyon Visibility Transport Commission to the
U.S. Environmental Protection Agency:
http://www.wrapair.org/forums/MTF/group_reports/ANNEX/ANNEX.htm
Annex to the Report of the Grand Canyon Visibility Transport Commission to
the U.S. Environmental Protection Agency:
http://www.wrapair.org/forums/MTF/group_reports/ANNEX/ANNEX.htm
Other Organizations
•
Institute for Tribal Environmental Professionals (ITEP):
Main ITEP Phone: 520/523-9555; ITEP Fax: 520/523-1266
http://www.cet.nau.edu/Projects/ITEP/itep_home_default.htm
Mailing Address:
The Institute for Tribal Environmental Professionals
Northern Arizona University
PO Box 15004
Flagstaff, AZ 86011
•
National Tribal Environmental Council
2501 Rio Grande Blvd, NW, Suite A
Albuquerque, NM 87104
Phone: (505) 242-2175 Fax: (505) 242-2654
http://www.ntec.org/
•
Western Governor’s Association
1515 Cleveland Place, Suite 200
Denver, CO 80202
Phone: (303) 623-9378, Fax: (303) 534-7309; http://www.westgov.org/
•
International Energy Conservation Code
Available at the International Code Council
http://www.iccsafe.org/e/category.html
63
APPENDIX B
CASE STUDY DETAILS
64
Many of the recommendations presented previously (see Sec. V) are directed towards
creating an organizational and political infrastructure within a tribe that will foster
successful implementation of Energy Efficiency (EE) projects to serve the greater good
of the people. Once this infrastructure has been established, it then becomes the
responsibility of an energy manager within the tribe (or working for the tribe) to evaluate
and recommend specific EE projects. The eventual decision of whether to adopt a
particular EE measure will depend upon the economic merit of the measure combined
with other considerations, both qualitative and quantitative, such as the opportunity to
improve the living or working conditions, the potential for positive societal impact, the
availability of capital, etc.
The purpose of this appendix is to describe a widely accepted method for evaluating the
economic merits of an EE measure. Once described, the method will be applied to the
three case studies summarized in Sec. IV of this report, including details of calculating
the Net Present Value (NPV), the Internal Rate of Return (IRR), and the Simple Payback
Period (SPP). In this sense, this appendix is a companion to the material presented in Sec.
IV, which should be read prior to this appendix.
EVALUATING THE ECONOMIC MERIT OF AN EE MEASURE
Successfully evaluating the economic merit of an EE measure or several EE measures
will assist in determining whether or not to implement a given measure, or in deciding
which of several measures is best. When evaluating an EE measure, it is important to
employ a consistent, reliable method for evaluating the economic merits. Presented
below is a general, six-step procedure to apply when considering energy efficiency
improvements. The procedure follows the one described by Sullivan (2000), but adapted
specifically to EE.
Step 1) Identify the opportunities for EE.
Step 2) Develop feasible alternatives for EE improvements.
Step 3) Select the decision criteria.
Step 4) Analyze and compare the feasible alternatives
Step 5) Select the preferred alternatives
Step 6) Revisit your decision
In practice, steps one through five are typically an iterative process. Each of these six
steps is described in greater detail below. The focus here is on the process to be followed
and not on how to perform the economic calculations. Examples of how to perform the
calculations are provided within the details of case study examples to follow.
Step 1) Identify the opportunities for EE.
In order to identify the opportunities for energy and cost savings, it is necessary to know
how much energy is used, how that energy is used (i.e., the end- use), and how much it
costs to use the energy. This information is most easily obtained from utility bills
(electricity, gas, etc.) or other energy related bills (propane, wood, etc.). Those energy
65
resources with significant costs can be expected to provide the greatest opportunities for
cost savings. Once the larger energy expenditures have been identified, it is necessary to
identify the specific end- uses that consume the energy. Typically, walking through
buildings or facilities where the energy is consumed and performing an “energy audit”
accomplishes this. The goal of an energy audit is to identify how much energy is used by
each of the end- uses. Energy audits can be conducted at various levels of detail, from
simply making a good estimate of the energy consumption, to installing meters that
record the actual energy consumption. In practice, the level of detail actually employed
may depend upon the potential for energy savings, the cost associated with implementing
an EE measure, and the sensitivity of the economic measure (i.e., the net present value) to
the magnitude of the energy consumption. Typically, some combination of measurements
and estimation are used. For information describing how to perform an energy audit, see
Capehardt (1997) or Turner (1997). A good way to identify end-uses that consume
significant amounts of energy, and to find potential EE measures, see Sec. II of this report
(the subsection on “What is Energy Efficiency”), as well as Wulfinghoff (1999),
Capehart (1997), Turner(1997), and related Energy Information Agency reports
(www.eia.doe.gov/emeu/cbecs/). For assistance in conducting an energy audit, it may be
worthwhile to contact your state energy office, local utility, or to consider contracting
with an energy service company.
Step 2) Develop feasible alternatives for EE improvements.
Having identified the energy end-uses that cost a significant amount of money, one is
now in a position to develop a list of feasible EE improvements. Listing the energy enduses in rank order by expense and then holding a brainstorming session is a good way to
get this process started. The goal of brainstorming is to identify several potential EE
measures that will reduce energy use, and if possible also increase the effectiveness of the
end-use (e.g., improve the comfort of a working space). People involved in the
brainstorming session could include the energy manager, key personnel working or living
in the areas under consideration for an EE improvement, an energy expert or consultant,
and perhaps others. The end result of the brainstorming process should be a relatively
short list of the potential EE measures or programs with the best expected potential for
savings, successful implementation, and positive impact on the people affected. A good
source of ideas to consider when developing a list of alternatives are the references listed
in Step 1 above, and those shown in Table 2 (found in Sec. III of this report).
Step 3) Select the decision criteria.
All criteria used to decide which EE measures are best should be selected prior to
evaluating the alternatives. As mentioned previously, the economic indicators
recommended for use are the NPV, the IRR, and the SPP. However, all relevant criteria
should be identified at this time, including those that do not have a monetary value (such
as the potential for positive societal impact, or to improve public image, etc.). It is
important that when developing these criteria that a consistent viewpoint be employed
along with a common unit of measure when comparing the various alternative EE
66
measures (including implementing an EE measure versus not implementing that measure,
if there is only one alternative).
Step 4) Analyze and compare the feasible alternatives.
When comparing the economic merit of a proposed EE measure, it is common to
compare the life-cycle costs of implementing versus not implementing the measure.
Indeed this is the basic premise in the NPV and IRR techniques. From the perspective of
the proposed EE measure, the “life-cycle” costs refer to all the costs of implementing the
measure over its expected lifetime. 2 From the perspective of NOT implementing an EE
measure, the life-cycle costs are all those costs associated with NOT implementing the
measure over the expected life of the measure. Indeed, the most critical step in comparing
prospective EE measures is to accurately identify these costs ( also called “cash flows”)
associated with each measure and when these costs occur. When thinking about the cash
flows of an EE measure, it is worth recognizing that if a proposed EE measure had the
exact same cash flows as not implementing the measure, then the economic merits of
implementing versus not implementing would be identical. Thus, it is the differences in
the cash flows that are important, and only those differences need to be considered when
comparing alternatives. Once the differences in the cash flows are identified, they are
transformed into a common unit of measure, such as the NPV, for comparison. In
performing this transformation, it is very important to employ time-tested, industryaccepted techniques of accounting for the effects of financing costs, inflation or deflation,
depreciation, taxes (if applicable), and possibly other factors. How to correctly account
for these effects is well described in Sullivan (2000), Capehart (1997), and Turner(1997),
and will be demonstrated in the case study examples to follow.
Once the cash flows have been identified and transformed into a measure such as the
NPV, it is important to explicitly account for the uncertainties related to the calculations.
Future cash flows, interest rates, energy costs, etc., are usually based on assumptions and
best estimates and are subject to error. Because there is a degree of uncertainty with any
future prediction of a cash flow, it is worthwhile to make this uncertainty explicit. For
example, one may be concerned about inaccuracies in the projected cost of electricity and
how that will affect the NPV of a proposed measure. To make this uncertainty explicit,
one could recompute the NPV several times using several different values for the cost of
electricity. Doing this will illustrate how sensitive the NPV is to changes in the
electricity cost, and will provide a sense of the importance of a good estimate of the
electricity. Spreadsheet programs are particularly good at facilitating this type of
“sensitivity analysis” since they have many built in functions specifically for computing
the NPV or IRR. Consequently, all calculations associated with the case studies to follow
were performed with a spreadsheet.
2
Note that the time frame or “planning horizon” for assessing the economic merit of a project does not
need to be the expected life of a particular EE measure, but rather can be a predetermined length of time
such as 5 years, 10 years, 15 years, etc. In fact, it is not uncommon that alternative EE measures under
consideration may have different lifetimes, making it necessary to select a common length of time over
which to consider the alternative projects in order to fairly compare their relative economic merits (for
more information, see Chapter 5 of Sullivan (2000)).
67
Step 5) Select the preferred alternatives.
Having determined the selection criteria in Step 3, and then performing the analysis in
Step 4, one is now ready to select the preferred alternative EE measure(s). If considering
whether or not to implement a single potential EE measure, then the NPV or the IRR are
the best economic measures to use. 3 However, when comparing multiple possible EE
measures, the NPV is the preferred economic measure. 4 In addition to the economic
measures, all the other relevant criteria identified in Step 3 should be considered in
making the final decision. It is worth noting that Steps 1 though 5 of this process will
likely be iterative, with new ideas for EE measures arising during the analysis or new
decision criteria being included for consideration, etc.
Step 6) Revisit your decision.
The importance of this step cannot be understated. After implementing an EE measure, it
is important to revisit the decision by monitoring the outcome of the EE measure. Did it
achieve its intended results? If the energy savings results are different than predicted,
why so? By comparing the predicted energy and cash flows predicted with the actual,
one can learn how to do a better job in future analyses as well as build confidence in their
predictions. This includes gathering feedback from personnel affected by the EE
measure (e.g., did the measure really make their working environment more comfortable,
etc.).
ENERGY EFFICIENCY CASE STUDIES
Researchers from Northern Arizona University spent one day each with the Yurok Tribe,
the Pasqua Yaqui Tribe, and the Confederated Salish and Kootenai Tribes learning about
their energy issues and concerns, their thoughts about energy efficiency, and spent some
time gathering information related to one potential energy efficiency measure. The case
studies to be presented below provide representative analyses of the potential EE
measures for the three tribes visited. The details of each case study will be couched
within the various steps of the process as described above, but emphasizing the
calculations involved in step (4) (analyzing and comparing the alternatives). Each
potential EE measure is analyzed for its economic merit. The decision of whether or not
to implement each of these proposed measures is left to each of individual tribe for their
consideration. Note that because of the limited time available to the NAU visitors as well
as the personnel from the host tribe, exhaustive investigations were not conducted for
3
Since the SPP does not consider all the life -cycle costs or the time-value of money, it is not as accurate as
either the NPV or the IRR.
4
Though the IRR is useful in indicating the “rate-of-return” that can be earned on money invested in an EE
measure, there are some potential drawbacks with using the IRR that require careful application of the
technique. One drawback is the inconsistent ranking problem that arises when comparing multiple,
mutually exclusive alternatives (mutually exclusive implies that only one measure can be implemented).
The inconsistent ranking problem occurs when the IRR leads to an incorrect ranking of the economic merit
of the various proposed EE measures (see Sullivan (2000), Sec. 5.4.2.1).
68
each potential EE measure. However, sufficient information was collected to enable a
useful analysis, even though some refinements would be sought prior to choosing to
implement a given measure (for example, ensuring the correct value for the minimum
attractive rate-of-return, or getting more precise estimates of equipment cost, etc.). Prior
to reading the details of each case study below, it is suggested that the overview of each
case study presented in Sec. IV be reviewed.
Case Study One: Yurok Tribe Lighting Retrofit at the Ke’pel Head Start Facility
When querying the Yurok tribe about potential energy efficiency measure of interest, one
that rose to the top of their list was the possibility of an efficiency improvement at their
Ke’pel Head Start facility. A picture of the facility was provided in Fig. 6 in Sec. IV.
Because this facility is not supplied by utility electricity, but rather has its own standalone electric generator fueled by propane and supplemented with solar photovoltaics
(see Fig. B1), for reliable and robust operation of the generation equipment it is important
to ensure efficient use of the electricity. A walk through of the Head Start facility
showed that energy was being used wisely throughout the building, and that the staff was
very conscientious in their use of electricity. For example, when not in use the computer
Figure B1 – The Propane generator (left) and solar photovoltaic panels (right) at the Ke’pel Head
Start Facility.
69
and copier in the building were normally turned off. The refrigerator and freezer were
both well insulated and powered using propone. Skylights were used in the building so
that the electric fluorescent lights could be used less. Figure B2 shows a picture of the
classroom with the skylights and the fluorescent lights. Note that only some of the
fluorescent lights are being used due to the effectiveness of the daylighting (the round
lights are the daylights). Of the uses of electricity in the building, the fluorescent lights
appeared to be the largest user of electrical energy (despite the use of daylights), and a
closer inspection of the lights showed that T12 fluorescent bulbs were being used. These
bulbs, while more efficient than incandescent light bulbs, are now outdated. Newer, more
efficient T8 bulbs and ballasts are being used in new construction. When comparing the
T12 and T8 bulbs, the T12 is one and one-third inches in diameter (twelve-eights of an
inch) while the T8 bulb is only one inch in diameter (eight-eights of an inch). These
bulbs put out nearly the same amount of light, but the T8 bulb uses 34.5% less energy. It
was decided at the end of the walk through to analyze the potential cost savings of doing
a lighting retrofit using new T8 bulbs and ballasts to replace the T12 bulbs and ballasts.
In this case study, steps one and two of the process of selecting potential EE measures
(identifying opportunities for EE and developing a set of feasible alternatives) were
conducted during the walkthrough. Had more time been available, a more thorough
investigation of potential EE measures would have been performed. Nonetheless, the
lighting retrofit is a good example of an EE measure and because lighting is one of the
largest consumers of electricity in many buildings (see Figs. 1 and 2 in Sec. II) it is likely
one of the largest energy end- uses in this building also. Step three in the process
Figure B2 – Fluorescent lights (rectangular) and daylights (round) used in the classroom
of the Kepel Head Start facility.
70
of analyzing an EE measure is to select the decision criteria. In this case, the net present
value (NPV) will be used, but the internal rate-of-return (IRR) and simple payback period
(SPP) will also be calculated.
Step four in the process of selecting potential EE is analyzing and comparing the feasible
EE alternatives. In this case study only two alternatives (scenarios) are being considered:
implementing a lighting retrofit with T8 bulbs and ballasts (the “retrofit scenario”) versus
NOT implementing the measure (the “business-as-usual scenario”). The enumerated list
below describes in detail the steps taken in calculating the NPV in comparing these two
alternatives, and are representative of the steps that would be taken in any NPV
calculation for this facility (or other facilities not connected to the electrical grid).
1. Pick a length of time over which to do your economic analysis.
This choice can range from 1 year to 30 years, depending on the application. For
this analysis 10 years was selected as the planning horizon for analysis.
2. Create two tables with one column for each year (include a year 0) and rows
for categories such as fuel cost, materials cost, and labor cost.
Use one table for the business-as-usual scenario and one table for the retrofit
scenario. Each table should have a total cost row where the total expense of each
scenario for each year can be summed. Because of their utility in solving
problems such as this, a spreadsheet program was used to create these tables and
for performing the calculations (Microsoft Excel was used here, though any
spreadsheet program will do). The table used for this analysis is displayed in Fig.
B3. In this figure, the top and middle tables correspond to the business-as-usual
Business-as-Usual Scenario - No Retrofit
Year
0
Fuel Costs
Material Costs
Labor Costs
Salvage Value
Total
Retrofit Scenario
Year
Fuel Costs
Material Costs
Labor Costs
Salvage Value
Total
0
1
2
3
4
5
6
7
8
9
10
1
2
3
4
5
6
7
8
9
10
Differences (Retrofit minus Business-as-Usual)
Difference (Total with retrofit
minus Total without)
Difference (including Inflation)
Discounted Differences
Figure B3 – Spreadsheet table used in evaluating the NPV, IRR and SPP of the
Yurok lighting retrofit case study.
71
scenario and the retrofit scenario, respectively, while the bottom table (shaded)
contains only the differences between the cash flows for each scenario. The cash
flows to be entered into year 0 column of the table correspond to upfront costs
incurred prior to the EE measure taking effect. All costs incurred during the first
year that the EE measure is in effect are recorded in the Year 1 column of the
table and assumed to occur at the end of the year (though this may not be how the
cash flows actually occur during the year, it is an approximation made in order
simplify the calculations so that the problem tractable and typically leads to a
more conservative estimate of the NPV ). Similarly, all costs occurring during
year 2 are summed and assumed to occur at the end of the year, etc.
3. Estimate the upfront costs for each scenario.
There are typically no upfront costs for the business-as-usual scenario, and that is
the case here. To retrofit the building with new T8 bulbs and ballasts, 46 bulbs
and 23 ballasts would need to be purchased (the ballasts modify the electricity in
the building into a form usable by the fluorescent bulbs). At $2.67 each, the bulbs
would cost $122.82. The ballasts at $15.49 each would cost a total of $356.27.
Allowing $100 to cover installation labor, the total cost of the retrofit would be
$579.
4. Estimate the annual costs for each scenario.
What will fuel (electricity, natural gas, etc.) cost in each scenario in each of the
ten years of the analysis horizon? Will there be any predictable and ongoing
maintenance or operation costs? Write these costs into your tables in the
appropriate years.
The most complicated part of this case study was the determination of the cost of
electricity. Since electricity comes from the propane generator, the efficiency of
the generator at different load levels affects the price of electrical energy (dollars
per kilowatt-hour (kWh)). For example, at low load levels (not much electricity
being used in the building) the efficiency of the generator is low and the cost of
electricity is relatively higher, while at the design load of the generator (about 12
kW) the efficiency is relatively higher and the cost of electricity is lower. The
process of determining the price of electricity has been broken into steps below.
Step 1) Find the price of electricity ($/kWh) for the business-as-usual scenario.
The price of electricity was calculated from the fuel consumption curve for the
generator. The generator is a Kohler 12RY62 propane generator with a rated
power of 12 kilowatts (kW). The fuel consumption information was obtained
from a distributor of Kohler generators, and is reprinted in the first three columns
of Table B1. The distributor also provided conversion factors from cubic feet of
gas to gallons of liquid propane gas (LPG), which is how it is purchased. This
factor is only valid for the specific regulation pressure for the generator used:
72
154.3 cubic feet per hour of gas = 1 gallon of LPG per hour
Using this factor, the fuel consumption (gallons/hour) was added as the forth
column in Table B1. Concerning the cost of the propane, the Yurok Financial
Office indicated that they paid 92 cents per gallon for propane. By multiplying
the fuel consumption in gallons per hour by $0.92 per gallon, the expense rate
column of Table B1 was created. Finally, dividing the expense rate by the load in
kilowatts yielded the cost of electricity. As can be seen, the cost of electricity (due
to fuel) increases as the load of the generator decreases below its rated 12 kW.
Table B1 – Cost of electricity from the Ke’pel buildings Kohler propane
generator at various levels of load.
Percent
of full
Load
Load
25%
50%
75%
100%
3 kW
6 kW
9 kW
12 kW
Fuel
Consumption
(cubic
feet/hour)
36
48
60
75
Fuel
Consumption
(gallons/hour)
Expense
Rate
Cost of
Electricity
($/kWh)
0.2333
0.3111
0.3889
0.4861
$0.21/hour
$0.29/hour
$0.36/hour
$0.45/hour
7.2
4.8
4.0
3.7
Because it is not expected that the load on the generator will be equal to one of
the four specific load values shown in Table B1, it is convenient to plot this data
as shown in Fig. B4. A curve was fit to this plot (equation shown in the figure) to
facilitate computing the cost per kWh at any given level of load (note fitting a
curve such as this is fairly easy using built- in spreadsheet “regression” tools).
Cost of Electricity by Load
Cost per kWh
$0.70
$0.60
-0.483
$0.50
y = 3.3271x
2
$0.40
$/kWh
R = 0.9787
$0.30
Power ($/kWh)
$0.20
$0.10
$0.00
0
2000
4000
6000
8000
10000
12000
14000
Watts of Load
Figure B4 – Electrical load data plotted versus cost of energy. A curve fit to this
data is also provided (y = Cost per kWh; x = Watts of Load).
73
Using this equation and knowing the average load at which the generator runs, it
is possible to determine the average cost of electricity. Thus the next step is to
determine the average load on the generator.
Step 2) Determine the average load on the generator and the cost-of-electricity.
The teacher at the Head Start facility provided time-of-usage estimates for all of
the electrical appliances in the building, and these were used to calculate the
average load on the generator. Because of an on-going problem with a
component of the battery system connected to the solar photovoltaics (PV), the
PV was not contributing to the building’s energy supply, and the generator was
running full time. If repaired, the power supplied by the PV would reduce the load
by up to 600 W. Table B2 provides the estimates of run time in hours per day and
power draw in Watts of the electrical equipment used in the Head Start building.
The energy consumed is computed by multiplying the run time by the power
draw. By summing the energy consumed and dividing by the total run time per
day, the average load on the electrical generator was found to be 2150 W. It is
interesting to note that this average load is significantly less than the rated
capacity of the electrical generator.
Table B2 – Cost of electricity from the Ke’pel buildings Kohler propane
generator at various levels of load.
Item
Only 13 Light
Fixtures
All 23 Light Fixtures
Computer/Printer
Copier in Use
Copier on Standby
Coffee Maker
Occasional Use Items
Hours/Day Power Draw Energy consumed
(Watts)
(Watt*Hours/Day)
2
90*13=1,170
2,340
6
8
2
3
1
3
90*23=2,070
150
300
50
200
100
Total energy consumed (Wh/day) =
Total hours of electricity usage in school day =
Average Load on Generator =
74
12,420
1,200
600
150
200
300
17,210
8
17,210 / 8 ≈
2,150 W
Using the equation provided in Fig. B4 and a load of 2,150 W, the cost of energy
for the business-as-usual scenario is calculated to be 8.2 cents per kWh, as shown
below:
Cost of electricity = 3.3271 * ( 2,150) −0.483 = $0.082 / kWh
A similar table can be constructed for the retrofit scenario, and would be identical
to Table B2 with the exception that the power draw of a T8 light fixture is 59
Watts versus 90 Watts for a T12 light fixture. The resulting average load on the
generator in the retrofit scenario is then computed to be 1,520 Watts. Plugging
this load into the cost-of-electricity equation yields a cost of energy of 9.7 cents
per kWh.
Step 3) Determine the electrical energy costs.
Now that values have been obtained for the cost-of-electricity in both scenarios, it
is necessary to find the annual electricity consumption and costs. Assuming the
Head Start facility is in operation for 181 days per year (a typical school year), the
electricity consumption due to the lights in the business-as-usual scenario is 2,340
+ 12,420 = 14,760 Wh or 14.76 kWh. Multiplying this by 181 days and by
$0.082/kWh gives an annual energy cost of energy to run the lights of $220. For
the retrofit scenario, the annual cost of energy is $143.
Step 4) Predict a schedule of equipment maintenance and replacement costs
It was assumed that this particular retrofit would make no difference in maintenance costs
or the lifetime of the generator because the hours of operation would not change and the
average load on the generator would be a low percentage of full capacity in both
scenarios. The identical schedules for generator maintenance and replacement would
cancel out, and so were left out of the analysis (recall that only the differences in the cash
flows need to be considered).
Based on bulb and ballast typical lifetimes, it was assumed that the old bulbs would
require replacement at the end of the seventh year, and that the new bulbs would not need
replacing during the 10-year period. Replacement bulbs were estimated to cost $75.44
and require about $10 in labor to replace them. In neither case would the ballasts require
replacement due to failure.
5. Enter the cash flows for each year of each scenario into the spreadsheet.
Figure B5 shows the cash flows for each scenario entered into the spreadsheet
table. Note the values shown here are for the “base case” which represents our
best estimates of the cash flows for each scenario. It is called the base case for
75
Business-as-Usual Scenario - No Retrofit
Year
0
1
2
3
4
5
6
7
8
9
10
Fuel Costs
$0.00
($220.00) ($220.00) ($220.00) ($220.00) ($220.00) ($220.00) ($220.00) ($220.00) ($220.00) ($220.00)
Material Costs
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
($75.44)
$0.00
$0.00
$0.00
Labor Costs
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
($10.00)
$0.00
$0.00
$0.00
Salvage Value
$0.00
Total
$0.00
($220.00) ($220.00) ($220.00) ($220.00) ($220.00) ($220.00) ($305.44) ($220.00) ($220.00) ($220.00)
Retrofit Scenario
Year
Fuel Costs
Material Costs
Labor Costs
Salvage Value
Total
0
1
2
3
4
5
6
7
8
9
10
$0.00
($143.00) ($143.00) ($143.00) ($143.00) ($143.00) ($143.00) ($143.00) ($143.00) ($143.00) ($143.00)
($479.00)
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
($100.00)
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
($579.00) ($143.00) ($143.00) ($143.00) ($143.00) ($143.00) ($143.00) ($143.00) ($143.00) ($143.00) ($143.00)
Differences (Retrofit minus Business-as-Usual)
Difference (Total with retrofit
minus Total without) (579.00)
77.00
Difference adjusted for Inflation (579.00)
77.00
Discounted Differences (579.00)
73.33
77.00
77.00
69.84
77.00
77.00
66.52
77.00
77.00
63.35
77.00
77.00
60.33
77.00
77.00
57.46
162.44
162.44
115.44
77.00
77.00
52.12
77.00
77.00
49.63
Figure B5 – Cash flows entered into the spreadsheet used in evaluating the Yurok
lighting retrofit case study. The numbers in parent heses indicate cash outlays.
reference when comparing its NPV to the NPV computed with modified cash
flows or assumptions about those cash flows (such as would be done in a
sensitivity analysis). In this base case it has been assumed that the lighting
equipment has no salvage value at the end of the 10-year project life. Notice that
the row entitled “salvage value” in the tables for both scenarios have no values
entered. It was included in the table for use later in a sensitivity analysis. At the
bottom of the table for each scenario is the “Total” row. In this row, the cash
flows for the fuel, materials, labor and salvage are summed.
6. Complete the “Differences” table.
Now look at the “Differences” table on the bottom in Fig. B5 (the table with three
shaded rows). As mentioned earlier, it is only the differences in cash flows
between alternative scenarios that impact our decision of whether or not to
implement an EE measure, so a table has been created specifically to focus on the
differences. The values entered in the first row of this table are found by
subtracting the total cost for a given year in the business-as-usual scenario from
the retrofit scenario. For example, the ($579.00) entered in the year 0 column was
computed as follows:
(Retrofit year 0 total – Business-as-Usual year 0 total) = ($579) - $0 = ($579)
Note that a number in parenthesis represents a cash outlay, so this ($579)
indicates an outlay of cash for the upfront costs of the retrofit that would not
occur in the business-as-usual scenario. Progressing to the next column
representing the difference in cash flow between the two scenarios at the end of
year 1, there is a difference of $77. Because this number is not in parenthesis, it
represents a savings of $77 during year 1 (due to decreased fuel costs). An
76
77.00
77.00
47.27
identical procedure is repeated to determine the differences in cash flows for each
year of the 10 year planning horizon.
The second row in the differences table is labeled “Difference adjusted for
Inflation.” In this base case the inflation rate was assumed to be zero so the
numbers in this row are identical to the numbers immediately above. However, if
the inflation rate were not assumed to be zero then these values would all be
inflated an assumed inflation rate (though not used in the base case, non-zero
inflation rates were investigated in a sensitivity analysis).
The last row in the differences table is labeled “Discounted Differences.” In this
row, the present value of the numbers listed in the row immediately above (the
“Difference adjusted for Inflation” row) are displayed. The present value is
calculated using the following equation:
present value =
( difference adjusted for inflation)
(1 + MARR ) Year
For example, at the end of year 2, the difference adjusted for inflation is $77.
Using the MARR of 5% (use 0.05), the present value is:
present value =
($ 77 )
= $69.84
(1 + 0.05) 2
While it is easy enough to perform this calculation, most spreadsheets have a built
in function to compute the present value. In Excel©, the function that would
perform this calculation is as follows:
PV(0.05,2,,-$77) = $69.84
7. Compute the NPV, IRR, and SPP.
Once the tables shown in Fig. B5 have been completed, it is a simple matter to
calculate the NPV. To do so, one needs only to sum the numbers in the
“Discounted Differences” row. Alternatively, one may use a built- in NPV
function in the spreadsheet program instead of summing these numbers. For the
base case, the NPV is $76.29 indicating that this is an investment worth
considering (recall a positive NPV indicates the return on investment for the EE
measure will be better than the MARR).
The IRR is also easy to compute using the values in this table. Excel©, like many
spreadsheet programs, has a built in function (named IRR) to compute the IRR
(refer to the help screen of your spreadsheet program to learn how to use the
function). In essence, the IRR is determined by finding the value of the MARR
that would cause the NPV to be zero. For the base case, the IRR is found to be
77
7.54%. This implies that an investment in this EE measure will produce an
annual return of 7.54% on the investment.
Finally, the SPP can be computed. The SPP is typically determined by dividing
the initial cost of the EE measure by the annual savings in energy costs
(neglecting inflation, replacement costs, and salvage values). In the base case:
SPP = $579 / $77 = 7. 5 years
Thus the SPP is 7.5 years.
8. Perform a sensitivity analysis of your results.
In order to explicitly address the uncertainty in the results obtained for the NPV,
IRR, and SPP, it is wise to perform a sensitivity analysis. This is accomplished
by varying the base case values for the cash flows, MARR, inflation rate, etc., one
at a time. For example, if one wished to know how sensitive the NPV is to the
annual fuel savings (calculated to be $77 in the base case), one simply needs to
vary this value within over a reasonable range of possible values. Spreadsheet
programs are particularly helpful in performing these analyses, because once the
spreadsheet table has been created (such as the one in Fig. B5) it is a simple
matter to change any of the cash flows and the results for the NPV and IRR are
instantly updated. It is in just this manner that the sensitivity plot showing NPV
versus net annual fuel savings was created, as displayed in Fig. 7 of Sec. IV.
Two more sensitivity plots have been created for this case study, and are shown in
Figs. B6 and B7. In Fig. B6, the NPV is plotted versus the percent deviation in
the most likely estimate of the MARR, fuel cost, replacement cost, and salvage
value. The most likely estimate of these values are the values used in the base
case. For example, the most likely estimate of the MARR is 5%. As shown on the
plot, if the value of the MARR increases by 50%, then the NPV is zero (so if the
tribe were to increase its minimum annual rate-of-return to 7.5%, this project
would probably not be recommended). Another interesting result shown on this
plot is that the NPV is not very sensitive to the assumed replacement costs and
salvage values; it stays positive regardless of their values (note the salvage value
was assumed to be zero in the base case; for this plot, a 100% increase in this
value corresponds to an increase from zero to a salvage value of ¼ of the initial
cost). Figure B6 does show that the NPV is somewhat sensitive to the fuel cost
for the generator. If the fuel costs drop by 15%, then the NPV goes to zero.
However, if the fuel costs increase, the NPV rapidly increases.
The sensitivity plot shown in Fig. B7 plots the NPV versus the inflation rate. For
the base case, the inflation rate was chosen to be 0%. As can be seen from the
plot, if the inflation rate is actually greater than 0%, the value of the NPV
increases. If one assumes an inflation rate of 2% (approximately that during the
78
$400.00
$300.00
$200.00
NPV ($)
$100.00
MARR
Fuel Cost
$0.00
Replacement Cost
Salvage Value
($100.00)
($200.00)
($300.00)
($400.00)
-100 -80% -60% -40% -20%
%
0%
20% 40%
60% 80% 100%
Percent Deviation in Most Likely Estimate (%)
Figure B6 – Sensitivity plot showing variation in the NPV versus changes in the
MARR, fuel costs, replacement costs, and salvage value for the proposed lighting
retrofit at the Ke’pel Head Start facility.
$400.00
$300.00
$200.00
NPV ($)
$100.00
$0.00
($100.00)
($200.00)
($300.00)
($400.00)
-3%
-2%
-1%
0%
1%
2%
3%
4%
Inflation Rate (%)
Figure B7 – Sensitivity plot showing variation in the NPV versus inflation rate
for the proposed lighting retrofit at the Ke’pel Head Start facility.
79
5%
1990’s), then the NPV of this project increases from $76 to $150, making this
project somewhat more attractive.
9. Select the preferred alternative.
With the values of the NPV, IRR and SPP in hand, one can now make a judgment
on whether or not to fund this EE measure. In this case, the retrofit scenario looks
as though it may be a good investment.
10. Revisit your decision.
If the decision is made to fund this retrofit, the one remaining step is to revisit the
decision after the project has been implemented. Are the expected savings and
the return on investment being realized? If not (whether greater than or less than
expected), try to determine why they are different. Following-up on an analysis
in this manner will lead to improved accuracy in the analysis of future proposed
EE measures, and build confidence in the economic predictions.
Case Study Two: Confederated Salish and Kootenai Tribes –Irrigation System
Improvements for Agriculture
As was described in Sec. IV, the Mission Valley Power Authority (MVP) that serves the
Flathead Reservation has a sophisticated, effective and well- funded energy conservation
program. In fact, when questioned about potential EE projects that may be of interest,
very few ideas came to mind that were not already being addressed. However, one group
of MVP’s customers that did not have an efficiency program directed specifically
towards them was the farmers. After some discussion with the staff at MVP, it was
decided to look at irrigation equipment and see if there were any opportunities for EE.
Inspecting a few typical irrigation systems revealed that large centrifugal pumps driven
by electric motors supply the water distribution equipment using water from a nearby
irrigation canal. Since the electric motors use a significant amount of electricity, there
may be an opportunity for an EE measure. Figures 8 and 9 in Sec. IV shown an ir rigation
system and two supply pumps, respectively. Inspection of the pumps and electric motors
indicated that these devices had fairly high efficiencies, and not great potential for
efficiency improvements. However, further investigation related to irrigation systems led
to the idea of improving the entire irrigation system and not just the pump.
Irrigation System Efficiency Measure
Within the external boundaries of Flathead Reservation, which encompasses 1.2 million
acres, are thousand of acres of farmland. Some of this land is tribal land and some of it is
privately held; however, MVP provides electrical service to all of the farms. During the
summer months, many of the farms employ irrigation (refer to Figs. 8 and 9 of Sec. IV).
Large water pumps that run on electricity are required to draw water from an irrigation
canal to feed these irrigation systems. During fiscal year 2001, irrigation customers
80
accounted for approximately 8 percent or the electricity sold by MVP, and MVP is
interested in exploring the potential for energy savings through irrigation system
improvements. After searching for an EE measure applicable to an irrigation system, it
was decided to consider retrofitting a typical irrigation system with a Low Energy
Precision Application (LEPA) irrigation system.
LEPA systems are modifications of standard pivot irrigation systems that deliver water
directly to the soil. These systems save both energy and water, and are one possible
irrigation system improvement. Instead of nozzles that shoot water high into the air,
LEPA systems employ drop tubes and sprinkler heads that deliver water directly to the
soil around crops, as shown in Fig. B8. This modification allows for lower system
pressures and smaller electric motors, and cuts evaporative losses of water reducing the
amount of water required to irrigate a given field.
Having inspected a few farmland irrigation systems on the Flathead reservation, and then
having settling on a LEPA system as a possible EE improvement, the first two steps in
the procedure to evaluate an EE measure were completed. The two alternatives to be
considered are retrofitting an existing irrigation system with a LEPA system, and not
retrofitting (business-as-usual). In completion of step 3, the NPV, IRR, and SPP were
selected as the economic measures to consider. Step 4, to analyze and compare the
feasible alternatives, is addressed in detail in the list below:
1. Pick a length of time over which to do your economic analysis.
Twenty years was selected as the analysis horizon for this case study.
2. Create two tables with one column per year (include a year 0) and rows for
categories such as electricity cost, materials cost, and labor cost.
Figure B8 – On the left is shown a typical irrigation system on the Flathead reservation, and
on the right is shown a LEPA system (Photo courtesy of Western Area Power
Administration).
81
The two identified alternatives are the business-as-usual (no retrofit) scenario and
the retrofit scenario. Tables similar to those shown previously in Table B3
(Yurok case study) should be created.
3. Estimate the upfront costs for each scenario.
In both scenarios, calculations have been performed for an irrigation system
covering 80 acres and operating for 900 hours per season. In the retrofit scenario,
a farmer buys a conversion kit to a LEPA system and installs it with some help
from farm hands. The estimated cost for a conversion kit and labor is $3,000, as
derived from Western Area Power Administration’s Pump Testing and Irrigation
Efficiency Profile #40 (1992). This is a reasonable estimate for this example, but
would require refinement prior to making a decision on purchasing the system
(such as obtaining an actual price quote on a LEPA kit from a distributor). There
are typically no upfront costs for the business-as-usual scenario (no retrofit), and
that is the case here since a high-pressure irrigation system is already in place.
4. Estimate the annual costs for each scenario.
Three categories of costs were identified for evalua tion on an annual basis. The
first is the electricity costs for running the pumps, the second is the water costs for
irrigating, and the third is the operation and maintenance costs.
Electricity purchased from MVP for the purpose of irrigation costs $0.0363 per
kWh plus a demand charge of $11.05 per horsepower (hp) of the electric motor.
For the business-as-usual scenario, a 40- hp motor is assumed to drive a highpressure system (typical). For this motor, the demand charge is $11.05/hp ´ 40
hp = $442. The energy consumed by the motor during the entire irrigation season
is calculated below, using 95% as the motor efficiency (as stated on the motor
nameplate) and 900 hours of use per season.
40hp  1kW 
×
 × 900 hours = 28, 280 kWh
0. 95  1.34 hp 
Note the conversion of 1 kW = 1.34 hp was used in the calculation. To determine
the energy cost, the 28,280 kWh is now multiplied by $0.0363/kWh giving $1,026
per year in electrical energy costs. The total annual electricity cost (energy plus
demand) for the business-as-usual scenario is $442 + $1,026 = $1,468.
For the LEPA system retrofit, an estimate of the energy costs is taken from the
Western Area Power Administration’s Pump Testing and Irrigation Efficiency
Profile #40 (1992). The LEPA system retrofit employs a 28 hp motor that
operates at a similar volume flow rate of water to the original system. Using this
motor and the LEPA distribution system, an energy savings of 30% can be
expected (however, under certain conditions it is possible to achieve up to 70%
savings (Texas A&M 2003). Performing calculations similar to above, the
82
demand charge for the 28 hp motor would be $309, the energy consumed would
be 18,810 kWh, and the energy cost would be $683. The total cost per year sums
to $992.
The next cost to consider is the water costs. Water for irrigation is available at
$19.95 per acre from the Flathead Irrigation Project. For an 80-acre farm, the
water cost would be (80 acres) ´ ($19.95/acre) = $1,596. When installing a
LEPA system, it is possible to increase the water utilization efficiency from 70%
to 95%, thus requiring about 20% less volume of water (Texas A&M 2003).
However, on the Flathead reservation water is charged per acre of irrigated land
and not on a volume basis (such as per acre-foot), so there is no financial benefit
to conserving water with the LEPA system.
The final yearly expenses to consider are operations and maintenance. For this
analysis, it was assumed that these costs remain the same regardless of the type of
system (high pressure or LEPA). Since we are only concerned with the
differences in cash flows each year, these costs are not entered into our tables.
5. Enter the cash flows for each year of each scenario into the spreadsheet.
Figure B9 shows the cash flows for the base case entered into the spreadsheet
table. The base case for this study assumes a 5% MARR, a 20-year planning
horizon, 30% savings in electricity due the LEPA system, and that the irrigation
equipment is run for 900 hours per season. For simplicity, any replacement costs
that may be incurred are assumed to be the same for both systems, and the salvage
value of each system has been neglected. The inflation rate in the base case was
assumed to be 0%.
Business As Usual Scenario - No Retrofit
Year
$0
1
Electricity Costs
$0
($1,468)
Water Costs
$0
($1,596)
Total
$0
($3,064)
2
($1,468)
($1,596)
($3,064)
3
4
($1,468) ($1,468)
($1,596) ($1,596)
($3,064) ($3,064)
5
($1,468)
($1,596)
($3,064)
6
($1,468)
($1,596)
($3,064)
…
…
…
…
18
($1,468)
($1,596)
($3,064)
19
($1,468)
($1,596)
($3,064)
20
($1,468)
($1,596)
($3,064)
Retrofit Scenario
Year
LEPA Parts and Installation
Electricity Costs
Water Costs
Total
$1
$0
($992)
($1,596)
($2,588)
$2
$0
($992)
($1,596)
($2,588)
$3
$4
$0
$0
($992)
($992)
($1,596) ($1,596)
($2,588) ($2,588)
$5
$0
($992)
($1,596)
($2,588)
$6
$0
($992)
($1,596)
($2,588)
…
…
…
…
…
$18
$0
($992)
($1,596)
($2,588)
$19
$0
($992)
($1,596)
($2,588)
$20
$0
($992)
($1,596)
($2,588)
($3,000) $476.00
($3,000) $476.00
($3,000) $453.33
$476.00
$476.00
$431.75
$476.00
$476.00
$411.19
$476.00
$476.00
$372.96
$476.00
$476.00
$355.20
…
…
…
$476.00
$476.00
$197.79
$476.00
$476.00
$188.37
$476.00
$476.00
$179.40
Difference (total with retrofit
minus total without)
Difference (incl. Inflation)
Discounted Differences
$0
($3,000)
$0
$0
($3,000)
$476.00
$476.00
$391.61
Figure B9 - Cash flows entered into the spreadsheet used in evaluating the Flathead
irrigation retrofit case study. The numbers in parentheses indicate cash outlays. Note
years 7 through 17 have not been shown due to space limitations.
83
6. Complete the “Differences” table.
In Fig. B9, the lowermost, shaded table contains the differences in cash flows
between the alternative scenarios. As described previously (see the Yurok Head
Start facility case study, in a similarly titled section – “Complete the Differences
Table”), the first row in the “Differences” table is completed by subtracting the
total yearly cash flow for the business-as-usual scenario from the total yearly cash
flow of the retrofit scenario. In the base case, where the inflation rate is assumed
to be 0%, the following row (“Difference (incl. Inflation)”) has identical values to
the row above it. For details on how to include the effects of inflation, refer to the
similarly titled section in the Pascua Yaqui case study (following this case study).
Once this value is obtained, its present value is computed and entered into the
“Discounted Differences” row on the very bottom of the table shown in Fig. B9
(refer to the Yurok case study for details about how to calculate the present
value).
7. Compute the NPV, IRR, and SPP.
Once the tables shown in Fig. B9 are comp leted, the NPV is calculated by
summing the numbers in the “Discounted Differences” row (or by using a built- in
NPV function in the spreadsheet program). The NPV of the base case for the
retrofit is $2,932 indicating that this is an investment worth considering.
Computing the IRR yields a value of 14.9%, also indicating an attractive
investment. Finally, the SPP is determined by dividing the initial cost of the EE
measure by the annual savings in energy costs (neglecting inflation, replacement
costs, and salvage values). In the base case:
SPP = $2,932 / $476 ≈ 6.3 years
Thus the SPP is 6.3 years. Based upon the NPV, IRR, and SPP, this retrofit is
certainly worth considering. Once again, for details about how to perform these
calculations, please refer to the Yurok Head Start case study.
8. Perform a sensitivity analysis of your results.
In order to address uncertainty in the results obtained for the NPV, IRR, and SPP,
two sensitivity analyses have been performed. Recall that in performing a
sensitivity analysis, one typically varies one of the cost factors (e.g., the MARR,
the inflation rate, the electricity costs, etc.) and then recomputes the NPV and
IRR. Following this procedure, the sensitivity of the NPV to the MARR was
investigated and is shown in Fig. B10. Shown on the horizontal axis in this figure
is the MARR, and on the vertical axis is the NPV. As can be seen from this plot,
the NPV remains positive for values of the MARR beyond 10%. Figure B11
displays the variation in the NPV with changing values of the inflation rate. As
can be seen, if the inflation rate is assumed to be greater than 0%, the NPV
84
rapidly grows making the project even more attractive. Note that even if there is a
deflation in the price of electricity, that the NPV still remains positive.
9. Select the preferred alternative.
Once the economic analysis has been performed, the results for the NPV, IRR,
and SPP are considered alongside the non-monetary criteria associated with the
proposed EE measure (impact on people in the facility, etc.). Depending upon
these other criteria, this retrofit will likely be considered favorably.
10. Revisit your decision.
If implemented, this remaining step in the process of evaluating this project is to
revisit the decision and determine the actual cost savings. Are the expected
savings being realized? If not (whether greater than or less than expected), try to
determine why they are different. Following- up on an analysis in this manner will
lead to improved accuracy in the analysis of future proposed EE measures, and
build confidence in the economic predictions.
$7,000.00
Net Present Value ($)
$6,000.00
$5,000.00
$4,000.00
NPV = $2,932
in the base case
(5% MARR)
$3,000.00
$2,000.00
$1,000.00
$0.00
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
MARR (% )
Figure B10 – Sensitivity plot showing variation in the NPV versus the MARR,
for the proposed LEPA irrigation system retrofit.
85
$7,000
Net Prestent Value ($)
$6,000
$5,000
$4,000
NPV = $2,932
in the base case
(0% inflation)
$3,000
$2,000
$1,000
$0
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
Inflation Rate (%)
Figure B11 – Sensitivity plot showing variation in the NPV versus inflation rate,
for the proposed LEPA irrigation retrofit.
Of the three case studies presented in this appendix, this one is the most general in that it
compares a typical high-pressure pivot irrigation system to a LEPA system. Prior to
making a decision on this measure, it would be important to obtain more site-specific
information for specific applications and reevaluate the economics. Furthermore, there
was no cost savings for irrigated water in this comparison, and if that could be factored
into the analysis thorough changes in how the farmers are billed for their water, the
retrofit would become even more attractive and water conservation would be encouraged.
Case Study Three: Pascua Yaqui Tribe – Automatic Lighting Sensors
As a tribe experiencing rapid development and significant numbers of new buildings, the
Pascua Yaqui are working to develop in ways that increase their energy independence
and sovereignty. A relatively new health center on the tribe’s original 202 acres utilizes
efficient fluorescent and compact fluorescent fixtures throughout its many rooms and
hallways, as well as skylights that enhance lighting during daylight hours. The plans for
the new head start facility, under construction at the time of visitation, also specify
efficient fixtures throughout. In the context of their new development, energy efficiency
measures of interest to the Pascua Yaqui include investigation of additional measures that
could be incorporated in new structures, including motion-sensing light switches that
automatically turn lights off when a room is not in use. It was decided at the time of the
visit to evaluate the worthiness of installing motion sensing switches in their new Head
Start facility. A picture of the facility was provided in Sec. IV, Fig. 10. As was mentioned
86
in Sec. IV, since motion sensors are simple and inexpensive to install in a retrofit
scenario, it is not necessary to install them at the time of construction. Delaying
installation is advantageous because the usage patterns for the classroom lights can be
determined in the first several months of operation of the facility, allowing for a more
accurate prediction of the potential for cost savings.
Investigation of the Head Start floor plans and electrical plans was informative in the
completion of step 1 (identifying the opportunities for EE), showing that there were six
large classrooms, each one with many lights operated by only two switches. This setup is
ideal for automatic motion-sensing switches because many lights (and a lot of electricity
usage) can be controlled without the need to purchase large numbers of automatic
switches, and a modest reduction in time-of-use will correspond to a significant amount
of energy savings. In step 2 (developing feasible alternatives for EE improvements), the
alternatives identified were to leave the switching as drawn up in the building plans (the
“business as usual” case) or to install automatic switches. In step 3 (select the decision
criteria), the primary economic measure was again chosen to be net present value (NPV),
but calculations of internal rate of return (IRR) and simple payback period (SPP) were
carried out as well.
Step four in the process of evaluating this EE measure (analyze and compare feasible
alternatives) is enumerated and presented below as in the previous case studies.
1. Pick a length of time over which to do your economic analysis.
Twenty years was selected as the analysis horizon for this case study.
2. Create two tables with one column per year (include a year 0) and rows for
categories such as fuel cost, materials cost, and labor cost.
In a case such as this one, where the two identified alternatives are business-asusual (no retrofit) scenario and the retrofit scenario, tables similar to those shown
previously in Table B3 should be created.
3. Estimate the upfront costs for each scenario.
Since the business as usual scenario would leave the original light switches in
place, there would be no upfront costs. A retrofit employing lighting sensors
manufactured by espEnergy would cost $1,080 for 12 switches ($90 each), with
and an estimated $108 for installation.
4. Estimate the annual costs for each scenario.
A precise prediction of energy savings is difficult to achieve in a brand new
building with no established patterns of use. Thus, the economics (NPV, IRR,
SPP) were analyzed assuming a realistic range of potential levels of savings.
87
The local price of electricity for the facility is $0.11 per kWh with an additional
charge of $3.53 per kW maximum load per month. Since the switch retrofit
would affect the time of use and not the magnitude of the peak load, the $3.53/kW
charge would be identical in each scenario. Since it is the differences in the costs
of each scenario in which we are primarily interested, the demand charge need not
be considered in the cash flows for each alternative.
One key assumption in the estimation of annual electricity costs for this study was
that the classroom lights would be used 8 hours per day on average for 220 days
out of the year. This usage pattern is common for public, educational buildings,
but it is not at all obvious whether or not the Pascua Yaqui Head Start facility will
follow this pattern. Because of this uncertainty, these are good factors to examine
using a sensitivity analysis, as well as re-evaluate after the building has been
occupied for a few months.
There are a total of 90 light fixtures in the six classrooms; each employs bulbs
requiring a total of 90 Watts of electricity. Multiplying 90 light fixtures by 90
Watts per fixture yields a total load of 8,100 W (or 8.1 kW). Using this
information and the above estimate for time of use, the annual electricity
expenditure can be calculated as follows:
220 days/year * 8 hours/day * 8.1 kW * $0.11/kWh = $1,570/year
To compute the cost of electricity in the retrofit scenario, all of the numbers in the
above equation remain the same except for the time of use, which is reduced from
8 hours/day by some percentage. Table B3 summarizes the yearly cost of
electricity for the classroom lights at various reductions in time of use.
Maintenance costs are negligible for the switches themselves, but reducing the
time of use of the light fixtures under the retrofit scenario results in longer bulb
life, reducing the ongoing cost of bulb replacement. Due to the long life of
fluorescent bulbs (20,000 hours), they need only be replaced once during the 20year analysis horizon. However, since the timing of a cash flow has an effect on
the NPV and IRR, delaying bulb replacement is a factor worth considering. Table
B4 shows the year in which bulb replacement is required at various levels of
reduction in light use due to the light sensors. Sixty dollars was allowed for the
labor cost of replacing the 270 light bulbs whenever replacement was necessary.
5. Enter the cash flows for each year of each scenario into the spreadsheet.
Figure B12 shows the cash flows for the base case entered into the spreadsheet
table. The base case for this study assumes a 4% MARR, a 20-year planning
horizon, 10% savings in electricity due to using the lighting motion sensors, that
the lights would be used for 1,760 hours per year under normal usage conditions
(without the lighting sensors), and that it would cost $482 for replacement bulbs
88
Table B3 – Yearly hours of use and cost of electricity for the Pascua Yaqui Head
Start classroom lights at various levels of percentage reduction in time of use.
Percentage
Reduction in
Time of Use
0%
5%
10%
15%
20%
25%
30%
35%
40%
Hours
Used per
Year
1760
1672
1584
1496
1408
1320
1232
1144
1056
Power
(kW)
Cost of
Electricity
($/kWh)
$0.11
$0.11
$0.11
$0.11
$0.11
$0.11
$0.11
$0.11
$0.11
8.1
8.1
8.1
8.1
8.1
8.1
8.1
8.1
8.1
Cost per
Year
Savings
per Year
$1570
$1490
$1411
$1333
$1255
$1176
$1098
$1019
$941
$0
$80
$159
$237
$315
$394
$472
$551
$629
Table B4 – Year in which bulbs require replacement in the Pascua Yaqui
Head Start classroom, given various levels of reduction in time of use.
Percentage
Reduction in
Time of Use
0%
5%
10%
15%
20%
25%
30%
35%
40%
Calculation for Year of
Replacement
(= bulb life / yearly usage)
20,000 hours / 1760
20,000 / (1,760 * (1- 0.05))
20,000 / (1,760 * (1- 0.10))
20,000 / (1,760 * (1- 0.15))
20,000 / (1,760 * (1- 0.20))
20,000 / (1,760 * (1- 0.25))
20,000 / (1,760 * (1- 0.30))
20,000 / (1,760 * (1- 0.35))
20,000 / (1,760 * (1- 0.40))
Years After Installation
when Bulbs Require
Replacement
11.4
12.0
12.6
13.4
14.2
15.2
16.2
17.4
18.9
and $40 for the labor to replace them. In the business-as-usual scenario
replacement would occur during year 12, but because of reduced light usage in the
retrofit scenario replacement is not necessary until year 13 (refer to Table B4).
No salvage value has been considered for the lighting equipment at the end of the
20-year study period, due to its negligible impact on the NPV and IRR. The
inflation rate in the base case was assumed to be 0%.
89
Business-as-Usual Scenario - No Retrofit
Year
0
1
2
Electricity Costs
$0.00
($1,568.16) ($1,568.16)
Material Costs
$0.00
$0.00
$0.00
Labor Costs
$0.00
$0.00
$0.00
Salvage Value
Total
$0.00
($1,568.16) ($1,568.16)
Retrofit Scenario
Year
Electricity Costs
Material Costs
Labor Costs
Salvage Value
Total
Difference (total with retrofit
minus total without)
Difference (incl. Inflation)
Discounted Differences
…
…
…
…
11
12
13
($1,568.16) ($1,568.16) ($1,568.16)
$0.00
($481.50)
$0.00
$0.00
($40.00)
$0.00
…
…
…
…
19
20
($1,568.16) ($1,568.16)
$0.00
$0.00
$0.00
$0.00
…
($1,568.16) ($2,089.66) ($1,568.16)
…
($1,568.16) ($1,568.16)
0
1
2
$0.00
($1,411.34) ($1,411.34)
($1,080.00)
$0.00
$0.00
($108.00)
$0.00
$0.00
…
…
…
…
11
12
13
($1,411.34) ($1,411.34) ($1,411.34)
$0.00
$0.00
($481.50)
$0.00
$0.00
($40.00)
…
…
19
20
($1,411.34) ($1,411.34)
$0.00
$0.00
$0.00
$0.00
($1,188.00) ($1,411.34) ($1,411.34)
…
($1,411.34) ($1,411.34) ($1,932.84)
…
($1,411.34) ($1,411.34)
(1,188.00)
(1,188.00)
(1,188.00)
156.82
159.95
153.80
156.82
163.15
150.84
…
…
…
156.82
194.98
101.86
678.32
860.27
423.67
(364.68)
(471.76)
(219.02)
…
…
…
156.82
228.45
108.43
156.82
233.02
106.35
Figure B12 - Cash flows entered into the spreadsheet used in eva luating the Pascua
Yaqui lighting switch retrofit case study. The numbers in parentheses indicate cash
outlays. Note years 3 through 10 and 14 through 18 have not been shown due to space
limitations.
6. Complete the “Differences” table.
inf
In Fig. B12, the lowermost, shaded table contains the differences in cash flows
between the alternative scenarios. As described previously (see the Yurok Head
Start facility case study, in a similarly titled section “Complete the Differences
Table”), the first row in the “Differences” table is completed by subtracting the
total yearly cash flow for the business-as-usual scenario from the total yearly cash
flow of the retrofit scenario. In the base case, where the inflation rate was
assumed to be 0%, the following row (“Difference (incl. Inflation)”) would have
identical values to the row above it. However, for illustration purposes (and as
used in the sensitivity analysis to follow), a 2% inflation rate is shown in Table
B12. The effect of inflation on the net cash flow for each year (the value in the
“Difference” row) is computed as follows:
difference adjusted for inflation = (difference) × (1 +
lationrate) Year
For example, at the end of year 2, the difference between business-as-usual and
retrofit costs is $156.82. Using an inflation rate of 2% (use 0.02), the difference
adjusted for inflation is:
differenceadjusted for inflation = ($156.82 ) × (1 + 0.02) 2 = $163.15
90
Once again, while it is easy enough to perform this calculation, most spreadsheets
have a built in function to compute this value. In Excel©, the “future value”
function would perform this calculation is as follows:
-FV(0.02,2,,$156.82) = $163.15
Once this value is obtained, the present value is obtained and entered into the
“Discounted Differences” row on the very bottom of the table shown in Fig. B12,
as was explained in the Yurok case study. This process is repeated until the
discounted difference for every year is obtained and entered into the table.
7. Compute the NPV, IRR, and SPP.
Once the tables shown in Fig. B12 are completed, the NPV is calculated by
summing the numbers in the “Discounted Differences” row (or by using a built- in
NPV function in the spreadsheet program). The NPV of the base case for the
retrofit is $956 indicating that this is an investment worth considering.
Computing the IRR for this EE measure yields a value of 12%, also indicating an
attractive investment. Finally, the SPP is determined by dividing the initial cost
of the EE measure by the annual savings in energy costs (neglecting inflation,
replacement costs, and salvage values). In the base case:
SPP = $1,188 / $159 ≈ 7.5 years
Thus the SPP is 7.5 years. Based upon the NPV, IRR, and SPP, this retrofit is
certainly worth considering. Once again, for details about how to perform these
calculations, please refer to the Yurok Head Start case study.
8. Perform a sensitivity analysis of your results.
In order to explicitly address the uncertainty in the results obtained for the NPV,
IRR, and SPP, a sensitivity analysis was performed. Recall that in performing a
sensitivity analysis, one typically varies one of the cost factors (e.g., the MARR,
the electricity costs, the number of hours per day the lights are used, the inflation
rate, etc.) and then recomputes the NPV and IRR. The sensitivity of the NPV to
two important factors, the MARR and the estimated number of hours per day the
lights are “on”, is shown in Figure B13. Shown on the abscissa in this figure is
the “percent deviation in the most likely estimate.” The numbers used in
formulating the base case (shown in Fig. B12 ) represent the most likely
estimates. So, a percent deviation in the most likely estimate of –25% implies
that the base case number for either the MARR or the “hours on per day” is
reduced by 25%, and then the NPV is recomputed. As Fig. B13 displays, the
lighting sensor retrofit remains economically attractive even if the MARR
increases by 100% (doubles), or if the number of hours per day the lights are
assumed to be left on is reduced by 25%. Note from this figure that including
91
Vary MARR (no inflation)
Vary Hours per Day Lights On
Vary MARR (2% inflation)
$2,000
NPV ($)
$1,500
$1,000
$500
$0
-50%
-25%
0%
25%
50%
75%
100%
125%
Percent Deviation in Most Likely Estimate (%)
Figure B13 – Sensitivity plot showing variation in the NPV versus deviations
from the most likely estimate (the base case) in the daily time of use of the
classroom lights and the MARR, for the proposed lighting sensor retrofit at the
Pascua Yaqui Head Start facility.
the effect of inflation make the project more attractive by uniformly increasing the
value of the NPV. Two other sensitivity plots are worth considering: the effect of
percent energy savings due to the lighting sensors (shown in Fig. 11 of Sec. IV),
and the effect of inflation on the NPV (see Fig. B14). As shown in Fig. B14, the
effect of price inflation is to increase the value of the NPV. For example, a
typical inflation rate of 2% would increase the NPV from $955 to $1,400.
11. Select the preferred alternative.
Once the economic analysis of the potential EE measure has been performed (in
this case the lighting sensor retrofit), one can examine the results for the NPV,
IRR, and SPP along with the non- monetary criteria associated with the measure
(impact on people in the facility, etc.). Depending upon the actual lighting usage
patterns at the new Pascua Yaqui Head Start facility and other non- monetary
criteria, this retrofit will likely fall somewhere between somewhat attractive and
very worthwhile.
12. Revisit your decision.
92
If the decision is made to fund this retrofit, the one remaining step is to revisit the
decision after the project has been implemented. Are the expected savings and
the return on investment being realized? If not (whether greater than or less than
expected), try to determine why they are different. Following-up on an analysis
in this manner will lead to improved accuracy in the analysis of future proposed
EE measures, and build confidence in the economic predictions.
$2,500.00
$2,000.00
NPV ($)
$1,500.00
$1,000.00
$500.00
$0.00
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
Inflation Rate (%)
Figure B14 – Sensitivity plot showing variation in the NPV versus inflation rate, for the
proposed lighting sensor retrofit at the Pascua Yaqui Head Start facility.
93
APPENDIX C
SUMMARY OF EFFICIENCY MEASURES AND POLICIES CONSIDERED FOR
ANALYSIS BY THE WRAP AIR POLLUTION PREVENTION FORUM
94
As part of its charge, the Air Pollution Prevention (AP2) Forum evaluated energy
efficiency measures to identify those measures potentially effective in reducing energy
use. This appendix provides a description of all measures considered by the AP2 Forum.
This material is intended to provide tribes with a more through understanding of energy
efficiency measure to help determine if such measures may be applicable for their tribe.
The information below is from the report Estimation Of Potential Energy Efficiency
Savings For The Western Regional Air Partnership By The Air Pollution Prevention
Forum, Approach, Methods and Summary Results, Attachment 1 by David Von Hippel
and David Nichols, Tellus Institute (Revised draft, June 26, 2002)
The energy efficiency measures are divided into four categories: residential,
commercial/institutional, industrial and combined heat and power (CHP) measures. From
these measures the AP2 Forum developed a list of measures that were used as inputs to
emissions modeling. In each description there is italic titles in parentheses. These short
titles are used in the tables of "Cost of Saved Energy Results" presented in Estimation of
Potential Energy Efficiency Savings for the Western Regional Air Partnership by the Air
Pollution Prevention Forum: Approach, Methods and Summary Results.
RESIDENTIAL SECTOR MEASURES
Residential Appliance Recycling : The appliance recycling program approach provides
incentives to customers to allow their operable refrigerators or freezers to be disposed of.
Appliance recycling has been operated successfully in several regions. A recycling
company is contracted to collect the appliances and dispose of them in an
environmentally responsible way. The electricity savings result from the fact that the
average stock of refrigerators and freezers now in use consumes more than twice the
electricity of the new units available on the market today ("Residential Appliance
Recycling").
Residential Air Conditioning—High-efficiency Units: Compressor, control, fan, heatexchanger, seal, and other improvements in central and room air conditioners make the
most efficient residential units available substantially more efficient than those just
meeting standards ("Residential Efficient CAC", "Residential Efficient Room AC").
Residential Air Conditioning—Evaporative Cooling : In contrast to typical
compressor-driven air conditioners, evaporative coolers lower indoor temperatures by
evaporating a mist of water, which carries away heat. Evaporative or "swamp" coolers
are effective in low-humidity areas, and use only a small fraction of the electricity used
by compressor-driven air conditioners ("Residential Evaporative Cooling").
Residential Air Conditioning—IDDEC: A variant of residential evaporative cooling
called indirect/direct evaporative cooling, or IDDEC, is under development that will
provide reliable cooling with significantly less electricity input than typical compressordriven air conditioning, and is useful in applications where standard evaporative cooling
might not be appropriate ("Residential IDDEC Cooling").
95
Residential Heating and Cooling—System and Duct Service and Repair: Many
existing heating systems can be made significantly more efficient by applying a package
of system and duct repair measures, including tune- ups for heat-pump condenser and
evaporator units, cleaning, sealing and insulating duct work, or re-routing duct work to
make the flow of heat from the furnace to living areas more efficient (evaluated as two
measures: "Residential Duct Test and Seal--CAC", and "Residential Duct Test and Seal-ESH").
Residential Heating and Cooling—Weatherization Retrofits : The thermal
performance of a dwelling—the degree to which a heated house stays warm and a cooled
house stays cool, is a function of many factors, including how well insulated the house is,
the integrity of its windows and doors, whether it has been well-sealed to control the
incursion of outside air, its overall design, its orientation relative to sun and wind, and its
proximity to nearby vegetation. Of these factors, the first three are usually addressed by
measures installed during a weatherization retrofit of an existing dwelling ("Residential
Weatherization").
Residential Heating and Cooling—Better-than-Code Building Envelopes for New
Homes: Although some parts of the West already have state (and sometime local)
residential building codes that mandate quite high residential building performance, there
are opportunities to exceed code levels. There are also opportunities to ensure that more
buildings are actually built to code, through improved code enforcement, and to
strengthen building codes to other states. For the WRAP energy efficiency analysis,
incentives were assumed used until 2009 to bring homes to IECC 2000 (International
Energy Conservation Code) levels ("Residential Building Envelope Impr.--IECC 2000"),
and that thereafter code changes mandate enhancements in performance beyond the IECC
2000 level ("Residential Building Envelope Impr.--Enhanced").
Residential Lighting—Compact Fluorescent (CFL) Bulbs : Over the last decade or so,
compact fluorescent light bulbs (CFLs) designed for use in incandescent fixtures – and
lamps and fixtures specifically designed to use CFL technology – have been making
inroads in the U.S. market. CFLs use roughly one-quarter of the electricity to produce
the same amount of light as incandescent bulbs, and last up to 10 times longer
("Residential CFL Bulbs").
Residential Lighting—Indoor CFL Fixtures: CFLs work best when used in fixtures
specifically designed for them ("Residential CFL Fixtures--Indoor").
Residential Lighting—Outdoor CFL Fixtures: Using CFLs in outdoor fixtures
presents an attractive way to save both money and electricity, as long-lived CFL bulbs
are used for many hours per day when installed for outdoor security lighting. In addition,
as many outdoor incandescent bulbs designed for outdoor use are both expensive and
short- lived, there are significant operation and maintenance savings from using outdoor
CFL-based fixtures ("Residential CFL Fixtures--Outdoor").
96
Residential Lighting—CFL Torchieres: The "torchiere" style of tall floor lamp gained
tremendous popularity in recent years as inexpensive units have become widely available.
Most units use bright, but inefficient, halogen bulbs, while some use incandescent bulbs.
Their high electricity use and the fire hazards created by high temperature halogen units
have prompted the development of the CFL torchiere. The CFL torchiere produces the
same light output as the halogen and incandescent units, using 20-30 percent of the
electricity and eliminating an important fire risk ("Residential CFL Torchiere").
Residential Appliance Standby Loss Reduction: Even when turned off, many
househo ld electronic devices consume small amounts of electricity. While insignificant
on an individual device basis, the total energy consumed by standby equipment adds up
to about 5 percent of current residential electricity use, due to the multitude of devices
and their steady power drain. The EPA Energy Star program already includes an
initiative to encourage the reduction in average standby consumption from 4.4 to 1 watt
per device, a drop of over 75 percent. For WRAP, introduction of measures for standby
loss reduction were modeled as an incentive program through 2009 ("Residential Appl.
Standby Loss Red.--Incentive"), and as a mandatory standard thereafter ("Residential
Appl. Standby Loss Red.--Mandatory").
Residential Clothes Washing : Improvements in clothes washers allow clothes to be
cleaned with less hot water use, and often "spin" clothes faster so that less energy is
required to dry them. Two types of higher-than-standard-efficiency clothes washers were
included in the WRAP analysis: vertical-axis Energy Star-qualified machines
("Residential Energy Star Clothes Washer"), and horizontal-axis washers ("Residential
SEHA Clothes Washer", where SEHA is "Super-Efficient Home Appliance").
COMMERCIAL SECTOR MEASURES (INCLUDING GOVERNMENT,
GAMING, AND RECREATION)
Commercial/Institutional Cooling—"Package" AC and Chillers : Use of higher-thanstandard efficiency "package" air conditioning (AC) units and centrifugal chillers for
small-to- meduim-sized and large commercial/institutional buildings produce more cold
air (or chilled water) per unit of electricity input than standard models ("Comml/Instit. AC
Impr., 20-ton Package Units" and "Comml/Instit. AC Impr., 350-ton Centrif. Units").
Commercial/Institutional Cooling—Residential-type Units : Many smaller commercial
buildings use units that are the same as, or larger but similar to, the AC systems used in
homes. For the WRAP study, models of room- type air conditioners, central air
conditioners, and heat pumps with energy efficiency ratings significantly higher than
standard units were evaluated ("Comml/Instit. AC Impr., Res. Room-type AC",
"Comml/Instit. AC Impr., Residential-type CAC", "Comml/Instit. AC Impr., Small Heat
Pump").
Commercial/Institutional Cooling—Evaporative Cooling : Evaporative cooling
technologies use the latent heat of vaporization of water to cool air. One of the most
promising configurations, indirect-direct evaporative cooling (IDDEC) can substantially
97
reduce electricity requirements relative to conventional cooling systems and operate well
in the relatively low humidity conditions that prevail during Western summers. For
WRAP measures in three size classes were modeled for use in different types of
commercial/institutional buildings, based on the size of conventional AC equipment tha t
would otherwise be used ("Comml/Instit. AC, IDDEC, 20-ton Equiv. Units",
"Comml/Instit. AC, IDDEC, 150-ton Equiv. Units", and "Comml/Instit. AC, IDDEC, 350ton Equiv. Units").
Commercial/Institutional Cooling—Gas-fired Air Conditioning : Electricity use can
be reduced by replacing electric air conditioners with gas- fired air conditioners. Gasfired air conditioners use either an absorption cooling cycle or a gas- fired internalcombustion engine that turns an air conditioning compressor. Additional energy is saved
by using waste heat from the gas-fired engine to heat water. Three gas- fired AC
configurations were evaluated: without heat recovery ("Comml/Instit. Gas AC, w/o heat
recovery"), with heat recovery and with the recovered heat avoiding the use of a gas-fired
water heater ("Comml/Instit. Gas AC, w/ heat recov. (GWH)"), and with the recovered
heat displacing an electric water heater ("Comml/Instit. Gas AC, w/ heat recov. (EWH)").
Commercial/Institutional Cooling—Cooling Tower Variable-Speed Drives: Cooling
systems for large buildings often have cooling towers, where waste heat is exhausted
using fans. Variable-speed drives for the fan motors on cooling tower allow the speed of
the fans to be adjusted to cooling needs, and thus save electricity. Efficiency savings
were estimated for WRAP using data from different regions of California. For example,
for the WSCP (Oregon/Western Idaho) region, "Comml/Instit. Cooling Tower VSD-Valley Climate" denotes an installation in a climate similar to that of the Central Valley in
California, while "Comml/Instit. Cooling Tower VSD--N. Coast Clim." Uses a California
North Coast climate as an analog.
Commercial/Institutional Space Heat: Electricity, and energy overall, can be saved by
switching from electric resistance heating to gas- fired heating systems, preferably gasfired systems of higher than standard efficiency. In some cases, gas- fired heaters and
boilers are less expensive to buy (as well as operate) than electric ones of equivalent
capacity. Three measures were evaluated for WRAP: High efficiency and standard gas
boilers replacing electric resistance boilers ("Comml/Instit. Space Heat High Eff. Gas
Boiler" and "Comml/Instit. Space Heat Std. Gas Boiler"), and gas "unit heaters" (standalone or ceiling- mounted, fan- forced heaters often used in spaces such as warehouses or
workshops; ("Comml/Instit. Space Heat Gas Unit Heater").
Commercial/Institutional Ground-Source Heat Pumps : Ground-source heat pumps
(sometimes called "geothermal" heat pumps) are used for both heating and cooling, and
differ from typical heat pumps in that they use buried "loops" of piping with water or
other fluid running through it to extract heat from (or, in cooling mode, exhaust heat to)
the earth below ground level. The relatively constant temperature of the earth allows the
heat pump to run more efficiently, under some conditions, than a typical air-source heat
pump. As the number of hours a ground-source heat pump will need to run depends on
climate, installations with running times (both heating and cooling) of 1000, 2000, and
98
3000 hours per year were assumed ("Comml/Instit. Ground-source HP, 1000 hrs/yr",
"Comml/Instit. Ground-source HP, 2000 hrs/yr", and "Comml/Instit. Ground-source HP,
3000 hrs/yr").
Commercial/Institutional Water Heat: Water heating electricity use can be reduced
substantially by switching from standard electric resistance-type water heaters to heatpump-type water heaters ("Comml/Instit. Water Heating, Heat Pump Unit"). Switching
from electric water heating to natural gas- fired water heating, using both boilers and tanktype water heaters, can also reduce both electricity use and overall energy requirements
after losses in electricity generation are accounted for ("Comml/Instit. Water Heater Fuel
Switching", "Comml/Instit. Water Heat Gas Boiler Fuel Switch").
Commercial/Institutional Building "Retrocommissioning": Retrocommissioning is
defined as "a process of thoroughly identifying the current needs for services within a
building, assessing the functionality and appropriateness of the equipment now serving
the building, devising and implementing a systematic plan for repairing, rejuvenating or
replacing the existing systems, and finally creating operations and maintenance practices
to assure continued functionality of the systems". It is therefore the process of reviewing
all of the energy uses in an existing building, and making changes to maintenance and
operation, and in some cases in equipment, to make sure that the building operates as
efficiently as possible ("Comml/Instit. Retrocommissioning"). Retrocommissioning
usually is designed to reduce a building's need for heating, cooling, and/or lighting.
Commercial/Institutional Building Standards : Higher standards for insulation,
window performance, thermal seals, and other building components help reduce heating
and cooling energy use. Two levels of building standards, one meeting ASHRAE
(American Society of Heating, Refrigerating and Air-Conditioning Engineers) 90.1.99
building guidelines ("Comml/Instit. Building Envelope--ASHRAE Stds."), and one
exceeding ASRAE guidelines by about 20 percent ("Comml/Instit. Building Envelope-Enhanced Level").
Commercial/Institutional Refrigeration: Commercial sector refrigeration ranges from
large refrigerators no t much different from residential units to walk- in or building-sized
cold storage rooms or freezers. Options for improving the energy efficiency of
refrigeration systems in the commercial sector include improving door seals,
compressors, insulation, and controls. The WRAP analysis included two sets of
measures, one of which includes measures having payback times of less than two years
("lower-cost measures", "Comml/Instit. Refrigeration, Low-cost Measures") and the other
having offering paybacks of between two and five years ("Comml/Instit. Refrigeration,
High-cost Measures").
Commercial/Institutional Lighting—Fluorescent Bulbs and Ballasts: Replacing
standard bulbs and ballasts in the four-foot fluorescent fixtures that are most common in
office and other applications with high-efficiency bulbs and ballasts produces significant
savings ("Comml/Instit. Lighting, Efficient Fluorescent ".
99
Commercial/Institutional Lighting—Advanced Lighting Measures: This measure
includes a "package" of "emerging" lighting measures, ranging from use of daylighting to
lighting controls to the use of advanced bulbs and fixtures, offering average energy
savings over standard practice of more than 50 percent ("Comml/Instit. Lighting,
Advanced Measures").
Commercial/Institutional Lighting—LED Exit Signs : LEDs are also increasingly
used in commercial and institutional exit signs in place of incandescent or fluorescent
bulbs. LED exit signs save a considerable amount of energy, and may not need to be
replaced for a decade or more, significantly reducing maintenance ("Comml/Instit. LED
Exit Signs").
Commercial/Institutional Clothes Washers : Upgrades in commercial clothes washers,
as with residential washers, can yield significant energy savings in water heating and
clothes drying, as well in the washer itself ("Comml/Instit. Efficient Clothes Washers").
LED Traffic Signals ("Comml/Instit. LED Traffic Signals"): Light emitting diodes
(LEDs) have been widely used in electronics for years, are now starting to find new
lighting applications. As with LED exit signs, long- lasting LED traffic signals, though
they cost more per bulb than incandescent signals, dramatically reduce energy use (by
90%) as well as O&M costs. Although LED traffic signals do not produce the same
amount of overall light as incandescent signals, the focused points of bright light
produced by LEDs make them easy for the eye to pick out, and thus ideal for traffic lights
and other signage.
Commercial/Institutional/Industrial Electrical Transformers : In larger commercial
buildings and in industrial installations, transformers are used to "step down" highvoltage power from the electrical grid to usable lower voltages. Transformer losses are
not substantial, but as each kWh of electricity used in a building typically must pass
through a transformer, even a small reduction in losses improves the energy-efficiency of
the entire building. The measures "Comml/Instit/Industrial Transformers (C/I)" and
"Comml/Instit/Industrial Transformers (Industrial)" model the purchase of higherefficiency "TP-1" transformers instead of standard units.
INDUSTRIAL SECTOR MEASURES
Industrial Motors Efficiency Improvements : The efficiency of industrial motors can be
improved in several ways: by replacing failed motors with premium (highest efficiency)
instead of standard models ("Industrial Premium Motors"), by substituting premium
motors where motors would otherwise be rewound ("Industrial Prem. Motor vs.
Rewind"), and by downsizing motors to appropriate capacity for the systems they power
("Industrial Motor Downsizing"). These types of improvements typically save only 1-4
percent of motor electricity requirements, but when applied across the large number of
industrial motors, the savings can be considerable.
100
Industrial Motor System Improvements : Even greater savings of motor electricity use
can be achieved by modifying the design and operation of systems that motors drive: air
compressors, pumps and valves, fans, and other systems (such as conveyors). For the
WRAP energy efficiency analysis, the potential savings for improving each of three types
of motor systems ("Industrial Air Compressor System Measures", "Industrial Fan System
Measures", and "Industrial Pump System Measures") were evaluated. Savings for these
measures can range, on average, from 5 percent for fans to nearly 20 percent for pumps
and air compressors.
Industrial—Aluminum Production Process Improvements: Primary aluminum
production – as opposed to secondary production from recycled aluminum feedstocks -is a very energy- intensive process. One of the key options for reducing electricity
consumption per unit of aluminum produced is to retrofit aluminum production cells for
higher electrolytic efficiency and lower heat loss ("Industrial Aluminum Process Impr.:
Cell Retrofit"). Other technological advances are possible, such as advanced forming and
near net-shape casting. These advances are designed to save energy by producing
aluminum in shapes that are close to their final form, can provide considerable O&M and
thermal energy (typically gas energy) savings, though typically small electricity savings
("Industrial Aluminum Process Impr.: Adv. Forming").
Industrial Electrical Transformers : (see listing under Commercial sector, above)
COMBINED HEAT AND POWER
From half to two-thirds of the energy used for fuel-based electricity generation is
typically lost as waste heat. Combined heat and power (CHP) systems effectively capture
this waste heat and supply it to a facility’s process or building heat requirements, and can
thereby approximately double the overall efficiency of fuel use to 80 percent or so. We
included in our analysis several types of natural gas-fired CHP systems in several size
classes:
•
Internal Combustion Engines: Internal combustion (IC) engines have been used in
stationary power generation applications for a century or more, and are a very mature
technology. Heat from gas-fired water-cooled IC engines can be captured from the
engine's coolant system via a radiator, and used to heat or pre- heat air or water to help
provide space or water heat.
•
Combustion Turbines: Conventional combustion turbines (CT) are a newer, but still
quite mature, electric generation option, having been in wide use for decades. Here
heat can be captured from the hot exhaust gases of the turbine via a heat exchange
unit, and used for space or water heat, or (more likely) for process heat in industrial
plants. We incorporated 10 and 40 MW combustion turbines into the industrial sector
CHP initiative that we evaluated.
•
"Micro" Turbines: Micro-turbines (MT) are self-contained CHP devices that are
new on the market. These units, the size of a large household refrigerator (in the 30
101
kW size) produce heat and electricity using a high-speed but very reliable miniature
turbine coupled to a generator. These units, recently commercialized, will be
available in size classes other than 30 kW soon, but only the 30 kW units are included
in our analysis.
The types of CHP systems included in the commercial/institutional and industrial sector
WRAP energy efficiency analyses are as follows:
•
Commercial CHP: CHP measures in the commercial sector included 30 kW MT
units, 100 kW IC units, and 800 kW IC units, with some of the units displacing grid
electricity and heat from electric resistance boilers or water heaters ("Comml/Instit.
CHP, 30 kW MT repl. Elect. WH", "Comml/Instit. CHP, 100 kW IC repl. Elect. WH",
and "Comml/Instit. CHP, 800 kW IC repl. Elect. WH"), and other units displacing grid
electricity and heat from gas- fired boilers or water heaters ("Comml/Instit. CHP, 30
kW MT repl. Gas WH", "Comml/Instit. CHP, 100 kW IC repl. Gas WH", and
"Comml/Instit. CHP, 800 kW IC repl. Gas Blr.")
•
Industrial CHP: For the industrial sector, our estimate included 800 and 3000 kW
IC units, and 10 and 40 MW CT units. All co-generated heat from these units was
assumed to displace gas- fired boilers or process heating equipment ("Industrial CHP,
800 kW IC repl. Gas Blr.", "Industrial CHP, 3000 kW IC repl. Gas Blr.", "Industrial
CHP, 10 MW CT repl. Gas Blr.", and "Industrial CHP, 40 MW CT repl. Gas Blr.")
102
APPENDIX D
SUMMARY OF U.S. DEPARTMENT OF ENERGY – STATE EFFICIENCY
PROGRAMS
103
WRAP states operate a variety of programs and projects to reduce energy use and
increase energy efficiency. These programs vary widely from state to state based on a
state’s energy priorities and available funding. Below is a list of programs assembled by
the WRAP Air Pollution Prevention Forum in 2001.
DOE – State Energy Program FY99
ENERGY EFFICIENCY PROJECTS
ARIZONA
Energy Efficiency
Information and
Outreach
Codes and Standards
State Buildings Financing
State Buildings Technical Assistance
Residential Buildings Financing
Residential Buildings Technical Assistance
Commercial Buildings Financing
Commercial Buildings Technical Assistance
CALIFORNIA
Provides information to
teachers, students and
general public. ($86,052)
Provides technical
assistance to city and
county employees.
COLORADO
Provides information to Provides information to
teachers, students, and
the general public
general public.
($377,640)
Comprehensive educa- Promotes energy efficient
tion/training/awareness building practices through
program for al l build- ing delivery of education and
types. ($2,651,474)
technical training to local
jurisdictions.
Consolidating efforts to
promote voluntary energy
efficiency building
programs. ($451,634)
Opportunities for
Funding available to local No
matching grants for
and state buildings to
building improvements. retrofit their buildings
Offers technical
Offers technical
Establish a computer
assistance on energy
assistance and energy
information infrastructure
management and
audits. ($1,263,840)
to help easily access
demonstrates
utility billing information
technologies.
in state buildings.
($210,000)
($80,396)
No
Offers weatherization to A Youth Energy Program
low and middle income offers limited
families.
weatherization to low
income families.
($159,199)
Provides information on Provides audits and
Promotes the
how to lower residential general education to all Homebuilders of CO
energy costs when buying residents.
green building program.
a new home.
Low interest loans for
Loans to small business No
energy efficiency projects and nonprofits for energy
to building owners.
retrofits. ($1,599,076)
($800,000)
Provides general
Technical assistance to Provides general
information.
commercial building
information.
owners.
104
Institutional (Schools No
and Hospitals)
Loans and technical
No
assistance to schools and
hospitals. ($219,192)
No
Assess, advocate and act
through partnerships to
improve energy systems
that will promote a strong
economy and healthy
environment. ($598,378)
Industrial
Agriculture
No
Rebuild America
No
HERS (Home Energy
Rating System)
No
FEMP (Federal Energy Increases awareness of
Management Program) energy programs to
federal agencies.
APPLIANCES
No
DEMONSTRATION No
PROJECTS
105
Disseminate information
on harvesting and
processing technologies
for small diameter wood
materials from forest
thinning operations, and
other energy efficient
technologies. ($67,137)
Promotes efficient use of No
energy resources among
CA food and fiber
industry. ($565,000)
Developing regional
Increases awareness and
partnerships and in-crease implementation of
awareness of achieving performance contracting
economic benefits
to achieve energy
through energy efficiency efficiency in buildings.
projects.
($523,320)
Supports Colorado’s
No
Home Energy Rating
system.
No
No
Provides user-friendly
No
appliance information to
all sectors.
No
Demonstration project for
electric consumers,
particularly homeowners
and small businesses to
show that fuels cells are a
promising emerging
technology. ($170,000)
Project to demonstrate the
viability of using
wetlands in CO to treat
wastewater. ($162,581)
ENERGY EFFICIENCY PROGRAMS
Energy Efficiency
Information and
Outreach
Codes and Standards
State Buildings Financing
IDAHO
MONTANA
Provides information and
education to all energy
consumers. ($79,902)
Helps promote voluntary
standards.
Provides information and
education to all energy
consumers. ($41,487)
Helps improve overall
building practice for
residential and
commercial buildings by
education and training on
MT’s codes.
($70,212)
Identify code changes and
other building expenses to
help lower the cost of
home building. ($92,344)
Offers an alternative
financing program with
repayments made by
energy savings. (A
portion of $2,117,448)
The State offers a bond
financing program.
State Buildings Identify and recommend
Technical Assistance energy efficient measures
through training and
technical assistance.
Offers technical
assistance to govt
agencies in developing
energy efficient
improvement projects and
help with obtaining bond
financing. ($114,132)
Raise awareness of
energy issues in waste
water facilities.
($27,946)
No
Residential Buildings - Offers an alternative
Financing
financing program with
repayments made by
energy savings. (A
portion of $2,117,448)
Residential Buildings - Identify and recommend Promotes energy efficient
Technical Assistance energy efficient measures manufactured homes.
through training and
($15,082)
technical assistance.
106
NEVADA
Commercial Buildings - Offers an alternative
Financing
financing program with
repayments made by
energy savings. (A
portion of $2,117,448)
Commercial Buildings - Identify and recommend
Technical Assistance energy efficient measures
through training and
technical assistance.
Institutional (Schools Offers an alternative
and Hospitals)
financing program with
repayments made by
energy savings. (A
portion of $2,117,448)
Industrial
Offers an alternative
financing program with
repayments made by
energy savings. (A
portion of $2,117,448)
Agriculture
Offers technical
knowledge and
awareness on irrigation
and crop management
issues. ($299,442)
Rebuild America
Developing regional
partnerships and increase
awareness of achieving
economic benefits
through energy efficiency
projects.
HERS (Home Energy Offers training and
Rating System)
assistance to promote
certified energy-efficient
homes.
FEMP (Federal Energy
Management Program) No
APPLIANCES
No
107
No
Provides general
information.
Eligible for the State
Bond Financing Program.
Help industry accelerate
deployment of energy
efficient technologies.
No
No
No
No
No
ENERGY EFFICIENCY PROGRAMS
NEW MEXICO
Energy Efficiency
Information and
Outreach
NORTH DAKOTA
Provides information and Provides information and
education to the general education to teachers and
public. ($8,061)
students and also the
general public.
($156,240)
Codes and Standards No
Promotes energy
standards and offers
energy efficient
construction workshops
and seminars to home
builders. ($70,000)
OREGON
Provides information and
education to the general
public.
Improvements for
residential and nonresidential building codes
are identified and
recommended based on
market readiness.
($425,000)
State Buildings No
No
Helps implement and
Financing
fund energy savings
improvements.
($108,000)
State Buildings –
Detailed utility bill
Offers audits and
Technical assistance in
Technical Assistance analysis, energy and
technical assistance to all finding cost effective,
water management plans state buildings.
energy saving
developed, and training ($480,000)
improvements.
and technical assistance Promotes the incorpora- ($289,879)
are provided. ($540, 980) tion of energy efficient
technologies with energy
service company
resources. ($3,500)
Residential Buildings - No
No
No
Financing
Residential Buildings - Provides general
Collaborates with all
Works with utilities to
Technical Assistance information.
groups dealing with
provide information and
housing to require that all education to residential
low income housing be customers.
more energy efficient.
($150,000)
Commercial Buildings - No
No
No
Financing
Commercial Buildings – Provides general
Assists in integrated
Provides general
Technical Assistance information.
building design, low-cost information.
energy efficiency
strategies, and informed
building siting. ($5000)
108
Institutional (Schools Reviews all plans and
and Hospitals)
specifications for school
building projects to
ensure compliance with
NM’s School Energy
Performance Standard.
($51,307)
Industrial
Agriculture
Rebuild America
Promotes the incorpora- No
tion of energy efficient
technologies with energy
service company
resources. ($3,500)
Offer matching grants for
energy retrofits.
($200,000)
Distribute the Best
A workshop to identify Increase awareness
Practices Pollution
and implement cost-effect through workshops,
Prevention Manual to the energy improve- ments in showcases and technical
oil and gas industry.
the oil and gas fields.
assistance. ($600,000)
($119,460)
($10,000)
No
Conduct site specific
workshops on farming
and reduced tillage,
irrigation, and grain
drying. ($13,000)
No
Develop partnerships to
improve energy savings,
job creation, growth
promotion. ($210,000)
Develop partnerships to
improve energy savings,
job creation, growth
promotion and
environment protection.
No
Develop action plan and
energy efficiency
programs with Rebuild
partners. ($170,000)
Assist Federal agencies
with energy efficiency
and renewable energy
efforts.
No
No
HERS (Home Energy No
Rating System)
FEMP (Federal Energy No
Management Program)
APPLIANCES
No
109
No
Offers tax credits for
premium efficient
appliances.
ENERGY EFFICIENCY PROGRAMS
UTAH
Energy Efficiency
Information and
Outreach
WASHINGTON
Provides information and Provides a comprehenseducation to the general ive range of education,
public. ($180,000)
training and technical
assistance to all sectors.
WYOMING
Provides a comprehensive
range of education,
informational materials
to schools on energy
efficiency. ($19,700)
Codes and Standards Promotes building codes Overall code review and No
and standards that
adoption of the 2000
incorporate the latest
Energy and
energy efficiency
Mechanical/Ventilation
technologies. ($50,000) Codes. Design training
tools for the codes.
($100,000)
State Buildings No
No
Makes available a pool of
Financing
money to purchase small
energy saving devices.
($10,000)
State Buildings –
Offers technical
Offers technical
Encourages and promotes
Technical Assistance assistance.
assistance for energy
energy efficiency
management.
programs in all state
buildings. ($5,000)
Residential Buildings - No
No
NO
Financing
Residential Buildings - Provides technical
Provides general
Provides general
Technical Assistance assistance on energy
information.
information
efficient home building
techniques. ($16,000)
Commercial Buildings - No
No
No
Financing
Commercial Buildings – Provides market alliance Provides general
Provides general
Technical Assistance programs, technical
information.
information.
assistance and training
and complete program
evaluation to owners.
($70,000)
Institutional (Schools Comprehensive energy No
No
and Hospitals)
efficiency program in the
schools that includes
training teachers,
distribution of materials
and promoting energy
efficiency. ($82,000)
110
Industrial
Agriculture
Helps industry improve
their competitiveness by
improving their energy
efficiency, materials
utilization and
productivity. ($200,000)
Promotes combined heat Provides accurate data on
and power(CHP) for a
electric motor efficiencies
stable and cost-effective to industrial users and
means of meeting their purchasers. ($15,000)
own electrical and
thermal requirements
Promotes energy
while becoming more
efficiency in the forest
efficient. Also offer
products industry.
assistance to all industries ($133,500)
to help streamline their
operations. ($270,599)
No
No
Rebuild America
No
Promotes performance An aggressive campaign Developing a school
contracting for all
to encourage school
Energy Design guide and
buildings. ( $50,000)
districts to adopt an
provide ismplementation
Partners with local school energy management
assistance to select WY
district to implement a
program. ($180,000)
counties. ($58,992)
comprehensive mode
energy awareness
program. ($50,000)
HERS (Home Energy In conjunction with 2
Pilot a HERS program for No
Rating System)
other states, implement new and existing HUD
the adoption of MEC.
code manufactured
($248,500)
housing Wash. State
FEMP (Federal Energy Develop a partnership to Offers information on
No
Management Program) coordinate and implement resource reduction and
energy efficiency in Natl work with utilities to offer
Parks. ($150,000)
additional programs to
federal facilities.
APPLIANCES
No
No
No
111