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Utilities’ Programs Offer Businesses Incentives for Saving Energy

5 min read

Energy is money, and businesses in Arkansas are saving both by taking advantage of energy-efficiency programs sponsored by the state’s electric and gas utility companies.

The savings go beyond individual companies, a representative of Entergy Arkansas Inc. said. Ratepayers and the utilities themselves benefit.

The programs trace their origin to 2007, when the Arkansas Public Service Commission approved rules for conservation and energy-efficiency programs to be operated by the utilities the PSC oversees. In addition to Entergy, these include Arkansas Oklahoma Gas Corp., CenterPoint Energy, Empire, Oklahoma Gas & Electric, Source Gas and Southwestern Electric Power Co.

Under PSC rules, the utilities are responsible for the administration and implementation of the programs in their service areas. In addition, the PSC must approve the utilities’ energy-efficiency programs, and the utilities must include programs for all customer classes, including residential, small business, industrial, municipal and agricultural customers.

The programs vary but generally they include financial incentives for improvements like fluorescent and LED lighting upgrades, lighting controls, air compressor system upgrades and HVAC upgrades and tune-ups.

The programs are funded with an “energy-efficiency cost rider” paid by all ratepayers.

Buddy Hain, president of energy contractor LSCO of North Little Rock, called it “found money” and lamented that more businesses aren’t taking advantage of the programs. Of course, as Hain readily acknowledged, his company is benefiting from the programs. Currently, he said, 100 percent of LSCO’s business lies in making buildings more energy efficient through the installation of LED lighting.

LSCO is a “trade ally” for Entergy Solutions, the energy-efficiency program of Entergy. That means the company, a licensed electrical contractor, is authorized to implement efficiency initiatives.

LSCO has performed energy upgrades for a number of cities in the state, including Stuttgart, DeWitt and Dumas, removing incandescent and fluorescent lighting in city halls, fire stations, libraries and senior centers and installing LED lighting.

“You can take out a 60-watt incandescent bulb and put in an 8-watt LED bulb and you’re getting the same light output, so you’re saving 52 watts,” he said.

Hain has done the same thing for grocery stores, schools, office buildings and real estate companies — “anyone who has a bunch of light fixtures.”

Entergy’s website presents the city of Berryville as a case study in its CitySmart Program, which recommended the city upgrade the interior lighting in several of its municipal buildings. Berryville got a cash incentive of more than $4,000 from Entergy, reduced its annual energy consumption by 41,536 kilowatt-hours and reduced its annual energy costs by $3,322, the utility said.

Alan Freeland, director of technical services for Schulze & Burch Biscuit Co. of Searcy, praised the Entergy Solutions program.

During the last three years, Schulze & Burch, working with CLEAResult, an environmental consultant that is Entergy’s implementing contractor, has replaced air compressors, installed energy-efficient lighting and motion sensors and even built insulated walls to improve the efficiency of the facility’s air-conditioning system.

Schulze & Burch has spent $589,000 and received incentives totaling $401,000, he said. On top of that, the manufacturer is saving $5,000 to $7,000 on its monthly energy bills.

Georgia-Pacific in Crossett is among Entergy’s case studies in its Large Commercial & Industrial Program. “In 2012, Entergy Arkansas representatives began working with the Crossett facility to determine how energy efficiency could be improved on site with a focus on lighting, compressed air, pumps and other large motors used in the manufacturing process,” the company said.

The improvements resulted in annual energy savings of $978,324 and were expected to pay for themselves in about a year.

Erin Kiefer is director of special projects for Assembled Products Corp. of Rogers, a manufacturer of electric shopping carts for the mobility impaired and commercial pressure-washing equipment, among other products.

Swepco, working with CLEAResult and Graybar, a distributor of industrial and electrical supplies, upgraded the lighting in most of Assembled Products’ facilities, Kiefer said. The project cost the company $33,000, but it received a rebate of more than $24,000. It’s experiencing a 5 percent energy savings year over year, Kiefer said.

Swepco’s program for small businesses — those with a peak demand less than or equal to 50 kilowatt-hours — allows them to save without any upfront costs, offering things like free installation of low-flow faucet aerators.

PSC Mandate

The PSC mandates that any energy-efficiency actions taken by a utility must assist all ratepayers, said Gabe Munoz, commercial and industrial energy efficiency program manager at Entergy.

“The idea is that the cheapest power plant that Entergy or any investor-owned utility builds is the one they don’t have to build,” Munoz said. “Every time a generation facility is built, the ratepayers pay for it. And so if we don’t have to build a plant, the ratepayers don’t have to assume that cost.”

Entergy seeks to foster energy efficiency through long-term energy savings along with reducing peak demand, “when we manage the amount of electricity that’s on the grid during our peak season,” Munoz said. And the peak season in Arkansas is always summer.

As part of reducing demand, Entergy offers to farmers the Agricultural Irrigation Load Control Program, which allows them to save an average of $100 per irrigation pump on Entergy Arkansas metered well pump accounts. Entergy installs control hardware on the pumps and the customer allows the utility to power off their participating wells during the peak demand months of June through August.

“These interruptions are restricted to weekdays, for up to four hours,” the company says. “Typically, power-offs happen much less frequently. In 2014, interruptions occurred on only one day of the entire summer, and only seven days of the year before.”

So far this year, about 2,000 small businesses have participated in Entergy Arkansas’ energy-efficiency programs, he said.

“Next year’s budget is going to be about $65 million,” Munoz said. “The $65 million is the entire budget for all our programs, and the majority of that is incentives going back to the customers.”

These energy-efficiency programs “last as long as they’re approved by the commission,” Munoz said. So far, Entergy has approval for its programs through 2016, but is waiting for PSC guidance on its programs for 2017-18.

Buddy Hain, the North Little Rock lighting contractor, is sold on the energy-efficiency programs and thinks others should be too.

“I was speaking at the Stuttgart Chamber of Commerce and this one guy — he was sitting in the front row and I could tell he wasn’t buying it. And I said, ‘You don’t believe this, do you?’ and he said, ‘No. Why would the utility company pay me to reduce what they’re trying to sell me?’ And I said, ‘No. 1, they’re mandated by the Public Service Commission to do this. No. 2, you’re being charged for it. Look on your bill. There’s an energy program charge.

“’But giving away this money, it decreases the load off the grid, and it’s cheaper than building power plants and transmission lines and transformers. And it’s the right thing to do. It’s obviously great for the environment because we’re reducing load so much.’”

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