In this issue
		Energy Services Bulletin home page
		Utility contest shows how energy-efficiency improvements pay
		California updates building standards to cut energy use
		Wyrulec loan program grows local business
		Efficient lighting takes off at California airports
		Nebraska's first digester produces energy, controls hog odor
		Granite Falls, Minn., offers customers first conservation incentive
		Utility's biodiesel fleet promotes New Mexico clean energy goal
		Arizona sun powers sustainable farming experiment
		Western governors map out region's renewable energy future
		Heating calculator helps utility promote electric heat systems
		Topics from the Power Line: Saving energy, maintenance with LED exit signs
		Energy shorts
		Technology Spotlight: Insulating Process Steam Systems
		Calendar of events

Granite Falls, Minn., offers customers first conservation incentive

The city-owned, 1.2-MW hydroelectric dam on the Minnesota River helps Granite Falls Municipal Utilities to provide low-cost electricity to residents. (Photo by Granite Falls Municipal Utilities)

Whether a utility engages in demand side conservation to control its load growth or does it because of a regulation or contract requirement, energy efficiency offers benefits for both the consumer and the power industry, as Granite Falls, Minn., Municipal Utilities discovered.

"If you're conserving energy, you're not purchasing it and that's a good deal for the utility," explained Granite Falls Electricity Supervisor Don Reznechek.

Granite Falls buys about half its power wholesale from the Central Minnesota Municipal Power Agency. The organization operates like a purchasing co-op for several municipal utilities. Western has supplied around 30 percent of the city's annual power load since the 1980s, and the rest of its electricity needs come from Granite Falls's own 1.2-MW hydroelectric dam on the Minnesota River.

That dam is one of the reasons the town only launched its first conservation program this year. "Most of our conservation has been done on the supply side," Reznechek said. "Those generators have really helped to keep the cost of electricity down for us."

Program addresses Federal requirement

However, Western's Energy Planning and Management Program requires customers to develop a plan for efficient energy use. One option is for a utility to spend 1.5 percent of its revenues on demand-side conservation programs. So Reznechek consulted with the city engineer and reached the same conclusion as many large utilities and regulatory agencies: lighting is one of the most cost-effective and easy-to-implement efficiency programs.

The utility provided customers with coupons worth $10 that could be redeemed for a compact fluorescent lamp. "Actually, with sales tax, the cost of two CFL bulbs is about $11," said Reznechek, "so they could get a second one for a few cents."

Distributing the coupons as bill stuffers kept the logistics simple. Ladner's True Value Hardware and the Sawmill Builder's Supply in Granite Falls carried the efficient light bulbs and accepted the coupons.

Advertisements explaining the program ran in the local newspaper and on the radio. Customers redeemed $2,300 worth of coupons — an excellent response for a utility with about 1,500 meters. The offer applied only to residential customers, but the utility has encouraged its commercial accounts to replace old T-12 lighting with more efficient T-8 lamps.

Other measures considered

For the utility's next efficiency program, Reznechek is investigating some type of incentive for energy efficient appliances. Cooling may be an application where Granite Falls could reduce its consumption, too. "Last summer, we peaked at just over seven megawatts, so that load is growing," he said.

The utility's load is increasing steadily at about 1 percent per year, after a period of intense building in the 1990s. "That was driven by flood and tornado recovery," explained Finance Manager Darcy Mulvihill. "Otherwise, the population is pretty stable."

The price of electricity in Granite Falls was stable, too, thanks to the town's hydroelectric facility. Even with a recent necessary cost adjustment, rates are still a very good deal. "When we made the adjustment, we did a comparison of our rates with Xcel's rates for Montevideo [Minn.], and ours still came out lower," said Mulvihill.

Most Granite Falls customers heat their homes with natural gas, however, leading some to look into alternatives to control their energy costs. "I've gotten calls from people wanting to know about dual heating rates," noted Reznechek.

The rates are good, he said, but not low enough to inspire many customers to switch to electric systems, or to inspire an incentive program for electric heating technologies.

Still, there are many technologies that can improve a utility's service and bottom line. Reznechek has recently been looking into using biodiesel in the city's 6-MW diesel backup generator. "It looks like there won't be a problem, but I'm waiting to hear from the company that it's covered under the warranty," he said. "I just want to get something in writing."

After all, a public power provider's first concern is supplying reliable, low-cost electricity to its customers. If conservation supports that goal, Granite Falls supports conservation, and its first successful energy-efficiency program won't be its last.