Necessity proved to be the mother of conservation when Mesa, Ariz., Utilities crafted a 10-year plan to meet Western's integrated resource plan requirement.

Under the 1992 Energy Policy Act, Western's firm power customers must submit an IRP every five years and update it annually. The plan forecasts a utility's electric power demand and evaluates the alternatives available to meet it. Mesa's 2007 IRP represented some firsts for the municipal utility. "They called me up to ask about the IRP requirements," recalled John Li, Energy Services representative for Western's Desert Southwest region. "This was the first time some members of Mesa's Resource Division had done an IRP for Western."

"I had completed IRPs at other utilities but the requirements are different for Federal hydropower customers," said Resources Division Director Frank McRae. "The IRP information on the Energy Services Web site was useful, but we wanted to verify our interpretation. Also, we needed some flexibility on the deadline. John was very helpful in both cases," he added.

Seeking new resources

The city had never considered demand side management as a potential resource either, but circumstances had changed since Mesa's last IRP. During the period the new plan covers, 2007 to 2016, three long-term power supply contracts are set to expire. In 2008, the city's contract with Arizona Electric Power Cooperative will expire, and two separate agreements with Public Service Company of New Mexico will end in 2012 and 2013.

The economics have changed, too, McRae observed. "Until recently, demand-side management was not a cost-effective strategy for the city," he said. "Now, the comparative cost of replacing those supply-side resources justifies Mesa's investment in DSM programs."

Reducing peak demand could enable the utility to reduce, defer or even eliminate supply-side resource acquisitions. To figure out which type of programs would get the best results, Mesa contracted with Boulder, Colo.-based Summit Blue Consulting, a company that specializes in demand-side strategies. Their previous experience with DSM programs in other utilities was a key factor in choosing them to work with Mesa. "Summit Blue evaluated our customer base, our goals and all possible demand-side options," said Mesa Public Information Officer Stacy Damp. "Then they narrowed the list down to the strategies that would give us the most 'bang for our buck.' "

Residential heating, ventilation and air conditioning turned out to be the area where efficiency and conservation could have the most impact. Not surprising, said McRae, for an Arizona utility with a significant residential customer base. "Our summer peak load is made up almost entirely of residential air conditioners," he pointed out. "Plain common sense tells us that there are a lot of old and inefficient units among them."

Program launch planned for summer

Mesa City Council approved the IRP early in January, and Western accepted it shortly thereafter. The next step is to implement the DSM portion of the plan. "A utility can usually get a demand-side program up and running much sooner than it can bid and negotiate a new power contract," said Li, "to say nothing of the time it would take to build new supply," he added. 

Summit Blue will return to develop and initiate the implementation of the programs. "We'd like to get an incentive for replacing old air conditioners in place before the summer cooling season," said Damp, who will be working on outreach. "We may do some kind of lighting program, too, because it's an inexpensive change and an easy way to introduce energy efficiency to our customers."

Air conditioning is likely to be a tougher sell, she acknowledged, as many of the targeted units are in older homes and low-income areas. Mesa Utilities also serves many non-English-speaking households, so it will be necessary to do bilingual marketing, as well. "The challenge will be communicating the payback to people who don't have a lot of money to spare for home improvements," Damp said. "The Utilities Department's business development coordinator will be working on a marketing plan to address those issues."

System upgrade may increase participation

As Mesa Utilities Resources Division prepares to launch its first DSM program, the Electric Division is stepping up its program to convert the city's 4-kV distribution system to 12 kV. "This gives us a unique opportunity, not only to reduce our line losses, but to encourage customers to replace their old air conditioners," said McRae. It is not economical to convert an old three-phase air conditioner to operate on a 12-kV system, he explained. "And those old units are the inefficient ones we want to phase out."

Mesa will be working with HVAC contractors to assess the configuration of customers' air conditioners. "We'll be able to get the vintage of the unit and its efficiency rating, too," McRae said. "In a lot of cases, we'll be able to offer the customer a higher rebate based on potential savings."

That could lead to greater customer participation, which would mean more energy and demand savings. The IRP's estimated savings from DSM were based on conservative assumptions about participation. "The program could turn out to be much more successful than we anticipated," said McRae. "It might even help to defer acquisitions to make up for the PNM contract. It's very exciting."

Learn more about an effective strategy

Demand-side management offers many exciting opportunities for utilities, which is why Western's IRP process has always encouraged customers to consider energy efficiency, said Energy Services Manager Ron Horstman. "Customers like Mesa are discovering the value of DSM apart from IRP requirements," he said. "As they develop programs, they will find that Energy Services' technical assistance can help them maximize effectiveness," he said. 

To help customers who are just starting to look at what demand-side management can do for them, Western recently hosted a series of seminars earlier this year. If you missed those events, streaming audio from the Nov. 14 webinar is available online. You can also download presentations from the Jan. 24 workshop. Watch the Energy Services Web site for announcements about further training opportunities.

Of course, many Western customers already have well-established DSM programs, reported here in the Energy Services Bulletin. You haven't seen your demand-side management story in print? Share your DSM experience with newcomers by contacting the editor today.