Industrial Utility Efficiency

# Energy Incentives from Great River Energy

Great River Energy (a Touchstone Energy cooperative) is an energy generation and transmission (G & T) provider owned by 28 electric cooperatives in Minnesota and Wisconsin. We run power plants and the high voltage transmission lines. We have a variety of power plants. The largest is coal-operated, 1050 MW plant in North Dakota called One Coal Creek Station. We also operate several gas-fired peaking plants in Minnesota. Great River Energy also has 300 MW of wind energy under contract and a refuse-derived fuel power plant in Elk River, Minnesota. We also generate close to 4 MW of power from numerous, smaller anaerobic digesters at dairy farms around the state. GRE serves the 28 electric distribution cooperatives that own and operate us. The cooperatives distribute power to the customers.

##### “Great River Energy Administers a \$9.5 million Energy Incentive Program” What market does GRE serve? The electric cooperatives we serve have 675,000 accounts serving 1.7 million people. Serving many rural areas, we cover two-thirds of the state of Minnesota and the northwest corner of Wisconsin. The two biggest electric cooperatives we serve are Connexus• Energy (serving the northern half of the Twin Cities) and the Dakota Electric Association (serving the southern half of Minneapolis metro). Lake Country Power, up north, is the biggest electric cooperative we serve in terms of service territory. The Dakota Electric Association, for example, is a member-owned, not-for-profit, electric utility founded by local farmers in 1937 with the help of the Rural Electrification Administration. With more than 100,000 members, Dakota Electric is the second largest electric cooperative in Minnesota and ranks among the twenty-five largest electric distribution cooperatives in the nation. Dakota Electric purchases wholesale electricity from Great River Energy and distributes electricity to homes, businesses and farms in parts of Dakota, Goodhue, Scott and Rice counties in Minnesota. Please describe the GRE Energy Rebate Incentive Budget. GRE administers a \$9.5 million dollar energy rebate incentive budget in 2010 for our 28 co-ops. Fifty percent of the budget is designated for Residential and fifty percent targets Commercial, Industrial, Agricultural. This is the same budget we had in 2009 and in 2008, our budget was \$6.5 million. Energy incentives are offered because we consider conservation our lowest-cost resource. It’s much lower cost than building another power plant. Being a non-profit we are an expense-driven company. Our energy rebate incentive programs really got started in 2007 with “The 2007 Next Generation Act” from the State of Minnesota Office of Energy and Security. This Act mandated utilities to save 1.5% of their produced energy per year starting in 2010. This means we have to save 167 million kWh in 2010. Our plans call for Commercial, Industrial, and Agricultural customers to generate 60-70 million kWh’s of savings in 2010. Residential customers will generate 40-50 million kWh’s of savings, and the balance will come from the supply-side of generation. ##### Paper Mill in Minnesota What does your Incentive Portfolio look like? Great River Energy administers a full Energy Incentive Portfolio for Commercial, Industrial, and Agricultural markets. Incentives cover projects for most processes including lighting, motors and drives, compressed air, and HVAC systems. Our biggest hitters are lighting, motors and drives (due to VFD), and ground-source (geothermal) heat pumps. Lighting projects have received the majority of our incentive dollars so far. They are simple and have quick paybacks. Our Motors & Drives Program provides \$35 per horsepower for newly installed VFD drives. We are at \$20 per horsepower for NEMA premium retrofit motors, and new construction motors are \$7.50 per horsepower.

HVAC systems are big for the Commercial market. We focus on the electrical side of air conditioning and roof-top units. Our incentives are at \$18 per ton. What is significant is that we have an escalator, which for every one point of EER (Energy Efficiency Ratio), we incent another \$5.00 per ton.

In hospitals, the proper application of HVAC equipment and lighting is where we focus. Hospitals have a lot of indoor air quality and lighting.

How would you rate the success of the incentive programs for compressed air projects?

We call compressed air “The 4th Utility.” We fund companies to perform compressed air system assessments with the objective being to find energy-saving opportunities. We will fund fifty percent of the system assessment. We provide Custom Grant rebates for the actual projects generated by these system assessments.

We are hoping to get more out of compressed air. It’s pretty low on the list of dollars received. We are trying to get more people aware of the costs associated with compressed air. We are working on an Awareness Campaign. We have a group of programs called Energy Wise. In them, we promote the compressed air studies.

We have some criteria we like to see on the implementation of compressed air projects:

• Air compressor installations should be of 50 horsepower or greater

• A compressed air leak study must be performed. Fifty percent of the found compressed air leaks must be corrected.

• The system assessment must cover both the supply and demand side of the compressed air system

• Based upon the system assessment recommendations we will go ahead and evaluate rebates for equipment upgrades or design fixes.

What are the main challenges to getting more energy-reduction projects done?

The main challenges to hitting the energy-reduction goals for our incentive programs are education and communication. It’s a challenge is to let enough people know about the different rebates and help them understand how the rebates can benefit them.

Our twenty-eight electric co-ops have Energy Service Reps and Key Account Reps who are educating our accounts. This field service group is very effective in communicating with our accounts on ways to save energy. We therefore invest in the on-going training of these Reps on energy-efficiency projects. We just did a Compressed Air Challenge• training for thirty of our Reps, a few months ago, here at our headquarters in Maple Grove. We had excellent feedback from our Reps on the training.

Thank you very much for your insights.