While an energy efficiency project tends to pay for itself over time, many businesses delay replacement of inefficient equipment and building components because the up-front purchase cost can be cost prohibitive.

Despite attractive returns on investment and other long-term benefits of energy efficiency projects, many customers simply cannot or will not pursue energy cost reduction opportunities because of these initial cost barriers.

Sun Prairie-based WPPI Energy is a regional power company serving 51 customer-owned electric utilities. Through WPPI Energy, these public power utilities share resources and own generation facilities to provide reliable, affordable electricity to more than 195,000 homes and businesses in Wisconsin, Upper Michigan and Iowa. In an effort to overcome first-cost barriers, WPPI Energy members have designed a Shared Savings program that offers WPPI Energy capital through member utilities to advance energy efficiency projects ranging from $2,500 up to $50,000.

The Shared Savings program allows a qualified utility business customer to receive future energy savings in advance to undertake an energy efficiency project and then repay the funding in 60 equal monthly installments on their utility bill. In many cases, the payments are less than the energy cost savings, resulting in a positive cash flow for the customer.

That’s the case with the Hughes Company, Inc., a Columbus manufacturer of food processing equipment, which replaced all of the old overhead lighting in its manufacturing and office facility with high-performance fluorescent lights last November.

“Not only are we saving electricity and money, but we are creating a better work environment,” says Jeff Powell, owner of the Hughes Co., who utilized the program with the help of Jim Schieble, an energy services representative for Columbus Water & Light/WPPI Energy.

“With the high efficiency lighting, the shop is twice as bright as it was before, so it’s a lot better now,” Powell says. “And, with the advance payment from Columbus Water & Light, it’s cash flow positive. The savings we have achieved in electric usage has more than offset the advance funding to get the project done.”

Hughes had a variety of older-style fluorescent lights that included high-pressure sodium and mercury vapor, which used to be the standard type of commercial lighting, Schieble says. The new high-performance fluorescent uses lighting tubes that are smaller in diameter (one inch), and consumes fewer watts.

“It does a better job – it’s cleaner, brighter, whiter, and uses less power,” says Schieble, who has worked with customers of Columbus Water & Light for the last 12 years. “We looked at a number of proposed lighting changes. We have standard incentives, and grants, that are based on electric savings. So, when Shared Savings came along, the new owner saw the opportunity to invest in new lighting and pay for it over time.”

Powell says his company is currently saving $1,000 per month on its utility bill. The project involved replacing all of the lights
in 54,000 square feet of combined office and manufacturing operations.

“Without the program, I probably wouldn’t have made the investment,” Powell says.

“Once a customer is approved for funding and completes their project, the monthly charge appears on their utility bill,” says Beth Carlson, program manager for WPPI Energy. “If a customer’s project is going to save energy, that equates to dollar savings.

“We determine those future savings and provide funding for the project upfront. The customer gets the money to pay for the project now, and then pays it back on their monthly utility bill over time.”

WPPI Energy member utilities have assisted their business customers throughout Wisconsin with a number of projects that boost efficiencies and reduce energy usage.

“The program is just getting off the ground,” Carlson says. “So far, we have funded mostly efficient lighting retrofit projects. Any project that will provide electrical energy savings may be eligible for Shared Savings funding. Over time, we expect to fund a wide variety of projects through this program.”

Help for businesses

As members of WPPI Energy, affiliated utilities have access to the programs, technical assistance and financial incentives businesses can use to operate more efficiently.

WPPI Energy members offer many energy efficiency programs appropriate for businesses of all sizes and at all stages – from pre-construction planning through retrofitting. Trained energy services professionals can help customers evaluate which energy efficiency measures would be a good fit.

The Shared Savings program is one of many energy efficiency programs some members offer that has significant potential to benefit smaller, commercial businesses.

To be eligible for the program, the customer must have three years of established utility bill payment history, complete an application package for consideration and pass a comprehensive credit review.

Specific projects also are required to follow a set of guidelines for project eligibility, according to WPPI Energy. Qualifying utility business customers repay the savings advance over a set period plus a small service fee.

About WPPI Energy

As a joint action agency representing its customer-owned utilities, WPPI Energy achieves economies of scale in the purchase of energy, owning about 40 percent of the electrical generation capacity to provide their utilities with necessary energy.

Promoting energy efficiency and fostering energy conservation have always been important to WPPI Energy member utilities. This year, they are among the top priorities with all customer classes, particularly with businesses.

Commercial and industrial businesses – as well as school systems, not-for-profit organizations and municipalities – can reduce operating expenses, freeing up money for other investments and improving the overall financial health of their organizations.  When businesses remain competitive, local economies stay strong.

Essentially, WPPI Energy provides its member utilities with a number of energy efficiency and renewable programs, such as Shared Savings, which they can offer to their customers in order to save money.

“We are a non-profit entity, and it was a bit of a breakthrough to get this Shared Savings program going,” says Schieble.

As public power utilities, WPPI Energy members are accustomed to thinking long-term on behalf of the communities they serve. Through WPPI Energy’s business plan and budget, collectively the utilities have made a significant commitment to ramp up conservation, energy efficiency and renewables system-wide. This strategic focus aims at controlling costs by reducing or delaying investments in expensive new generation resources, limiting future compliance costs under impending greenhouse gas regulation and helping customers keep their bills down.

WPPI is working harder than ever to develop and deliver programs that help customers conserve and use energy more efficiently, a significant factor in the management of costs in a rising rate environment.n

By John Rondy