From: Tom Fowler, Houston Chronicle
Published February 27, 2007 12:00 AM

New Push for Conserving Electricity Starts to Show Results

HOUSTON -- Baker Hughes has added some 800 workers to its 140-acre Rankin Road campus in the last few years but barely a penny to its power bill.


By replacing hundreds of old light fixtures and upgrading air-conditioning equipment, the oil-field-services giant cut its power consumption by more than 1 megawatt in 2006 alone and froze its annual power bill there at about $3 million for the past three years, said Michael Hope-Jones, director of facilities for Baker Hughes.


A deciding factor in some of the projects was a state programs for those who invest in energy efficiency administered through CenterPoint Energy, Hope-Jones said.


"It's helped our bottom line, but also helps us play our part in slowing or stopping the ever-increasing demand for energy," Hope-Jones said.


Such energy-efficiency efforts are "critically underutilized" in the U.S., according to a study by an industry think tank, Electric Power Research Institute, and could cut the country's overall demand for power by anywhere from 10 percent to 30 percent.


And many of the energy-saving efforts can be done for a fraction of what it costs to generate power, according to this report and others. A study released last month on behalf of the Natural Resources Defense Council and investor group Ceres estimates it costs about 1.8 cents to cut 1 kilowatt-hour of energy consumption in Texas, versus 7 cents to provide 1 kilowatt-hour of power using existing power plants.


"It isn't about turning off the lights and sitting in the cold," said Philip Mosenthal, a partner with Optimal Energy who co-authored the Texas study. "It's about doing the same things more efficiently."


Utilities have long had programs to encourage conservation and reduce power demand. Houston Light & Power, the former local utility, installed thousands of remote control devices on residential air-conditioning units in the 1990s that allowed it to turn down the units for short periods during peak summer hours. In exchange, the homeowners got a $35 rebate.


Bob Robertson of Kingwood had such a device on his home system for years and said he never noticed a change in temperature when it was in use. The system went dormant when deregulation of Texas' power markets took hold in 2002 and HL&P's breakup made it difficult for any one business to benefit from running this system.


"It's too bad, because it seemed like it could really help," Robertson said. "I didn't notice it all the time it was on."


New Jersey-based Comverge Energy has purchased the rights to the system and is hoping Texas' grid operators will create a way for them to reactivate it.


Bob Chiste, a Houston resident who is Comverge's CEO, said such systems are used widely throughout the country.


Rocky Mountain Power, a utility that serves several states, including Utah, is able to cut back power use by more than 30 megawatts though such a system, while Austin Energy in Texas has said a similar program used over the past decade has helped it avoid building an additional 600-megawatt power plant. One megawatt can power as many as 800 homes.


Eager to use the system


Chiste compared Houston's dormant system to a 45-megawatt power plant that burns no fuel sitting idle.


"We're helping other states roll out these programs, but it's very frustrating to have this existing system and no way to use it here in Houston," Chiste said.


Officials with the Electric Reliability Council of Texas, the organization that manages the power grid for most of the state, are developing ways to re-establish such demand response programs, ERCOT spokesman Paul Wattles said. That issue could be worked out in the coming months.


The primary conservation program in Texas requires local utilities to cut 10 percent of the yearly increase in power demand through conservation and efficiency programs. The utilities do that by offering businesses and homeowners rebates if they invest in more efficient equipment, energy-saving windows and insulation.


Baker Hughes received a $29,000 rebate through the program last year for replacing lighting fixtures on its manufacturing floor. The company spent about $65,000 upfront on the project, which reduced power consumption by 55 percent and increased light output 40 percent.


The project will save the company about $25,000 per year and pay for itself within three years, but the $29,000 rebate from CenterPoint shortens the payback to under two years, Hope-Jones said.


"The rebate will frequently make a marginal project viable and tip the decision balance, allowing a project to receive management approval rather than being shelved," Hope-Jones said.


The money for the rebates comes from electric customer bills. For example, Houston-area power customers who use 1,000 kilowatts per month pay about 35 cents per month into the fund.


Raising the bar


State Rep. Rafael Anchia, D-Dallas, has filed a bill that would increase the conservation goal from 10 percent to 50 percent of the annual growth rate. That would raise the monthly bill for a Houstonian by $1 or more. The bill has been referred to the House Regulated Industries Committee.


There appears to be pent-up demand for the conservation program, observers say.


Hope-Jones noted when the application process for last year's funds for companies opened in the spring, it was fully committed within 45 minutes and Baker Hughes was not able to get in.


It was only when a number of applicants later dropped out that Baker Hughes was able to get its projects included.


Copyright © 2007, Houston Chronicle


Source: McClatchy-Tribune Information Services


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