February 26, 2004
In this article, The FABRICATOR® attempts to shine the light on opportunities for improvement in both the front office and on the shop floor. In this case, the light is on the lights—as well as the heating and ventilating system and other energy-sapping devices.
To be more specific, fabricators may be missing out on an opportunity to pocket some savings if they haven't taken a close look at how their operations are consuming energy. And with the economic environment as tough as it is, many fabricators probably are concentrating more on the revenue-generating ideas rather than facility improvements that will have more of a dramatic long-term impact.
To get a better idea as to what kind of a role a utility might play in helping a small business realize these energy savings, The FABRICATOR®tracked down Kim K. Zuhlke, vice president of engineering, sales, and marketing, Alliant Energy-Wisconsin Power and Light (WP&L) Co. WP&L, Madison, Wis., has worked with its Midwest customer base for more than a decade to seek out such energy-saving solutions. The program is called Shared Savings.
Describe the Shared Savings program offered by WP&L.
Kim K. Zuhlke: Shared Savings is an energy-efficiency and -conservation program for agricultural, commercial, industrial, and state and local government customers of WP&L. Through the program, account managers provide the energy expertise customers need to assist them in identifying and implementing energy-efficiency projects. WP&L provides the upfront capital customers need to make the energy-saving improvements. Customers repay WP&L from the monthly energy savings over a contract term.
Why did WP&L develop such a program?
Zuhlke:WP&L developed Shared Savings in the late 1980s to help nonresidential customers overcome hurdles to implementing energy-saving projects. Shared Savings addresses energy-efficiency customer barriers, such as risk and lack of knowledge, time, and capital. Typically, nonresidential customers do not have extensive knowledge about how their processes, support systems, and building systems use energy. They also lack the time to research internal energy utilization and implement energy- savings projects in their facilities. Rather, their efforts are focused on growing their businesses.
How has the reaction been since the launch of the energy-savings program?
Zuhlke:WP&L has experienced overwhelmingly positive results over the years. More than 4,100 Shared Savings contracts have been implemented by more than 2,800 customers. We've been able to save more than 600 million annual kilowatt-hours of electricity in just the last six years—equivalent to the amount of electricity generated from a 200-megawatt power plant. That's enough energy to power about 70,000 homes for a full year. That's power that's produced at significantly less cost than it would take to build that new power plant.
|—Kim K. Zuhlke,|
Alliant Energy - Wisconsin Power and Light Co.
In addition, Shared Savings has invested $270 million in Wisconsin's economy over the last six years through customer investments in cost-effective energy-savings projects.
In a typical industrial facility, what areas generally need the most improvement?
Zuhlke:Shared Savings account managers focus on projects that require the greatest assistance to implement and where WP&L can provide the greatest impact. This includes process and process-related projects; difficult lighting; and heating, ventilation, and air-conditioning applications.
More than 65 percent of Shared Savings projects involve process or process-related technologies. Projects that impact processes directly reduce the customers' costs to produce their products. Many of these projects also save other production costs, such as raw material, or increase production rates. All of these projects help Wisconsin industry compete in the global marketplace.
WP&L's approach to reducing energy usage works. In 2002, Shared Savings customers averaged an 8.1 percent reduction in energy costs.
Some of the benefits of working with a local utility seem pretty apparent. One such obvious benefit would seem to be cost savings. What are some of the intangible benefits that arise once a Shared Savings program has been implemented?
Zuhlke:Investments in Shared Savings provide customers with more efficient process equipment and a better work environment with improved heating, ventilating, air conditioning, and lighting. Many of the process projects improve other production metrics, such as reduced raw material cost or improved scrap rates.
Are programs similar to the WP&L program part of a nationwide trend of utilities reaching out to their users to encourage more intelligent energy usage?
Zuhlke:WP&L is committed to energy efficiency and has been a long time leader in energy conservation. In the recent past, many utilities have either abandoned or cut back on energy-efficiency and -conservation programs, but the pendulum is in the process of moving back to utility-run energy-efficiency programs.
In Wisconsin, the situation is such that utilities were mandated to transfer their funds collected from customers for energy-efficiency programs to a state-run public benefits fund by Jan. 1, 2003. WP&L has been able to continue its Shared Savings program this year , but at a limited level of activity.
What lies ahead for WP&L's Shared Savings program?
Zuhlke:Unfortunately, the continuance of WP&L's Shared Savings program is in jeopardy. Earlier this year WP&L transferred the last of its energy-efficiency funding to the state's recently created public benefits program as required by Wisconsin legislation. However, WP&L believes utilities should have the option to operate energy-efficiency programs for their large-energy-use customers if they so choose and is currently working on all fronts to ensure Shared Savings customers are able to pursue additional energy savings projects in 2003 and beyond.
What words of wisdom do you have for fabricators who have yet to connect with their local utility for a consultation on energy usage?
Zuhlke:My advice is for fabricators to make the contact with their local utility a priority. We realize fabricators, like most other businesspeople, may not have the energy expertise, time, or resources needed to address energy usage. Besides, they need to focus on what they do best—producing a product that generates revenue. Remember, utilities are in the energy business and are best positioned to evaluate the energy-efficiency needs of their customers.
Alliant Energy-Wisconson Power and Light Co., 4902 N. Biltmore Lane, P.O. Box 77007, Madison, WI 53707-1007, 800-255-4268, www.alliantenergy.com.