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Technology Corridor

It's not just for enviros any more.
Fortnightly Magazine - April 1 2003

$275 per kilowatt-hour saved if the building exceeds the 28 percent mark, up to 50 percent energy savings.

For a utility like Xcel, the motivation to encourage green building stems from its interest in meeting conservation standards imposed by regulators. Minnesota has fairly rigorous conservation standards. All utilities there must spend a percent of gross operating revenues on energy conservation-electric utilities spend 1.5 percent, and natural gas providers pay 0.5 percent. Xcel Energy spends 2 percent, due to an agreement with the state over spent nuclear fuel storage.

While she acknowledges that Xcel's main motivation is meeting Minnesota standards, Gauthier also points to other benefits for the company from promoting green building among its commercial and industrial customers. Reducing the kilowatt demand on the hottest days, she says, is better for the environment, is better for Xcel's system, and keeps operating costs down and rates lower.

Despite a drop in participation rates in the green building program, Gauthier says there is heightened interest in Xcel's program. New construction rates have dropped even more precipitously than program participation rates, she explains, and customers are paying increasing attention to building costs past the opening of the front door of a new facility.

Serving the Customer

For other utilities, like Southern California Edison (SoCalEd), involvement in green building programs grows from customer demand-hardly surprising after Californians paid headline prices for power in 2000 to 2001. Yet for some segments of the California market, the crisis isn't the only motivating factor.

Gregg Ander, chief architect for SoCalEd, says schools are interested due to demonstrable gains in student performance when they're taught in green buildings. In addition, he says, retailers have noticed that stores in green buildings have higher sales throughput, and companies like the Gap, Target, and Wal-Mart are using green building techniques in their stores in California and across the country. According to the Rocky Mountain Institute, productivity of workers in green buildings can rise between 6 and 26 percent. And, executive orders from both the Clinton and Bush administrations to improve federal facility energy consumption means that military bases, post offices, and General Services Administration buildings are all utilizing green building design.

SoCalEd's involvement in green building all boils down to customer service, Ander says. The company is "passionately involved" in customer service, he says, and sees offering energy efficiency services as a great way to work with the utility's customers. Also, he points out, it benefits SoCalEd if customers remain profitable and stay within the utility's service territory, rather than relocating due to high energy costs.

Progress Energy Carolinas, formerly Carolina Power & Light, has been promoting energy efficient construction since the country's first energy crisis in the 1970s. Currently, the company offers a 5 percent discount on its kilowatt-hour price to customers who build EnergyStar homes.

Although the Environmental Protection Agency's EnergyStar program is well known when it comes to appliances and electronics, many consumers are less aware that homes can be EnergyStar rated. To receive the rating, homes must be 30 percent more energy efficient than homes built to the standard