FERC’s new rule on compensation for demand resources tips the market balance toward negawatts. Arguably the commission’s economic analysis is flawed, and the rule represents a covert policy...
Making Efficiency Cool
A new business plan for capturing big saving.
On the softer side, the BEB will require a reformed organizational culture. A more flexible learning and innovative organization is needed than what made sense in the Efficiency v.1 world. Appropriate reward systems will encourage management and staff to be demand-centric, and resist temptations to fall back on legacy approaches like serial discounting.
Efficiency v.2 is a quantum leap from the Efficiency v.1 world. Efficiency v.2 will be just as demand-centric, focused on growing demand for efficiency products and services, as Efficiency v.1 was focused on efficiency’s supply side. In the Efficiency v.2 world, providers of efficiency will look more like businesses and less like government agencies. Efficiency v.2 will be characterized by dynamic branding, marketing and selling strategies, driven by customer science, whereas potential savings studies and annual program reviews characterized Efficiency v.1.
The utility Best Efficiency Business (BEB) will play an essential irreplaceable role in the Efficiency v.2 world. A utility, uniquely, has a relevant relationship with every customer in its area and so has the potential to thrive in a demand-centric world. And a utility, uniquely, has the ability to be dynamic like a business while attending to the public service obligations of regulation.
1. Disclaimer: References to “Efficiency v.1” and “Efficiency v.2” in this article bear no relationship to any specific company or product name.
2. “Climate Change Affects California Water Supply,“ Reuters, May 10, 2007.
3. “State-level Spreadsheets 1990-2007, 1990-2007 Retail Sales of Electricity by State by Sector by Provider (EIA-861),” released Jan. 29, 2009. www.eia.doe.gov, U.S. Department of Energy, Energy Information Administration. U.S. Census Bureau provides California population estimates, to express electricity consumption on a per capita basis.
4. See Mitchell, Cynthia, “ Stabilizing California’s Demand ,” Public Utilities Fortnightly , March 2009.
5. “Can One Household Save the Planet: No, But the Planet Can’t Be Saved Without It,” Washington Post , Feb. 15, 2009.
6. “Eco-Friendly … and Frugal: Paying $1,299 for a Dishwasher in Order to Save $90 a Year,” Wall Street Journal , Feb. 12, 2009.
7. “The New Team: Steven Chu,” New York Times , Dec. 5, 2008.
8. “Current Activities,” University of Georgia, Office of Energy Services, Feb. 7, 2007.
9. “Utilities Turn Their Customers Green, With Envy,” New York Times , Jan. 30, 2009.