I was amused and concerned by the allegations of marketing warfare that Mr. Krebs felt compelled to address in his December 1996 article. From my perspective as a gas marketing manager (1981-85), as project manager for gas cooling systems at the Gas Research Institute (1985-91), and as director of the thermal storage center at the Electric Power Research Institute (1991-present), I would like to share an observation.
On the gas side, the marketing reps always complained that their electric counterparts had larger budgets and more personnel and that they would use rebates from demand-side management programs to buy projects. And on the electric side, the marketing reps complained that their gas counterparts had larger budgets and more personnel and would use DSM rebates to buy projects.
They were both right and both wrong. Each organization wanted to increase market share, improve profitability, and satisfy the customer's needs. Usually the electric side won, however; not because of unfair marketing tactics, but because its product enjoyed a lower "first cost," was easier to maintain, and was more readily available in the required size or color. That was neither warfare nor anti-competitive.
Mr. Krebs has made some arguments that fuel-cycle analysis would justify regulatory promotion of gas technologies. The U.S. Department of Energy and Oak Ridge National Laboratory have calculated the environmental impact of HVAC systems using the Total Equivalent Warming Index method (TEWI) endorsed by the American
Society of Heating, Refrigeration, and Air Conditioning Engineers. This comprehensive study far exceeds the simple and misleading analysis that compares a natural gas engine to a coal-fired generating plant. The entire mix of U.S. generation plants (coal, nuclear, hydro, gas, and others) is considered in national and regional analyses. The study confirms that existing electric cooling technologies are superior from an emissions perspective. Some advanced gas technologies may be attractive in the future (if they are commercialized), but they still will not perform better than the new electric systems that should be available.
Mr. Krebs indicated that thermal energy storage systems thwarted conservation under the guise of DSM and integrated resource planning. But one shouldn't question current TES technology based on the performance of older designs with significantly different goals. The evaluation on TES that Krebs cites is misleading. In fact, the intent of TES system design has evolved over the past 15 years:
• Early Designs. The initial systems were designed to increase off-peak loads to better utilize base-load generation. These systems often were simultaneously required to be revenue-neutral, which meant that they would use more energy, but of a less-expensive variety. Efficiency was not the principle consideration.
• Capacity Concerns. As public policy changed to promote reductions in peak demand and to avoid construction of new power plants, DSM programs developed to reward so-called, "full-lead-shift" TES systems. Unfortunately, however, these systems can be operated incorrectly if building managers fail to closely monitor and control maintenance, operator training, and changes in building use.
• Environmental Goals. Public policy has now changed again to promote efficiency and emissions reductions. Current TES technology has shown that it can reduce both energy consumption and peak demand. That is why TU Electric was recognized for its promotional programs.
Mr. Krebs has made an impassioned plea to correct deficiencies in DSM programs that can suppress the effective marketing of natural gas equipment. The issue has become moot, however. DSM programs have been scaled back; electric and gas utilities are combining to become energy providers. Warfare is not sustainable without ammunition and an enemy.
Federal mandates on efficiency standards and state and local codes on building construction should prove sufficient to avoid wasting our natural resources. New technologies and applications should be guided by sound business criteria.
I, for one, enjoy competition. Customers make good decisions, based on information available to them and their ability to pay. I just hope that the information they obtain is not misleading or erroneous.
Bruce B. Lindsay
EPRI HVAC&R Center
University of Wisconsin
Optional callout to use in box if needed for layout purposes
"Warfare needs ammunition and an enemy."
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