This blog was written by SACE intern Jeannie McKinney and Natalie Mims.
According to their second quarter report for 2011,*Georgia Power Company (GPC) has only accomplished 9 percent of their annual energy savings goal for the current year. In an effort to help their state “out of the bottom of national and regional comparisons on energy efficiency,” the Georgia Public Service Commission (PSC) set very achievable energy efficiency goals for GPC, covering 2011 to 2020.
However, after six months the company has made little progress, spending less than a quarter of their planned investment for the year. Based on the data they presented (see table), GPC does not appear to be on a course to achieve their energy efficiency targets on time.
This underperformance begs the question, are Georgia Power’s energy efficiency goals extreme? The short answer is no. As illustrated in the figure (below the break), the “Top Ten” states aspire to help reduce energy waste by more than 15 percent, and plans for the Southeast trail far behind peer utilities in other parts of the nation.
|Planned||2011 YTD||YTD as % of Planned|
|Energy Efficiency (MWh)||104,099||9,349||9 %|
|Investment ($ millions)||$ 12.8||$ 2.9||22 %|
Clearly, Georgia Power is not laboring under unrealistic expectations when compared to those of other utilities. In fact, GPC’s goals are lower than most of its Southeastern peers. Where, then, is Georgia Power going wrong?
Commercial Underperformance Unlike other utilities across the US, in its commercial custom program, Georgia Power only offers lighting incentives. Limiting the custom program offerings to only lighting reduces customer options and is a likely factor in GPC’s overall low commercial performance. Other utilities across the nation offer a robust custom commercial program because it often yields high savings with one point of contact. Focus on Energy (FOE), for instance, a third party implementer that works with Wisconsin utilities, offers a variety of custom measures to all business sectors including hospitals, paper and pulp manufacturers, plastics manufacturers, IT and data centers, hotel and lodging facilities, and agribusiness.
GPC’s commercial programs have achieved only 4 percent of the IRP energy savings target to date. Even if all of the “pending” commercial projects GPC projected in their second quarter are completed, GPC will still have only accomplished 19 percent of its annual target for their commercial offerings. GPC’s commercial customers should demand more options, delivered more effectively.
GPC can learn how to improve commercial program participation within its own Southern Company family. Sister utility Gulf Power offers programs similar to Georgia Power’s, such as commercial/industrial audits, HVAC, occupancy sensors, and food service equipment incentives, as well as a more robust custom program offering. These similar programs yielded different results in Florida though, as Gulf reported over performing on its commercial program goals by 179 percent in 2009 and 145 percent in 2010.
Low Customer Awareness Successful energy efficiency programs must be robust on two fronts: by achieving high energy savings per participant, and by increasing the number of participating customers. Although GPC has been relatively successful in promoting the residential Refrigerator Recycling Program, which captures, on average, over 1.1 MWh per participating household, the same cannot be said for their other programs.
In general, GPC is failing to attract customer participation at rates similar to its industry peers. As of June 2011, GPC is only capturing 2 percent of its anticipated commercial customers, and 55 percent of anticipated residential customers.
Why don’t GPC’s customers participate? In the past, GPC has hardly scratched the surface when it comes to making its customers aware of incentives Georgia Power offers them to reduce energy use. GPC needs to make a better effort determining how to reach more of its customers and turn them into participants.
The solution for Georgia Power Company is multi-faceted, but attainable; they need to work towards promoting these offerings more widely and more actively over the next few months to make a good faith effort at meeting the goals established by the Georgia Public Service Commission. While Georgia Power is being challenged to move in the right direction with its efficiency efforts, GPC is just not moving quickly enough.
Regardless of the reason, GPC is significantly underperforming on efficiency, and may need to change its implementation plan to achieve its annual savings target, or at the very least, significantly ramp up implementation. When Georgia Power’s third quarter results are released in late fall, and are made available on the Public Service Commission website, we will see just how much pressure they are under to perform.
*Document number 137899