by Andy Ferguson
In the race to reduce green house gases, Ft Collins, Colorado has moved into the Diamond Lane, adopting a plan the city hopes can overtake and pass previously attempted emission reduction strategies. On March 3, the City Council adopted a goal of reducing the municipality’s GHG emissions by 80% compared to the year 2005 levels by the year 2030. This eyebrow-raising move by the City Council was not based on wishful thinking. Ft Collins, working closely with the Rocky Mountain Institute, a business and environment-friendly think tank, developed a comprehensive plan to move the city toward radical GHG reductions based on RMI’s research into proven technological advances, plus a strategy for informed community mobilization. Ft Collins’ fast lane to the future is revealed in two documents. The first, entitled Stepping Up: Benefits and Cost of Accelerating Fort Collins Energy and Climate Goals, provides the city’s unified vision of reducing the City’s GHG emissions while promoting long term economic growth. The second, entitled Integrated Utility Services (IUS), sets out plans for a new business model for Ft Collins’ utilities.
Ft Collins efforts are attention grabbing due to the city’s completely revamped utility business model.
Like other cities, Ft Collins has drafted a plan for developing renewable energy unique to its situation. But the novel aspect of Ft Collins’s experience is its creation of a new IUS model with new and unique energy efficiency (EE) programs. Other cities and entities will closely watch this part of Ft Collins’ efforts and gauge its success.
A key component of the city’s new strategy is a vastly expanded role for on-bill payment for new household and business technologies. Despite the fact that customers will pay for new EE measures on their monthly bills, the amount they pay each month may yet go down. New EE measures provide savings that are often greater than the monthly term payment for the new technology. A customer that accepts only a basic package of home improvements, like insulation upgrades and new windows for example, will pay for these improvements on their bill, but the total amount paid each month is projected to be less than before due to these measures’ energy savings. Similar programs adopted by companies like Midwest Energy in Kansas and Green Mountain Power in Vermont have proven that this approach can not only successfully lead to rapid adoption of new EE measures, but can be profitable for customers and utility companies alike.
Ft Collins recognizes that different customers will want different approaches to this program. Households with the means to do so will have the option to purchase the improvements under term contracts and thus retain direct ownership. Households and landlord/renters not willing to buy the new improvements will be able to lease them instead, passing the payment plan on to the next homeowners or tenants without difficulty.
Automatic Enrollment in EE Programs
A second unique part of Ft Collins Utility Integrated Services is that customers are automatically enrolled in basic energy and cost saving measures unless they elect to “opt out.” Drawing on research that shows that most customers are willing to participate in such EE programs if they need not pay upfront costs, Ft Collins has taken this bold step to mobilize broad participation. While customers are free to “opt out,” a trained technical and marketing team will educate consumers about the compelling financial reasons to stay with the city’s EE program. Savings from even the most basic EE packages will be significant for both the City and its utility customers.
Ft Collins new utility plan, widely referred to as Utility 2.0, is possible because of a technical revolution. Rapid reductions in the cost of solar panels and energy storage, coupled with new smart grid technologies, more efficient lighting, and smart appliances have converged to create a sweet spot where both the utility company and consumers may share savings while reducing GHGs.
Yet despite the high hopes and apparent promise of Ft Collins and RMI’s vision, questions remain. To date, no energy efficiency program in the USA has achieved significant scale and realized dramatic reductions in total GHG emissions. Some observers believe that only the clear commoditization of energy savings will lead to rapid consumer and business adoption of EE measures and big scale emission reductions. Is a better strategy programs that depend on technology that tracks and monetizes home and business energy savings with sophisticated smart meters that track unit reductions in consumption, usually termed “negawatts.” When contractors can earn “negawatts” with a defined and incentivizing monetary value, then the drive toward energy efficiency might surpass even the best thought out programs, like the one Ft Collins now pursues. With Ft Collins pilot programs now swinging into operation, answers to such questions should forthcoming.