Monday, May 14, 2012

How To Become Energy Efficiency's #1 State

Monday, May 14, 2012
It’s easy to get the impression that technology game-changers happen in a near flash. And the stories of Facebook, Google, Microsoft and Apple leave us thinking that genius pops right out of the dorm room.

But in the energy industry it’s not that easy. The innovation we see today often stems from years of late nights, deep discussion and hard negotiation.

Take, for example, the Massachusetts story. The American Council for an Energy Efficient Economy named it number one for energy efficiency in October. You may wonder, how did that happen? Why not California — isn’t it the greenest of states?

But for Steve Cowell, chairman and CEO of Conservation Services Group, it was no surprise to see Massachusetts rise to the top. Cowell has been on the inside of the state’s energy efficiency scene for decades, going back to when he worked for former Governor Michael Dukakis in the late 1970s. He was there when the groundwork was laid to bring Massachusetts where it is today.

Cowell cites a pivotal event in the mid-1980s: A group of influential activists, thinkers and utility leaders converged in the state, ready to bring efficiency to the forefront. Their names weren’t necessarily recognizable then, but today several are national leaders in the energy arena: Jon Wellinghoff, Steve Nadel, Rick Sergel, Peter Flynn, Doug Foy, Armond Cohen, Alan Nogee, Ralph Cavanaugh, Mary Beth Gentleman, Clare Moorhead, Timothy Stout, Bob King, Joseph M. Chaisson, Rachel Greenberg, Brad Steele.

And then there was John Rowe, CEO of Exelon, now arguably one of the power industry’s most influential figures. Back then, he headed a smaller utility called New England Electric System (later absorbed by National Grid). Rowe directed a legendary challenge to the group that would frame the region’s direction: “I’m the rat, show me cheese.” In other words, give utilities a financial incentive to pursue energy efficiency, and they will do it.

Cowell and the others found the cheese and they convinced utilities to direct large sums of money toward efficiency. The group spent three years creating a guiding document for New England called “Power to Spare.” This year marks the 25th anniversary of its publication. Cowell described how the report led to today’s efficiency gains at Raab Associates’ monthly Restructuring Roundtable in Boston last month.

“Power to Spare” brought forward the then relatively novel idea of efficiency as a kind of power plant, a way to meet power demand by injecting efficiency rather than more megawatts into the grid.

The report also envisioned a day when New England would actually “bend the curve,” meaning those charts that show power demand forever rising would instead someday show it falling.

Cowell had his doubts that the bend would ever occur. After all, demand for power has been on the rise since Thomas Edison invented it. But in fact, the “Power to Spare” group saw its vision realized this year, on the report’s 25th anniversary. The curve has bent downward, and analysts say the slow economy, alone, did not cause the reversal. They attribute as much as half to the LED lights, better motors, smart appliances and other efficient equipment that is decreasing demand for energy.

Bending the curve wasn’t easy; it took a lot of mental muscle, a host of innovations that sprang up in New England over the years. Some of the most significant innovation centered around the idea that efficiency is a true energy resource. It can be used instead of building new power plants.

In that vein, New England became known as the first place to let energy efficiency resources compete in a forward capacity market auctions. The region also pushed forward with mandates that utilities use all cost effective efficiency before building adding generation. In addition, New England instituted white tags, the system benefits charge, and the Regional Greenhouse Gas Initiative, a source of revenue for efficiency programs.

Power to Spare aimed to increase New England’s economic competitiveness. That, too, has happened, Cowell said. The region is emerging twice as fast from the economic downturn as the rest of the nation, while at the same decreasing its total energy consumption. “That is historic,” he said.

So now that the curve is bent, energy consumption is down and the economy on the rise, is the work done? Hardly. Next Cowell would like to see ISO New England incorporate efficiency into its energy markets. And longer term, he envisions the region relying on self-contained microgrids that use locally generated renewable energy and combined heat and power. He admitted that it will take some doing, perhaps another 25 years of work. So we set up an appointment for a follow-up interview on May 1, 2037. Check back in — I’ll let you know how it went.

Elisa Wood is a long-time energy writer whose work can be found at

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