Better Life: In Michigan, a Utility's Energy-Efficiency Effort Doubles as a Jobs Program
Who would have thought a utility company energy-efficiency program could double as a job-saver? Probably no one but a bunch of environmental economists.
But that’s just what’s happened in Michigan, where the state’s energy-efficiency standard—the so-called EEPS—is not only reducing the air pollution that jeopardizes our children’s health and threatens our fragile atmosphere. It’s also strengthening businesses and keeping workers off the unemployment lines from Lambertville to Sault Ste. Marie.
A case in point is the efficiency program pioneered by Jackson-based utility Consumers Energy. The EEPS, which then-Governor Granholm signed into law in 2008, is what got Consumers into energy efficiency in the first place. “Without the law, it would have taken us longer to get into the efficiency business,” says Terry Mierzwa, of Consumers’ Marketing, Energy Efficiency and Research group. “Now, we’ve really embraced it as a company.”
Because of the state mandate, which requires utilities cut their energy demand by certain increments each year, Consumers’ innovative programs now bring energy and money savings to business customers of all kinds. At the Szikszay family farm in Otisville, for instance, a $23,000 incentive from the utility allowed the family to invest in a new grain dryer that’s integral to their operations. “Most of what we grow cannot be stored at the moisture it has when it’s harvested,” explains Nancy Szikszay, whose husband and brother-in-law farm land that has been in their family since 1925.
Consumers Energy helped the Szikszayz family farm buy an energy-efficient grain dryer (second structure from right) that will reduce farm expenses by $40,000 annually and help keep the farm in business. (photo: Consumers Energy)
The new, efficient dryer will cut the farm’s energy costs by an estimated $40,000 a year and help keep the family on the land they love. “It’s a struggle to keep the farm,” Szikszay says. “These energy savings really make a difference.”
Farmers aren’t the only ones benefiting from the program, though. On the other side of the state, in Grandville, mom & pop Pizza D’Oro is saving “10 percent or better” on their electric bills, thanks to lighting retrofits Consumers helped underwrite. “My initial cost of $65 will be captured within months,” says owner Joe Puplis. “And we’ve gotten positive comments from our customers about the new lighting.”
What’s particularly inventive about Consumers’ model is the way the company has developed a network of “trade allies”—small businesses—to help implement their efficiency goals. The 40 employees of Answer Heating & Cooling in Freeland, for instance, are selling increasing numbers of efficient furnaces and air conditioners at reduced prices, thanks to incentives from Consumers. These efficiency incentives Mierzwa says, allow the company’s “allies” to “sell higher-margin, more-efficient equipment. The customer saves over the life of the investment. And we can achieve our energy-savings goals. It’s a win-win-win.” Pat Flory, Answer’s Sales Manager, agrees. The efficiency incentives, he says, “help us keep people on staff and off the ‘unenjoyment’ line.”
What’s in it for Consumers? To begin with, these incentives don’t cost them a thing. They’re financed by surcharges that amount to about a dollar a month upfront for residential electric customers and $1.50 for natural gas. That might sound like a lot, but even customers who don’t participate directly in the efficiency programs save more than the surcharges cost, as a result of the program’s existence. Explains Judy Palnau, spokesperson for Michigan’s Public Service Commission, which regulates the state’s utilities, “for every dollar you put into a program like this, customers get about $3 worth of benefits.” That’s because efficiency programs cut energy demand, especially when prices are highest. And they help customers save on their bills by eliminating the need for costly new power plants. With efficiency, Mierzwa says, “the company saves, and those savings are passed on to the customer. If you participate in the programs, you save even more.”
Finally, Michigan utilities get bonuses from the public service commission when they exceed their efficiency targets. Consumers just got one worth $5.7 million.
Mierzwa’s right: the Michigan energy-efficiency standard is a win for everyone—for our health, for our atmosphere, for our pocketbooks. And, it’s a jobs program, too.
It’s amazing what efficiency, and the legislation that enables it, can do.