"The net savings for our customers is about $3.5 million a year."
--Robert Fletcher, Snohomish PUD.

The move is saving their customers millions of dollars in energy costs, according to an National Public Radio piece this week. It could also save the utility millions more by delaying investments in generation.

The devices are the product of Seattle-based MicroPlanet LTD. They perform a function known as conservation voltage reduction, which is to say that they reduce the line voltage from the typical 120 or so volts down to 117 volts.

Why doesn't the utility just lower the voltage at the power substation? Because of the principle of line loss (among others), voltage drops with distance from the substation. Utilities are required by regulation to deliver 114 to 126 volts, so they err on the side of caution. Customers closest to a substation will get power at the high end of the range; farther away, the customers get less power.

Mike Sheehan, an executive at manufacturer MicroPlanet, explains: "If you looked at a circle within the first half mile of the substation, all those customers would be running on the high end of the scale, 125 volts. Then as you get a mile out, they'd be running 124 volts."

Utility customers are charged based on kilowatt-hour usage, which is a factor of the voltage supplied and the amps drawn by lights and appliances. So lower voltage means fewer kWh are needed for the same lights and appliances, which means lower electric bills. Robert Fletcher of Snohomish PUD said conservation voltage reduction drops the utility's voltage by 2.5 percent, to 117V.

"That buys the average customer about 350-400 kWh per year savings," Fletcher said. "So the net savings for our customers is about $3.5 million a year."

An EPRI study shows that appliances last longer at the lower voltage. A spokesperson for the Edison Electric Institute, a trade association, said there are potential problems with running at lower voltages. A sudden surge in demand could drop the voltage to a level that could harm appliances. Snohomish PUD says their equipment can adapt and prevent damage.

The NPR piece did not go into the power factor reductions found in some of MicroPlanet's field tests, but this is another source of potential savings for utilities who deploy conservation voltage reduction.

The Northwest Energy Efficiency Alliance is evaluating the Snohomish PUD's experience to see if it is viable for deployment across a four-state region.

The NPR report is part of a podcast posted today. Search for "NPR Environment" in iTunes.