Avista Utilities has been promoting energy efficiency since 1978 — it’s one of the few utilities that has as many years of uninterrupted experience. This investor-owned utility in Spokane, WA, provides electric and natural gas service to homes and businesses in three states. It gained national recognition in the 1990s for its efficiency programs, which have been widely copied, and it recently won awards for its use of the web and social media. Denis Du Bois sat down with Bruce Folsom, Avista’s Director of Energy Efficiency Policy, to find out why a 123-year-old utility in the Pacific Northwest is a leader in the U.S. when it comes to energy efficiency.
Avista Utilities is known for being successful at implementing energy efficiency measures. What’s your secret sauce?
My company has had a focus on the customer for a very long time. And like any business we’re focused on cost containment. If our commercial customers can contain costs through lower energy bills, maybe that can make them more competitive in the regional, national and global economy — and in so doing provide economic development and promote jobs. Energy efficiency is good business for customers and for the region.
Avista’s Efficiency Avenue commercial efficiency program has been running for three years. Is it working, and why?
Efficiency Avenue has been incredibly successful. It was an interesting project to watch being born. It started when we did some research and the findings were surprising. Customers thought they had done all the energy efficiency they could, they thought it was expensive, and they thought it didn’t matter. Our Every Little Bit campaign came about as a result. It was a multiyear effort to overcome those misconceptions. It had no-cost measures, low-cost measures, and measures with rebates.
The centerpiece of Every Little Bit was the House of Rebates, an interactive explainer of residential energy efficiency measures and incentives. That really worked for residential customers, so we asked ourselves what we could do for commercial customers.
On the commercial side, the counterpart was a program called Site Specific. In retrospect I wish we had named it better, it could have won awards! Site Specific is a custom program. The customer’s Avista account executive organizes a site visit and generates a report of custom projects that Avista can help pay for.
Efficiency Avenue is an interactive web explainer about energy efficiency measures and Avista incentives for commercial and industrial facilities
After a while some of our custom measures became standard offers that we could wrap a rebate around. That led to Efficiency Avenue, the commercial and industrial counterpart to the House of Rebates web page.
Coming up with a concept to depict the whole smorgasbord of commercial demand-side management is really a challenge, but our marketing folks got pretty creative. Site Specific is still available. It’s responsible for almost half of our kilowatt-hours saved. It’s our signature program.
What’s the key to getting customers to say yes to energy efficiency?
Our industry has not done a lot of marketing because we’re a monopoly — we haven’t depended on advertising to move our product. What can we be doing from an outreach standpoint to provide the motivation? In ‘The Graduate’ the word was ‘plastics.’ For my industry, the key word is ‘marketing’ — effective marketing.
How do you measure success?
We measure traffic on the web site and increases in the uptake of the programs we offer. When we run a flight of advertisements, you can see the uptick in traffic. We measure success by kilowatt-hours saved. We only count the savings where we’ve made a financial contribution.
How is Avista doing, by that measure?
We exceeded our 2010-2011 target by 28 percent. Our target in Washington was 128 million kilowatt-hours over two years, or about 15 average megawatts, which is established by regulators. The beauty of this is that it accumulates over years. We keep adding to that and get to a small power plant in a short time.
In your view what’s the outlook for energy efficiency in the next five years?
I’m curious what’s the next big thing in terms of technology or measures. Equally interesting is the question of how to do it. I’m really impressed by the Europeans. They have $.30 to $.35 per kilowatt-hour rates. At Avista we’re a low cost provider at one fourth of what European customers are paying. But European households are using 3,000 to 4,000 kilowatt-hours per year, while our customers use 10,000 kilowatt-hours per year.
How can we cost effectively get to conservation before we get to higher rates that would make cost-effective what the Europeans are doing with, for example, lighting controls or on-demand hot water? How can we bring lower rate increases through energy efficiency in a way that customers will appreciate, understand, and opt to do? That’s what I’m focused on.
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Denis Du Bois interviewed utility executives at Efficiency Connections Northwest. Avista Utilities is an investor-owned utility that provides electric and natural gas service to homes and businesses in Washington, Oregon and Idaho.
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