Establishing the Energy Incentive Benchmark - The Ameren Illinois ActOnEnergy® Program
Compressed Air Best Practices® Magazine interviewed Keith Martin (Director Energy Efficiency) and Cheryl Miller (Energy Efficiency Advisor) from Ameren Illinois and Robert Baumgartner (Business Program Manager) from Leidos Engineering.
Good afternoon. According to my sources, your program is one of the most effective in the U.S. at incenting industry to make their compressed air systems more efficient. Congratulations! In broad strokes, please describe the Ameren Illinois ActOnEnergy® Program.
Good afternoon and thank you! Seven years ago, a team of three of us at Ameren Illinois made the commitment to create and deliver a program that would make a difference. Today, the Ameren Illinois ActOnEnergy program is an award-winning energy efficiency program covering southern and central Illinois. After six program years, we are thrilled to report our business customers are saving over $132 million in annual energy costs due to energy efficiency measures they implemented with financial incentive assistance from ActOnEnergy.
The funds come from the Ameren Illinois rate payers (residential and business), based on the amount of electric energy they use. All eligible customers are paying into the Energy Efficiency Program with a Rider EDR charge on the monthly electric bills.
The purpose is to provide cash incentives to help businesses with the up-front costs of installing energy-efficient electric and gas equipment. It can also be used to perform tune-ups on existing equipment.
The ActOnEnergy program year starts on June 1st and ends on May 31st. Program Year (PY) 7 started on June 1, 2014. For customers requesting pre-approval, the completion date of their project determines which program year the project will be associated with and the incentives for which the project is eligible.
With Custom Incentives making our scope almost limitless, we organize our equipment-specific incentives and programs into twelve areas. Compressed air incentives fall under three of them; Retro Commissioning, Leak Survey and Repair, and Custom Incentives.
|Ameren Illinois ActOnEnergy Incentives|
Small Business Lighting
Process Steam & Steam Traps
Variable Frequency Drives
Metering and Monitoring*
|*Applicable to compressed air systems|
Jim Timmersman, Talbot Pratt, Dan Trachsel, Peter Faust, and Adam French (left to right) from Power Supply Industries.
Erin Roehrs, Naomi Marciante, Jennifer Barkalow, Erik Woehrle and Walter Deeken (left to right) from HTE Technologies.
Mark Olson and Tim Mathews from Kaeser Compressors.
What’s new for Program Year Seven?
There are a number of changes from Program Year Six (PY6) summarized below:
- Project completion dates for PY7 must be on or after June 1, 2014 and before June 1, 2015.
- The incentive caps have changed. Previously, all Standard, Custom, and Retro-commissioning projects were capped at $600,000 per project for electric incentives and $400,000 per project for natural gas incentives. In PY7, standard and custom projects may receive up to $500,000 in electric incentives per project, and an additional $250,000 in gas incentives per project. The Competitive Large Incentive Project, Staffing Grant, Retro-Commissioning, Feasibility Study, Leak Survey and Repair, Metering & Monitoring, and New Construction programs are the exception to this limit.
- In PY7, all Standard and New Construction Lighting projects will be capped at 75% of the project cost (project cost includes cost of materials and external labor; internal labor is not considered in the project cost).
Please describe the Compressed Air Retro Commissioning (RCx) incentive.
Through the ActOnEnergy Retro Commissioning Programs (RCx), a pre-approved Retro Commissioning Service Provider (RSP) will evaluate a business' existing compressed air systems to identify no-cost and low-cost energy efficiency measures to optimize their systems. This RCx program is designed to help manufacturing and industrial customers optimize the operation of their compressed air systems.
The RCx incentive can defray 80 percent of the discovery phase cost for tune-up projects that have a simple payback period of up to one year. No-cost and low-cost compressed air energy efficiency measures that qualify for this program may include:
- Leak loss reduction
- Adjustment of an existing flow controller or air compressor sequencer to match plant operations
- Correction of inappropriate uses of compressed air such as open blowing
A typical plant in the Ameren Illinois service territory can expect to see energy efficiency savings of more than 15 percent as a result of compressed air leak repairs alone!
Pre-approval from Ameren Illinois is required before the RCx survey is initiated and a purchase order is generated.
|Ameren Illinois ActOnEnergy RCx Incentive Registered Service Providers|
Jim McAuley, LLC
John Henry Foster
Ingersoll Rand Chicago
Ingersoll Rand Indianapolis
Power Supply Industries
Is there an incentive to implement the recommendations of the RCx survey?
Of course, this is key! RCx program incentives include the aforementioned survey incentive and an implementation incentive. The additional implementation incentive applies to all implemented and verified retro-commissioning measures with a payback period of 0-1 years. This incentive is $0.02/kWh saved.
Customers qualify for the retro-commissioning incentive by implementing sufficient 0-1 year payback energy efficiency measures to meet the minimum energy savings requirement outlined in the pre-approval letter.
Our customers may implement their projects using in-house resources, a contractor of their choice or the RSP. The retro commissioning survey may also identify capital improvement projects (1-10 year payback) that might qualify for additional incentives through the ActOnEnergy Custom Program. The recommendations and supporting data from the RCx Survey may be used to provide the basis for a Custom Program application.
How does the Custom Program encourage rapid implementation of energy efficiency measures with 1-10 year paybacks?
The ActOnEnergy Custom Program provides incentives to support the implementation of energy efficiency measures with a 1-10 year payback. Custom Program incentives are $0.07/kWh for annual savings. In addition, we offer two bonus incentives to incent rapid implementation.
- Applications submitted for custom compressed air projects within six months of the completion of compressed air retro-commissioning are eligible for a 15% incentive bonus (electric) upon project completion.
- Applications submitted for custom compressed air projects within one year of the completion of compressed air retro-commissioning are eligible for a 5% incentive bonus (electric) upon project completion.
Factories may receive up to $500,000 in electric incentives, per project. There is no cap on the amount of incentives that can be requested in a program year for a facility. Stockpiles of equipment are not allowed. All incentivized equipment must be installed and operational.
Please describe the Illinois ActOnEnergy Metering & Monitoring Incentive.
Absolutely. This is an exciting incentive for compressed air systems. ActOnEnergy is now offering financial support for enhancements to metering and monitoring of energy. We will pay up to an initial $10,000 (up to 50% of the costs) to install new meters or software to better visualize, manage and reduce energy use at an industrial facility. When enough energy is saved through efficiency actions that result from the use of this enhanced metering, we will pay up to an additional $10,000 (up to 50% of the costs). So it is possible that ActOnEnergy may cover 100% of the cost of the enhanced metering and monitoring.
This incentive provides an answer to the problem facing so many facilities – a lack of measurement. We want to incent the installation of metering and monitoring software/equipment - to provide data for energy savings and other factors required for a customer decision to move forward with an energy savings project. Metering and monitoring software/equipment are intended to identify and implement energy efficient measures through a structured plan.
Subsequent Custom and Standard projects resulting from Metering & Monitoring data should be extensive energy-efficiency projects, equipment optimization or process improvements, and must also meet ActOnEnergy cost-effectiveness and technical criteria. Compressed air, HVAC energy management and industrial process improvements are typical examples of the kinds of Custom projects that we incentivize. Project pre-approval is required to receive this incentive. Here is further detail:
- Base Incentive: The “base” Metering & Monitoring application incentive is calculated as the lesser of 50% of the Metering & Monitoring installed costs or $10,000. This will be paid once the new monitoring equipment or software is installed.
- Performance Incentive: The “performance” Metering & Monitoring application incentive will be paid based upon the annual energy savings generated by Custom or Standard projects identified and implemented via metering and monitoring at the rate of $0.01 per kWh or $0.20 per therm, capped at the lesser of 50% of the Metering & Monitoring installed costs or $10,000. The total maximum for “base” and “performance” incentives is $20,000.
Coglianese from Brabazon and Zach Switalski from Sullair Compressors.
Brent Christensen and Bryan Crane from John Henry Foster.
Brice Schultz and John Eckley from Quincy Compressor.
Any success stories you’d like to share related to compressed air?
We could share countless stories but we know you are familiar with the project at Continental Tire in Mt. Vernon, Illinois. This plant manufactures thousands of passenger car and truck tires every day. They operate multiple 900 horsepower air compressors and had annual energy costs related to compressed air totaling $2 million. They turned to Power Supply Industries (PSI), a registered ActOnEnergy Program Ally to survey their system and recommend energy efficiency measures.
Jim Timmersman, from PSI, conducted an in-depth retro-commissioning study with ActOnEnergy covering 80 percent of the survey costs through the RCx incentive. The survey identified significant compressed air leak and piping changes that would allow the air compressors to operate at lower pressures and permit Continental Tire to shut down one 900 horsepower centrifugal air compressor.
In order to help Continental Tire implement the larger-scale (and longer payback) recommendations made by PSI, ActOnEnergy provided more than $236,000 through its Custom Incentive Program. As a result of these energy efficiency measures, Continental Tire is already seeing annual savings of $200,000 per year.
Do small and medium-sized plants use your incentives for compressed air?
You bet. One of our favorite case studies is from Original Smith Printing in Bloomington, Illinois. Like all commercial printing facilities, compressed air is used throughout the plant most notably in their presses and in the bindery department. Lane Company is a Program Ally of ActOnEnergy and they conducted a compressed air leak survey using a ultrasonic leak detector throughout the 119,000 square foot facility. The pre-approved leak survey qualified for a $1,920 incentive from ActOnEnergy covering more than 40 percent of the costs for leak identification and subsequent repair.
Lane Company’s Justin Penn identified 25 compressed air leaks which when fixed reduced air compressor related electricity use by more than 110,000 per year – a saving of $8,700 per year for Original Smith Printing. The ActOnEnergy incentive not only helped give the company the confidence to do the survey but also reduced the project costs from $4,390 to $2,470. That’s a pretty amazing payback!
How do you get the word out-through the Business Symposium?
We have a comprehensive marketing and communications strategy and plan. The Business Symposium is absolutely one of the highlights of our annual plan. As you know (and thank you for speaking!), this year we held them June 3rd and 4th in Collinsville (outside St. Louis) and in East Peoria, Illinois.
The Symposium was once again extremely well attended with over 300 Ameren Illinois business customers attending the workshop sessions and visiting with our Program Allies in the exhibit hall.
We were thrilled that Joe Abernathy, the VP of Stadium Operations for the St. Louis Cardinals, could be our Keynote Speaker. Wasn’t he good?! He is responsible for all day-to-day facility operations and game-day event management activities at Busch Stadium. He manages a staff of 25 full-time and 800 part-time employees and contractors.
Joe has been in charge of Stadium Operations for the Cardinals for 18 seasons with the last 8 being at Busch Stadium III. This 42,500 seat stadium, located in downtown St. Louis, opened in April of 2006. Joe, a Mechanical Engineer by education, has always had a keen interest in operational efficiency and continuous improvement. In 2008, the Cardinals embarked on their Sustainable Operations journey under the “4 a Greener Game” title. Since then, the Busch Stadium Operations Department has reduced solid waste by 30%, energy use by 20%, and water use by 10%.
We also received good feedback on the breakout sessions covering our ActOnEnergy incentives, energy benchmarking, project ideas, variable frequency drives, compressed air solutions, and LED lighting technology. Over-all, we were very pleased with the results.
Thank you for inviting me to Illinois and I think your business customers are thanking you for helping them save energy. We hope more incentive programs follow your lead.
To read more Energy Incentive articles, visit www.airbestpractices.com/energy-incentives.