1. Partnering with Manufacturers
LPEA is a distribution cooperative in SW Colorado
We have about 40,000 customers – of which 33,000 are residential accounts.
Mark Schwantes
La Plata Electric Association
August 15th, 2008

2. La Plata Electric Association
Provide Electric Service
Safe
Reliable
Affordable
Our electric cooperative, La Plata Electric Association is in business to provide electric service to our members.
Electric Service that is:
Safe
Reliable
Affordable
One way to accomplish this is to utilize concepts of LOAD MANAGEMENT

3. Load Management Encourage Better Utilization of Electricity
Not Discourage Further Use of Electricity
Provide Options to Members
Change Electrical Demand
Control Electrical Demand
Many people wonder why electric utilities should even have an energy use or conservation program. They are here to sell electricity. Right? Therefore, it makes sense to assume that the more kWh you sell, the better you will do.
That line of reasoning is not necessarily correct.
Load Management Programs must offer members opportunities to use electricity more efficiently. Be careful not to discourage future use of electricity, which would in turn raise costs and afford less value to members.
And, of course, it is important to not underestimate the importance of offering options.
Load Management can be defined as changing (shifting) or controlling electrical demand in ways that are beneficial to the coop and members.
Load Management, often called demand side management:
Can be used to reduce load
Can be used to build load
Can allow a more efficient use of the load

4. Load Shapes and Demand Side Alternatives
Peak Clipping
Reduction of Load During Peak Periods
Peak Clipping, or reduction of load during peak periods, is generally achieved by directly controlling customer’s appliances.
This can be used to reduce capacity requirements operating costs, and dependence on critical fuels.
This has been accomplished by installing timers or load controller on to base board electric heaters.

5. Load Shapes and Demand Side Alternatives
Valley Filling
Building Load During Off Peak Periods
Building load during off-peak periods, is particularly desirable when the long run incremental cost is less than the average price of electricity.
Adding properly priced off-peak load under those circumstances can decrease the average price.
An example of this is LPEA’s Watt Watcher/Time of Use Program tied to Steffes ETS and Marathon water heaters.

6. Load Shapes and Demand Side Alternatives
Load Shifting
Shifting Load from On Peak to Off Peak
Load shifting accomplishes many of the goals of peak clipping and valley filling.
This involves shifting load from on-peak to off-peek periods, allowing the most efficient use of capacity.
Converting base board to Steffes ETS room units and,
Putting a timer on a Marathon water heater
Are two ways to do this.

7. Load Shapes and Demand Side Alternatives
Strategic Conservation
Reduction of Sales
Strategic Conservation involves a reduction in sales, often a change in the pattern of use.
Utility planning personnel must consider what conservation actions would occur naturally and then evaluate the cost-effectiveness of utility programs intended to accelerate or stimulate conservation actions.
Compact Fluorescent Bulbs, Ground Source Heat Pumps, Changing the Thermostat setting, Re-insulation of building envelope. All these will help with this Load Management strategy.

8. Load Shapes and Demand Side Alternatives
Strategic Load Growth
Targeted Increase in Sales
A targeted increase in sales, may involve increased market share of loads that are or can be served by competing fuels, as well as development of new markets.

9. Why Have a Program? Better Utilization of Natural Resources
Reduced Energy Costs
Cleaner Environment
Defer Capital Expenditures
Members Appreciate Options
The reasons to have a strategic load management program are many.
It allows for better Utilization of Natural Resources
Helps Reduce Energy Costs For Coop Members
Promotes a Clean Environment
Defers Capital Expenditures for the Utility
Members appreciate options from their Local Cooperative

10. LPEA Programs Time of Use (WattWatcher) Rates Steffes ETS Heaters
Marathon Water Heaters
Load Shifting Valley Filling
Again these three programs, when successfully implemented, will have positive impacts to:
Load shifting and
Valley Filling

11. Steffes ETS & Marathon Water Heater Programs
Off-Peak Electricity Usage
Affordable Electric Heat
Rebate Incentives
Reduction of Operating Costs
Financing Available
Our goal for these programs are to:
Move Energy Usage to Off-Peak for Heating
We did this by:
Providing Affordable Electric Heat Option
Offering Rebate Incentives
Reducing Operating Costs For Our Members
Making Financing Available (6%)
Provides an effective means for LPEA to reduce power costs, allowing us to offer the consumer a reduced rate.
Provides consumers with a low cost, safe, comfortable and reliable space and water heating option.

12. LPEA Time of Use Program
Summer Season
Off Peak Monday – Friday 10:00 pm to 10:00 am
Saturday and Sunday all day
On Peak Monday – Friday 10:00 am to 10:00 pm
Winter Season
Off Peak Everyday 11:00 am to 5:00 pm
10:00 pm to 6:00 am
On Peak Everyday 6:00 am to 11:00 am
5:00 pm to 10:00 pm
What are the time of use hours?
Summer Season - May 15th through September 14th .
Winter Season – September 15th through May 14th.
“Just mention the off peak times”

13. LPEA Time of Use Program
Watt Watcher / Time of Use
Off Peak $0.042 / kWh
On Peak $0.146 / kWh
Monthly Service Charge $14.00
Standard Residential
Rate $0.101/kWh
Monthly Service Charge $12.75
2008 Rates

14. LPEA Time of Use Program
Watt Watcher TOU
4,225 Signed Up
Average Savings ~ $210
There are 4,225 signed up, or about 12.5% of our residential customers. As this graph clearly shows, we are steadily increasing this percentage.
The average yearly savings over the regular residential rate is about $213 (This is about $900,000 for the whole group)

15. Steffes ETS Program Program Started in 1990
Compliments WattWatcher TOU Rate
Through 2007
2,140 Units Sold
~ 1,500 Homes
15,300 kW of Controlled Load
5 year manufacturers warranty, 1 year labor warranty through Coop
Now for some specifics regarding our Steffes ETS Program:5
Our program was started up back in It works very well with our TOU rate. Through 2007 we sold 2,140 heaters. 1,450 homes are heated with a Steffes unit. We have more than 15.3 MW of controlled load on our system.

16. This graph shows the annual operating costs for a 1,800 square foot home. The bars show the annual heating costs for “off – peak” electric / natural gas and propane.
There are three sets of data here. The one on the left is a home with low insulation. The middle has good insulation and the bars on the right set are for a home with excellent insulation.
Since most of members are choosing ETS over traditional electric and propane we see here on the right that the cost is ~ $861 for off peak electric. For comparison, the cost for heating with propane would be $1,710 at $2.00 per gallon. I am not sure what propane is in other parts of the country, but in our service territory, it is now over $2.00 per gallon.
The members are annually saving from hundreds to thousands of dollars over the other options per site.

17. Steffes ETS Rebates Offered
New installation or conversion from another energy source
TSGT $16 / kW
LPEA $24 / kW
All controlled usage - WattWatcher Rate
We mentioned “rebates” earlier.
LPEA purchases our power from Tri-State Generation and Transmission Association headquartered in the Denver area. Tri-State has an Energy Efficiency Credit Program that LPEA participates in.
This slide shows the amount of rebate paid to our members (broken down in to Tri State and LPEA’s portion) for ETS heaters.
Rebates Offered:
New or Conversion from another source
TSGT $16 / kW
LPEA $24 / kW
ETS Replacing baseboard
LPEA $4 / kW
Resistive Heat
TSGT $6 / kW
LPEA $4 / kW
All controlled usage - WattWatcher Rate

18. Steffes ETS Program Rebates Distributed: Year LPEA TSGT 1999 $ 8,000
$ 8,000
$ 7,000
2000
$ 6,000
2001
$ 16,000
$ 12,000
2002
$ 16,500
$ 15,000
2003
$ 34,000
$ 17,000
2004
$ 40,500
$ 18,500
2005
$ 76,000
$ 35,000
2006
$ 95,500
$ 47,000
2007
$ 85,100
$ 47,100
This shows the credits paid out for the past nine years.
As you can see, we are approaching $100,000 annually from LPEA alone.

19. Marathon Water Heater Program
Program Started in 2003
Compliments WattWatcher TOU Rate
Through 2007
620 Units Sold
Lifetime tank warranty against leakage, 5 year parts warranty, 1 year labor warranty through Coop
Since water heating generally accounts for 15-25% of residential load, LPEA decided to start offering a water heater program in 1998.
In 2003 we started marketing and selling the Marathon line of products. This was a wonderful compliment to our Steffes heaters.
620 units were sold through 2007 through LPEA to our members.

21. Marathon Water Heater Rebates Offered
New or Conversion from another source
TSGT $100
LPEA $200
$25 rebate for timing devices
Rebates are given for all brands of electric water heaters. If our member purchases a Marathon – the rebate is more.
More information is available over at our table and the Marathon display.

22. Marathon Water Heater Rebates Distributed: Year LPEA TSGT 1999 $ 5,200
$ 5,200
$ 2,500
2000
$ 3,100
$ 1,500
2001
$ 1,900
2002
$ 9,900
$ 4,000
2003
$12,400
$ 5,800
2004
$18,700
$ 9,700
2005
$20,600
$11,900
2006
$31,200
$17,500
2007
$28,525
$15,700
This table breakdown for rebates distributed by LPEA and Tri-State since conception.
This shows a steady growth in participation throughout the years.

23. Energy Cost Comparison
Off-Peak Rate $.042 / kWh
Energy
Cost Comparison
This table shows where the cost of propane would need to come in to compared with our electric off peak rate of $0.042 per kWh.
Many propane furnaces are more efficient than 80 %, but the cost comparison of 4 cent electric versus propane is still very attractive.

24. Building Trade Homebuilders Associations
Parade of Homes – Highlight Steffes ETS and Marathon Water Heaters
Building business and other alliances has been very important in making our programs successful. Although there may still be some general concerns regarding the operating costs of an all electric home, we have made great strides in changing the accepted notion that it will cost too much.
Locally we have done this by being very involved with the home builder’s associations in the area. Over the years we have developed a wonderful relationship with the contractors and electricians and provided training and seminars. We now have them promoting, and communicating, the benefits of both the Steffes and Marathon heaters.
One measure of our success, and the strong relationship we have built with the local home builders, is demonstrated by the fact that for the past three years we have had a different home (built by a different contractor) showcased in our annual Parade of Homes events.

25. Membership Customer service and education is key
Become our best proponents
12 month guarantee
As we get more systems installed and more members utilizing out off peak / time of use rate option we get more buy in.
One important thing we did at the very beginning was to guarantee that our members would not pay more than the standard residential rate for the first 12 months. We calculate the bill for both rates and charge the less amount.
This gives our member a chance to see if the program works for them. They like that! The learn to shift to cheaper times of the day.

26. Board and Employees Board approval and support is key
Employees committed to program
Initial and continued support from our board and employees has been key to our success.
We continue to work hard in this area. It is very important.

27. What does this mean? Use Least Cost Energy Source Watt Watcher Rate
Combined with:
Steffes ETS Heaters
Controlled Marathon Water Heaters
Choices of When to Use Electricity
So… What does this all mean to LPEA?
It is our responsibility to offer our customer options and educated advice in all of their energy needs.
We have found that this provides us with an opportunity to communicate with our members. We recently sent out a survey regarding time of use and the feedback has been incredible. I mentioned that over 12% of our residential customers are on time of use. These same 12 % are very supportive of the cooperative and our programs and offerings.
Sometimes the least cost solution to heat their home or water is with electric. Quite often this is not the case. In fact, we don’t market much in traditional “natural gas” areas.
For our members, there is certainly no debate when the options are off peak electric or propane. We are about half the cost.

28. What does this mean? From TOU Participation 2008.xls Year 2008 4182
The passed on savings to our members in their electric bill, versus what it would have been under our regular residential rate (or propane) is:
~ 18% or $550,000 for the twelve months between Mar 2004 and Mar (we are working on updating this information)

29. What does this mean? Use Least Cost Energy Source
Watt Watcher/TOU Rate
Annual Member Savings (2005)
15 % or $600,000
Annual Member Savings (2006)
17% or $700,000
Annual Member Savings (2007)
19% or $900,000
From information brought out of the billing system we know that the passed on savings to the members in their electric bill, versus what it would have been under the regular residential rate (or propane) is:
15% or $613,000 in 2005
15% or $732,000 in 2006
19% or $890,000 in 2007
This is about same amount if the other option is propane .
From TOU Participation 2008.xls

30. What does this mean (2007)? Watt Watcher Rate
Use Least Cost Energy Source
Watt Watcher Rate
~ 2.9 MW ETS Sold in 2007
$70,000 in Additional Margin
Power Bill Reduction of $270,000
LPEA Passes Savings on to the Members
Savings over Propane more than $270,000
As we showed earlier, the members are saving money on time of use - what about the cooperative – let’s look at just one year of ETS sales…
The Coop sold over 2,900 kW of ETS, controlled heating systems to members in 2007
Because of the G&T rate structure and because these are controlled, the coop saved $270,000 on the power bill. We pass on these savings to members in the Watt Watcher rate.
Coincidentally, our members also save about $270,000 on their space heating bills compared to propane. Include a controlled Marathon water heater and the savings are even more.
(And… they continue to see similar benefits each year from here on out)
Calculations: (Based on 2008 Rates)
Additional Margin
2,900 kW x $24 margin/kW = $69,600
Power Bill Reduction
2,900 kW x Tri State $ x ¾ On Peak x 6 heating months = $268,000
Propane is more than twice the cost of the Off Peak Rate.

31. What does this mean? Annual Propane Versus ETS Heating
This chart is another way of looking at the economics for the members who installed more than 2.9 MWatts of ETS in 2007:
Their propane bill would have been ~ $540,000 if they had not gone with ETS (each year) – This is shown on the bar on the left.
Their electric bill will be ~ $270,000 (of that the coop earns ~$70,000 in additional margin)
The coop has $270,000 less expense from G&T because the load is controlled… these savings are passed on to the WattWatcher members.

32. What does this mean? Use Least Cost Energy Source Watt Watcher Rate
G&T wins
Coop wins
Members win
As we have been able to demonstrate…
G &T is able to sell electricity during low demand periods
G &T is able to increase their load factor – good for generation (base load plants run more efficiently) good for transmission system
G &T can defer system improvements / additions in transmission and generation
The distribution coop has a lower average cost of power
Coop can defer system improvements / additions to transmission, substation and distribution system
Coop lowers losses and therefore the amount of energy we purchase
Members save on their total combined energy bill

37. Now let’s jump forward to 2004 and look at the past few years….

41. At the beginning, we talked about load management strategies and look at load curves. Here is a “real” load curve example for LPEA.
Projected peak demand (light blue line) versus the actual demand (dark blue line) for January of There is about 8 M Watts difference.
Today, that is worth ~ $18 / kW, or $144,000 per month off of our purchased power bill.
Next year “2008” estimated to be $20 / kW, or $160,000 per month !

42. At the beginning, we talked about load management strategies and look at load curves. Here is a “real” load curve example for LPEA.
Projected peak demand (light blue line) versus the actual demand (dark blue line) for January of There is about 8 M Watts difference.
Today, that is worth ~ $18 / kW, or $144,000 per month off of our purchased power bill.
Next year “2008” estimated to be $20 / kW, or $160,000 per month !

43. At the beginning, we talked about load management strategies and look at load curves. Here is a “real” load curve example for LPEA.
Projected peak demand (light blue line) versus the actual demand (dark blue line) for January of There is about 8 M Watts difference.
Today, that is worth ~ $18 / kW, or $144,000 per month off of our purchased power bill.
Next year “2008” estimated to be $20 / kW, or $160,000 per month !

44. At the beginning, we talked about load management strategies and look at load curves. Here is a “real” load curve example for LPEA.
Projected peak demand (light blue line) versus the actual demand (dark blue line) for January of There is about 8 M Watts difference.
Today, that is worth ~ $18 / kW, or $144,000 per month off of our purchased power bill.
Next year “2008” estimated to be $20 / kW, or $160,000 per month !

45. Conclusion
Energy Efficiency tied with Steffes ETS and Marathon Water Heaters
Reduces peak power costs
Defers new plant construction
Steadies electricity pricing
Secures our energy future
In conclusion again…
These programs:
Promise reduced peak power costs
Allow for deferral of new plant construction
Result in steadier electricity pricing and a more secure energy future

46. Questions?