Fort Collins Utilities: A Municipal Utility Leading Innovation
 Utility Energy Efficiency Programs in Colorado

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Fort Collins Utilities: A Municipal Utility Leading Innovation
Maureen Quaid, The Cadmus Group, Inc.1 John Phelan, Fort Collins Utilities

Fort Collins Utilities (FCU) has proven itself a clean energy role model and bellwether among public utilities over the last decade, demonstrating that a small community-based utility can implement comprehensive energy efficiency programs that generate significant economic and environmental benefits. FCU has a history of innovative planning, creative partnering and effective execution, and recent initiatives put FCU at the leading edge of policy implementation. In 2012, FCU began a collaboration with the Rocky Mountain Institute (RMI), leading to the development of a pilot business model that will offer opt-out efficiency and renewable energy choices at scale within the City. The pilot is scheduled to roll out in early 2015. Other recent initiatives include advanced metering, performance-based incentives for new construction and deep retrofits, a solar feed-in-tariff, integration of marketing segmentation and targeting tools, and the FortZED initiative, a smart energy test bed that aims to dramatically scale participation and results within the City. FCU provides efficiency solutions for nearly every facet of energy and water use across all customer classes, and has built a strong portfolio of efficiency programs, resulting in net utility savings from 2002-2013 of more than 101,000 MWh per year. Its 2013 annual savings represented 2.2 percent of its retail electric sales on a gross customer basis, or 1.9 percent on a net utility basis, achieved at an average cost of 2.0 cents per kWh. MORE: Download the complete article >>

Utility Energy Efficiency Programs in Colorado


  • House Bill 1037, passed by the Colorado legislature in 2007, directed the Public Utilities Commission (PUC) to establish energy savings goals for investor-owned electric and gas utilities. The bill also directed the PUC to provide utilities with the opportunity to earn a profit from implementing cost-effective energy efficiency programs for their customers. The PUC established rules for electric and natural gas utilities’ efficiency programs in 2008. 
  • The PUC established energy savings goals and performance-based incentives for Xcel Energy in 2008 and for Black Hills Energy (BHE) in 2009. Xcel Energy serves about 1.4 million customers and BHE serves about 100,000 customers. 

  • These actions led to greatly expanded utility energy efficiency and other demand-side management (DSM) programs implemented by Xcel Energy and BHE. The programs help households and businesses reduce their energy use and utility bills through education about energy savings opportunities; rebates on energy-efficient products and equipment; technical assistance; and free installation of efficiency measures in low-income households. 

  • In 2011 the Colorado PUC increased the energy savings goals for Xcel Energy by about 30% for the period 2012-2020. In 2014, the annual savings goals for Xcel Energy were revised a second time; between 2015 and 2020 Xcel Energy’s annual goal is saving 400 GWh per year. The PUC also modified the shareholder incentive that Xcel Energy can earn based on the performance of its energy efficiency programs. 

  • There are no energy efficiency program requirements for municipal utilities or rural electric cooperatives in Colorado, which are self-governed and not subject to PUC regulation. A few municipal utilities and rural cooperatives (notably Fort Collins Utilities, Colorado Springs Utilities and Holy Cross Energy) have established comprehensive energy efficiency programs on their own, but most offer limited or in some case no efficiency programs. 

Impacts of Efficiency Programs 
  • The table below shows the key performance indicators for the energy efficiency and other DSM programs implemented by Xcel Energy and BHE during 2009-2014. In total, the two utilities spent $414 million on energy efficiency and load management programs, while households and businesses will save about $1.1 billion net as a result of this investment. 

  • In response to Xcel’s and BHE’s energy efficiency programs and the efficiency measures installed during 2009-2014, households and businesses reduced their electricity use in 2014 by nearly 2.1 billion kWh, equivalent to the electricity use of 264,000 typical households served by these utilities. Xcel Energy exceeded the energy savings goals set by the PUC every year during 2009-2014 and underspent its approved DSM budget all years except 2012. 

  • The electric efficiency programs of Xcel Energy and BHE have been very cost effective, with an overall benefit-to-cost ratio of more than two-to-one. Customers will save nearly $3 on their utility bills for every $1 invested by the utilities in energy efficiency programs. 

  • In addition to recovering program costs, Xcel Energy was awarded $97 million in incentives based on the level of energy savings achieved and the cost effectiveness of its energy efficiency programs in 2009-2014. About 91% of the net benefits of energy-saving programs were retained by customers with about 9% awarded to the utility. 

  • Utility energy efficiency programs increase employment through the production, sales and installation of energy-efficient products and services. Energy efficiency improvements to buildings support more than 40,000 jobs in Colorado according to a new report by Environmental Entrepreneurs using U.S. Department of Labor and U.S. Department of Energy data. Jobs are also gained when households and businesses use utility bill savings to buy other goods and services in the local economy. Colorado Job Report 2016 | Energy Efficiency Jobs in America 2016
  • Xcel Energy avoided 1.46 million tons of carbon dioxide emissions between 2009 and 2014 due to energy efficiency programs, assuming that half of the energy savings reduces operation of coal-fired power plants and half reduces operation of gas-fired power plants. The reduction in emissions is equivalent to taking 299,000 cars off the road. 

Impacts of Electric Utility Energy Efficiency (DSM) Programs, 2009-2014* 

UTILITY 2009 2010 2011  2012 2013  2014  TOTAL 
 XCEL DSM SPENDING (M $) 43.9 54.7 63.8  79.4 75.3  77.0  3,941
 XCEL DSM SPENDING (M $) 1.4 2.5 3.2 3.5 4.5  5.1  20.2
 XCEL ELECTRICITY SAVINGS (GWH/YR) 220 252 312 401 384  392  1,961
 BHE — ELECTRICITY SAVINGS (GWH/YR)  5 17 19 20 21  18  100
 XCEL NET ECONOMIC BENEFITS (M $)  206  210  178 170 160 123   1,047
 BHE — ECONOMIC BENEFITS (M $)  2  4  10  8  36
 XCEL — BENEFIT-COST RATIO  4.1  3.3  2.8 2.4   2.3 1.9   —
 BHE — BENEFIT-COST RATIO   2.3 1.6   1.8 1.8   2.3 2.0   —
 TOTAL  166.2  806  207.9  >3  644    

Xcel Energy avoided 1.46 million tons of carbon dioxide emissions between 2009 and 2014 due to energy efficiency programs

SOURCE OF DATA: Utility data are from annual Demand-Side Management reports submitted by the utilities to the Colorado Public Utilities Commission. Electricity savings are at the generator level. 

Report courtesy of the Southwest Energy Efficiency Project.

*2012 EEBC State of the State Report

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