17 Dec Wisconsin’s Businesses Can Become Environmental Leaders
Studies suggest 1500 Megawatts of Electricity Could Be Saved
The current state of energy policy in the Wisconsin, especially after the California Energy Crisis and the Blackout of 2003, is undergoing a paradigm shift. There was a time when the major power for change in the electricity industry resided with the utilities, the federal government and individual state public service commissions, while the environmental component of each decision made by those parties was either ignored in earlier times, or lately, was debated by the warring factions. On one side was a state’s utility including its business community and on the other side was the state’s Public Service Commission and the various environmental groups.
Expanding on three decades of environmental mitigation by all parties, the next frontier for further environmental improvements is to be found with the individual end users, especially the business community who are the largest of those energy users. Wisconsin businesses – rightly or wrongly- have been branded as the state’s worst polluters, but they now have an opportunity to seize the environmental initiative by reducing significant amounts of electrical consumption (three 500-megawatt power plants) and reducing significant amounts of air pollution at the same time.
In particular, emerging energy efficiency technologies offer the business community a cost-effective opportunity to harvest civic recognition and environmental public relations. Some states, including California, New Hampshire, New Jersey and Wisconsin are currently running or designing a registry that creates a voluntary program for businesses to register all emission reductions including those provided by documented energy efficiency strategies. It is E4’s mission to highlight the benefits of its member’s energy efficient activities.
In Wisconsin’s case, the stated purpose of the Voluntary Emission Reduction Registry (VERR) is “to ensure, to the greatest extent possible, that efforts undertaken voluntarily by persons in Wisconsin to reduce or avoid emissions of GHG [greenhouse gas] or air contaminants or to sequester carbon are publicly recognized (bold and italics mine) and that these reductions are considered under future mandatory federal or state emission reduction programs.” In addition to gaining the recognition they deserve, businesses will be able to derive economic value from their emission reductions if an emission reduction marketplace emerges where emission credits are bought and sold. In fact, the Chicago Climate Exchange has already been created to handle just such trades.
There is one over-riding reason why Wisconsin’s business community could have such a large effect on emissions and the environment: They use approximately 70% of all electricity produced. In practical terms, this means that they can employ large-scale energy efficiencies that would have the same effect as reducing the entire energy consumption of whole towns and cities.
What E4 is proposing is that the old “command and control” methodology used by governments and the utilities can be superceded by a marketplace created by energy efficiency providers and individual businesses: The ultimate goal of this new economic model is to reduce enough energy costs to justify the purchase of the energy efficient products or services. This means that a three- year payback, or a return on investment of 33 1/3 % per year, is a basic minimum to prompt a business to use their valuable cash on energy efficiency versus other competing investment opportunities. In most cases, a business needs a return on investment of 50% to ensure that energy efficient projects get done.
According to a recent study done by the Energy Information Administration entitled Annual Energy Outlook 2002, “Commercial lighting is the industrial sector’s most important energy application.” This is especially true when one considers that lighting on average accounts for 35% of business electricity bills. Other potential areas for improved energy efficiency and emission reductions are space heating, space cooling, refrigeration, compressor sequencing, water heating, and motion and ambient lighting sensors to name a few.
Once done, the most important environmental and economic development benefits to this Wisconsin approach are as follows: (1) It is entirely voluntary; (2) It is by definition economically justifiable; (3) The decision makers are the ones who write the checks; (4) It would take hundreds of megawatts off the grid; (5) It would have an over-sized impact on the environment by reducing the pollution created by out-dated or even newly built power plants; (6) It could be employed tomorrow without legal or political intervention; (7) By using energy efficient strategies, each Wisconsin company who adopts it can be identified as good corporate citizens with the appropriate positive PR associated with it; (8) It would create a context and an atmosphere where all parties (including taxpayers, voters, politicians, environmentalists, business people, regulators, and utilities) could agree on the societal benefits of reduced energy consumption in Wisconsin.
With the help of E4 and its members, Wisconsin can document and honor the members of their business community who use good environmental practices; and, through practical acts of energy efficiency, the business community and E4’s members can receive the well-deserved respect that goes with economic development, good corporate citizenship and environmental stewardship.
Stephen Heins, “the word merchant,” is Vice President of Corporate Communication at Orion Energy Systems. He is also a founder of E4-—Energy, efficiency, environment and economy—A Pro-Business & the Environment Organization which will launch its website in January 2004. He can be contacted at firstname.lastname@example.org.
The opinions expressed herein or statements made in the above column are solely those of the author, & do not necessarily reflect the views of Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.