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Coronavirus-Related Restrictions Affecting Energy Efficiency Efforts

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Peter Key's picture
Freelance Writer, Editor, Consultant, Self-employed

I've been a business journalist since 1985 when I received an MBA from Penn State. I covered energy, technology, and venture capital for The Philadelphia Business Journal from 1998 through 2013....

  • Member since 2015
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  • Mar 26, 2020

The restrictions being put in place to control the novel coronavirus are having an effect on energy efficiency efforts by electric utilities and others.

With many areas requiring residents to work from home unless their job is considered critical, much energy efficiency work that needs to be performed in person, ranging from energy audits to construction projects, is being postponed or cancelled. For example, Southern California Edison has suspended all energy audits and instead is promoting its online energy tool for residential customers.

SCE also is trying to help its customers who are working at home keep their energy bills down in other ways, such as by posting a story called “Your Guide to Teleworking and Energy Efficiency” on its Energized news site. The story offered four easy-to-follow tips for people whose residences are now their offices, the simplest of which involves opening curtains in the daytime so they don’t have to turn on their electric lights as much.

Additionally, SCE recently launched the Southern California Edison Marketplace, where its customers can check out the latest in energy efficient products ranging from light bulbs to washers and dryers, get details on the products, including how their cost compares to the cost of other similar products, and be directed to web sites where they can buy them.

Other utilities are taking similar steps. Last week, San Diego Gas & Electric posted a story on its website on how people working at home can save energy and Northwestern Energy issued a press release on its preparations for dealing with the large number of people staying home to prevent the spread of the coronavirus that ended with a list of energy saving tips.

Although, depending on where they’re located, utilities are limited in what they can do on their customers’ premises, they still have an interest in making sure their customers conserve energy. Since utilities can’t shut off people’s power, they need more than ever to work with their residential customers who can’t afford to pay their bills to make sure those customers are using energy as efficiently as possible because the utilities are now bearing the cost of any electricity those customers waste.

The economic aid package agreed upon by the White House and Senate leadership may also give utilities a reason to ratchet up energy efficiency programs for their poorest customers.

Tom Hulsebosch, who heads West Monroe Partners’ Energy & Utilities practice, said a preliminary version of the package he saw contained funding for states to put into programs to help low-income utility customers pay their bills. One such program, the Low-Income Home Energy Assistance Program, or LIHEAP, works with the Weatherization Assistance Program, or WAP, which promotes energy savings by installing energy conservation and efficiency measures in low-income housing stock.

Utilities aren’t likely to be sending people out to customers’ homes to conduct energy audits or seal cracks around their customers’ doors and windows until the coronavirus-related restrictions are lifted. But if they enroll more customers in energy efficiency programs while the restrictions are in place, that could result in more work for energy efficiency contractors after they’re lifted, Hulsebosch said.

So far, how energy efficiency contractors are being affected by coronavirus-related restrictions depends on a wide range of factors including their location and size, the type of work they do and the types of customers they serve.

“The message I’m getting is inconsistent,” said Tim Unruh, the executive director of the National Association of Energy Service Companies. “I’ve not seen any consistent reaction across members I’ve spoken to.”

NAESCO has roughly 100 members, including companies that sell services and products to energy service companies. They range in size from a couple dozen employees to 10,000 employees and are located throughout the country. As a result, Unruh said, each faces a unique set of circumstances, and even though some of their projects are shut down, others are proceeding apace.

In some cases, that's because the companies are in places that have yet to impose major restrictions on movement. In others, that's because even though the companies are in such places, they're working on projects that are considered crticial. Also, no matter where the companies are located, some of their work, from consulting with customers to pricing equipment, doesn’t require in-person contact.

Of course, the more widespread that coronavirus-related restrictions become and the longer they stay in place, the more economic pain that causes businesses in all industries. Small businesses that don’t have the resources of their larger counterparts to weather economic storms may face more difficulties than their larger counterparts, regardless of what industry they’re in.

One plus for NAESCO members is that their customers are typically public institutions, such as governments, hospitals and colleges, that finance their projects through energy savings performance contracts. In those, the monetary savings that result from the energy savings produced by the projects goes to paying off the loans on the projects. That means that even though economic downturns like the one the coronavirus is producing can cause their customers to scale back projects, the customers can still do the projects if the projects can be solely financed by the money they save. Additionally, those customers have survived economic downturns before and think long-term as a result.

“I think for the industry we may see some delays in schedule, but there’s still strong interest in seeing projects go forward,” said Judith Judson, the vice president of distributed energy systems for Ameresco, a publicly traded energy services company.

Ameresco does some work with utilities, which, like public institutions, think long term, and so are continuing to move projects forward, even if they have to delay construction on them.

“I think the focus on having clean and efficient energy continues to be there,” Judson said.

Energy efficiency “has become a highly valued distributed energy resource” for utilities, said Michael Mernick, a senior vice president at consulting firm ICF. “While there may be some short-term demand planning impacts, EE will continue to be a highly valued resource for utilities to call upon.”

It's also a highly valued economic resource, according to its proponents, who gained some evidence for their claim on March 23 when the National Association of State Energy Officials and the Energy Futures Initiative released the 2020 U.S. Energy and Employment Report. According to it, 2.38 million people in the country are involved in the design, installation, and manufacture of products and services related to energy efficiency and their employers added 54,000 jobs last year.



Matt Chester's picture
Matt Chester on Mar 25, 2020

Great overview of the situation-- thanks for keeping the community informed, Peter!

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