led bulb

The Bigger Picture Behind One Utility’s LED Lightbulb Giveaway

I can’t wait to get my free LED lightbulbs.

Any day now, I’m expecting to open my mailbox and receive two LEDs, courtesy of my electric utility, Alameda Municipal Power.

What sounds like a cool but mundane program is, on further inspection, something of a groundbreaking effort that hints at the power of clean energy in northern California and its future in the state.

To get to the bottom of the impact of this program, you’ve got to start with California’s Renewable Portfolio Standard (RPS), which currently requires 33 percent of the state’s electricity sales to come from renewable energy sources by 2020. Last month, Governor Jerry Brown began the process to raise the bar to 50 percent renewable energy by 2030.

Across the state, utilities approached the clean energy requirement with varying degrees of enthusiasm and effectiveness. Alameda Municipal Power, serving this San Francisco Bay city of 76,000 people, took the call to green to heart.

ampower giveaway“We were one of the first utilities to go green; we did it decades ago,” explained AMP spokesperson Rebecca Irwin. “We had a strong portfolio, and that’s what the folks in Alameda wanted.” As of about 2011, Irwin said the utility’s power sources are 98 percent carbon-free: 68 percent renewable energy and 30 percent large hydropower (which California’s Public Utilities Commission doesn’t count as renewable).

Being so far in front of the requirements gave AMP the luxury to share some of its surplus green power with agencies that hadn’t yet caught up to the RPS requirements. So AMP began the process of selling some of its renewable energy credits (RECs) to the California Department of Water and Power.

Then came the question of what to do with the proceeds from the sale? Because the revenue came from renewable energy sales, the PUC insisted that the money be used for ongoing emissions reductions within Alameda, not to lower customers’ rates temporarily.

“The PUC board was clear: we can’t reduce rates with this,” Irwin said, “and we wanted to give back to the customers…. Our hope was to do projects that would help renters. We wanted to find something that would be good for them.”

Enter the LEDs.

In Alameda, Irwin said, peak loads start at 5pm in December, reaching a crescendo at 7pm and requiring AMP to purchase surplus power on the open market, when rates are the highest.

“Our calculations showed that if we could get 30,000 households to install LEDs, it would really bring down our load” as well as lower their customers’ bills, Irwin said. “It helps everyone; us and you as the ratepayer.”

LEDs on the rise

As near as I can tell, AMP’s program is a first in a couple of notable ways. While other utilities are working to reduce the energy demand from their customers, that seems to mostly take the form of rebates offered through retailers like Home Depot or Lowe’s, or occasionally through on-site giveaways. In August 2014, Anaheim Public Utilities gave away LEDs through the library, and AMP itself offered an LED Christmas light trade-in in December 2013. But mailing LEDs is a rare if not unique program.

“We have done projects like this for other utilities; in years past it was compact fluorescent lights (CFLs) going in the mail,” said Rachel Barker, general manager at Service Concepts, the Indiana-based company that helped AMP distribute the LEDs. CFLs, which contain a tiny but not-insignificant amount of mercury, pose particular hazards for shipping and disposal, were still the bulb of choice for energy-efficiency due to high LED prices. But with recent major price drops for LED bulbs, everyone from shoppers to utilities is taking a second look at them.

“Now that LED prices have gone down, I do think you’ll see more utilities do this,” Barker said, “although they may not be doing it in the same way. The West Coast is more trendsetting — they’re kind of the first [to take this on].”

In addition to pioneering the LED mail-out campaign, AMP also seems to be the first utility to use sales of RECs to fund emissions-reducing programs within its service area. When I contacted the California Energy Commission, analysts there said the group doesn’t track that information, but even anecdotal evidence for a similar program doesn’t exist.

AMP’s LED program is just the first of three funded through its REC sales.

The utility is also working with city officials to switch the streetlights across town to LED bulbs, starting with the modern lamps and eventually replacing the city’s historic streetlights. And starting last month, AMP is working with small and mid-sized businesses to conduct lighting retrofits, and has trained electricians that the utility can recommend to do the work well.

Lighting retrofits for businesses work just like the LED giveaway to residents, but with bigger impact: Business owners save money on their energy bill, and the utility sees a reduction in energy demand from its commercial customers.

“For business owners, the rebates will cover 80 to 90 percent of costs, and they get the savings,” Irwin said. “RPS funds [from selling AMP’s green energy] go to cover the costs of the retrofits.”

The future of green energy sales?

Alameda Municipal Power has been selling excess clean energy since 2013, and sales have been approved by the utility to continue through 2016, so the funds for these projects will continue to come in. And depending on the state of the carbon market in California and the returns AMP can get for selling more RECs, the utility may continue even further: AMP has approval to continue selling RECs through 2019, Irwin said, although it will depend on if it makes business sense to continue the sales.

While results from each of these programs will be some time in coming, Irwin said that responses from its customers to early mailings of LEDs are quite positive. Customer support plus a positive market for RECs will ensure that AMP will continue the program in the coming years.

After a bit of hesitation at first, Irwin said that within AMP strong support has developed for these green projects. “At first there was a lot of concern that we couldn’t say we’re as green as we were for a few years,” Irwin said, “but what better way to prove you’re green than by reducing emissions?”

LED photo CC-licensed by Alan Alfaro on Flickr.

Matthew Wheeland
Author: Matthew Wheeland

Matthew Wheeland is the editor of SolarEnergy.net. He has been an environmental journalist for nearly 15 years, covering everything from farming to green chemistry to corporate sustainability. Follow him on Twitter @MattWheeland.

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