Although utility prepayment programs are not yet a major market in the United States, which lags behind many other countries that have offered such schemes for decades, Navigant Research has forecast that the North American electric prepaid metering market will grow rapidly over the next several years, expanding at a robust compound annual rate of about 23% from 2013 to 2018.

The Salt River Project (SRP) in Phoenix, Arizona, a prominent trailblazer of prepay, has operated prepaid electric services under the M-Power brand for 20 years. Today, about 126,800 residents are enrolled in SRP’s prepay plan, more than 12% of the residences that it serves.  M-Power customers have consistently demonstrated a high level of customer satisfaction in surveys by the utility, but most noteworthy has been their overall reduction in electricity use: around 12%.  Despite SRP’s results and similar finding by other utilities, establishing a reliable and statistically proven link between prepay and energy usage is still difficult.  However, a recent study led by consulting firm DEFG shows a strong positive correlation between prepayment of energy bills and conservation behavior.

Impressive Savings

Using consumer data from Oklahoma Electric Cooperative (OEC), which launched prepay services in 2006, to compare post-pay and pre-pay customers, the study concludes that participants in prepaid plans on the average reduce their energy usage by 11% (about 1,690 kilowatt-hours per year for an OEC customer) ‑ very similar to SRP’s findings. Compared to other energy efficiency measures ‑ and considering the relatively low cost of implementation, from a utility standpoint, and the ease of adoption for customers (there’s no need to purchase a special energy efficiency device, for instance) – this is an impressive figure.  Since the average monthly bill for OEC’s customers is $146, an 11% energy saving translates into a $192-per-year reduction on the customer’s utility bill.

The energy use reductions can be attributed to several factors, including increased awareness of when and how electricity is consumed.  The study also demonstrates that regular (even daily) communication from the utility to the customer that provides actionable information (usage tied to dollars and cents) changes consumption behavior.

This data provides strong evidence that electric prepayment is a winning proposition for both utilities and consumers, and it should convince more utilities to offer prepay options.  What’s more, according to a recent national survey of 1,000 individuals, 38% said that they were interested in prepaid electric services.  This shift is long overdue.

Having moved the clocks forward for Daylight Saving Time (DST), I thought it would be interesting to revisit the energy impact of DST.  I expected to find a plethora of data extolling the virtues of DST.  Instead I found a mish-mash of data and opinions.

DST was first adopted in the United States during World Wars I and II, but it wasn’t until the energy crisis days of the 1970s before it was widely adopted across the country.  A 1975 study by the U.S. Department of Transportation investigated the energy impact of DST and found that it reduced the country’s energy use by 1% each day.  A more recent 2008 U.S. Department of Energy (DOE) study found that extending DST to the second Sunday in March through the first Sunday in November reduced electricity use by 0.5% each day during the added DST weeks.

I also found some state-specific studies, most notably this 2007 California Energy Commission study that found starting DST early in California had no significant energy impact and this 2006 National Bureau of Economic Research study from Indiana that found DST actually increased energy use for Indiana residents by 1% to 4%.

Looking at other countries’ research produces even more conflicting information on the subject.  With so much contradictory information, isn’t it time we re-evaluated this practice as a country?

Wake Up

It’s questionable to use a 40-year old study as the validation for any practice.  Energy-use profiles have certainly changed from the 1970s to today.  One of the biggest changes is the increased use of air-conditioning across the country.  Sure enough, the 2008 DOE study said that Southern states saw the least impact from the DST extension, likely due to air-conditioning.  Undoubtedly, other factors like increased appliance penetration and plug loads have changed how we use energy compared to 40 years ago.

By no means am I saying we should abandon DST.  However, as DST also comes with a lot of headaches (and at least one night of interrupted sleep), we should really have a better grasp of why we’re doing it.  It’s been over 40 years since we had a thorough, nationwide study on the impact of DST.  For a country whose government is going through a budget crisis, we owe it to ourselves to know if a practice first started in 1918 is still delivering value.

The building and property management industries have been invigorated over the last few years by the advent of building energy management systems (BEMSs) that harvest, visualize, analyze, and report energy-related information in buildings.  The market is crowded and highly competitive worldwide; over 300 players – from Azbil to Zerofootprint – offer solutions that tie energy-related data to the decision makers that are in a position to act on them.

No two of these BEMSs are exactly the same.  Each offering pulls in unique data sets, runs proprietary algorithms on the data, and provides a front end designed to report the information in the most actionable way possible.  The overwhelming number of solutions and the fast pace of BEMS technology evolution have made it difficult for many software vendors to grasp the state of the art today and how best to differentiate their products.  These conditions have also led many would-be BEMS customers to hesitate to invest in BEMS technology, as they are waiting for the products to mature and commoditize before making major investments in new enterprise technology.

Given the complexity of the BEMS market structure, Pike Research has developed a typology of BEMS technology to provide a simple way to understand the market.  As explained in Pike Research’s recent research brief, Building Energy Management Technology Landscape, the landscape for BEMS technology can be classified based on the four primary types of data upon which the platforms are built:

• BMS/BAS data
• Facility operational data
• Utility data
• Enterprise-level data

This data is then folded into the software applications available today, as shown in the diagram above.

Most of the offerings available today focus on squeezing value out of one of these data sources.  However, some software platforms allow users to access and compare data from a much broader range of sources.  For example, Schneider Electric’s StruxureWare platform ties in information from the building management system (BMS), utility bills, asset management schedules, and corporate sustainability metrics into a single interface.  Other players with a stronghold in one type of data management are increasingly looking to diversify their features to gain broader reach.

As software vendors look to elbow their way into a competitive position in the BEMS market, the existing offerings will continue to expand.  What will the market look like in a few years?  Some consolidation is inevitable, either through targeted acquisitions of specialty firms or the demise of insufficiently differentiated offerings.  Yet, firms in this space need to be mindful not only of providing robust solutions independently, but also of the opportunities available through strategic alliances with other firms and interoperability.  The rapid expansion of this market means there’s opportunity for many players to succeed – but many will fall aside as well.

In the United States, gasoline is a mix of 10% ethanol and petroleum fuel.  Since 2009, the Environmental Protection Agency has been considering a change to the ruling that would permit fuel stations to sell a mix of E15 (15% ethanol).  This switch is opposed by automakers, who are concerned with engine longevity issues when using E15.  In 2010, I wrote, “Some ethanol groups are starting to push for immediate approval of E12 (12% ethanol) as the tests continue.  As a result, I would not be surprised to hear, come November [2010], the EPA will delay a decision again until 2011 without any action on E12.”  Well, the approval of E15 didn’t end up coming until April 2, 2012 for 2001 and later model year vehicles, and as expected there was no movement on E12.

But the controversy didn’t come to a close on April 2, as many might have hoped.  Since that time, E15 adoption has been very low.  Now, AAA, the auto and travel association, has issued a warning that E15 could “damage millions of vehicles and void car warranties.” This warning can be expected to have an impact on the sale of E15, since AAA claims to have over 50 million members.  That number represents almost a quarter of the 209.6 million licensed drivers in the United States, giving AAA a big voice in the debate.

What does this mean for E15?  It seems likely that AAA’s foray into the arguments will likely scare off some stations that were considering making the investment to offer E15.  Making things worse, blender pumps, which would be the most affordable method for delivering E15 to the market, are required to sell a minimum of 4 gallons of fuel to prevent damage to small engines, such as lawnmowers.  Blender pumps blend gasoline and ethanol at the 10% proportion at the time of refueling, so new storage tanks would not be required, but since fuel remains in the hose some E15 would get into small engines and potentially cause damage.

The cost of E15 is below gasoline (about $3.28/gallon this past summer), but it also has 5% less energy than gasoline (about 2% less than E10) and therefore could ultimately cost consumers more as a result of reduced fuel economy.  One might surmise that since it might cost more, the fuel isn’t widely available, many stations don’t want to carry it, automakers warn it can’t be used in their vehicles, people have to buy a minimum amount in many cases, and now AAA is all but telling its members not use it, that the EPA would reconsider.  Don’t count on it.  Lawsuits from the automakers were thrown out this summer and the EPA has shown no signs of revisiting the topic.  One thing I think we can count on is more E15 controversy to come.