Industry Leaders Interview: Brian Reidy

Imagine that electrcity flowed into your home through a pipe, as water. Then imagine that the energy company sent so much electricity to your house that the pipe couldn't hold it all and the excess spilled out as waste that you had to pay for. Something like this actually happens; electric utilities send more voltage to homes than the appliances need. The unused electricty is not only a needless expense, it also decreases the life expectancy of electric appliances. One company, MicroPlanet, makes devices that regulate the electricty flowing into businesses and homes to reduce waste and prolong the lives of electronics. e-FFICINECY NEWS interviewed MicroPlanet CEO Brian Reidy, who talked about his company's products and mission.

e-FFICIENCY NEWS: According to your website MicroPlanet sells “intelligent efficiency”. Can you tell us a little bit more about the technologies that Microplanet has developed and how they work?

Brian Reidy: MicroPlanet is a producer of point-of-consumption voltage regulators that are installed at the delivery interface between the electric grid and the consumer of electricity – for most residential and commercial customers this interface occurs at the electric utility meter.

MicroPlanet's products provide utilities the ability to deploy energy efficiency programs through conservation voltage reduction (CVR) across most or all distribution feeders. CVR decreases the voltage at which electrical power is consumed, and for most loads, the lower the consumption voltage, the lower the overall power consumption. By regulating delivered voltage at the point-of-consumption to 114 - 115 volts, MicroPlanet's products allow utilities and their customers to capture the full potential of CVR—CVR is considered a form of demand side management (DSM). MicroPlanet's products utilize a patented combination of advanced power electronics and transformer technology that raises or lowers voltage delivered from the electric utility to a constant output voltage.

Energy efficiency products

• MicroPlanet's EVR™ and HVR™ products regulate a consumer's voltage received from its electric utility to the lower end of the allowable delivery range, thereby reducing energy consumption and associated costs, improving the lifespan of electrical appliances, and reducing greenhouse gas emissions.
• The Company is currently completing the design of a new three-phase product (the EVR 3P™) targeted for sale to mid-size commercial businesses such as restaurants and convenience stores. The EVR 3P serves the same role as an EVR only for 3-phase services. MicroPlanet expects prototypes of the EVR 3P to be available during the 2nd half of 2005 and is targeting initial commercial demonstration projects by the end of 2005.

Voltage compliance products

• MicroPlanet's LVR™ product boosts the operating voltage for consumers suffering from chronically low voltage service from electric utilities, assisting the utilities in maintaining the minimum level of voltage service to these consumers.

e-FFICIENCY NEWS: Are your products readily available on the market place and if so where are they being implemented and by whom?

Brian Reidy: Yes, our products are readily available and can be produced by the tens of thousands should a customer require them.

Specifically, the HVR & LVR are available to and are being installed by electric utilities worldwide:

• 500 HVRs will be installed beginning July 2005 across 11 electric utilities in the U.S. Pacific Northwest including several very large investor owned utilities (Puget Sound Energy, Portland General Electric, PacifiCorp, Idaho Power), a few municipal utilities (Eugene Water & Electric Board, Idaho Falls Power) and
  public utility districts (Snohomish County PUD, Douglas County PUD, Franklin County PUD, Skamania County PUD, Hood River Cooperative) as part of a project with the Northwest Energy Efficiency Alliance.
• Several utilities on the U.S. East Coast, in the Midwest and across the Pacific Northwest have installed one or two HVRs each as field trials or to resolve critical customer problems.
• In Brazil, MicroPlanet recently announced a partnership with Eletropaulo, a large operating unit of AES Corporation, to install a meaningful pilot project featuring the HVR. This project is expected to be kicked off by year end 2005.
• In the United Kingdom, MicroPlanet is collaborating with ScottishPower. The ScottishPower engineering team conducted lab and field demonstration projects with earlier prototype versions of a European LVR. As a result of these successful trials, ScottishPower is working with MicroPlanet to consider a larger pilot
  project. A partnership with ScottishPower allows MicroPlanet the opportunity to introduce its products into the European community.
• Approximately 10%20 utilities across the globe have independently lab tested the HVR or LVR and successfully confirmed technical efficacy. The EVR is available to both commercial businesses with many smaller retail sites (e.g., convenience store chains) and to electric utilities interested in thought leading energy
  efficiency customer care program(s) for their local commercial customers.

As an example, in California, MicroPlanet recently announced that the Sacramento Municipal Utility District (SMUD) is conducting a demonstration project featuring the EVR.

The focus of this project is the energy efficiency impact of reduced voltage on air conditioning loads – a key component of summer peaks in many parts of the U.S. We are actively recruiting customers for demonstration projects deploying our new EVR 3P. Based on pent up demand, we believe every EVR 3P built in the first production run will be spoken for very quickly. These units should be installed by the end of 2005.

e-FFICIENCY NEWS: What is the main reason customers should consider using your technology… in other words what are the energy and cost-saving benefits to them; and what are the broader benefits to the environment?

Brian Reidy: Most energy efficiency programs promoted by electric utilities have taken place “behind the meter”, meaning in the homes or businesses of their customers. MicroPlanet believes there is opportunity on the utility side of the meter as well. Why? According to the DOE's National Renewable Energy Laboratory, up to 70% of energy is wasted from the point where the original fuel source enters the system to the point where a consumer uses the energy in the form of a kWh. This means collectively there is a lot of work to be done to improve the efficiency of the grid from top to bottom.

For instance, most electrical equipment and appliances in businesses and homes operate efficiently at 114 to 115 volts. Due to technological limitations of the existing electricity grid, the majority of US states allow electric utilities to deliver higher voltage to ensure that customers furthest away from the substation receive the minimum 114 volts. The normal operating range of line voltage service is between 114 volts and 126 volts. As a result, the vast majority of electric utility customers receive more voltage than necessary. This translates into wasted electricity, higher operating and capital costs for electric utilities and customers, larger electricity bills, shorter lives for electrical apparatus and increased greenhouse gas emissions resulting from the production of surplus electricity.

Many consumers, and commercial enterprises in particular, have turned to various smallscale conservation methods in an effort to curb rising electricity rates, with varying levels of success.

By regulating delivered voltage at the point-of-consumption to 114 - 115 volts, MicroPlanet's products reduce power consumption for most locations.

Meaning:

• Electric utility customers can use MicroPlanet's products to reduce operating costs for electricity, reduce capital expenditures by prolonging the life of electrical equipment and help reduce each customer’s contribution to greenhouse gas emissions.
  
  For instance, if the MicroPlanet HVR™ was deployed across North America on individual residences, each home would successfully reduce its greenhouse gas emissions by about one ton per year. This is based on the following assumptions: a typical home in the U.S. uses 10,000 kWhs per year, emitting about 2.5 pounds
  of greenhouse gases per kWh totaling 25,000 pounds per year, per home. Assuming an average energy savings of 10 percent, on the homes fitted with the HVR™ an average residence would successfully reduce kWh usage by 1,000 and emissions of greenhouse gases by about one ton per year, per home.
• Electric utilities can use MicroPlanet's products to lower electricity demand of their customers, while conforming to minimum service requirements at costs that are lower than the traditional infrastructure upgrades used to increase electricity grid capacity

• e-FFICIENCY NEWS: Do you think enough attention is being paid to available energy-management technologies such as yours and how they can help address today’s natural resource concerns? What is the potential for change?

  Brian Reidy: You can always do more so this is of course a “loaded” question. Be that as it may, MicroPlanet has never had a problem getting “attention” from any electric utility, regulatory body, congressional office, etc…which I believe is a credit to societal interest in finding ways to collectively improve our impact on the environment. The general reaction to our technology and the waste institutionalized through voltage standards in North America is “Wow that seems like a ‘no-brainer’”. However, translating from a ‘no-brainer’ to a ‘standard solution’ is the real opportunity in front of us. So I guess you can say that MicroPlanet would like to dramatically reduce the time from “attention” to “meaningful action”. For instance, there are two changes we’d like to see regulators and utilities adopt immediately:

  • Reduce the maximum allowable voltage defined in ANSI C84.1 by at least 10 volts (i.e., from 126v to 116v) which would translate into millions of recovered kWhs per year, driving a reduction in operating and capital costs for utilities and their customers, a reduction in stress on overtaxed distribution and transmission
    systems, and a reduction of millions of tons of greenhouse gases per year.
  • Implement a financial incentive program to motivate end use customers to install HVRs, EVRs and EVR 3Ps in droves. How? Most utilities we speak to suggest that if public utility commissions would resurrect the 1980’s style financial incentive programs designed to proliferate adoption of demand side management programs that they would install the MicroPlanet products en masse. Under DSM type programs in the 1980’s utilities paid for customers to install weather stripping, wrap hot water heaters, put in extra insulation and add double paned windows to their home. Why? Because way back in the 1980’s everyone understood that the economics of reducing a kWh versus building a kw of capacity were dramatically in favor of kWh reduction. Those economics have not and will not change until the utility infrastructure reduces its total waste factor, which to a large extent is driven by the physics of the traditional grid design.

  A well designed program to motivate customers to install an HVR, EVR or EVR 3P would not only help recover millions of kWh’s per year, reduce millions of tons of greenhouse gases but it would help improve the reliability of the U.S. distribution grid.

  e-FFICIENCY NEWS: Can you share some examples of where MicroPlanet has succeeded in implementing energy efficiency savings either domestically or overseas with your product?

  Brian Reidy: I think we covered this in question #2.

  e-FFICIENCY NEWS: Where do you think the Alliance to Save Energy could be most effective in helping to increase the energy-efficiency commitment and understanding about transmission efficiency?

  Brian Reidy: The Alliance to Save Energy can help by educating your associates, members of congress, as well as the federal and state level regulatory bodies about the electric utility industry and its opportunity to make responsible choices. The choices made today will have a dramatic and long term impact on society. Here’s a brief primer:

  The structure of the electric utility industry in the industrialized west as it exists today is characterized by large, central power plants that generate electricity to be transmitted via high voltage transmission lines to localized substations, which in turn distribute electricity to homes and businesses for delivery at a lower voltage that is compatible with consumers' electrical equipment and needs. This structure of generation, transmission and distribution plus the regulatory incentives supporting the system was first established during the early 1900s, and while the industry has witnessed significant growth since the original construction of this power grid, there has been relatively little change to the basic
  infrastructure.

  However, the electric utility industry internationally is under pressure today on several fronts including:

  • Increasing global demand for electricity and infrastructure;
  • Insufficient supply to meet demand growth particularly in developing countries;
  • An aging infrastructure in much of the industrialized west;
  • Aging workforce demographics for the industry in North America which indicate an imminent and unprecedented loss of qualified, experienced industry players to retirement;
  • And of course, the much maligned issue of the environment.

  Because of organizations such as the Alliance to Save Energy, there is an increasing public awareness around the negative environmental impacts from the traditional methods of generating electricity. Given that fossil fuels and nuclear power still provide over 90% of the world's electricity, and that carbon dioxide which comes from burning fossil fuels accounts for 82 percent of all greenhouse gas releases (source: Energy Information Administration), the regulatory agencies governing the electric utility industry should carefully consider the consequences of the important decisions in front of them today.

  Fortunately, at the Kyoto Climate Change Conference in December 1997, many industrialized countries agreed to reduce greenhouse gas emissions in aggregate by approximately 5% as compared to 1990 in the commitment period of 2008- 2012. Signatories to the Kyoto Accord include Brazil, Canada, Russia, Japan and most major European and Latin American countries. During this window of opportunity in the electric utility industry, MicroPlanet believes the Alliance to Save Energy is in a unique position to proselytize the importance of aggressively improving the efficiency of this antiquated grid system and regulatory structure.