SMUD and Economic Development

By Patrick D. Kennedy

Lowering Energy Costs for Businesses

Energy represents the single largest and most controllable operating expense for office buildings + representing approximately 1/3 of businesses' variable expenses. EPA studies and real world experience of businesses participating in the Energy Star program show that typical energy savings of 30% are readily achievable without large investment. Businesses are spending resources on energy consumption that they do not need to and the result is waste. I will work with fellow SMUD Directors and staff to:

1. Reach out to and partner with executive management of regional businesses and industry groups to secure commitments to energy efficiency programs. When businesses save energy, they save money and increase their competitiveness and prosperity;

2. Develop a strategic plan on a company by company basis;

3. Benchmark to assess and measure the performance of the programs;

4. Audit each participant's facilities in order to assess baseline usage and determine where best to begin (find the low hanging fruit);

5. Look at opportunities for partnerships in new construction and remodeling projects.

Unhealthy Air = Unhealthy Economy

Sacramento has the 5th dirtiest air quality in the nation. This poses a serious environmental and health threat as well as a hindrance to economic growth. As the electricity provider for the Sacramento area, SMUD can play a pivotal role in cleaning our air. Specifically, SMUD should be a community and corporate leader in efforts to:

• Develop & commercialize energy efficiency and renewable technologies

• Groom a future workforce for energy efficiency and renewable employment

• Prepare decision makers to make wise energy choices

• Develop a clean energy industry

• Continue to monitor the District's Carbon Dioxide inventory and identify ways of effectively decreasing those emissions.

Through partnerships with such organizations as UC Davis Clean Energy Center, Institute Transportation Studies, CA Lighting Technology Center, CSU Sacramento, Community Colleges, K-12 School Districts and Technology Incubators such as the Renewable Energy Institute, McClellan Technology Incubator, CA Fuel Cell Partnership, Clean Start, Sacramento Area Regional Technology Alliance, and Lawrence Berkeley National Lab SMUD can maximize it's investment and leverage funding.

Increased partnerships and investment in Research & Development will leverage SMUD's dollars, lead to clean energy technlogy development and create jobs.

Ensuring Dependable Service and Responsible Growth

When businesses look at moving to the Sacramento region, one of the key factors the decision makers look at is the reliability of the area's utilities. SMUD recently commenced operations of a 500 MW highly efficient natural gas burning power plant near the Rancho Seco site. The district has licensing for an additional plant of similar size, when it is deemed necessary. SMUD's infrastructure problem is not one of production, but consumption. We need 400 additional MW, but only 40 hours a year. Prior to considering a new power plant to meet our infrastructure needs and ensure continued dependability, we need to:

1. Demonstrate energy and environmental leadership by example, procuring energy efficient and environmentally preferred equipment, materials and services. (Perhaps give extra weight to vendors who can demonstrate that they do this)

2. Ensure that the highest levels of cost effective energy efficiency are achieved along the entire fuel cycle (from generation to the customer), incorporating the highest efficiency equipment that is technically feasible, reliable and cost effective in all transmission, distribution and power plant generation projects, and establish matrices to measure progress.

3. Develop resource planning processes consistent with SB 1037 that require planners to look at energy efficiency and demand reduction where cost effective, reliable and feasible.

4. Study price signals that are set to optimize efficiency and resource utilization, considering the load curve and peak load profiles when setting time of use rates to recover costs and consider a critical peak. In the long term, when the metering technology is available and cost effective, we have to consider extending time of use rates to all customers.

5. Enable customers to take greater advantage of demand side management opportunities to further decrease their energy bills, add added value to their homes and businesses, and contribute to improving the local economy and environment.