It was a dozen years ago, in 1997, when Lakeland Electric (LE), a municipal utility in Lakeland, Florida, offered its customers a simple solar heated hot water option: LE would own and maintain the systems and the customer would pay a small fee, only for hot water delivered to the faucet.
“There was nothing like this anywhere,” said LE’s Jeff Curry, director of Lakeland Electric’s renewable energy programs.
Customers who participated saw some big benefits, like up-front equipment expenditures and maintenance costs were eliminated. These systems had reduced standby losses, which meant energy cost reductions.
“The big selling feature of this program,” said Curry, “was that customers were exempt from an increases in fuel charges. The price of this fuel never goes up; they pay one price forever.”
In addition to a smaller footprint, customers could provide hot water during power outages. But the customer wasn’t the only one benefitting.
For the utility, this program meant a reduction in electricity demand in both summer and winter peaks and decreased transmission and distribution losses. Lakeland also realized a positive return on its investment (~10%/yr) while it was diversifying its resource base. Its environmental footprint was shrinking, its PR image was on the rise, and they were selling SHW renewable energy credits (RECs).
“Our entry into the REC world was in 2004,” said Curry “with the Democratic National Convention in Boston. It was powered by solar energy RECs from Lakeland Electric.”
Under this pilot program, about 60 customers signed up, though hundreds were interested. After 10 years, those same customers are still on board, and the systems are operating well.
“We learned a lot of valuable lessons from this pilot program,” said Curry, ‘like how to deal with and survive hurricanes, what once-in-a-while freezing weather might do to the systems, and how to navigate ownership changes in real estate transactions. Those obstacles provided us with good solutions for future programs.”
In 2008, Lakeland Electric entered into a power purchase agreement (PPA) with SunEdison, a long-term contract in which it would buy electricity from a power plant that it doesn’t own.
“Some 24 megawatts installed will offset four percent of the utility’s average summer peak at a cost that customers can afford,” said Curry.
Now, in 2009, Lakeland Electric is at it again, continuing with its atypical SWH business model that removes the risk from the customer, like system ownership, high up-front costs, perceived reliability and availability of maintenance services, while providing benefits like lower electricity charges and smaller environmental footprint.
Just last week, Lakeland Electric’s Jeff Curry went before Lakeland’s City Commission to finalize its next SHW initiative, this one for 15,000 SHW residential installations in Lakeland’s service territory. Regenesis Power, a renewable energy service company that owns and operates solar assets in the U.S., will install and maintain the systems, a mix of active and passive SHW systems, equaling about 30 MW.
“This next phase of SHW installations-15,000–represents 15% of our customers and 30 MW of generation capacity,” said Curry. “Lakeland’s contractor, Regenesis, is prepared to assume the risks associated with equipment ownership, financing and maintenance. In return, customers will pay (in this case) a $35/monthly service fee based on the energy delivered by the SWH system.”
With Sun Edison’s 24 MW and Regenesis’s 30 MW, Lakeland Electric has 54 MW of generation capacity equivalent.
Now that the City has approved the contract with Regenesis, Lakeland Electric is now focused on setting up the internal infrastructure and marketing aspects of the project. According to Curry, Lakeland expects to launch the program in 90 days.
“We’ll be working on policies and administrative support to roll this program out,” said Curry. “‘We’ve got to make sure that our infrastructure is in place to accommodate the response. We’re planning for a favorable customer response.”
It’s a reasonable expectation. What’s not to like about lower electricity charges and a smaller environmental footprint?
“By any measure, this is a heck of a deal in these economic times,” said Curry.
For more information about Lakeland Electric’s SHW programs, contact Jeff Curry at (863) 834-6853
Thanks to Jeff Curry for his help with this article