The Crunch: The goal of the Environmental Law & Policy Center (ELPC) is to create positive solutions for protecting the environment while also boosting the economy. In the area of energy efficiency, ELPC engages pragmatically with utilities and public service commissions to reduce energy demand in ways that not only save money for consumers but get the economy moving. In Illinois, the ELPC negotiated a rebate program for smart thermostats that increased market competition and lowered prices for the devices as it incentivized consumers to install them to save on energy bills. For 25 years, ELPC’s combination of strong advocacy and focus on eco-business entrepreneurship has benefited the environment and lifted the economy.
The Environmental Law & Policy Center (ELPC) is on a mission to find ways to encourage environmental progress and economic development — simultaneously. Since 1993, ELPC has worked in nine Midwestern states to improve environmental quality and protect natural resources.
The brainchild of longtime Chicago attorney Howard Learner, the center operates on a “hyper-regional” basis, meaning that it focuses primarily on addressing environmental challenges in its home region.
There’s a good reason for that. The Great Lakes provide drinking water for more than 40 million people. At the time ELPC got started, some of nation’s dirtiest coal-fired power plants were located in the midwest. And the region remains a transportation crossroads, as it is home to one of the world’s most-traveled airports along with an assortment of major highways and railways.
Robert Kelter, Senior Attorney and ELPC Energy Efficiency Program lead, saw a significant opportunity to accomplish the ELPC’s goals by partnering with Illinois energy utilities to institute a rebate program for smart thermostats. The devices connect to the internet and use learning algorithms to automate heating and cooling systems, increasing their efficiency.
Negotiations were challenging, but the resulting “One Million Smart Thermostats” initiative, which launched in late 2015, aims to install at least that many smart thermostats in Illinois homes within five years.
Through its advocacy on behalf of clean energy, air, water, and transportation, the ELPC looks for ways to mitigate the environmental consequences of corporate actions — but not in ways that harm the economy or consumer and business interests. Howard also considers the ELPC a “grasstops” advocacy organization in that it seeks to unite competing stakeholders in leadership roles around common goals. That’s right in Robert Kelter’s wheelhouse.
“We work with utilities in our region when we can. But we don’t always agree. And that’s part of the challenge — utilities don’t necessarily have the same goals as environmental organizations,” Robert said. “In cases where you don’t agree, you’ve got to be an effective advocate, and you’ve got to be able to win.”
Helping Utilities Deliver the Best Possible Results for Consumers
States typically mandate that utilities develop programs to promote energy efficiency. Utilities are usually required to submit those plans for approval by their public service commission every three to five years. The ELPC Energy Efficiency team ensures that the utilities present the best possible programs and strategies for reducing electricity demand and costs.
That means considering efficiency not simply from a quantitative perspective but also in terms of quality. Robert and his team look beyond the numbers to determine whether utilities’ efficiency plans build toward a more rational future for the industry and consumers.
“ELPC has a very successful track record in improving the programs, including the amount of efficiency the utilities can attain,” he said. “But there are instances where we’ve shifted resources from programs where we believed money wasn’t being so well spent to programs producing better results.”
A recent case involved discerning whether utilities should incentivize consumer adoption of compact fluorescent lighting (CFL) or light-emitting diode (LED) lighting. Both technologies are more efficient than the obsolete incandescent lighting they replaced. CFLs carry lower upfront costs and, although they don’t last as long as LEDs, they were first to market and, for a few years at least, were seen by consumers as more similar to incandescents.
But CFLs also contain mercury, a toxic heavy metal, which makes disposal hazardous and broken bulbs dangerous. LEDs emit much less heat and are usually made of tough polycarbonate resins, not glass.
“A lot of the utilities were more comfortable with just discounting CFLs because, when you’re trying to meet an energy-savings target, it’s easier when you’re working with technologies that are more accepted by the public,” Robert said. “But that didn’t advance the consumer and environmental interests we were concerned about.”
ELPC was able to get the utilities to agree to shift the discounts over to LEDs. “In other instances, we got the commissions to direct the utilities to do it,” Robert said.
Smart Thermostats: A Win-Win for Customers & the Environment
Smart thermostats leverage technology to solve the problem of heating and cooling empty space. Sensors, software, and internet access provide their intelligence and the promise of new levels of savings for customers.
But overcoming industry inertia was a challenge. Although the public service commission in Illinois had concluded that consumers were wasting more energy on heating and cooling empty rooms than on anything other than inefficient lighting, the technology was so new that it held no official savings value in the state’s Technical Resources Manual. Meanwhile, Illinois was only in the first year of its three-year energy efficiency plan. Neither the commission nor the utilities, including the large electricity provider ComEd, had much incentive to construct a large-scale rebate program.
What got them moving was ELPC’s argument that bold innovation would grow competition in the state’s smart-tech market and bring national prominence to its energy providers.
“Through our research, we learned that customers could actually save money using previous-generation programmable thermostats if they used them correctly,” Robert said. “But in reality, few programmed them or used the programs consistently. So we worked very hard to do a program that would discount smart thermostats and make professional installation easier. Hundreds of thousands of installations later, customers are saving money while helping to reduce power plant emissions.”
The marketplace effect of the smart thermostat rebate program has been dramatic. When the program started in 2015, consumers could choose among only a few devices. Now they can get a $100 rebate off any EnergyStar-certified thermostat.
“We try to introduce people to new products where we’re creating market transformation,” Robert said. “That not only helps customers understand the benefits of a new savings opportunity, but, in a lot of instances, it drives down the market price.”
Transforming Markets by Boosting Demand for Better Products
When Illinois utilities first started discounting smart thermostats in 2015, the few available models carried a cost in the $250 range. “Now there are models with innovative features on the market in the $150-$160 range, and we anticipate that that price will continue to drop,” Robert said. “And that drop from $250 to about $160 has happened over a period of only about three years.”
The same thing occurred in the market for LED lighting. When utilities first moved into discounting the newer technology, LED bulbs cost as much as $10. Now they’re generally available for less than $2 apiece.
“That’s a huge drop — much faster than utilities and industry analysts predicted,” Robert said. “A lot of it is due to the competition generated by the increase in customer interest from the energy efficiency programs.”
In both cases, ELPC provided the push that got the markets moving and put the energy and costs savings in motion. And the organization continues to look for ways to benefit the environment and consumers while still stimulating the economy and boosting business interests.