Sustainable Energy Utility

What Is It?

A Sustainable Energy Utility presents new options to finance, market, and deliver sustainable energy services to energy end-users. Developed by Dr. John Byrne and his colleagues at the Center for Energy & Environmental Policy at the University of Delaware, the objective of an SEU is to provide renewable energy and energy efficiency with the same simplicity that traditional energy is provided through the existing utility model. SEU’s are typically created through legislation to establish an organization to administer financing programs, offer technical services, and coordinate the services of private Energy Service Companies (ESCO’s) and financial institutions.

A typical SEU would capitalize a fund with relatively low interest state or municipal bonds and use that capital to contract with private energy service companies to conduct energy audits and perform upgrades. Once the project is completed, the energy customer would share the savings resulting from lower energy costs with the SEU to repay the bond and to fund the SEU’s activities. Because it can aggregate a large amount of demand for ESCO services, the SEU can help lower costs further by standardize offerings, negotiate bulk discounts, and otherwise streamline the process of identifying and executing cost effective energy efficiency upgrades.

Case Studies

State of Delaware

Created in 2007 Energize Delaware is a nonprofit organization that administers the state’s SEU. It offers one-stop resources to help residents, businesses, and governments save money through clean energy and efficiency. The SEU is financed mainly through low interest state bonds that are repaid from energy savings at the projects it funds. Because it aggregates energy demand from a large number of relatively small sources, it was able to secured guarantee cost savings from the ESCOs it contracts with. By sharing cost savings with its participants, the SEU is designed to achieve financial self-sufficiency over the long run. Through the program Delaware aims to reduce energy waste by 30% by 2020 and stimulate job creation. (more information)

Sonoma County, CA

The Sonoma County Water Agency is launching a program to finance energy efficiency and water conservation retrofits for public and non-profit facilities. The Sonoma County Water Agency has partnered with the Foundation for Renewable Energy & Environment to develop the Sonoma County Efficiency Financing (SCEF) Program. Under the SCEF Program, participating organizations contract with an Energy Service Company to complete energy and water conservation measures. Improvements can include street lighting, building lighting, system controls, water pumps, HVAC systems, boilers, chillers, and others. The participating organizations will receive substantial utility cost savings, including a contractual guarantee sufficient to cover the full cost of all retrofit work. The Program intends to use tax-exempt bonds to finance the projects. (more information)

State of Vermont

Established in 2000, Efficiency Vermont is the state’s SEU. A charge on ratepayers' electric bills provides the funds for delivery of energy efficiency services. Vermont businesses and homeowners who have used Efficiency Vermont's services to make cost-effective efficiency investments have saved more than 660 million kilowatt hours (kWh) in annual electric energy, and the cumulative lifetime economic value of efficiency investments in Vermont has totaled more than $643 million. (more information)

State of Wisconsin

Focus on Energy is Wisconsin utilities' statewide energy efficiency and renewable resource program. The program is funded by the state's investor-owned energy utilities and participating municipal and electric cooperative utilities and has been operating since 2001. Focus on Energy works with eligible Wisconsin residents and businesses to install cost-effective energy efficiency and renewable energy projects. Focus on Energy provides information, resources and financial incentives help to implement energy projects that otherwise would not be completed, or to complete projects sooner than scheduled. (more information)

Washington DC

The District of Columbia Sustainable Energy Utility The District of Columbia SEU, administered by the Vermont Energy Investment Corporation, is funded primarily though a utility charge. It offers rebates businesses to help offset the costs of energy efficient equipment. In addition, it offers cash incentives and financing packages to residents to reduce the upfront costs of qualifying home energy upgrades. (more information)

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