Monday, October 21, 2019 by Ryan Thornton

Commission supports energy rebate program change, calls for more information

Austin Energy has long struggled to find enough customers to take part in its multifamily energy efficiency rebate program. The trend continued last fiscal year when more than half of its rebate funds, which don’t carry over into subsequent years, never made it into customer hands.

Denise Kuehn, the utility’s director of energy efficiency services, told Electric Utility and Resource Management commissioners last week that both customers and contractors are discouraged by the program’s four- to six-month process.

Half of the process consists of the utility’s own pre-inspection phase and the other half is the time needed for each project to go through both of the commissions and City Council for approval. Austin Energy threw commissioners a curveball last week during a typical project approval request by coupling the item with a request to remove the second half of that process for the remainder of the fiscal year.

Kuehn said multifamily is already a “hard-to-reach” market. With the drawn-out approval process on top of that, there are now only a handful of contractors actively seeking to participate in the program. Foregoing the individual approval process would cut wait time down to two to four months total and could help attract more contractors and property owners to the program.

Stakeholders and commissioners expressed some hesitation, but the argument succeeded. The request to amend the approval process earned unanimous support from the Electric Utility Commission and passed the Resource Management Commission in a 6-1 vote.

On average it takes two months for a multifamily energy efficiency project to get through both commissions and Council, Kuehn said. If a project comes up near Council’s July break, in December, or around the annual budget adoption, the process can easily stretch to three months. During that time, customers or contractors may lose interest or funding, or even forget they had applied for the rebate program in the first place.

Even when customers follow through with the request, they don’t appreciate waiting half a year to get projects approved, said Manuel Garza, who manages the utility’s commercial, multifamily and small business programs.

Kuehn said customers are particularly frustrated by the wait when trying to prepare for summer heat but are not approved until the summer is already over.

The utility’s standard energy efficiency rebate covers up to 80 percent of costs for smart thermostat replacements, HVAC maintenance and energy conservation audits. For the income-restricted program, the rebate is even higher. Most customers, explained Debbie Kimberly, vice president of customer energy solutions, are therefore relying on the rebates and won’t move forward without the rebate funds.

Electric Utility Commissioner Karen Hadden took issue with the proposal being included as part of a request for approval of three multifamily energy efficiency rebate projects. Besides the presentation, she also said she prefers the current process of considering projects “up front, not after the fact.”

Kuehn said she would have presented the proposal separately if the projects were at all controversial, but that she had never seen a multifamily energy efficiency request rejected by either commission or Council in her five and a half years with the program.

Electric Utility Commissioner Cyrus Reed offered an alternative perspective: “We haven’t turned down any projects but we have shaped the idea that we want more information, that we want kilowatts and kilowatt hours, and I think this is a big improvement over how it used to be a couple of years ago.”

Garza said the utility is open to providing as much information about the projects as desired once they are in progress or complete. “The whole gist of this is the process: do we have to hold these projects up or can we provide the reporting on the back end so we don’t have these issues?”

Electric Utility commissioners agreed on a friendly amendment to the proposal that entails receiving monthly emails with links to fact sheets on ongoing multifamily projects. The fact sheets will include general details about the projects, such as location, number of units involved, estimated energy savings, and estimated cost savings to customers. As is current practice, the fact sheets will be available prior to meetings of the Resource Management Commission on the third Tuesday of each month.

Individual approval by the commissions and Council is currently required only for projects exceeding $61,000, which is around 30-40 percent of all energy efficiency projects, commercial and multifamily. Because multifamily projects are typically larger than commercial, commissioners saw 14 of 17 total multifamily requests last fiscal year but only about 3 percent of commercial requests.

With a $1.4 billion operating budget, Austin Energy takes up just shy of a third of the entire city’s $4.2 billion budget for this fiscal year. If approved by Council, the blanket authorization for the rebate program will include a small fraction of that total, no more than $4,455,000.

Resource Management Commissioner James Babyak represented the only opposing vote from either commission last week.

Moore McDonough, co-founder of 360 Energy Savers, called the amendment a “godsend.” Though he did not recall losing any projects to the current long wait time, he said it does complicate things financially.

“We do projects in multiple states,” McDonough said. “The most difficulty we have is right here in our own backyard with the speed of the process and the scheduling.”

This story has been changed to correct the spelling of a name and to clarify the 4-6 month time frame referenced includes more than just the boards and commissions approval. Photo by Larry D. Moore [CC BY-SA 4.0], via Wikimedia Commons.

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Key Players & Topics In This Article

Austin Energy: As a municipally-owned electric utility, Austin Energy is a rarity in the largely deregulated State of Texas. It's annual budget clocks in at over $1 billion. The utility's annual direct transfer of a Council-determined percentage of its revenues offers the city a notable revenue stream.

Electric Utility Commission: The advisory body charged with oversight of Austin Energy, the City of Austin's municipally-owned electric utility.

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