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The top 5 challenges and opportunities of implementing a midstream program

When I was the C&I portfolio manager at ComEd, we launched a midstream lighting program in the Spring of 2010.  Over the next four years, ComEd’s midstream program offer would evolve to become one of the most successful program offers ever launched at ComEd.  Here are the Top 5 “lessons learned” from my time spent at ComEd.

 

  1. A C&I midstream program is vastly different than a residential retail program. Like many utilities, ComEd had a residential retail lighting program that was very successful.  ComEd’s initial C&I midstream program launch was to mirror the residential program.  Once launched, it was apparent that the participation barriers for lighting distributions are much different that the issues faced at retailers such as Home Depot and Menards, which largely revolve around signage and displays.
  2. A C&I midstream program needs to be integrated within the entire portfolio. When a midstream program is launched and then established, you are developing another program channel to the marketplace.  Incentives provided and kWh claimed through the midstream offer need to be aligned with Standard / Prescriptive program offers or Direct Installation programs.
  3. The outreach strategy needs to be delivered by people knowledgeable in the lighting distribution business. When you move from an application-based program to a midstream program, you are also moving the administration burden from the customer to the distributor.  While in theory this sounds great, if you don’t address the administration concerns of the distributor, you’ll find a distributor market unwilling to support your energy efficiency program.  By building IT automation, being strategic about specifications and eligibility, and streamlining payment processing, you can have a program that works for the program and the distribution market.
  4. Plan beyond the current program year. After you decide to launch a midstream program and distributors decide to participate, it helps to lay out a roadmap beyond the current year. At ComEd, the midstream program began with a single product (CFLs) and grew over time into multiple lighting and non-lighting categories.  As the lighting market and needs of the program evolve, ComEd communicated program changes though newsletters, webinars, and the utility website.
  5. Be flexible about your budget. As the midstream program begins to gain traction, you’ll find that program savings will grow along with the budget of the midstream element. Once the lighting distribution community becomes fully engaged in your midstream offer, a large portion of your program goal can be achieved at relatively low cost.  This can present a tremendous opportunity for the remainder of your portfolio and can allow you to focus on non-lighting technologies, targeted outreach approaches, or to dabble in system based program offers.

Properly managed, a midstream offer can create tremendous value for both utility programs and market participants.  However, each utility’s regulation and evaluation framework is different, thus careful program design and execution is critical in obtaining success in this expanding program approach.

Learn more about how DNV GL can help you develop and implement a midstream program by visiting www.dnvgl.com/energy_efficiency.

2 Comments Add your comment
Avatar Steve Baab says:

Yes, I completely agree that the legislative framework a utility is governed by drives the definition of success.

Avatar Cássio says:

Hello Steve,
Thank you for this article, it’s very interesting.
Considering de fact that the utilities’ energy efficiency programs aren’t its core business (but a legal obligation) the definition of “success” of a program can change a lot depending on the government’s will.
Your experience in the ComEd’s program is very interesting, but may not fit in other countries due the legislation’s diferences between different countries.
My best regards,
Cássio – Brazil

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