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RE: Innovative Strategies for Electric Utilities



John,

I totally agree with you that we have to use market forces to reach more 
companies.  At the funding level we have in Illinois it will take us at 
least 150 years just to provide technical assistance to each manufacturer 
in our state.  I'd like to have a quicker and bigger impact than that in my 
career.  One such proven approach is called technology diffusion or 
innovation diffusion.  Everett Rogers documented this approach.  A book on 
this by Dr. Rogers can be found at 
http://www.amazon.com/exec/obidos/tg/stores/detail/-/books/0029266718/reviews/ref%3Dpm%5Fdp%5Fln%5Fb%5F6/103-7698216-8673466

There are other tools such as regulations, use of taxes and other 
incentives that can also accelerate the adoption of a new technology.

In my view some P2 technologies make it just fine in the market place (e.g. 
powder coating, low VOC paints and solvents), some fail as they should, 
others fail because of perceived (not real) problems of complexity, poor 
marketing, etc.  It is this third group of highly beneficial  technologies 
(e.g., advanced filtration) that government and university TA programs 
should focus on in terms of further research, development and 
demonstrations using the innovation diffusion approach.  With this approach 
leading companies are recruited to demonstrate or try out innovations and 
serve as mentors.  Often vendors have to get involved and in some case the 
vendors are the ones that have to adopt the innovation.   Once a critical 
mass of leading companies adopts the new technology market forces will take 
over and government can and should get out of the way.  We then move on to 
the next P2 technology market failure.

This approach requires the technical capability of identifying P2 needs, 
finding innovations that have failed in the market place but are actually 
cost effective P2 solutions, and the ability to determine the reasons for 
that failure plus the wherewithall to figure out how to overcome those 
failures.  it might sound complicated but I'd rather focus our efforts on 
getting widespread adoption a innovation throughout industry than 
ineffectively se4lling lots of things to many companies.  we found about a 
5% adoption rate before implementing the innovation diffusion 
approach.  Now with the same technologies and the same companies we have 
over a 70% adoption rate.  We still don't have full diffusion throughout an 
industry but it is starting to happen.  The savings really are adding up.

one more point is that something I might not view as very innovative can be 
perceived as quite innovative to a business person.  Two quotes from 
Everett Rogers are helpful to me on this topic:

"Innovations that are perceived by individuals as having greater relative 
advantage, compatibility, trialability, observability, and less complexity 
will be adopted more rapidly than other innovations. Past research 
indicates that these five qualities are the most important characteristics 
of innovations in explaining the rate of adoption."

"An innovation is an idea, practice, or object perceived as new by an 
individual."

Gary Miller






At 12:11 PM 7/25/2002 -0400, John.Atcheson@EE.DOE.GOV wrote:

>      Folks who are interested in P2 in power plants should be aware that
>there is a long history of demand side management, which is essentially P2
>downstream from the plant performed by end users, but until recently funded
>by power plant operators.  It dates back to the 70's when Amory Lovins
>began a campaign to show Utilities that the cheapest new source of power
>was "negawatts" -- or power not used by virtue of efficiency.  That's still
>true today.  Amory convinced utility regulators to give credits in
>electricity rate decisions to efficiency-based strategies (efficient
>lighting, appliances etc.)
>
>      Some very good books on P2 in energy include Joe Romms' Cool Companies
>and Lean and Clean Management, as well as one by Lovins and Hawkins titled
>Natural Capital.  All three are a bit broader than energy, but they focus
>on it in key sections.
>
>      Also, last year EPA issued a Guidance on the NOx  Rules promulgated
>under the CAA encouraging states to establish a set-aside for emission
>reductions and credits achieved by  energy efficiency.  Pretty big deal, in
>terms of incentives, and anyone interested in motivating plants to do P2/E2
>should be sure their state takes advantage of the set-aside.  It only
>pertains to the 22 OTAG states (basically east of the Mississippi) covered
>by the NOx rule, but there is a similar provision in the Haze Rule (also
>CAA) which by coincidence covers  the entire West.
>
>      Now, I'm curious.  This issue I raised yesterday about whether
>technical assistance -- even assuming it works well and each visit yields
>great results -- is up to the job of actually making a difference in the
>environment (since it's by nature transactional i.e. done one
>company/facility at a time and there are hundreds of thousands of
>facilities -- not to mention the fact that individuals' homes and cars
>directly  cause at least a third -- and possibly a half of all emissions)
>-- Anyway, it would take an army of people doing TA for decades to reach
>that many facilities, all achieving great results on every visit,  before
>we'd begin to make a dent in emissions, and even then we'd be leaving half
>of the sources off the table.  No one responded.  Are you all ignoring it
>because you think I'm full of bull, or because you are in denial?
>
>      Don't get me wrong, I think TA is great.  Probably necessary, but
>certainly not sufficient.
>
>      But I've been in the P2 business since '87, and I'm seeing the same
>demonstrations, pilot projects and success stories being "discovered" as
>new over and over again.  Doesn't this suggest that the implicit assumption
>underlying a lot of the P2 rhetoric (build and demonstrate a better,
>cheaper, mousetrap and the market will adopt it) just aint so?    And if
>that's true, don't we need to think about policies that will actively get
>the market to adopt the mousetrap rather than passively waiting for it to
>happen?
>
>      There's an old joke about a bus load of neoclassical economists  going
>to a convention in Los Angeles.  They are driving down the Pacific Coast
>Highway, singing, drinking and carrying on.  Suddenly, the bus careens off
>of one of those thousand foot ocean cliffs and begins to plummet toward the
>sea.  To the dismay of the bus driver, the Economists keep singing.  He
>turns around and says, "What's wrong with you people.  Don't you realize
>we're going to die?"
>      At that point, the senior economist on the bus, a venerable professor
>at the University of Chicago stands up and says, "Don't worry, young man.
>With this much demand, parachutes will appear."
>
>      I'm afraid the P2 "revolution" has stalled,  because everyone is
>waiting for parachutes.  And denial won't change that.
>
>
>
>
>
>John Atcheson
>
>
> 
>
>                     <Jack.Annis@uw 
>
>                     sp.edu>              To: 
> gmiller@wmrc.uiuc.edu@internet@HQMAIL,
> 
>TVINSON@tnrcc.state.tx.us@internet@HQMAIL,
>                     07/25/02 
> 09:41        nppr@great-lakes.net@internet@HQMAIL,
>                     AM 
> p2tech@great-lakes.net@internet@HQMAIL
>                                          cc: 
> GHSIEH@tnrcc.state.tx.us@internet@HQMAIL,
> 
>KZARKER@tnrcc.state.tx.us@internet@HQMAIL,
> 
>SROOTHAA@tnrcc.state.tx.us@internet@HQMAIL,
>                                           raulg@utep.edu@internet@HQMAIL 
>
>                                          Subject:     RE: Innovative 
> Strategies for
>                                           Electric 
> Utilities
> 
>
>
>
>
>Hi
>Interesting discussion as usual. I think there is some good P2 opportunity
>for the utilities in renewables. I'm guessing that the electricity
>customers get from "Green Power" programs is not all directly from
>renewable sources, however the utilities get a premium on those rates and
>they don't have much problem signing up customers for Green Power Programs
>so it does at least encourage the utilities to look at renewables.
>
>I'm not an expert in this area but have heard good anecdotal stories about
>power companies having to turn away customers on their Green Energy
>programs because they are not yet generating enough from renewables.
>Wouldn't hurt utilities to take a look at fuel cell technology either, if
>they don't diversify in to some of these things maybe someday they will
>have a big coal pile or long term Ngas contract and no reason to burn it
>anymore. That could be a P2 incentive.
>
>All depends on the market in the long run-my opinion.
>
>Jack
>
>Jack Annis, Director
>Solid and Hazardous Waste Education Center
>Center for Environment and Energy (July 1, 2002)
>http://www1.uwex.edu/ces/cee/
>College of Natural Resources
>UW-Stevens Point
>Stevens Point, WI
>715-346-2793
>jannis@uwsp.edu
>http://wip2.uwex.edu WI Pollution Prevention Partnership
>
>
>-----Original Message-----
>From: Gary Miller [mailto:gmiller@wmrc.uiuc.edu]
>Sent: Thursday, July 25, 2002 7:59 AM
>To: Thomas Vinson; nppr@great-lakes.net; p2tech@great-lakes.net
>Cc: Grace Hsieh; Ken Zarker; Susan Roothaan; raulg@utep.edu
>Subject: RE: Innovative Strategies for Electric Utilities
>
>
>Thomas,
>
>You make an excellent point.  Perhaps we need to "sell" electric utilities
>on the concept that they are providing a service - not just a
>commodity.  With a service approach the less materials (in this case
>electricity) required by the customer the more money the vendor makes.  The
>vender's focus changes to producing less commodities through improvements
>in transmission and end use efficiency.  Some chemical suppliers are taking
>this approach now.  It seems to me that this concept could work with any
>commodity including electricity.  I have greatly oversimplified this
>concept and what it would take to make such a paradigm shift in this
>particular industry.  You would have to find just the right innovative
>mindset in order for a utility to adopt such a radical approach.  Some good
>articles have appeared in P2 Review on the topic of innovative supplier
>contracts or chemical management systems.  The automotive industry has been
>adopting this approach.
>
>Has anybody come up with a way to promote this approach with utilities in
>the U.S.?
>
>Gary Miller
>
>
>
>At 12:44 PM 7/24/2002 -0500, Thomas Vinson wrote:
> >It is a very interesting discussion.  It has moved to an area that I have
> >had on my mind for a number of years...how do we "sell" electric utilities
> >on P2?
> >
> >The Electric Utilities is an area I have always wanted to address.  With
> >so many sectors we have applied P2 principles and seen enormous benefit to
> >the environment and the economy.
> >
> >But like the proverbial salesman who can't get his foot in the door I seem
> >to be at a loss with Electric Utilities.
> >
> >Mark and LCRA are very open to change; in fact I have a great deal of
> >respect for LCRA's innovative mindset.
> >
> >In every other sector I have seen resistance to P2 change, but there is
> >also some acknowledgement that P2 is a good idea. It is simply a matter of
> >convincing them that the approach is feasible (sort of along the five
> >factors that Gary Miller mentioned.)
> >
> >But with this sector I seem to be missing something.  There seems to be
> >some key factor that I am not addressing.  Discussions on P2 are ussually
> >met with indifference and all my usual strategies seem ineffective.
> >
> >I think I see the barriers:
> >
> >1. Source reduction is nearly impossible.  This process is simple.  Burn
> >stuff, convert it to electricity.  Without changing that paradigm it is
> >hard to offer solutions.  LCRA found some options that involved using
> >fuzzy logic (this is a math term not an assessment) to set a plants
> >operating conditions at optimal working conditions.  But so far I have
> >seen no interest from other utilities.
> >
> >2. Source reduction from a use standpoint is economically detrimental to
> >the utility company. Programs to reduce generation (like those discussed
> >by Burton) of electricity are not in the better interests of the
> >sector.  After all, they get more revenue as electric use increases.  I
> >once heard a city manager lamenting the cool summer because it was cutting
> >into his budget.  Energy conservation was the furtherest thing from his
>mind.
> >
> >3. The politics are intense.  If you offer a solution to a metal finishing
> >shop you affect at most a couple hundred people. But offer a change at a
> >utility and you are talking about millions of people.  Energy issues tend
> >to be highly charged.
> >
> >4. Environmental department not integrated?  Perhaps Mark can offer some
> >insight on this.  When talking with other sectors I get the impression
> >that the environmental departments are ussually integrated into their
> >business.  But sometimes I get the feeling electric utilites have
> >segregated environmental departments.  Is this the case?  If so, what is
> >the motivation for a utility to integrate it.
> >
> >So does this group have sector specific ideas about how to approach this
> >sector?
> >
> >It seems to me there is enormous opportunity here to help the environment
> >and save money if we could just get some momentum.
> >
> >I think Burts discussion of strategies gets to the heart of the
> >issue.  While we may get good results with the "you will save M O N E Y!"
> >pitch, we are probably not at 100% effectiveness.
> >
> >So, I put it to the group.  How do we practically implement the other
> >areas Burt mentioned, and specifically how would this approach work for
> >utilities.
> >
> >Tomas Vinson
> >www.srwm.org
> >
> >Fax: 512/239-3165
> >Phone: 512/239-3182
> >
> >Engineering Specialist
> >TNRCC - Pollution Prevention
> >MC112
> >PO Box 13087
> >Austin, Tx 78711-3087
> >tvinson@tnrcc.state.tx.us
> >
> >
> >Disclaimer:  Regulatory guidance  e-mails are provided to quickly get you
> >an answer to legal requirements.  They are not a substitute for compliance
> >with the regulation, but guidance based on the best information available
> >to the staff of TNRCC at the time.
> >
> >
> > >>> <jlmartinezp@repsolypf.com> 07/22/02 01:40AM >>>
> >Very interesting discussion
> >
> >I am writing form Europe. Here, we have a an internal law called IPPC
> >(Integrated Pollution Prevention and Control); the idea was to
> >have  something like PPAct but  being a bit more flexible. We are trying
> >to combine  making a trade off between Prevention and Control of the
>Pollution
> >
> >I think we, process, design or environmental engineers,  should be able to
> >think about a trade off between  PP or Pollution Control following a case
> >by case procedure.  Does Pollution Prevention pay? The answer should be
> >yes, but applying  concepts like best available technologies not
> >entailing  excessive costs.
> >I remember a paper form Bob Pojasek titled: "For PP be descriptive not
> >prescriptive" so let us  select scrubbers when necessary  or let us select
> >any source reduction measure when available at economic good conditions
> >
> >I agree that we should avoid to transfer pollutants from  air to land (for
> >example) but this is not always technical  or economical feasible.
> >I am studying  petroleum refineries cases and believe me that  it is
> >harder to  decide when  to apply Pollution prevention or pollution control
> >measures that go to your PP recipe book and select one of them
> >
> >Jose-Luis Martinez
> >
> >
> >
> >  -----Mensaje original-----
> >De:     Snyder, Mark [mailto:mark.snyder@moea.state.mn.us]
> >Enviado el:     viernes 19 de julio de 2002 20:53
> >Para:   nppr@great-lakes.net; p2tech@great-lakes.net;
> >scott.butner@pnl.gov; 'Mark Johnson'
> >Asunto: RE: Innovative Strategies for Electric Utilities
> >
> >
> >This certainly sounds like a good step forward for cleaner air in Texas,
> >but after reading the press release, I'm left with some questions.  Is
> >this project to install scrubbers an example of pollution prevention or is
> >it an example of more stringent pollution control?  Given that scrubbers
> >have been around for a number of years and have been required for a number
> >of facilities in different areas, what exactly makes this permit
> >innovative?  Or is there something I'm missing from the press release?
> >
> >Mark Snyder
> >Pollution Prevention Specialist
> >Minnesota Office of Environmental Assistance
> >mark.snyder@moea.state.mn.us
> >
> > > ----------
> > > From:         Mark Johnson[SMTP:Mark.Johnson@lcra.org]
> > > Sent:         Friday, July 19, 2002 12:02 PM
> > > To:   nppr@great-lakes.net; p2tech@great-lakes.net;
>scott.butner@pnl.gov
> > > Subject:      Innovative Strategies for Electric Utilities
> > >
> > > A shameless plug for my organization Lower Colorado River Authority
> > (LCRA) and the Texas Natural resource Conservation Commission (TNRCC) and
> > EPA Region 6!
> > >
> > > We recently submitted an application for a Flexible Air Permit to the
> > TNRCC for our 1,500 MW coal fired power plant in La Grange Texas.   The
> > innovative air permit will allow our facility to implement many P2
> > projects that would have not been possible without the Flex Permit (most
> > of these P2 projects would have triggered NSR).   The Flex permit will be
> > put in motion over the next 10 years.
> > >
> > > This innovative permit strategy can be followed by most other utilities
> > if the states are able to provide the flexibility.  It can provide some
> > near term benefits and long term reductions without waiting for CAA
> > reforms or implemntation of the Bush Clear Skies initiative.
> > >
> > > For more details please visit this link
> > > http://www.lcra.org/about/news/2002/07/plan.html
> > >
> > >
> > > Mark L Johnson, REM.
> > > Senior Environmental Coordinator
> > > Lower Colorado River Authority
> > > Email: mark.johnson@lcra.org
> > > Phone (512) 473- 3200 ext 2868
> > > Fax: (512) 473-3579
> > > Fax (512) 473-3579
> > >
> > >
> >
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>*******************************************************************
>Gary D. Miller, Ph. D.
>Assistant Director
>Illinois Waste Management and Research Center
>Department of Natural Resources
>One East Hazelwood Drive
>Champaign, IL  61820
>www.wmrc.uiuc.edu/
>www.pneac.org
>www.glrppr.org
>www.p2rx.org
>www.elsevier.nl/locate/issn/0959-6526
>
>217/333-8942 phone
>217/333-8944 fax
>gmiller@wmrc.uiuc.edu
>******************************************************************************
>
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*******************************************************************
Gary D. Miller, Ph. D.
Assistant Director
Illinois Waste Management and Research Center
Department of Natural Resources
One East Hazelwood Drive
Champaign, IL  61820
www.wmrc.uiuc.edu/
www.pneac.org
www.glrppr.org
www.p2rx.org
www.elsevier.nl/locate/issn/0959-6526

217/333-8942 phone
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