Amber News

November 10th, 2014


Arlington ISD Eliminates Nearly $175,000 in Annual Energy Related Costs

Arlington ISD recently teamed with Rapid Power Management to implement a system-wide power factor correction project. By correcting the power factor at virtually all of their schools in the district, Arlington ISD is saving taxpayers $175,000 a year. The project began in April 2014 and is expected to be complete in early 2015.

Bebensee Elementary School, Arlington, Texas:Bebensee Elem School 2

(Left) is an example of an outdoor wall-mounted low-voltage unit with a remote mounted disconnect. Both the capacitor and the disconnect are NEMA 3R enclosures designed for operations in North-Texas weather and heat. The Automatic 150 kVAR 480V unit connects to the school’s main switchgear panel behind the wall on the bus bar. A Current Transformer (see the ½” conduit) is used by the system controller to measure system values and bring on capacitor stages based on load requirements. The CT is installed in the main around a single phase of conductor wire.




Remynse Elementary School, Grand Prairie, Texas:Remynse Elem School

(Right) is a 175 kVAR, 480V, automatic, indoor, floor mounted unit.

In this application there was space available inside the mechanical room of the school for us to mount the capacitor unit in the middle of an open area. The capacitor is mounted and bolts directly to the floor, and cabling is routed via ceiling suspension and conduit.





Wood Elementary, Arlington, Texas:

(Left) is a 125 kVAR, 480 V, Wood Elementaryindoor, floor mounted unit.

This is an example of an indoor application that required a remote disconnect, where wall space was at a premium and options were limited. The simple solution was mount the capacitor in the middle of the room, but RPM still had to mount the remote disconnect near enough to the switchgear and capacitor. The solution was to mount the capacitor bank and it’s disconnect, back to back. To further reduce cost and installation time, the two share the same assembly of unistrut.




Upgrade from Fluorescent to LED!

Installing an LED lamp, Source: Philips

Philips has developed the world’s first LED replacement bulb compatible with high frequency fixtures and drivers in linear fluorescent tube lighting. With this application, there are no wires or drivers to replace. In just a few minutes, replace your outdated fluorescent bulbs with LED lighting.

Savings and return on investment are significant! Moving from a typical 2L T-8 fluorescent fixture with 32 Watt lamps, can cut usage by as much as 60%. Also, with a rated life around 50,000 hours, the fixtures maintenance costs are $0. In a typical office, the fixture would last 15 to 20 years.

Please note: Philips LED T8 lamps will only operate properly on compatible instant-start ballasts.


Construction Begins on World’s largest Floating Power Plant

Floating Solar

Floating Solar Plant, Source:

Kyocera Corporation, Century Tokyo Leasing and Ciel et Terre recently announced construction on the world’s largest floating solar installation. The 2-piece project, which began construction in September, will total 2.9 megawatts (MW). The 1.7 MW planned at Nishihira Pond will become the world’s largest solar power generating system installed on water. The other 1.2 MW will be located at Higashihira Pond.

Solar power is gaining popularity in Japan and due to increasing difficulty in securing land, floating solar power plants will help utilize all possible options.

Features and Added Benefits of Floating Solar Power Plants:

  1. Floating solar power plants generate more electricity than ground or rooftop systems thanks to the cooling effect of the water.
  2. The reservoirs in which the panels are installed experience less evaporation and algae growth due to the shading of the water.
  3. Ciel et Terre’s platforms are 100% recyclable and can withstand UV rays and corrosion.
  4. The design and technology used are to ensure durability against typhoons.

(Source: Kyocera)


2014 Nobel Prize for Physics Awarded to Creators of Blue LEDs

A Blue LED, Source:

Isamy Akasaki, Hiroshi Amano and Shuji Nakamura were named the winners of the 2014 Nobel Prize for physics for their creation of blue LEDs. They first created blue LEDs in the early 90’s and their invention has led to a new generation of LED-based computer and TV screens.

Red and green LEDs had been around for many years while blue LEDs remained a challenge for scientists to create. Without them, the colors could not be mixed to produce the white light we see inside smart phones, TV’s and even LED lamps in offices and homes.

The president of the Institute of Physics, Dr. Frances Saunders, said “20% of the world’s electricity is used for lighting, it’s been calculated that the optimal use of LED lighting could reduce this to 4%.”

According to an article in Energy Manager Today, The LED lighting market is poised for strong growth in the next five to 10 years as energy-hungry technologies being systematically banned across the world. The research by Akasaki, Amano and Nakamura have made this possible.


Fortune 100 Companies Invest in Solar Power

According to the 3rd annual Solar Means Business reports, released by the Solar Energy Industries Association (SEIA), many of America’s leading companies continue to ramp up their use of clean, solar energy.

Combined, the companies have 569 megawatts (MW) of solar capacity – a 28% increase from last year and a 103% increase since 2012.

Walmart leads the pack for the third year in a row with 105 MW installed across 254 locations. Some other companies that made the list include   Kohl’s, Costco, Apple, IKEA, Macy’s, Johnson & Johnson, Target, McGraw Hill, Staples, Campbell’s Soup, U.S. Foods, Bed Bath & Beyond, Kaiser Permanente, Volkswagen, Walgreens, Safeway, FedEx, Intel, L’Oreal, General Motors, Toys “R” Us, Verizon, White Rose Foods, Toyota and AT&T.

Source: Solar Energy Industries Association (SEIA).


GDP Update: 

Real gross domestic product (GDP) increased 3.5% in the third quarter of 2014 according to an advanced estimate released by the Bureau of Economic Analysis. GDP increased 4.6 percent in the second quarter.

The increase in GDP for the second quarter is due mainly to personal consumption expenditures, exports, nonresidential fixed investment, federal government spending and more. Imports (a subtraction of GDP) decreased.

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August 5th, 2014

Q3 2014: LED in the Office – Money Well Spent

How much do you think the commercial market in America will spend on LED lighting by 2020? Would $8.8 billion shock you?

LED technology is far superior to older systems in efficiency, lighting quality and life. The lifespan of LED lighting is longer than that of incandescent, fluorescent or HID lamps. This has huge ramifications on the market being that a high quality LED can last 70,000+ hours.

N America Lighting

*The LED market is expected to grow 17.6 times from 2010 through the end of the decade. Courtesy of LEDLinX.

Because LEDs never really burn out, product lifespan is measured by illumination depreciation. The lifespan of an LED is at the point in which it reaches 30% illumination depreciation. This equates to anywhere between 70,000 – 100,000 hours. Hypothetically speaking, if your facility is lit 24 hours, all day, every day, it would equate to 8,760 burn hours a year. At the very minimum, your LED fixture would last 8 years. No past fixture has come close to even half of that life. Manufacturers that run 2 to 3 shifts are great LED candidates because of the low return on investment.

Beyond the busy plant, the commercial market still seems skeptical of the new technology. An application that all commercial clients should consider is the LED office retro-kit. The image below is a typical office fixture that presents a good LED savings opportunity.

The parabolic LED fixture above typically comes with 4 fluorescent lamps. See below for wattage and price differences.

The parabolic LED fixture above typically comes with 4 fluorescent lamps. See below for wattage and price differences.

Fixture                                 Wattage              Hours                    Annual Cost @$0.10 per kWH

4-Lamp T-12           200     W/Ballast             2,600                                     $52

LED Retro-Kit           40     W/Driver             2,600                                     $10


Based on upfront cost, the LED retro-kit would still take about 4 to 5 years to payback. That may still be a long ROI to justify at your facility. If you are able to use your own personnel to install the fixtures and take advantage of utility rebates, the payback can be as little as 1 to 2 years.

To see how easy it can be for your personnel to install, reference the Philips Lighting video below:

Philips EvoKit Installation

LEDs outlast all other lighting solutions! Call RPM to get a free estimate for your custom application: 469-759-1450 or


Advances in Solar Energy: What Will the Future Hold?

With the recent advances in solar technology, and the amount of sheer energy we use for giant sporting events like the World Cup, is it probable that we could see an improvement on the amount of fossil fuels used by the next World Cup in 2018?

The jet fuel used to fly in spectators, players, equipment and general personnel along with the electricity to power stadiums and the approximately three billion viewers’ television sets makes for a lot of carbon dioxide emitted into the atmosphere during the month long World Cup.

It is estimated that the 2014 World Cup will burn through enough energy to fuel almost every car and truck in the US for an entire day (

The advancements in solar cell technology are ever changing. Solar makers test different materials and technologies to improve efficiency and costs of cells.

A team at the Massachusetts Institute of Technology (MIT) has set a new record for the most efficient quantum-dot cells. Another MIT team created the first solar cell that gives off extra electrons from high-energy visible light. According to research from the team, applying the technology as an inexpensive coating on solar cells could increase efficiency by as much as 25%.

Vladimir Bulović, a professor at MIT, was quoted saying, “silicon had six decades to get where it is today, and even silicon hasn’t reached the theoretical limit yet. You can’t hope to have an entirely new technology beat an incumbent in just four years of development.”

While researchers continue to reduce costs around manufacturing and materials, create more efficient cells and find versatile ways to use the technology, it isn’t stopping consumers from purchasing solar systems.

SolarCity, an energy services provider, posted a record breaking 136 megawatts of solar power in the first quarter of 2014 and added 17,664 customers. The company has worked to lower solar installation costs by approximately 30% within the past two years and plans to reach 2 gigawatts of power by the end of this year.

Close to 6,000 MW of PV are forecasted to come online throughout 2014, which represents 26% growth over 2013’s record installation totals. As strides are continually made in the advancement in efficiency and falling prices we can expect that more and more people will adopt the use of this technology.

Solar Industry Data

  • There are now over 13,000 MW of cumulative solar electric capacity operating in the U.S., enough to power more than 2.2 million average American homes.
  • Year-over-year, the national average PV installed system price declined by 15% to $2.59/W in Q4 2013.
  • The average price of a solar panel has declined by 60 percent since the beginning of 2011.
  • Close to 6,000 MW of PV are forecasted to come online throughout 2014, which represents 26% growth over 2013’s record installation totals.
  • 2014 will be a record year for CSP as 840 MW are expected to be commissioned by year’s end.
  • Together, new solar electric capacity projected to be added in 2014 will generate enough clean energy to power over 1.13 million average American homes.

Courtesy of the Solar Energy Industries Association (SEIA)

 GDP Update

Real gross domestic product (GDP) increased 4% in the second quarter of 2014 according to an advanced estimate released by the Bureau of Economic Analysis. GDP decreased 2.1 percent in the first quarter.

The increase in GDP for the second quarter is due mainly to nonresidential investment, state and local government spending, exports and private inventory investment. Imports (a subtraction of GDP) increased.

The second Q2 update or revision will be released on August 28, 2014 and will be based on more complete data.

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April 8th, 2014

Q2 2014: Facility Transients – Identify and Protect!

Q: How much longer will your equipment last if protected by a surge protection device?

A: Two to Three Times Longer

Doubling or tripling the life of equipment should encourage all facilities to install surge protection, right?  Unfortunately, this isn’t the case as the direct correlation between surge protection and a defined payback is challenging.  In the surge protection world, the “Three D’s” are destruction, degradation and downtime. Many business leaders are only interested in protecting equipment following destruction, or if an insurance company is involved.

To help inform upper management of the importance of surge protection, it first requires a basic knowledge of the two types of transients, or surges.  Reference the illustrations below for comparison against a normal voltage line:

Impulse Transient

The “impulse transient” referenced above is a one-shot type surge in power.  This type of surge often occurs as a result of lightning strikes, utility distribution equipment switching or even by neighboring facilities daily change in operation.

ringing transient

The transient above is known as a “ringing transient” and is the most common type of surge.  This type oscillates above and below the normal voltage and is caused by the everyday switching of equipment in the facility.

The start-up of a five horse-power motor can cause up to a 1,000 volt impulse and if the motor has faulty wiring or insulation, a continuous stream of transients above 600 volts is common.  The list below is of common equipment which could be causing ringing transients in your facility.

Common Internal Sources of Transient Activity


PC Power Supplies

Laser Printers

Electronic Ballasts


Power Factor

Power Supplies

Temperature Controllers

Motor Controllers





Variable Speed Motors

Standard Electric Motors

High-frequency Lighting Power Supplies

An additional way to educate upper management regarding a preventative surge protection program is to maintain accurate logs of replacement equipment and of restarts due to program interruptions.  If possible, you may run a log comparing similar pieces of equipment, one with surge protection and one without.  Over time, relate the interruptions to a cost impact based on downtime.  This process should help determine a return on investment for implementing surge protection.

In making that investment, the Innovative Technology line from Eaton has two distinct products:  the PTX (Figure 1) and the PTE (Figure 2).

The PTX line will serve your incoming main and most sub panels with immediate protection against the transients referenced above.  This line is the most commonly purchased for general plant protection.

The PTE has an advanced protection feature called Active Tracking Network (ATN).  The ATN is recommended for critical or electronically sensitive loads because the feature clamps the voltage down into a narrow band thus limiting the effect of ringing transients.

ATN Performance Curve

Call RPM to help set-up the appropriate surge program for your facility.

Finding Unique Ways to Harvest Energy

We’ve always been encouraged to wear light colors in the summertime because it keeps us cooler than black or dark clothing does. Black objects absorb all colors of the visible spectrum, reflecting no light.

If you have ever seen a solar cell, you may have noticed they are black and often placed on roofs. It makes sense that they wouldn’t be white, but what about other colors?

University of Michigan students and staff are thinking outside of the box and invented colorful, see-through solar cells. The thought process behind these cells is to utilize solar technology differently than the traditional rooftop applications.

An American flag solar cell. Photo courtesy of the University of Michigan.

An American flag solar cell. Photo courtesy of the University of Michigan.

Black solar cells absorb all wavelengths of visible light and colored cells do not. This makes colored cells less efficient but more applicable for places where they will be seen on a daily basis. The see-through design also helps expand placement options.

Jay Guo, professor at University of Michigan, pictures the colored cells on the sides of buildings, on billboards and as window shades. Broadening the application for solar cells can help densely populated areas benefit from energy harvested by the sun.

For more information on the development and background of these solar cells, please click here for the full article and a video on the development.


Did you know?

Natural Gas Vehicles in the world

Natural Gas Vehicles in the world

  • Natural gas is the earth’s cleanest fossil fuel and is colorless and odorless in its natural state.
  • Of the 50 states in America, 32 of those are now producing or have produced natural gas.
  • The U.S. is the world’s largest producer of natural gas, but lags behind other nations in natural gas transportation. There are over 15 million natural gas vehicles on the road worldwide – but only 140,000 are in the United States.
Source: American Gas Association




CoServ Teams With the Department of Energy’s SunShot Initiative

In 2013, 4,751 megawatts of new solar photovoltaic (PV) were installed in the United States – a 41% increase from 2012. This means that solar accounted for 29% of all new electricity generation capacity added in 2013. Falling costs have made solar energy more appealing and feasible for homes, businesses and even electric cooperatives. (Solar Energy Industries Administration – SEIA).

Chart courtesy of the Solar Energy Industries Association (SEIA).

Chart courtesy of the Solar Energy Industries Association (SEIA).

CoServ Electric is the second largest electric cooperative in the state of Texas. It provides electricity to more than 152,000 residents and businesses across the DFW area. Headquartered in Corinth, Texas, CoServ installed its first solar PV system in 2009. It produces an average of 136,000 kWh per year – roughly 2.5% of the kWh energy needs at the facility.

The average cost of solar electricity was about 25 cents per kWh in 2009.

Today, CoServ is planning a 1 megawatt (MW) solar PV project with the National Rural Electric Cooperative Association and several other electric co-ops sponsored by the U.S. Department of Energy as a part of the SunShot initiative.

The SunShot Initiative seeks to make solar energy costs competitive with other forms of electricity by 2020. This PV project has been dubbed SUNDA, which stands for Solar Utility Network Deployment Acceleration. The objective of the project is to enhance co-ops ability to design, deploy and operate utility scale solar PV systems at their facilities.

Source: Texas Co-Op Power Magazine, The U.S. Department of Energy and the Solar Energy Industries Association.

Where Does LNG Stand?

Since 2011, the U.S. Department of Energy has conditionally approved six proposals to export LNG to countries with which the United States does not have free trade agreements (Reuters).

According to the EIA’s Annual Energy Outlook 2014, U.S. exports of LNG from new liquefaction capacity are expected to surpass 2 Tcf by 2020. Natural gas prices are low in the U.S. compared to other global markets, making natural gas attractive for other countries to purchase from us.

The United States is set to begin exporting LNG in late 2015 at Cheniere Energy’s Sabine Pass in Cameron, LA.

No other LNG plants are set to go into service until 2017, so the Sabine Pass exports will help us evaluate what kind of affect it will have on our supply and demand in the United States. Not to mention, the Sabine Pass is the only facility to receive approval from the Federal Energy Regulatory Commission (FERC) so far.

The chart below outlines some of the major applications received by the Department of Energy to export LNG. For a full version please visit this link.

Source: U.S. Department of Energy, SeekingAlpha

Source: U.S. Department of Energy, SeekingAlpha


GDP Update

Real gross domestic product (GDP) increased 2.6% in the fourth quarter of 2013 according to a third estimate released by the bureau of economic analysis. Up 0.2% from the second estimate in February, more sufficient data proves that personal consumption expenditures were larger than previously thought. On the other hand, private investment in inventories and in intellectual property products were smaller than what was previously estimated.

Thanks to severe winter weather early in 2014, economists expect consumer spending to decline from Q4 2013 until after Q1 2014.

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February 3rd, 2014

Q1 2014: Surge Protection Devices – A Cheap Insurance Plan

Does your equipment experience nuisance tripping? Do you have to re-boot controllers? Do you have to replace drives often? Do your drives have unexplained behaviors? Does your plant have frequent motor re-winds?

For any facility, these questions are important to address before developing a sound maintenance program; particularly for manufacturers. Forward thinking manufactures integrate surge protection as a critical part of their preventive maintenance program. This is done to optimize and protect operations and assets helping to avoid downtime, delays and monetary loss. Below is an interview with Special Products, a prominent sheet metal manufacturer located in Rockwall, Texas:

SPD units protect from more than just lightning.

SPD units protect from more than just lightning.

What are some estimated costs around surge issues that could have been saved had you installed a surge protection device on your equipment?
“Before we started putting the surge protection on everything, about once a year we would have a power event, lighting storm, whatever, that would damage a piece of equipment. On average, the repair cost is usually between eight and 15 thousand dollars and usually shuts that piece of equipment down for 3 to 10 days depending on parts availability. So, that’s what drove us to actually start using the surge protection.”

How much money do you think SPD units save your company each year?
“Eight to 15 thousand [dollars] for repair and then down time could be, 3-10 days on a particular piece of equipment.”

How many pieces of equipment are in your facility?
“We have probably around 65-70 pieces of CNC type equipment; I don’t have an exact count today it’s changing all the time.”

Do you have SPD units on every piece of equipment?
“We do have some equipment where the factory has installed surge protection as part of the unit itself so we don’t add surge protection to those. But the ones that don’t come that way, we have added surge protection to. Our primary target for the SPD’s is the CNC type equipment, with a lot of computer equipment, electronic controls, and things like that”

Is there any upkeep/maintenance that needs to be done on a SPD unit? If so, what are the costs around that?
“We have a weekly checklist that our equipment operators go through and one of the items is to just check the lights on the unit to make sure it’s working properly. They [SPD units] do eventually wear out if you get enough power.”

One last important note, most facility managers only think about protecting their facility from outside surges like lightning strikes when, in reality, plant equipment represents 80% of all surges. These surges are smaller in size than lighting strikes but are more frequent. Problems arise slowly once the system is compromised. Surge is inexpensive and worth the insurance against the costs that can impact your plant. Why risk it? Call RPM to set up an appointment or get a quote for your application.

LED Applications a Bright Idea

What percentage of the annual $66 billion global lighting market does LED represent? The answer is 18% – and growing.  Just a few years ago this share was below 5% as Light Emitting Diode (LED) systems were too expensive with simple returns of over 10 years. The annual growth rate of LED is 34% and is predicted to be 70% of all lighting sales by 2020. At that point the global market will be over $100 billion.

These are astonishing numbers and facility managers are trying to figure out the current sweet spots. Therefore, which applications are the most popular due to their cost effectiveness? Below are some of the best applications:

Lastly, note that it probably is a “bright idea” to check your application every year to see if it has hit your financial threshold as LEDs continue to drop in price.  Please call RPM today to schedule a time for an energy manager to evaluate your application.


ERCOT Demand Response ERS 30 Program Changes

Demand Response is a program designed to pay large energy consumers to be available to curtail their load during unstable electricity grid conditions.  Participants in Demand Response programs receive revenue simply by participating in the program, whether there is a curtailment event or not.

Recently, ERCOT published changes to their ERS 30 Demand Response program, including making the program a permanent fixture in their Demand Response product mix.  The changes are summarized below:

  • Participants are now paid a clearing price for participation rather than the price as bid by the customer.  ERCOT uses a “bid stack” approach and pays each participant equally.
  • Additional funding has been allocated for Summer Business Hours 2 and Business Hours 3 and funding has been reduced for Non-Business Hours.
  • Participants who do not perform will no longer be suspended from the program, but revenue to participants will be reduced based on performance.  The minimum performance level for full payment is 95%.

In conclusion, participating in ERCOT’s ERS 30 Demand Response program is simpler and more lucrative during typical peak demand periods.  Please contact your RPM Energy Manager for more information about Demand Response.


GDP Update


Courtesy of CNN

Gross Domestic Product (GDP) increased 3.2% in Q4 2013 according to advance estimates released by the Bureau of Economic Analysis (BEA). GDP rose at 4.1% in Q3 2013.

Consumer spending and international trades were large drivers of the growth seen in Q4.

Inventory investment slowed as well as federal government spending which contributed to the slow growth in Q4.


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November 5th, 2013


Natural gas rig count totals are below those of last year (see chart below) but gas output is higher than it has ever been. The Energy Information Administration (EIA) stated increases in drilling efficiency and new well productivity have been the main drivers of recent growth in domestic natural gas production.

Hydraulic fracturing, or fracking as it is more commonly referred, is the latest method of extracting gas, albeit controversial. Use of this method has caused a bump in the production numbers and forced older, outdated wells to work less. Cabot Oil and Gas is one company that has increased their output in the Marcellus Shale by approximately 20% with more sophisticated wells. They announced during their 2014 drilling campaign that their average output per well will approach 20 Bcf.

Thanks to the technology, the US leads as the largest developer of natural gas in the world.

The EIA is projecting US natural gas production to increase from 23 trillion cubic feet in 2011 to 33.1 trillion cubic feet in 2040 – a 44% increase. See chart below:

Source: U.S. Energy Information Administration, Annual Energy Outlook 2013 Early Release

Regardless of production being high, energy-related CO2 emissions have fallen to low levels. The EIA reported last week that carbon emissions fell 3.8 percent in 2012. This is the lowest level since 1994. Moving from coal to gas fired generation accounted for almost 60% of this reduction. Reduced residential consumption, a warmer than usual winter and an increase in fuel-efficient cars are among some of the other reasons there was such a large decline in emission.

Source: Baker Hughes

While this is all positive news for natural gas advocates, it brings into question the status of renewable energy sources. Many note that the gas boom is preventing the escalation of even cleaner fuels exploration – wind, solar and nuclear. Many believe the natural gas industry should support innovation beyond gas to support the renewable resources.



Of the natural gas consumed in the United States in 2011, approximately 95% was produced domestically ( In determining ways to take advantage of the incredible supply of natural gas, transportation comes to the forefront of discussion. Alternatives to gasoline powered vehicles, busses, fleet trucks, etc., offer the United States an opportunity to reduce foreign oil dependency and utilize something produced in our own backyard.

Low Natural Gas Prices Spur Fuel Conversion Options

You may have recently noticed city buses, work trucks or a seemingly average car with a CNG sticker on the back or side. CNG stands for “compressed natural gas” and these vehicles are fueled by natural gas rather than gasoline.

Vehicles running on CNG produce approximately 30-40% less greenhouse gas emissions than a gasoline powered engine and help reduce dependence on foreign oil. Natural gas is about one half the price of gasoline or diesel fuel in most parts of the country and not only is it cheaper and cleaner, it is produced locally.

Photo courtesy of Tesla Motors

Electric Car Manufacturing Gaining Momentum

Tesla, the electric sports car manufacturer, has, in essence, revolutionized the auto industry. Using a $465 million loan from the Department of Energy in 2009, the company now has a market cap of over $22 billion and repaid their loan nine years early. Tesla’s success is putting pressure on larger manufacturers to step their game up.

Rising fuel prices and increased pollution from gasoline powered vehicles are two of the many reasons consumers are looking at different car-buying options – electric and natural gas fueled vehicles included. A $65,000 Tesla Model S may not be a practical price range when considering a standard vehicle, but factor in the low cost of fuel (~3 cents per mile) and it could become a more attractive option for many.

Natural Gas Supply + The Electricity Grid

While a CNG vehicle essentially takes directly from natural gas supply, electric vehicles take from natural gas supply in a more roundabout way. Natural gas power plants produce electricity which then fuels the electric vehicles. If CNG and/or electricity is the standard for vehicles in the future, we have to consider what this will mean in terms of grid reliability and the natural gas storage levels. Coupling innovation like alternative fuels with something like LNG exportation, it is hard to say what will happen in terms of future pricing or natural gas reserves.

CNG fleets and Tesla’s success may be surprising but definitely proves a market for alternative fuel type vehicles exists. It also shows that people are willing to invest in innovation. All of this helps the US get one step closer to energy independence.



If your company is considering selling a building with an energy contract in place, please contact your energy manager early in the process. Breaking an energy contract before its expiration can be costly. However, there may be options.  Some energy providers may allow you to assign the contract to the new owner or move the contract to a new facility.  Either way, we should discuss your options early in the process to avoid costly penalties.


Solar has been off the radar for corporations that want a reasonable return on their equity. Time has come to change this perspective as paybacks are down to levels below 4 to 5 years. See the above example of a manufacture’s Solar Project priced at $872,467. Once all Federal, State and Local incentives were applied, the cost was just $143,807.

True Value

Because solar systems have a long life, simple payback doesn’t give a true representation of the value to a corporation. The above system with a projected life of 30 years and a discount rate of 5%, delivers an internal rate of return of 19.0%, thus recognizing the time value of money. At 19%, the value on the project is well above the corporate average IRR.

Annual Review

Be sure to reach out to your RPM Energy Manager to get a quote and understand the financial benefits of a project for your facility.



Photo Courtesy of CNN Money

Real gross domestic product (GDP) in the United States increased 1.1% in the first quarter. Advanced estimates for the second quarter showed a 1.7% increase in GDP. The second quarter actually increased at an annual rate of 2.5% according to a third estimate by the Bureau of Economic Analysis.

The estimate is showing an increase due to personal consumption expenditures, exports and residential fixed investment. Imports, which subtract from the GDP calculation, increased as well as negative contribution from federal government spending.
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August 1st, 2013



Saving money can be as simple as turning off the light when leaving a room, turning up the A/C while on vacation or unplugging unused appliances. Recognizing and changing a few habits here and there cuts costs without affecting day-to-day operations. The same tricks translate to commercial and industrial power users, on a larger scale, by monitoring energy consumption with the installation of an energy management system.

What and how you can monitor.

An energy management system is designed to provide a short-term return on investment by generating long term savings without disrupting business operations. The system allows for real-time monitoring, control and programming of anything from lighting to HVAC systems. Several applications allow management from not only a specific site but via wireless device (smart phone, iPad, etc) as well. Below is an example of the many different things an energy management system can offer:

Courtesy of Google Images

Why might your facility need this?

The emergence of energy management systems, specifically with industrial and commercial facilities, allow for a better understanding of a user’s load. Property, facility, plant and procurement managers will have the ability to view any of their site’s current or past usage to determine better ways of operating.

A property manager for an apartment building may notice that the clubhouse, which is closed from midnight to noon, has the A/C set at 70 degrees for those hours. Since it is closed and no one is in the club house during those times, the A/C can be bumped up. A procurement manager can drill in to one specific location’s usage or get a combined overview of all locations usage trends. The systems are also very helpful in emergency type situations. If a facility is aware of an upcoming blackout, the system will allow for a prompt and proper shut down of equipment. A leading manufacturer in building automation systems, Schneider Electric, states the implementation of the product will reduce operating costs by as much as 36%.

Data Collection

As building management systems advance, so has the way in which data is collected.  An undeveloped technology just a few short years ago, wireless communication is now ubiquitous with any new systems being put in place. The monitors can log any plant equipment wirelessly — with no hardwiring or telecommunication — and upload data into the system.  An example of a Wi-Fi interface with an antenna is shown below:

Courtesy of Dent Instruments

According to a study from Navigant Research, spending on industrial energy management systems will reach $22.5 billion by 2020, doubling 2013’s total projected numbers. The popularity is increasing and now many retailer electric providers already offer their own tools in conjunction with electricity contracts.

If an energy management system is something you may be interested in, please contact your Energy Manager from Rapid Power Management. We will be more than happy to facilitate choosing the correct retailer and/or product offering for your site. There are many options available and we urge you to be diligent in your research if you choose to go down the path without us.


Your Junk Mail Could Be A Legally Binding Electricity Contract

In some states, local governments are forming utility aggregation groups.  According to the Public Utility Commission of Ohio, “these groups… leverage their ‘buying power’ to solicit a lower supplier price for the electricity needs of their members.”

Rather than offering an opt-in procedure for those interested, you are automatically registered as a member. The only way to opt out is by providing a written reply to these unassuming letters.  Therefore, what could pass as junk mail may actually be a legally binding electricity contract.

Why are utility aggregations a good idea?

According to the Illinois Commerce Commission, “[local governments] are choosing to pursue aggregation because they may be able to help their residents and eligible small businesses save money by creating a combined customer group that has more buying power than individual residents and businesses and/or they may choose an electric supply offer that includes a higher percentage of ‘green’ power.”  In other words, assuming you do not have the ability to actively seek competitive bids, your local government can combine your usage with others in your area to become a more attractive customer for retail electricity providers.

This program is advantageous to the consumer who does not wish to be as involved in the decision-making process or who is less capable of gathering competitive rates for electricity.

Why are utility aggregations a bad idea?

Utility aggregation groups turn back the clock on electricity deregulation, putting a central buying authority in charge of your energy rate.  The program eliminates your options as a consumer.  However, there is a financial risk as well.  Most of the utility aggregations do not consider any existing electricity supply contracts you may already have in place.  For example, if your current electricity contract expires in January, and you already have a twelve-month extension in place, the switch to the utility aggregation could automatically generate large early termination penalties as your current and future retail electric providers assume you are discontinuing service through them.  By unwinding your existing contracts, the retail electric providers pass along the financial loss to you, the consumer.

Moreover, utility aggregations are not the only game in town.  By working with a private aggregator, you still have the opportunity to achieve greater “buying power” in the market, but with the partners of your choosing.  For example, privately you could aggregate with like businesses or business partners to form an aggregation that is beneficial to your industry or network.

Be proactive in determining whether or not you want to participate. 

The retail electricity market is one of the most competitive industries in the nation – which drives down costs and margins.  While it could make sense for you and/or your business to participate in an aggregation only you can determine the level of input and authority you would like to control during the electricity purchasing process.  Either way, please watch the mail for what could be an unassuming legally binding electricity contract.  For more information about aggregations, please contact the Rapid Power Management Team.

For Ohio-only clients, you may register your accounts on the “do not aggregate list” at the following link:



Prices are rising in the Northeast, specifically the PJM Territory, due to increased capacity costs. PJM is a Regional Transmission Organization (RTO) that coordinates the movement of wholesale electricity for 13 states & the District of Columbia.  PJM operates as a forward capacity market, unlike ERCOT which is an energy-only design. In the capacity market, RTOs make payments to power generators via a “capacity charge.” The generators are paid this piece and agree to make themselves available regardless of whether or not they are called upon during peak times. This market design was implemented in 2007 as a way to incentivize investments in the reliability of the grid, in both maintaining existing generation and creating new sources of capacity.

PJM holds an annual base capacity auction (using the Reliability Pricing Model or RPM) every May for delivery 3 years in advance.  The auction works to ensure that there is enough capacity to meet peak usage, plus reserve margin. Before each auction, PJM estimates peak electric usage for the entire region and provides bidders with this estimate and other important information.  After the annual base capacity auction, there is a possibility of 3 incremental auctions to seek additional or release unneeded capacity due to change in circumstances. The graphic below shows the time frame for each auction leading up to the delivery year. The 3rd incremental auction results are the final results that will be used to determine a customer’s capacity cost. A capacity service period is always June 1st – May 31st of the following year.


Based on the final auction results, all customers in the PJM territory pay a “capacity charge” every month.  This charge can either be bundled in your supply rate from your Retailer Electric Provider, or it can show as a line item on your bill if you choose not to lock it in your supply rate.  The capacity charge can range between 8% on the low end and 40% on the high end of your supply rate.

Another factor in calculating your historical or future capacity costs is the Peak Load Contribution (PLC) or Capacity Obligation.  This is the component that can be manipulated by the customer.  The PLC is very similar to the 4CP in ERCOT.  PJM will identify the 5 hours with the highest demand from June through September.  Your usage during these days will be averaged and used as your PLC for the following year (June – May).  PJM will not publish these dates and times until after the summer.  As a customer, if you are aware of days that COULD be a peak demand day, you can reduce your load during peak times (usually 3-6 PM) to lower your PLC for the next capacity year. Please see below for 2012’s coincidental peak days and times. RPM will begin sending out emails to PJM customers to alert them of a high probability peak day.

Below are the Capacity Auction results from 2009 to 2017.  The results for years 2014 – 2017 will most likely change slightly in the remaining incremental auctions.

• Years 2011-2012 & 2012-2013 were some of the lowest capacity prices due to the auctions occurring during the recession
• Year 2013-2014 has the highest prices for the New Jersey, Maryland & Pennsylvania utilities
• Year 2014-2015 has a significant increase for the Ohio utilities, but shows a decrease for the New Jersey, Maryland & Pennsylvania utilities
• Years 2014-2015 & 2015-2016 show a balance of capacity prices where most of the utilities in PJM have similar auction results (other than ATSI). The slight increase for 2015-2016 is because of coal fired generation being retired. This affected northern Ohio to a larger extent which is why ATSI is so much higher
• Year 2016-2017 shows a significant drop in pricing for all utilities other than PSE&G. This is due to new gas-fired generation, low growth in demand and increased imports from MISO

An example customer:

Since capacity is such a large portion of the supply charge, understanding why it’s necessary and how the price is determined is important. Please contact your energy manager to get a further explanation of capacity and what it means to your company.



Real gross domestic product (GDP) in the United States increased 1.1% in the first quarter, less than the original reported growth of 1.9%. Advanced estimates for the second quarter are showing a 1.7% increase in GDP. The second quarter increases are based on incomplete data and the second estimate, based on more complete data, will be released in late August.

The advance estimates are showing an increase due to exports, residential and nonresidential investment. Imports, which subtract from the GDP calculation, increased and consumer spending decreased significantly from the first quarter.


America’s Power Grid: World Ranking

A 2011 report by the World Economic Forum ranked US infrastructure below 30th for the quality of it’s electric power sector, and the American Society of Civil Engineers gave the country’s energy transmission infrastructure a grade of D -plus. Power outages cost the country between $80 billion and $180 billion annually, according to some estimates. And over the past decade, the number of major outages has doubled. Courtesy of GDF Suez Market Monitor Blog, July 29, 2013.

United States Power Grid, Courtesy of FEMA.

Shale Plays Leading to Massive Pipeline Growth

Consider Pipeline construction. A study by the Interstate Natural Gas Association of America Foundation concluded that between $130 billion and $210 billion will be required through 2030 on midsream infrastructure to meet projected market demands; about 80 percent of that would go toward gas transmission pipelines in the United States and Canada. The report further predicts that an additional 28,900 to 61,600 miles of pipeline will be needed through 2030. Courtesy of GDF Suez Market Monitor Blog, July 29, 2013.

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May 10th, 2013

Q2 2013 – Project Leasing: Take Advantage of Low Interest Rates and Low Monthly Payments

Project Leasing: Take Advantage of Low Interest Rates and Low Monthly Payments

An LED Light Fixture

In today’s economic environment, many private and public organizations are faced with tight operating and capital budgets. These restrictive budgets are hindering organizations from investing in necessary purchases to ultimately reduce operating expenses.

A common way to reduce operational costs is to address and adjust how efficiently facilities are consuming power. For example, up to 80% of a commercial building’s electricity charges can come from lighting alone. Replacing or retrofitting old, obsolete lighting with a more efficient system will save money but is a significant upfront purchase. Because of this, leasing can be an attractive and financially viable option.

Project leasing can allow you to increase your buying power by purchasing at today’s prices and low interest rates while stretching out tightly budgeted money over several fiscal years.

General Characteristics of a Lease

A lease is collateral-based finance product, utilizing the advantages of fixed term, fixed rate and fixed periodic payments.  It eliminates a significant equity investment by the customer and fixes the cash flows to simplify the budgeting process.

The lessor looks to use the leased equipment as the primary source of revenues and cash flows from which to repay lease obligation.

Financing can include “soft costs” such as installation, maintenance, freight, etc. as a part of the lease investment.

Why Consider Leasing?

1. 100% financing. Since leasing generally provides 100% financing, companies are attracted by the minimum upfront expenses and down payments required by other financing alternatives. Tangential out-of pocket expenses like shipping, freight, installation and engineering can be included in the financing.

2. Leasing is a fixed expense. With the uncertainty of interest rates and inflation, it is advantageous to lock-in long term expenses with today’s dollars. In addition, you have the opportunity to pay for the equipment from the savings realized (i.e. energy efficiency, utility rebates, and federal tax deductions).

3. Preserves existing lines of credit. Growing businesses generally have substantial credit needs to finance their development. By diversifying lending relationships, your business maximizes its access to credit and you never “put all of your eggs in one basket.”

4. Tax advantages. Leasing provides substantial tax advantages, in some cases providing a 100% write-off of the monthly lease payment. This is especially attractive to businesses subject to Alternative Minimum Tax.

5. Eliminates Cost of Waiting. With energy efficiency equipment time is literally money. With leasing, you can prevent the delays in equipment acquisition if you budget 6-12 months in advance and have not allowed for this particular purchase. With energy efficiency projects, one year of lost energy savings is usually greater than the entire cost of financing!

What Projects Can Be Leased?

Many energy efficiency measures can financed through a leased and multiple projects can be combined into a single lease. Examples include:

  • Lighting – Lighting technologies are constantly improving. Today’s systems are not only energy efficient, they produce better illumination and have lower maintenance costs than older systems.
  • Power Factor – Many industrial and manufacturing plants face a power factor penalty from their electric utility on every bill. Installing a capacitor bank to correct power factor can save thousands each month.
  • Solar – Harvesting energy from the sun is another way to save on electricity costs by increasing energy efficiency and decreasing dependence on the utility grids.
  • HVAC – Upgrades to HVAC systems improve energy costs with newer, more proficient technology. Aside from saving energy, you could reduce noise and lower maintenance costs.


Lease Example:

Leases can be structured on varying term lengths to accomplish a company’s goals, whether that is quicker ownership or higher positive cash flow. Below is an example of a lighting & power factor project:

Energy project leasing may not be a fit for all companies, but for many, it can provide an alternative finance mechanism. Let RPM help you explore the opportunity to capture energy cost savings today, without little to any upfront cash outlay through leasing.


CREZ: Competitive Renewable Energy Zone

In 2008, the Public Utility Commission (PUC) approved a transmission plan proposed by ERCOT to create more than 2,300 miles of transmission lines linking west Texas wind power generation with the densely populated areas in central and east Texas.  The plan identified areas in west Texas where wind generation had the greatest potential and determined the transmission infrastructure needed to move the power to market.  The CREZ project was initiated by the state legislature in 2005 to create a competitive market for wind power in Texas.

Thirteen transmission companies have contracted with the PUC to move the power east, which was the largest financial barrier for west Texas wind generators.  The total project was estimated at $4.93 billion, which was expected to be paid back by residential electricity consumers over the next decade.  However, cost overruns have increased the total project cost by about 40% to $6.8 billion – or $800 per residential consumer.  The project is expected to be completed by December 2013.


New Home Product: Nest Thermostat

Forget programmable thermostats — this ‘smart’ thermostat learns your behaviors and sets itself by mimicking your heating and air conditioning habits. Most programmable thermostats are complicated and time consuming to use, leaving no real benefit over a standard one.

People often leave their homes for work, vacation, a day out, etc. without adjusting the temperature. Nest learns your patterns and programs itself after a few times of use and can also be controlled from your smart phone.

Only 11% of programmable thermostats today are built to conserve energy. The Nest products ability to adapt to lifestyles allows an average user up to 20% savings on heating and cooling bills.

Installing Nest can be as simple as installing a new light fixture. Three out of four users installed the thermostat themselves in thirty minutes or less.

To see whether or not your home system is compatible with Nest please call 855-4MY-NEST. For more information, reviews and photos, visit




Gross Domestic Product (GDP) rose at a 2.5% annual pace in the first three months of 2013. This was driven primarily by a rise in consumer spending. Consumer spending rose at the fastest pace since the end of 2010. On the other hand, cuts in government spending dragged on the economy in the first quarter.

Though the GDP rose 2.1% from Q4 2012 economists were expecting a stronger rate of 2.8% growth.

Economic growth isn’t as likely to be as strong in the second quarter due to the public sector cutbacks and lack of job growth in March.

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February 5th, 2013

Q1 2013 – Customers Earn Revenue through Load Curtailment Programs

Q1 2013 – Customers Earn Revenue Through Load Curtailment Programs 


As grid reliability is becoming more of an issue across the United States, many utilities have begun to offer load curtailment options. One program offered in Texas is gaining notoriety from industrial and manufacturing companies for the extra revenue it can bring. Texas has experienced growth like no other state in the nation with more than 421,000 new citizens added to the population in 2012. All growth requires infrastructure support, including building new generation plants to meet energy demands. Power plant construction is a long process and the Public Utility of Texas (PUCT) along with Electric Reliability Council of Texas (ERCOT) is offering commercial and industrial users an opportunity to earn money for load reduction as a substitute for new generation construction.   In short, ERCOT and utilities will pay power users to be available to curtail electrical load, as long as a reduction is performed when called upon.  The two main programs are LAR (Load Acting as a Resource) and ERS (Emergency Response Service), formally known as EILS. The LAR program is instantaneous load interruption and is targeted for large industrials with flexibility in load reduction.  The ERS program offers advanced warning and is great program for demand response beginners.

Past Participation

In the past, commercial and industrial power users were reluctant to participate in the program due to high hurdles the state put in place to participate. Some of these obstacles included a maximum 10-minute warnings and shedding at least 1,000 kilowatts (kW) of load. Also, many demand response providers required installation of load curtailment equipment and software.

The program turned a corner on June 26, 2012 when ERCOT announced a new, voluntary, 30-minute pilot program ( in which $6 million has been allocated for funding. This has led to a higher level of participation and opened the door for more power users to take advantage of the financial benefits of the program. See below details and financial analysis of a potential participant.

ERCOT – Emergency Response Service (ERS) 30

This program requires a bid process where load is accepted up to the point whereby system load goals are reached.  The maximum amount of time an event can last is eight hours and payments are made to power users who curtail at least 85% of their load bid.  If at least 85% of the load bid is not curtailed, the power user can face suspensions from the program. The minimum commitment is 100 kW.

The program consists of four daily shaped participation blocks during each four month contract periods: October through January, February through May and June through September. See the below daily time periods:

  • Business Hrs. 1 or BH1 (8am-1pm)
  • Business Hrs. 2 or BH2 (1-4pm)
  • Business Hrs. 3 or BH3 (4-8pm)
  • Non Business Hrs. or NBH (all other hrs. and weekend and holidays)

Utility Programs

Texas summers have the highest risk for potential rolling blackouts and as a result, many utilities are offering their own program along with the ERCOT ERS 30 program.

Oncor – Customer Load Management (CLM) Program

One of the main benefits of this program is that all load is accepted into the program.  There is no bidding process.  See some highlights and financial analysis below:
Oncor Program highlights are as follows:

·         June – Sept Only
·         M-F excluding holidays from 1-7pm
·         One Hour notification
·         Events cannot be called after 5pm
·         Up to 25 hours of unscheduled events – unscheduled events duration 1-4 hours ($39.82 per kW)
·         One required 3 hour scheduled test ($0.18 per kw)*
·         No events were called in 2012

Example Calculation: Summer Block (June, July, August & September)


There have been nineteen LAR calls since the start of the program in 2002. As for ERS, there have only been two calls since the start of the program in 2008 and both events were in 2011.  There were no curtailment events in 2012. As referenced in the ERCOT 2012 CDR report below, the potential for shortages in system will be increasing, and therefore, a potential for higher payments in the future.

ERCOT May 2012 CDR Report (Capacity, Demand and Reserves Report)

In conclusion, companies are affected by rolling blackouts. An organization which chooses to participate in a load curtailment programs is choosing to be part of the solution. If your company chooses a proactive approach, a financial payment can be your reward.

Next Step?

Simply contact RPM and an Energy Manager will walk you through a free financial load participation evaluation.

Main Line – 469-759-1450 | Email:

The Top 10 states for new installed wind capacity in 2012

1. Texas (1,826 MW)
2. California (1,656 MW)
3. Kansas (1,440 MW)
4. Oklahoma (1,127 MW)
5. Illinois (823 MW)
6. Iowa (814 MW)
7. Oregon (640 MW)
8. Michigan (611 MW)
9. Pennsylvania (550 MW)
10. Colorado (496 MW)

Solar Check

In Obama’s second inaugural address, the President put a direct focus on regulating emissions to combat global warming. Thus, the EPA will take on a new focus as Chief Lisa Jackson is stepping aside.  Below shows the major EPA regulations over the next three years with the most impactful legislation being MATS (Mercury and Air Toxic Standards) that will take effect in 2015. The law requires current coal plants to put in pollution control equipment to reduce harmful emissions. This equipment is very expensive and thus most coal plants will be retired.

To make up for this void of generation, all other types of power plants will have to be built including solar photovoltaics. Most corporations have passed on solar due to long returns and haven’t looked at it again. Corporations should change this habit and have an annual review due to the momentum of more aggressive incentives from Federal, State, Municipal and local utilities. See the below analysis of Texas commercial building incentives for 2013 in Oncor territory:

Lastly, Congress is looking at alternative financial methods to promote renewables.  The two financial structures being proposed are allowing solar companies to for a REIT or M.L.P. for renewable energy projects. This would allow companies to reach more investors as the income is passed back to investors as they don’t pay corporate taxes and are often publicly traded.  In conclusion, every corporation should have an annual review of Solar as an option for their facilities as the incentives keep gaining momentum.

Use the following link to a PDF example of a full proposal with roof layout: Proposal Example

Smart Meter Texas

Did you know that if you have a Smart Meter at your home or apartment, you can monitor your daily usage? Visit Smart Meter Texas at to register your Smart Meter.  All you need is the ESI ID and meter number off of your electric bill.

GDP Economic Update

According to advance estimates, the real GDP decreased 0.1% in the fourth quarter of 2012 after increasing 3.1% in the third quarter. The drop reflected a fall in government spending- mainly a decrease in defense spending- a decline in exports and inventory investments.

The full 2012 year GDP increased 2.2% after increasing 1.8% in 2012. The pickup for the annual GDP growth was due to a slowdown in imports and consumer goods, the housing market rebound, an overall upturn in inventory investment and a smaller decrease in state and local government spending.

Courtesy of the Bureau of Economic Analysis:

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November 12th, 2012

Q4 2012 – LEDs: A Low Energy Lighting Solution

LEDs: A Low Energy Lighting Solution

LEDs are often associated with the red lights illuminating your alarm clock numbers, the brightly colored light panels in a night club or the bulb in the tiny flashlight key chains for sale at a convenient store. Fluorescent and incandescent bulbs remain the more practical lighting application; having lit up office spaces, hallways and our homes for decades. As time goes on, though, LEDs are evolving and finding their way as a lighting solution for residential, commercial and industrial users.

A Brief Background on the Light Bulb

Thomas Edison invented the first practical light bulb and electric lighting system in 1879. In more than 130 years, the light bulb has remained extremely similar to the original design. Modern incandescent/fluorescent bulbs are widely used due to low costs, wide availability and standard functionality.

General Electric developed the first light-emitting diode (LED) in the 60’s; a small light source that is illuminated by electrons moving through a semiconductor material. Original LEDs glowed red and several more colors came along over the next decades. Eventually LED manufacturers discovered how to create the bright-white color everyone is accustomed to in their standard bulbs.

LEDs Today
Many are familiar with LED lighting but it is a technology that has not yet been widely accepted. This is mainly due to the high upfront costs.

Like any newer-age product, LEDs are ever changing. Their quality, durability and versatility are increasing and prices continually decreasing. The light is produced very efficiently and can last up to ten times as long as fluorescents and incandescents.

In an interview with Greg Barry, president of light engine solution company LEDlinX, he stated that more than 60% of all fixtures sold or replaced in the next five years will be LED.

“Technology is changing monthly,” he said, “with better chips, drivers, heat management and optics.”

Energy Consumption and Lifetime
The lifespan of an LED is much longer than a conventional bulb’s because there is no filament that will burn out. Technically, an LED will illuminate forever but the intensity decreases over time – they are considered officially dead when they produce no more than 70% of their original lumen output (brightness). Additionally, due to an LEDs design, they are not damaged in circumstances that a standard bulb would be. It is a solid fixture and stands exceptionally well to shipping and transportation.

According to Energy Star, incandescent bulbs release 90% of their energy as heat. This is why you have to turn a light off and let it cool down before removing the bulb. Efficiency remains the number one advantage of an LED over standard bulbs. Not to mention they are cool to the touch.

Barry explained that one year ago return on investment for LED fixtures were in the 8 to 10 year range. Today the industry is seeing payback in the 5 to 6 year range and in five years consumers will see payback in the two year range.

“As acceptance matures, costs will come down significantly,” said Barry.

The above chart, courtesy of LEDLinX, shows the approximate lighting sales in North America. In 2012, LEDs made up $0.5 billion of the sales and in 2016 it is estimated that this number will increase to about $5.4 billion. In 2020, LED sales are estimated to be around 65% of the total lighting sales in North America.

For more information on LED lighting options for your facility, please contact us today. For more information on LedLinX please visit

The PUCT Raises the Offer Cap for 2013 and Beyond

The Public Utilities Commission of Texas (PUCT) voted again to increase the system-wide offer caps for 2013 and beyond. The current cap, at $4,500, will increase to $5,000 on June 1, 2013; $7,000 on June 1, 2014 and $9,000 on June 1, 2015.

Discussions on raising the cap began when the Electric Reliability Council of Texas (ERCOT) announced decreasing reserve margins. A reserve margin is the amount of available power above the capacity needed to meet normal peak demand levels. ERCOT’s target reserve margin, used to ensure stable grid operation, is set at 13.75% and actual reserve margins are likely to fall below the target by 2014.

The anticipated goal for the cap rate increase is to spur construction of new generation facilities. More generation would lead to an increased reserve margin, resulting in fewer struggles to meet demand during extreme weather situations coupled with Texas’s continuous population growth.

United States’ First Tidal Power Generation Project

Ocean Renewable Power Company’s underwater turbine located off the coast of eastern Maine is the first of its kind in the United States. On Thursday, September 13, the ocean tide turbine delivered it’s first electricity to the US power grid.  An underwater turbine generates electricity by using the ocean’s tide to spin blades which are connected to electrical generators.

The amount of electricity produced in this project is small – powering roughly 30 homes – but the potential is great. Two more turbines are planned to come online in 2013 bringing production up to 4 megawatts (MW), which is enough electricity to power 1,000 homes per day.

Ocean Renewable Power invested $15-million in this project.

An underwater turbine. Courtesy of Ocean Renewable Power.

In 2014, Ocean Renewable Power Company and Fundy Tidal Incorporated plan to install units off the coast of Nova Scotia, where the Bay of Fundy offers even greater tidal power potential.

Increasing West Texas Nodal Charges

Nodal, an electricity congestion charge that began in December 2010, is frequently passed through from a retailer to the end user. Previously, this cost was distributed evenly for all end users across the four major regions of the state: Houston, North, South and West.  Now localized, Nodal costs are directly tied to the congestion occurring in your specific location.

The grid has been strained in west Texas mainly due to increased oil and gas production in the region. The recent results are Nodal charges as high as $0.03 per kWh for many west Texas customers. To relieve the congestion, ERCOT’s board approved a $57 million project to improve transmission capacity across west Texas.

RPM advises it’s West Texas customers to lock in basis on their next contracts. Please contact us today.

GDP Update

The United States’ real GDP rose at a rate of 2% from the second to the third quarter of 2012 according to advanced estimates. This estimated increase reflects positive contributions from personal consumption expenditures, federal government spending and residential fixed investment. Imports (a subtraction in the calculation of GDP) decreased.

Economists predicted a 1.7% growth for the third quarter. Although .3% higher than expected, the growth is not enough to lead to strong hiring and is still a sign of the sluggish economy. On major theory suggests that the economy needs to grow around 3% a year to bring unemployment down by one percentage point.

Chart courtesy of

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August 1st, 2012

Q3 2012 – Electric Market Design vs. Price Reliability

Electric Market Design: Price vs. Reliability

Most states participating in power deregulation started in the late 90’s to early 2000’s. The intention of deregulation was to expand the market for competition and strive to reduce costs for consumers. Retail and generation entered into a competitive market, while the delivery function remains regulated by the utility.

While a consumer’s main focus is pricing, regional transmission organizations (RTO) or grid operators focus on the reliability of power. A significant part of the reliability equation is making sure there is adequate generation to satisfy the electric demand.

Grid operators are in charge of selecting a wholesale market design to incentivize new generation. Two main designs are used in the US; energy-only or capacity. As an example, ERCOT, an energy-only market, will be compared to PJM’s capacity market.

Map: There are 10 regional transmission organizations (RTO) or grid controllers in North America. Courtesy of 

ERCOT – Energy-Only Market

The Electric Reliability Council of Texas (ERCOT) launched its competitive retail electric market in 2002, allowing residents and business owners to choose their own power providers. Over time, several adjustments have been made but one thing remains un-changed – ERCOT has always been an energy-only market where selling electricity drives operations and investments. ERCOT is the only region in the United States with the energy-only design (Alberta and Australia are two regions who also follow this strategy).

PJM – Capacity Market

PJM is an RTO that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia. As a capacity market, PJM provides reliability by offering power plant investors a stable revenue stream in which they can finance electricity generation investments:  the main purpose of capacity markets is to incentivize these investments.  PJM mandates adequate reserve margins (10% minimum level) through their capacity market. A reserve margin refers to the amount of available power above the capacity needed to meet normal peak demand levels.


Day-ahead or real-time pricing is used in ERCOT and while PJM uses real-time or day-ahead pricing as well, the capacity portion of the price is determined three years in advance.  This piece tends to reflect the delta in price between the two markets.

The chart on the left (courtesy of Frank Travaglione with First Energy) shows the capacity portion of PJM’s prices. The price from one year to another fluctuates greatly in the different territories. Some prices increase while others decrease.

Generators submit capacity bids which determine prices 3 years in advance. Because this capacity portion offers more stability for power plant investors, retail prices tend to be more stable than in an energy-only market.

The fluctuating market may not always reflect a low price in either design but when prices drop to the lows in which we see today, ERCOT immediately benefits while the capacity portion of PJM’s prices lags.


Demand Response Role

Demand Response programs also play a role in both market models. Demand Response is a voluntary program in which customers cut back on power when shortage is a threat. Clients get paid for their load reduction because it is helping the grid operators maintain reliability. Because the PJM market has advanced auctions that demand response companies participate in, customers have accepted demand response as a revenue opportunity. ERCOT customers have lower participation in these types of programs because the real time market payout hasn’t presented enough economic incentive.


In theory, a capacity market offers more generational stability, but it is not always guaranteed that there will be sufficient power in either market design. Extreme weather events, power plant maintenance, government regulations (i.e. EPA rulings) and other unforeseen events can still cause power outages.

At this time, ERCOT is experiencing a shrinking generation fleet coupled with increased demand. The Public Utilities Commission of Texas (PUCT) is being forced to analyze options to address the lack of generation and exposure to rolling blackouts. Experts have proposed several recommendations to make ERCOT more reliable and efficient. One short term solution is to make participation in demand response programs more attractive to consumers, just as PJM has.

Another option is to implement the capacity portion of the market in ERCOT. It is unknown at the time what the best option is and experts suggest further analyzing the market before applying any drastic changes. The debate will continue on whether the reliability of a capacity market is better than the immediate price advantages of an energy-only market.


Production Tax Credits

The American Wind Energy Association (AWEA) wants congress to extend at least the wind portion of the production tax credits (PTC). The PTC is scheduled to expire on December 31, 2012.

The PTC provides an income tax credit of 2.2 cents per kilowatt-hour for electricity production from renewable energy sources, such as wind or geothermal energy. The PTC is an effective tool used to keep electricity rates low and encourage renewable energy projects. Extending the credit will also create jobs and investments in proven clean energy technology.

Urge Congress to extend the PTC today!


EPA Update

The Senate upheld the EPA’s Mercury Air Toxics Standard (MATS) rule after a vote on June 20. According the the EPA, Mercury and Air Toxic Standard will prevent 130,000 childhood asthma attacks; more than 6,000 cases of acute bronchitis among children; as many as 11,000 avoidable premature deaths; and 4,700 heart attacks, annually. Read more about the MATS here. The Cross-State Air Pollution Rule (CSAPR) is currently being held up in the US District Courts.

Photo courtesy of EcoWatch.


GDP Update

America’s economy grew at a 1.5% annual rate in the second quarter of this year – down from the 2% growth the previous quarter and slightly above the expected 1.4% gain. The increase reflected positive contributions from personal consumption expenditures and exports, which were offset by a negative contribution from government spending.  Imports, which are a subtraction in GDP, increased. Economists see no decline in unemployment in the near future because of weak consumer spending.  Expected growth for 2012 is 2.2% followed by 2% in 2013. Annual economic growth of 2.5-3 percent is needed to create enough jobs just to keep up with the expanding workforce and 4 percent or more is necessary to significantly reduce the unemployment rate.

Oil and Gas Update

The EIA estimates the second half of 2012 crude oil prices to be $88 per barrel and the price of West Texas Intermediate (WTI) crude oil will average about $89 per barrel in 2013. EIA expects regular gasoline to average $3.49 for 2012 and around $3.28 per gallon in 2013. The average price for regular gasoline in 2011 was $3.53 per gallon.

Natural gas inventories reached seasonal record highs due to a warm withdrawal season and increased production of natural gas in the shale plays across the US.  At the end of the second quarter, natural gas inventories were at 3.1 trillion cubic feet, about 23% above the same time last year. Prices remain at historically low levels; the June 2012 price averaged 46% less than the June 2011 price.  The Henry Hub natural gas spot price is forecast to average $2.58 per MMBtu in 2012 and $3.22 per MMBtu in 2013. Projected consumption of natural gas in the electric power sector grows by 21 percent in 2012, primarily driven by the increased relative cost advantages of natural gas over coal for power generations.

Coal exports are to total 112 million tons in 2012, 4.6 percent higher than 2011, but the EIA expects that coal exports will fall by 14% in 2013.

The latest rig count for the second quarter totaled at 1,966 – 1,425 of which were oil rigs and 541 of which were natural gas rigs. Compared to last year’s numbers, oil rigs have significantly increased while gas rigs have shown a steady decline.   The production continues to shift from natural gas to oil due to extremely low natural gas prices.

GDP Economic Growth Rate Chart Courtesy of CNN Money.

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