6.4 ERMUSR 02-10-2004 •
Elk River
Municipal Utilities
322 King Avenue phone: 763.441.2020
Elk River,MN 55330 Fax:763.441.8099
Feb 5, 2004
To: Bryan Adams
From: Vance Zehringer
Subject: Commercial CIP Rebates
A recent building audit of one of our existing commercial accounts revealed a
potential for substantial energy savings by retrofitting their lighting system. Since
this is a large building there is a potential for a large rebate if we proceed as we
have previously. So large, in fact, that it could consume over 50% of the dollars
budgeted for 2004 for commercial rebates. There is also an even larger project
that will be submitted later this spring by another large account.
In order to assure that our Commercial Grant Program dollars are not consumed
by just one or two large customers, I believe we need some "caps" and "stops" in
our policy. This process will assure dollars are available throughout the year to a
larger number of our commercial accounts. And, it will also keep us in line with
what neighboring utilities are offering. I recommend the following:
1. The CIP rebate for retrofitting lighting or replacing motors should not
exceed $10,000 per customer per year. Our total 2004 budget is 22K.
2. The rebate awarded for retrofitting lighting or replacing motors should not
exceed 50% of the total project cost. The target should be in the range of
from 15 to 30%.
3. No rebate should be awarded if simple payback (Total Project Cost/
Annual Power Cost Savings) without rebate, is less than one year.
Applying these guidelines to the existing commercial rebate program will make it
easier to administer, and it will assure our customers are treated fairly and our
rebates are consistent with what neighboring utilities offer.