In state electric co-op's plan, everyone wins

South Carolina's electricity cooperatives have an $800 million plan that could dramatically cut energy use in nearly a quarter-million homes -- and cost almost no money.

The plan could save billions of dollars in costs for electricity use and power plant construction, and substantially cut greenhouse gas pollution.

How would it work?

The federal government would put up grant and low-interest loan money. The cooperatives would administer the program and help homeowners use the money to upgrade the energy efficiency of their homes. And the monthly savings on electricity bills would be divided between the homeowner and a loan-repayment program.

Every bit of the money loaned to a homeowner would be repaid within eight years.

All the cooperatives have to do is persuade the federal government to buy into the idea.

The plan is the brainchild of Ron Calcaterra and his staff at the Central Electric Power Cooperative in Columbia, which purchases and supplies electricity for all 20 cooperatives across the state and will oversee the effort.

The cooperatives cover mainly rural areas and serve about 1.4 million people, almost a third of the state's population.

The grant and loan proposal is the key aspect of a multipart program by the cooperatives to cut the energy consumption 20 percent over the next 10 years. If successful, it would reduce electricity use by about 700 megawatts, enough to pull an entire coal-fired power plant off line, or make unnecessary the construction of a new one.

By policy, Central views environmental protection and energy conservation as important parts of its efforts. The cooperative already has prevented the construction of a proposed $1.2 billion coal-fired power plant that Santee Cooper, the state-owned energy company, wanted to build in Florence County.

In August, Santee Cooper pulled the plug on that plant because Central switched 1,000 megawatts of the power it buys from Santee Cooper to Duke, making the proposed Pee Dee power plant unnecessary.

Duke had excess power supply capacity due to the decline in the textile industry, and Central's action freed up electricity for Santee Cooper to meet the growing demand along the Grand Strand.

Getting public buy-in

The initial part of the cooperatives' energy conservation plan already is in the works: educate the public about the advantages of cutting electricity use and grab the lower hanging fruit of energy conservation.

Getting people to replace energy-gobbling incandescent bulbs with energy-efficient, compact florescent bulbs is the most immediately effective way to cut electricity use.

Central plans to provide customers with 7 million free florescent bulbs over the next 10 years. The company already has spent $6 million mailing homeowners 2 million bulbs in packets of two with energy-savings tips.

When all are sent, Central expects a 3 percent cut in the electricity used by the cooperatives.

One problem Central must overcome is a general lack of awareness by consumers of the advantages of energy conservation for them as well as the environment, Calcaterra said.

The U.S. Department of Energy ranks South Carolina as one of the nation's bigger consumers of electricity per person in the nation, so a public-education program is a key part of the cooperatives' initial efforts.

In one very public campaign, the cooperatives are working with television stations in seven markets across the state to run a show this fall called "Help my House." In the show, Central will spend $10,000 on one house in each market to demonstrate how to make a home more energy-efficient, and will follow-up to illustrate the advantages.

The Charleston area show will be on WCBD News 2.

Another key to the conservation effort is to determine what works best. To accomplish that, Central has launched several programs:

--Manufactured houses account for one out of every four homes Central serves and are typically the least energy efficient. As a result, Central will spend $3 million this year to retrofit 800 of the homes with different energy efficiency methods. New ducts and heating-and-air systems will be installed on 200; new roofing and insulation will be used in 200; energy-efficient appliances will be placed in 200, and the final 200 will be weatherized. At the end of two years, Central will see which method saved the most energy for the least cost.

--Spend $300,000 to upgrade the heating-and-air systems of 60 site-built houses to see what works best.

--Install passive solar water heaters on 60 homes to see if they can reduce electricity use by as much as half by pre-heating water.

--Place "Beat the Peak" alerts in 300 homes to see if homeowners will voluntarily cut back on electricity use during peak demand and wait for off-peak times, when electricity is cheaper, to use major appliances or hot water.

--Install a $3 million, 1,000-kilowatt battery early next year at a substation to store electricity during off-peak times and put it back into the system during peak times. If successful, Central could install the tractor-trailer-size, zinc bromide batteries at all 400 of its substations and effectively remove the need for another power plant to provide electricity at peak times.

It's up to Washington

With all of that information in hand, Central hopes to more effectively launch and target its proposed $800 million grant and low-interest loan program.

Calcaterra took that plan to Washington on Oct. 19 and presented it to the Rural Utility Service, an agency of the Department of Agriculture. He wants the federal government to provide $80 million a year for 10 years.

If the government approves the plan, the money would be used to weatherize the 150,000 homes, remove electric resistance heating elements from 75,000 other homes and replace them with efficient heat pumps, and replace older heat pumps with new ones in another 15,000 homes.

A main selling point for the plan is that it's not a government giveaway. It comes with a built-in repayment system that virtually guarantees the loans will be repaid.

That's being done, in part, because 25 percent of the people served by the cooperatives live below the poverty level and can't afford the out-of-pocket, up-front costs, Calcaterra said. Grants will be provided to help some of the least able.

Here's how the program would use the savings on homeowners' electric bills to automatically repay the loans: Central estimates the cost of weatherizing each home at $1,250, and the owners should realize a savings of $18 a month on their electric bills. The cooperative would automatically take $12 of that as a monthly loan payment and let the homeowner keep $6 of the savings.

The loan would automatically be paid off in about eight years. The monthly savings from changing out the resistance heating units and replacing them with heat pumps would be about $86. The homeowner would keep $30 of that and the rest would pay off the loan in less than seven years.

Calcaterra said the federal officials he met with "seemed positive" about the idea. The cooperatives plan to present a formal proposal early next year after figuring out how to administer the program and manage upgrades.

Weldon Freeman, a public information officer with the Agriculture Department, said the agency wouldn't take any action on the idea until it is submitted as a formal proposal. He said the agency had no comment on the idea at this time.

To Calcaterra, the plan is simply too good for the government not to approve. As an added benefit, it would boost the stimulus program by providing jobs all over the state to weatherize homes and buy and install more efficient heating-and-air units.

Already, he said, the state has provided $8 million in federal stimulus money to the technical colleges to prepare a work force with heating and air-conditioning classes.

In addition, Calcaterra said, the plan could be replicated in parts of the state served directly by power companies such as Santee Cooper, SCE&G and Duke and across the country.

If the federal government won't go for the plan, "we'll do it on a smaller scale," Calcaterra said. On its own, the energy savings would be much smaller, most likely 7 percent over the next 10 years, he said.

But Calcaterra remains confident the government will go along.

"This is it, all laid out: recovery by retrofit," he said. "If you want to have an impact, this is your best opportunity. ... I'm telling you this is the best that can be done. It's certainly the quickest that can be done."