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