What is the Block Bidding Program?
The Block Bidding Program is a sealed-bid auction that was established by NYSEG and RG&E utilities to help New York State reach their goal of reducing energy by 15% by 2015. NYSEG and RG&E purchase “blocks” of electricity savings – reduced electric usage – from commercial, industrial and municipal customers or from third-party aggregators working with these customers. The purpose of the program is to create ways for customers to achieve energy savings and allow third-party aggregators to participate in offering energy-saving solutions.
Since the first RFP was issued in February 2010, NYSEG and RG&E have approved approximately $10 million for nonresidential energy efficiency proposals that will save 45 million kWh of electricity. Power Management has participated in all seven of the Block Bidding auctions as an aggregator and have been successful at every auction. Power Management has secured approximately $2.68 million in energy rebates and has saved approximately 15 million kWh with the various projects completed.
A recent example of a successful Block Bid Program designed by Power Management is outlined below. The next Block Bidding Program RFP for NYSEG will be released on August 11, 2014, with bids due this fall. The current Block Bidding Program is set to expire in 2015, so if you are a NYSEG or RG&E customer and want to take advantage of the additional incentives for energy efficiency projects, call Power Management today (585) 249-1360!
Situation/Background: Power Management Company approached RYCO Management with an opportunity to join PMC’s aggregation in an RFP for the RG&E Block Bidding Program. The proposal was to purchase a “block” of electricity savings from RG&E on behalf of RYCO Management. If awarded, the electrical savings would be used to fund a Lighting Energy Project that would yield improved system performance and reduced maintenance expenses.
Solution: Power Management performed facility audits at five commercial office buildings where approximately 1,900 fixtures were audited. The audit revealed that a comprehensive lighting project that replaced the traditional T12 fluorescent lighting fixtures with energy efficient T8 lighting could remove enough energy to save RYCO Management money on its energy.
As a result of the audit performed and the proposal submitted to the RG&E Block Bidding Program, Power Management won the allocated “block” of energy proposed for RYCO Management’s Lighting Energy Project. The existing T12 equipment was replaced or retrofitted with Super T8 high efficiency lamps and ballasts. For added energy savings, occupancy sensors were installed to control over 35% of the lighting fixtures.
Result: The estimated RG&E Block Bid Incentive benefit was $81,000. An EPACT federal tax deduction was available for this project and that benefit amounted to approximately $49,614, a onetime tax deduction. The project will save approximately 63% annually in lighting energy. The installation of the new lighting system will perform better than the old system, including brightness and color rendering.
Annual Energy Savings:
Displaced Energy: 319,673 kWh
Lighting Energy Reduction: 62.9%
Project Payback: 1.26 years
Annual Environmental Impacts:
CO2 Reduction: 115 tons
SO2 Reduction: 925 lbs
NOx Reduction: 265 lbs