1. EDA E NERGY S TUDY Presenter Nathan Fazer, CUPPAD Team Members Jay Maldrum and Chris Green, MTU’s KRC Abhilash “Abhi” Kantamneni, MTU Grad Student

2. Purpose of the Study Study and research the feasibility of implementing alternative energy solutions at the industrial park scale across the U.P. Project was more talking with EDO’s and businesses rather than analyzing hard data. Seven (7) industrial parks were chosen for the purpose of this study – Ironwood, Houghton, Norway, Menominee, Escanaba, Newberry, Sault Ste. Marie.

3. Energy Background Natural Gas - backbone exists, many units “covered”, but service to customers is limited Most businesses in this study use little natural gas – those that do use mostly for heating Low natural gas prices and efficiency of natural gas generators is a viable alternative as a “peak-shaving” option, but these systems are expensive and sophisticated

4. Energy Background 90% of L.P.’s electric serviced provided by two utilities where the U.P. is serviced by: 4 private utilities 3 co-ops 12 municipal utilities EUP covered by one provider, get’s more complicated moving west from EUP

5. Energy Background Some Local Units have at least 2 electric providers, some even 3

6. Energy Background

7. saveupenergy.com

8. Energy Background Demand Charge: (Or ‘Capacity kW’). This represents your peak monthly demand (power) in kW, usually seen with commercial/small business. Energy Charge: This is the charge you pay for the energy in kWh consumed. Most utility companies further break this down into two distinct charges: Power Supply Energy Charge: The cost of bringing electricity over transmission lines, from a generation facility (power plant) to a local distribution station. Distribution Service Energy Charge: The cost of bringing electricity from the local distribution station to your home. MI Energy Efficiency Charge: (Or ‘Energy Optimization Charge’). The Michigan Public Act 295 authorized utilities to collect a small fee from customers to fund energy efficiency rebate programs. This program has been largely successful. The Michigan Energy Bill

9. Energy Background 1 – Low Energy Rates, High Demand Rates 2 – High Demand Rates, High Energy Rates 3 – Low Energy Rates, Low Demand Rates 4 – High Energy Rates, Low Demand Rates 12 3 4 Energy Rates versus Demand Rates

10. Study Highlights The Michigan Public Service Commission defines “industrial” customers as businesses having at least 1MW (megawatt) of load for at least three consecutive months. Most industrial park customers included in this study actually fall under the “commercial” customer category more so than industrial. Several industrial parks in study are on or near airport property, which greatly limits any energy development, so efficiency higher priority. Several businesses already investing in energy efficiency – lighting, etc.

11. Study Highlights The Sankkey diagram below represents the total energy consumption by utility on the left hand side, and consumption by sector on the right.

12. Solar Michigan’s net-metering policy offers support only for customer self- generation using alternative energy technologies for systems sized smaller than 20kW, and offers very limited support for larger systems.

13. Wind Most internal U.P. sites have poor or marginal wind capacity. Using anemometers at sites could provide better data on viability of wind.

14. Geothermal Report looks at “low grade” geothermal used for heating and cooling. Since most businesses have low heating and cooling costs, low grade geothermal is expected to be a lower priority.

15. Study Highlights  For most businesses, the cost of electrical energy far exceeded the cost of heating; so low cost electrical generation is the primary need in U.P. industrial parks.  Although there are many options for the self-generation of electricity, the dominating factors for low adoption are reliability and investment risk.  Businesses count on reliability, and it’s far easier to be a utility customer and not worry about generation. Investment in on-site generation is risky.  Alternative energy technologies are viable in industrial parks. However, systems large enough to provide any significant savings would require large investments, which businesses are hesitant to do. But small-scale, on-site systems could help businesses save something.  Ironwood has a good local model for business relationships with the IIDC – Ironwood Industrial Development Corporation  At the end of the day however, future federal and state regulations and the unknowns associated with changing policy “muddies the waters” for any clear energy objective

16. Energy Study Full Report and Condensed Report will be posted on CUPPAD’s website saveupenergy.com was created as part of this project to create a resource for future businesses, EDO’s, planners, etc. and will be updated by multiple groups and individuals For Planning related questions on energy, contact CUPPAD For specific Energy questions or data, MTU’s KRC is a great resource CUPPAD – www.cuppad.org MTU KRC - www.mtukrc.org