Commercial Strategic Energy Management

Utilities that design and implement CSEM programs create a better opportunity for closer engagements, to better understand customers’ energy and resource management plans, establish long-term professional relationships, increase customer satisfaction, and expand their overall customer service resources. Another benefit from deeper customer engagements is higher savings achieved in other program offerings, often in the form of additional lighting or custom projects. 
BPA incentives are available for utility program participants’ annual verified SEM savings and their qualifying Performance Tracking System, or PTS, installation and annual maintenance costs. 
By participating, utilities can expect the following benefit amounts:

• SEM: $0.025 per kWh of annual SEM verified* savings; 

CSEM participants will gain a better understanding of their company’s energy consumption, receive in-person and virtual organizational training and support from technical experts to identify O&M efficiencies, develop continuous improvement skills, all while frequently tracking their site’s performance and reducing energy costs. They will learn about energy management techniques and receive tools to identify and monitor their facilities’ equipment, operations, and staff practices to become more energy efficient.  They will also gain a better understanding of their utility’s incentive program requirements, while receiving payments for annual verified SEM energy savings, and incentives for the initial installation and annual maintenance of the data collection hardware and/or software solution costs. There are other non-energy benefits that may include improved surroundings for staff and enhanced safety.
SEM participants may also benefit from the Commercial Energy Project Manager measure as well as the Performance Tracking System, or PTS, measure.  Learn more about PTS below.   

*SEM Verified Savings are calculated at the end of Year 1 and at the end of Year 2. Verified total energy savings measured from the start of the current performance period.

There are a number of services, tools and resources a utility may consider including in their CSEM program:

• CSEM peer- or cohort-driven networking workshops
• CSEM coaching site visits
• O&M tune-ups
• Regression model development and maintenance
• Energy scans
• Energy Charting and Metrics, or ECAM, support
• Energy management assessments
• Utilities may require CSEM participants to designate an onsite energy champion that would participate in either a series of CSEM peer- or cohort-driven networking workshops or host a multi-day tune-up event.

The NW SEM Collaborative is a regional organization formed in 2011 and consists of SEM leaders across North America that shares SEM design lessons and expands the impacts of SEM. They engage with regional leaders responsible for the development of regional SEM resource planning. The SEM Hub is a valuable online resource that includes SEM information, templates, tools, and member contacts that may help utilities with program design.

Additional core elements of a utility’s two-year CSEM engagement should include:

• An agreement that outlines the industry’s commitment to implement SEM and the terms of the utility’s performance-incentive offer
• A baseline energy-intensity model for each participating site; this will be used to track energy performance and incentive payments
• A participant drafted SEM plan to identify, prioritize energy efficiency action items to be implemented
• Resources* to host SEM engagement planning sessions; to better align organizational needs with program resources
• An annual SEM (completion) report; entails action item statuses, verified energy savings, performance-incentive amounts, and energy goals for the following year

*Northwest Energy Efficiency Alliance’s Energy Management Plan Template, October 2022.

The Performance Tracking System (PTS) measure is available to businesses currently enrolled in SEM to provide payments to help with the costs of data collection. Improved awareness of how energy is used provides CSEM participants with the ability to make better-informed decisions, often resulting in verified energy savings.

PTS payments are associated with the verified installation of metering hardware and/or electric-energy data collection software that tracks key variables used to develop a meaningful, normalized energy-use profile.

• Initial installation payment is the lesser of PTS cost, $15,000, or a utility-specified cap
• PTS maintenance payment is the lesser of PTS cost, $10,000 per two-year performance period, or a utility-specified cap

Initial PTS installation may be required prior to starting a CSEM performance period or may be concurrent with a performance period. After the initial PTS setup payment, annual PTS maintenance payments will be available. These maintenance payments cover annual services, licensing and other data barriers that may be identified over the course of the CSEM engagement.

The PTS payment is an additional payment above and beyond other payments provided by BPA to utilities for verified energy savings (e.g., payments and savings associated with completed UES measures, lighting and custom projects).

The participation pathway is tailored for each site, the figure below outlines the typical SEM process

Research* has shown organizations with successful SEM engagements have clear support from top management along with a corporate focus on energy efficiency. They designate an energy champion who leads the day-to-day implementation of SEM within the company and encourage them to organize an energy management team to bring together staff from other departments or functions with energy-related responsibilities. Energy champions and members of the energy management team schedule a time (i.e., monthly, quarterly, semi-annually, etc.) to meet and discuss energy issues, consider new methods or procedures that can improve energy performance and reduce costs. Successful CSEM programs are a mid- to long-term engagement that extends over multiple years. While savings can be initially slow, sites may anticipate steady energy savings once SEM behaviors and practices are implemented.

Serving utilities may re-enroll participants with additional savings potential at the end of each two-year engagement period. Upon notification of re-enrollment, the energy champion should update the site’s SEM engagement plan.

*Energy Trust of Oregon’s Energy Trust Commercial Strategic Energy Management Pilot Evaluation Report 2, September 2014; and Impact Evaluation of Commercial Strategic Energy Management Final Report, March 2017.

• Strategic Energy Management Calculator 
• Commercial and Industrial SEM M&V Reference Guide (Click here to view other BPA M&V Reference Guides)
• Commercial and Industrial Annual SEM Report Template (Click here to be taken to the Document Library webpage)
• Commercial and Industrial Strategic Energy Management FAQ
• NW Collaborative SEM Hub website