2021 Webinar Series - 13 Electric Utility Embraces Geothermal Heating and Cooling
This NY-GEO Webinar will feature Boyd Lee with CKenergy Electric Cooperative in Oklahoma where they have installed over 1,300 free geothermal ground loops for their customers. Boyd will talk about changes in the market they observed and how this seemingly bold step has produced significant financial wins for the utility’s operations and benefits to rate payers. Granted, the market forces, energy prices and regulatory environments contributing to CKenergy’s success may be somewhat different than those in the Northeast. Nevertheless, we encourage you to listen for ideas that just might fit for our area. These could be the seeds of innovation needed to transform the way utilities deliver energy to their customers. Will Lange, the Director of Utility Marketing at WaterFurnace will introduce our speaker
- What are the most commonly cited reasons that other cooperatives don't copy your program?
- Boyd has more insight, but my experience has been risk avoidance at the board of directors level.
- Risk avoidance and lack of local championing from either a well educated energy use specialist or a CEO willing to promote.
- Does CKenergy use in house crews to install geo loops and HPs or do you use existing contractors? who owns the drilling rigs?
We don’t install anything as a Cooperative. The loop and HVAC equipment installations are done by independent contractors who have demonstrated proper training and qualifications for the work, including a track record of successful installations.
- If a home is sold, but the new owner doesn't want geothermal, what is your policy concerning cost recovery for the installed assets?
Boyd should confirm, but I'm fairly certain the agreement and utility rider transfer along with the normal utility service.
- The agreement and the loop fee does transfer to subsequent owner. It’s possible at some point that a new owner may not want to use geothermal and we wouldn’t try to “make” anyone use what they don’t want to. If that happens, the asset is is probably lost. However, it hasn’t happened in 9 years.
- Does the cooperative benefit from the Federal Energy Tax Credits in 26 USC 48?
- No. Member owned non-profit.
- We have to sell it to the customer on that basis, but even more importantly how do we sell geo at the policy level that way? I feel like we’re missing the boat on this.
Answered Live. Boyd acknowledged both the importance and difficulty in convincing policy makers and regulators that the value of the geo system is real to ALL customers of the utility whether the customer uses the technology or not.
- Of the 1,300 installations, how many required thermal conductivity testing or a geological feasibility study prior to installing the ground loop?
- We have never had to perform a geological feasibility study prior to installing a ground loop. Because we are an oil and gas producing state, thermal conductivity measurements for all soils are very common and easily performed even during the drilling process.
- What portion of your installations are vertical v horizontal?
Answered live. Almost exclusively vertical because it’s the loop that has the least long term risk of being dug into and more efficient per foot than horizontal
- Does the cooperative hold an easement on the ground in which the loop is installed?
Answered live. Yes, it’s a general easement, and carries over with the property. Some states might make you be more specific.
- What is the costing per foot for the loop installation?
We currently pay $10/foot for drilling and headering and $125/ton for glycol.
- Is less moisture in the soil in your region resulting in the need to use vertical rather than horizontal loops?
- No. Convenience and less risk of contacting the buried loop drives vertical installs.
- Is the return on the geo business capped for the Co-Op?
- There is no cap. CKenegy is not a State Commission regulated utility. Our Board of Directors would determine any cap limitations.
- Is geo offered to multifamily buildings as well?
- Yes, we would offer geo to multifamily buildings.
- Have you considered securitizing your portfolio of loops?
- Answered live.
- That has never been considered.
- Has the electric co-op also explored ownership of district or neighborhood geothermal heating systems?
- Complicated answers, but generally more expensive and difficult to maintain.
- CKenergy is a rural electric co-op and does not have many densely populated areas with a significant diversity of load where district systems have more appeal.
- is there a different electric service class for geothermal customers
- Answered live. Yes, we do have a geothermal rate within our residential customer class.
- Is geo offered to multifamily buildings as well
- Answered live. CKenergy has many commercial customers and would offer it to a multifamily building for sure.
- Does CKenergy use only certified geothermal design and installation professionals to design and install the GHP systems?
- Answered live. CKenergy does have installation requirements including a building energy model and associated heat pump and ground loop sizing. They have pre-approved heat pump installers and a separate group of pre-approved drillers.
- Where in OK is CK Energy
- Binger, OK http://ckenergy.coop/About-Us/Your-Co-OP
- Have you had difficulty getting an adequate team of drillers for rapid response to subdivision development or individual residential installations.
- Answered live. We’ve been very fortunate in that we have four drillers who have handled all of our installations over the past 9 years. We’ve never had to delay people for any reason other than weather.
- What is the typical cost per kWh for electricity to your customers and what is the cost under the geothermal rate?
The customer charge is $25/month higher on the geo rate versus the standard residential rate. However the kwh rate is almost $0.02/kwh cheaper on peak and $0.01-$0.015/kwh cheaper off peak. The customer charge is designed to recover the loop cost over 30 years, but a reward for demand reduction is given through the reduced rate.
- Are the loops located on the customer's property? If so, how does this impact CKEnergy's ownership of the loop?
- They are on the customer’s property and our ownership is in paper only. Some cooperatives have considered installing valves to shut off loops that are not used by the customer. We think that is a waste of time and money.
Boyd also added that they expect to recover their cost in 5 years so the risk is not extended as much as traditional utility infrastructure that is paid for over decades. A rate rider is applied to ALL system kwh sales to recover that investment.
- Were there/are there any regulatory considerations you had/have to deal with?
Answered live. CKenergy is not a State Commission regulated utility. The Board of Directors make all regulatory decisions.
- Does this concept scale to larger investor owned utilities like we have here?
Answered live. It ought to in my opinion. IOUs have a much higher instance of gas users for heating and water heating. With geo, the winter kwh sales would be significantly higher, and for some utilities, the system load factor between summer and winter would be worth major investment.
- Do the costs per ton shown also include the installation of the HP system in the home or business?
- The final cost per ton for a retrofit assuming all our incentives is about $2500-$3000/ton. Any tax credits further reduce that cost. CKenergy’s rebate breakdown is $2625/ton for the loop and $1000/ton for the HVAC equipment.
- Does the electric co-op also own air-source heat pumps or any heat pump infrastructure that is inside people's homes? If so, who is responsible for maintenance?
- Although we have thousands of air source heat pumps on our system, we do not have an incentive for them nor do we own any part of them.
- Are all loops vertical and not connected? Do you ever have multiple customers on one loop?
- We don’t currently have any loops that are shared by multiple customers but we do have loops that share multiple geo units.
- Where can I find the CKenegy Rate 45 Tariff online?
You can’t but I’d be happy to send a copy. firstname.lastname@example.org
- Who owns the indoor geothermal heat pump?