Lisa Schmidt from HEA talks about a free program to lower energy bills for PG&E customers in California. It’s called HomeIntel, part of something PG&E offers under something called “pay for performance” often called “P4P.” Pay-for-performance is part of an arrangement between the State of California and the utility companies. The State pays utilities to help Californian cut energy bills. In turn, the utility companies pay energy coaches.

Californians end up saving on energy bills with help from professionals free of charge. Lisa’s program, HomeIntel, is one of the P4P pilots that focus on lowering bills without needing to spend much upfront. HomeIntel focuses on “easy savings” with no purchases or $20-25 devices.

FYI, the California Energy Commission (CEC) supported HEA and volunteers to put together this educational website.

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TRAVIS:  Today, we have Lisa Schmidt from HEA.com. She’s going to talk about her experience in the energy industry for the past 10 years. She and her husband has been working on something called HomeIntel, which is part of something called Pay for Performance. How are you doing, Lisa?

LISA SCHMIDT:  I’m doing great. Thanks, Travis.

TRAVIS:  All right, Lisa. We like to start our interviews here at AskDrPower.com with this question. What do you remember wanting to be growing up?

LISA SCHMIDT:  I remember being in grade school and wanting to be two things. One, I wanted to be a writer–to write fiction. And second, I wanted to be a microbiologist. And I think the only reason I wanted to be a microbiologist was because it sounded like a really cool word. I don’t think I ever made it very far as a microbiologist.

TRAVIS:  Oh, why so?

LISA SCHMIDT:  Because I didn’t really understand what they did. I looked at things at a microscope for a little while and decided that probably I wasn’t going to make that a career, but it sounded so cool.

TRAVIS:  It does sound cool. Well, Lisa, what do you do now and how did you get into it?

LISA SCHMIDT:  Well, I’m the president of Home Energy Analytics. I got into it mainly because my husband, Steve, got into it. The question he was trying to answer is why does our home use so much energy, and what can we do about it? And being a good engineer, he analyzed it, metered our house, measured everything, and determined how appliances were using energy. In our case, it turned out to be our pool pump.

LISA SCHMIDT:  But he realized that we didn’t know by just looking at an energy bill from PG&E what was causing that. In fact, he thought that this might be the case for many of our friends in the area, too. And it was. So, he ended up measuring a few homes with some other people around here and built a spreadsheet looking at how the energy use was playing out.

LISA SCHMIDT:  About that time, PG&E was installing their smart meters, which record energy use every hour. He thought that you could use that data to help people figure out where their energy waste was. He did that for a year without me helping and then I came in when the business got big enough to support the two of us. We both really care about the mission of reducing energy consumption.

LISA SCHMIDT:  At this point now, he manages all the engineering and technical side while I manage the regulatory and program management and business side. It turned out to be a really good split between the two of us, and we’re still really passionate about its mission.

TRAVIS:  What makes you passionate about the mission of energy use reduction?

LISA SCHMIDT:  Well, I’m very concerned about the future of the world and the impact of climate change. Different people can contribute to solving that problem in different ways. Some people are great political advocates. Some people do other things. They may have invented the electric car.

LISA SCHMIDT:  What Steve and I know well is how to take data and analyze it and present it to people in a way that they can make changes. I also feel that I’m pretty good at figuring out how to make things work together. So, this is how we could apply our talents to make a difference: really get HomeIntel and energy savings out to a lot of people.

TRAVIS:  Can you talk a little bit about how HomeIntel got started with something called Pay for Performance?

LISA SCHMIDT:  Yes. When we first came up with our software, we call it Smart Audit. It’s a web application. We thought that the utilities in California would be excited because it was a new way to help people save energy. In California, and now in many states in the US, the utilities are encouraged to reduce energy consumption. Even though they make money by selling the energy to their customers, the State Public Utility Commissions have set it up so that they’re also rewarded for reducing the energy consumption.

LISA SCHMIDT:  We thought, boy, PG&E will be excited because now they can spend less money to reduce energy consumption, but at first they weren’t interested at all. And this is because you have to have a way to prove to the State or the Utilities Commission that you have saved energy. Back then, PG&E and the other utilities in the state did this by proving that they got their customers to take actions on an approved list.

LISA SCHMIDT:  And they would count up all the people who had done these approved actions, like installing better lightbulbs. They would apply a factor of how much energy they would save and then add them all together, and that’s how much energy they saved. It was just a big guess. They didn’t really know how much energy was being saved. It was all based on assumptions that had been made in a laboratory. The assumptions didn’t really necessarily apply the real world.

LISA SCHMIDT:  We had to work pretty hard along with some other companies to make it acceptable that the utilities be able to measure the energy saving by actually looking at the results from measuring energy use at the meter. PG&E and other utilities are recognizing that this is a really good way to help their customers save energy and help companies like ours get the maximum energy savings for the least cost.

LISA SCHMIDT:  It took a legislative change and a regulation change. Now, the California utilities can perform these or support these energy saving programs such as HomeIntel that looked for the specific ways to save energy in individual homes. They don’t rely on a list of things that they have to do, e.g. change light bulbs or put in new windows. California utility companies can now say, “Oh, this home has this problem. We’ll save energy by turning off the hot water recirculation pump. We’ll measure how much energy that saves and then we’ll pay a company such as ours for that work based on the energy savings.”

TRAVIS:  Oh, I see. Let me get this straight. Before Pay for Performance, the utilities companies would say, “Oh, maybe a bunch of people bought a bunch of new light bulbs that’s supposed to be better, but they got credit for savings even though they didn’t install the light bulbs.” That was kind of problematic. If you just bought really healthy food and never ate it, but instead kept on eating pizza, you didn’t really save calories.

LISA SCHMIDT:  Yeah, absolutely. Or if you install those, if you got five-watt bulbs and you installed them all in closets and never turn them on… There’s also other variables, e.g. if you gave them to your friends. Yes, you’re absolutely right. It’s not very good to sell things or to count things that way without any proof that they were actually used.

TRAVIS:  I see. So now, under Pay for Performance, people actually have a meter at their home, a smart meter, to measure actual savings?

LISA SCHMIDT:  Yes.

TRAVIS:  Okay, great. So you said all the California utilities companies are doing this?

LISA SCHMIDT:  They are mandated to do it. Yes. They’re now starting to do it this way.

Continue reading part 2 where Lisa talks about how energy coaching works.