Legend Power Blog

The Financial Post has been running a series the last few months called “Ontario’s Power Trip”. In the series, Parker Gallant, a retired Canadian banker, explores the finances and politics behind Ontario’s power sector. With power that’s already priced 65% higher than Quebec and Manitoba, it’s about time someone explored the problems with Ontario’s power.

Gallant says,

As a former banker, I have no direct expertise in the electrical sector. I was simply curious as to why my electricity bill in Ontario went up when my consumption went down. What I found as I researched is a bewildering story of a province whose electrical sector is in trouble. Ontario is a high-price energy province and, under current policy, it is poised for a further escalation in prices. In short, Ontario is pricing itself out of the market and will not have the ability to attract any manufacturers or service sector companies that require significant energy in their daily processing.

It appears that Gallant was first inspired to write the series after examining Hydro One’s annual report. In his post on February 24th, Ontario Power Risk he notes that the annual report (deemed not newsworthy by the press) shows that while the company is handling less electricity, both their costs and debt are rising. Gallant notes that this should alarm electricity consumers and Ontario taxpayers, predicting that “many more rate increases will follow.”

In his April 14th post, Ontario’s power trip: Priced out of the market, Gallant examines the regime behind Ontario’s power sector, calling it a “complex, unproductive, costly and expanding beehive of corporate and institutional activity that produces less and less electricity at ever rising cost.” With 6 institutions making up the power structure, including parts of old Ontario Hydro and government appointed groups, here’s the breakdown he provides:

1. Ontario Power Generation (OPG), which produces electricity.
2. Hydro One, which manages the province-wide transmission and distribution grid.
3. Independent Electricity System Operator (IESO), which manages the hourly power needs and also operates a trading and pricing system.
4. Ontario Electricity Financial Corporation (OEFC), which holds the stranded debt of the old Ontario Hydro and acts as a funding arm.
5. Ontario Energy Board (OEB) , which regulates electricity.
6. Ontario Power Authority (OPA), which acts as the government’s policy execution vehicle.

Gallant asks “What is this conglomeration of government-controlled agencies doing? One thing is clear. They are doing much less for a lot more money than they used to…The number story is simple: Less electricity, higher costs.”

And higher costs is right. Gallant notes in his May 11th post, Ontario’s Power Trip: The 20% hydro grab, that early in May Toronto Hydro told the National Post’s editorial board that rates will be increasing by about 20% and similar increases will effect all of Ontario. With this news, Gallant takes apart his power bill to see where the costs are coming from and what he can expect in the future. This is what he finds:

Under the regulated price plan (RPP) my bill (assuming I use 2480 kwhs over two months) will increase by $61 (up 20.5%) for two months’ worth of power. Under the TOU plan [beginning on May 1 Ontario consumers with Smart Meters will be under a new Time of Use (TOU) system], it will increase by $53 (up 17.9%). That means my electricity bill will jump $366 on an annual basis under the RPP and $318 under TOU.

In order to help Ontarians understand their electricity bills, Gallant created a useful chart that breaks down all of the complicated costs.

So what can you do?

Our solution to these price increases is an electronic tap changer, the Harmonizer-AVR. It regulates energy at your building’s power source to help your building conserve 6 – 10% of its energy.

See how Ikea saved 7% on electricity with the Harmonizer-AVR.

What are some other solutions?

Now when you install Legend Power’s smart transformer, the Electrical Harmonizer-AVR, in your building it will contribute up to 5 points to your LEED certification. Kyle Anders, a Sustainable Design Specialist, states:

5 points is a very noteworthy contribution in my experience, it is rare that a single product/technology can have this high of an impact.  I don’t have experience with evaluating other voltage optimization technologies, but since LEED emphasizes reductions in energy cost (rather than just energy), Legend has the advantage over many other energy savings technologies since it impacts electricity (the more expensive portion of a building’s energy use), compared to other technologies that may generate heating fuel savings but not electricity savings.

Read the full press release.

According to the U.S. Green Building Council (USGBC), LEED, which stands for Leadership in Energy & Environmental Design, is an internationally recognized certification system for green building. Originally developed by the U.S. Green Building Council, it certifies both residential and commercial buildings, providing third-party verification (through the Green Building Certification Institute) that a building is operating in the most sustainable way possible. 

As the Canada Green Building Council notes, LEED certification gives you recognition for your sustainability efforts and allows you to qualify for government funding incentives.

LEED measures a building’s performance in the following areas:

• Sustainable Sites – looks at where a building is built and its impact on the ecosystem.
• Water Efficiency – encourages smarter water use.
• Energy & Atmosphere – promotes efficient and clean energy use.
• Materials & Resources – encourages sustainable building products and materials.
• Indoor Environmental Quality – promotes improving indoor air quality and access to natural daylight.

According to USGBC, Building’s are rated out of a possible 100 points, with the potential for 10 bonus points. Certification requires 40+ points, Silver is 50+ points, Gold+ is 60 points and Platinum requires 80+ points.

LEED Rating Systems include:

• New Construction
• Existing Buildings: Operations & Maintenance
• Commercial Interiors
• Core & Shell
• Schools
• Retail
• Healthcare
• Homes
• Neighborhood Development

The first step to LEED certification is registering your building or project. To register in the US, visit LEED Online. Canada has adapted USGBC’s rating system to work within it’s own climate and building regulations. To register in Canada, visit Canada Green Building Council.

International Distribution Launches as Domestic Sales Momentum Builds

Burnaby, British Columbia, May 20, 2010 – Legend Power Systems Inc. (“Legend Power”) (TSX-V: LPS) (FSE:XLE) announces that it has signed a Memorandum of Understanding with ElectroFlow Solutions (UK) Limited (EFS) to purchase the distributor license for Legend’s patented electrical conservation technology in the United Kingdom. The agreement includes an initial system as well as engineering and training services leading to the execution of a full distributor license.

Electricity rates in the UK are two to three times those in Canada and with the country’s switch from UK 220v to the EU standard 230v, forced over voltage energy waste is a significant problem that Legend Power’s Harmonizer-AVR’s conservation voltage reduction technology is well positioned to resolve.

With a bespoke manufacturing facility in Gorleston, Norfolk, and headquarters at the Beacon Innovation Centre, EFS offers a range of energy-efficiency and Power Quality services which help the largest users of electricity in the UK to cut their carbon footprint, and save money. The company’s engineers are NIC qualified, and have a minimum of 5 years experience of electrical engineering.

“The ability of the Harmonizer-AVR to add incremental savings to EFS’ current line up of conservation technologies, combined with the company’s strong engineering team and respected reputation among many of that country’s major brand, key accounts makes this an excellent partnership for both organizations and accelerates Legend’s international sales in a solid and familiar overseas market”, said Gerry Gill, Chairman and CEO of Legend Power Systems Inc.

View the full press release.

Note: This article was originally published in Green Technology Report.

By Jonathan T. Orr

www.GreenTechnologyReport.com | Full Article

Friday, May 14,  2010

When Green Technology Report last talked to Gerry Gill CEO of Legend Power (TSX.V: LPS, FSE: XLE) he spoke confidently not only of the good their proprietary smart grid technology can do for the environment by enabling commercial facilities to minimize carbon footprints by reducing electricity usage by up to 10 percent, but also about the momentum that Legend Power was building selling the technology directly to large retailers in Canada.

Well with Legend Power’s recent announcement of an agreement with one of Canada’s largest distributors and retailers of hardware, renovations and gardening supplies, to install its first Electrical Harmonizer-AVR in one of its Toronto outlets, that confidence has proven to be well founded.

This significant agreement demonstrates clearly that this retailer’s commitment to sustainability has led them to choose Legend Power’s smart grid technology to reduce its annual energy costs and greenhouse gas emissions, now rather than in some distant future. The potential for further sales for Legend Power is huge as the retailer has 700 corporate, franchises and affiliates stores, and will be evaluating additional stores for implementation of the Electrical Harmonizer-AVR.

Gill stated, “This is the result of having a product with proven energy saving results as well as the strength of our marketing team. We now have 21 facility audits scheduled with a further 14 proposals out and the potential for forty to fifty other facilities in Ontario. Then we’re looking at California and its million plus buildings”.

The opportunity for Legend Power to capitalize on this momentum is made even more likely by the fact that the Ontario Power Authority has increased its conservation incentive funding for the entire province for technologies such as Legend Power’s Electrical Harmonizer-AVR, which will triple the companies incentive funding and addressable market size outside metro Toronto.

While many green technology companies struggle to convince businesses of the practicality of their products or to demonstrate clear savings to companies, Legend Power continues to power forward and now has a full pipeline of sales about to pour forth in Canada and beyond. Based on the fact that this announcement is precisely what the company told us they would accomplish when we last wrote about them we think clean tech minded investors that admire results will want to ride this momentum with them.

Electricity Savings Now

While climate legislation and green energy policies remain stalled throughout the world, Legend Power provides a solution that will make practical sense to anyone: with it’s patented technology they can reduce a company’s energy costs by simply optimizing voltage use. With Legend Power’s smart grid system companies need not go through lengthy government consultations or costly environmental evaluations, they can save money today and reduce stress on the broader electricity grid while doing it.

For environmentally concerned consumers, green focused CEOs, and clean tech investors, deciding upon the best possible solutions to our dilemma of ever increasing GHG gas emissions can promote paralysis. So rather than generate more statistical smog or elucidating more convoluted theories, lets just sum up what Legend Power can offer.

• Up to 10% savings on electricity with improved efficiency
• A free facility audit
• A direct reduction in electricity grid usage
• A clear and concurrent reduction in C02 emissions
• No lengthy government consultations or environmental assessments

Gill was clear about LPS’ sales potential for other large retailers “We have a great answer to the question that any CEO would ask. How can you help us? We can help you by saving you money right now, not in the future and by reducing your corporation’s carbon footprint in one the world’s most environmentally aware countries. We can do this for you today.”

How It Works

The Electrical Harmonizer-AVR uses a transformer with a set of taps to set the degree of voltage optimization for the incoming power supply. The AVR component enables the taps to automatically change, under load, in response to fluctuations of the power grid. By optimizing the voltage level the Electrical Harmonizer-AVR allows customers to reduce energy consumption, peak demand, greenhouse gas emissions and maintenance costs while improving overall power quality issues.

The fundamental concept underlying Legend Power’s technology is based on “Conservation Voltage Regulation” (CVR) or Voltage Optimization. Simply put, the patented Electrical Harmonizer-AVR allows you to make best use of your electricity by giving you voltage when you need it and by limiting it when you don’t. Unbeknownst to many companies, they are frequently paying for electricity that they are not using as well as operating machinery and lights at its highest capacity and prematurely wearing them out.

Proof Is In The Power Savings

Many companies promising these kinds of energy savings and emissions reductions simply state that this is the case and ask you to rely on their expertise without being able to prove it. Legend Power’s Electrical Harmonizer-AVR results have been proven to reduce electricity consumption by 7% to 10% and have been independently verified by no other authority than BC Hydro. But you don’t have to take BC Hydro’s word because LPS will provide your company with a free energy use audit. This process includes a review of your energy billing, a walkthrough of your facility, a simulation of the Electrical Harmonizer-AVR technology and an in-depth presentation of the results.

This sale to such a large Canadian retailer is a clear testament to the attractiveness of Legend Power’s technology for clients who want to effectively and economically achieve substantial energy savings, while reducing their carbon footprint “. But LPS don’t intend to stop at Canada’s borders.

As Leonard Cohen might have put it for Legend ‘Once we take Ontario, then we take California’. Mr. Gill pointed out that “California is the world’s 8^th biggest economy with a million buildings and some of the highest utility rates in the country. It holds massive potential for a company like us and we intend to make it our next field of expansion”

Legend Power is on the cusp of major sales in Ontario with a focused and aggressive Canadian and North American expansion plan. At this rate it’s starting to look as though Legend Power are living up to their name as we predicated when we first wrote about them on GTR and bold investors will want to be part of the story.

Follow the company’s progress at: http://www.legendpower.com/

DISCLOSURE: A fee has been paid for the production and distribution of this article and as such should be viewed in the context of advertising.

Suppose your CEO calls tomorrow and asks, “What are we doing about power consumption?” What will you say?

Reducing consumption by turning off computer monitors and equipment requires lifestyle changes to be adopted through the entire organization. These are easy choices to make but they are hard to implement and substantial return on investment is not assured.

Proven, existing efficiency technologies — in everything from lighting to climate control and voltage regulation — can unlock the untapped reserves of efficiency gains buried in many non-residential buildings. Plus government incentive programs remove the barriers to implementation by making the up-front costs and payback periods affordable.

In high-cost energy states such as California, the state government has allocated $3.1 billion for energy incentives for the next three years. New York State also passed legislation at the end of 2009 to make loans available for businesses that want to improve their energy efficiency.

Each state’s programs require different application processes for commercial and institutional buildings and industrial facilities, which means that despite the availability of funding, many building owners and facility managers leave this money on the table, in part because they overestimate the cost of saving energy and forfeit researching their energy saving options.

So when the CEO comes calling, consider whether you are being overbilled for your energy and review the options and funding.

IKEA, for example, saved 7% of its annual energy consumption and saw a 50 kilowatt reduction in peak demand after installing Legend Power’s voltage regulation device in it’s Richmond, BC, facility. The electronic tap changer regulates incoming voltage and reduces energy consumption and costs, extends the life of equipment and does not require workflow changes.

Lighting retrofits, and the replacement of air conditioning sytems, industrial motors and other devices that consume electricity are other commonplace solutions covered by incentive programs.

To give you an idea of what is available, the following chart lists the states with the most expensive energy costs, the number of incentive programs that are available, and the state budget for energy efficiency projects.

To save money, reduce greenhouse gas emissions, and conserve power, find the incentive programs in your area:

The Database of State Incentives for Renewables and Efficiency lists all of the incentive programs in the US, by state.

The US Department of Energy explains each state’s energy incentive programs.

An explanation of inefficiencies in the power grid.