HAULING IN THE CULPRITS: MICHIGAN'S BOUNTY PILOT

Two non-profit environmental organizations were selected to conduct the pilot, which ran from March through May, 1989 in Kalamazoo and from June through August, 1989 in Ann Arbor. People were encouraged to call to have their refrigerators picked up through doorhangers, brochures, news releases and newspaper advertisements. The Commission used a different bounty level in each city--$50 in Kalamazoo and $25 in Ann Arbor. With a screening call, we attempted to weed out any refrigerators that were not plugged in and operating. Participants tended to be employed or retired single-family homeowners with at least a high school education. A relatively large number of them were over 65 years old.

After a substantial number of refrigerators were collected, the commission decided to either recondition or recycle, based on the age and condition of each unit. A small number of the most efficient refrigerators were then reconditioned and donated to non-profit or charitable organizations. The remainder were recycled. Environmental protection techniques used in the process included the removal and proper incineration of capacitors (which contain PCBs) as well as recycling chlorofluorocarbons (CFCs).

In Ann Arbor, 373 telephone inquiries led to 138 refrigerator pick-ups. In Kalamazoo, 573 calls resulted in 137 pick-ups. We selected control groups of the same size for each city--one neighboring control household for each participant. The refrigerators we collected had been, on average, operating as second units for over 4.5 years.

Although data was collected at the time of pick-up, additional information was obtained from a follow-up telephone survey. A short interview assessed participant satisfaction, and events prior to or following the program that could have potentially effected electricity consumption. We also asked if the participants had since acquired any additional refrigerators. Ninety-nine percent of those interviewed said that they were either satisfied or very satisfied with the program.

Measuring The Energy Savings

Utilities provided monthly electricity consumption data, monthly meter reading dates, bill codes for each read, and the number of days in each billing period for the participants and the matched comparison group. In order to eliminate confounding influences of space cooling and space heating load, the analysis was limited to September and October for Ann Arbor and September through November for Kalamazoo. We eliminated houses with problem data and calculated an average pre- and post-pick-up daily consumption figure for the appropriate matched-time period for each sample.

Participants significantly reduced their electricity consumption. The best estimate of net annual savings for the program participants was 544 kWh (1.49 kWh per day). However, this figure was lower than engineering estimates had suggested. For example, one study estimated that the average consumption of second refrigerators was just over 1,000 kWh per year. Aside from the basic problem of imprecision from using whole-house monthly fuel bills to measure the affects of a single appliance change, there are a number of other possible explanations for that discrepancy:

• Despite attempts at screening initial applicants, it is likely that some participants weren't really using the second refrigerator, or using it full time. These free riders may have lowered the overall average program savings observed in this pilot.

• Follow-up surveys indicated that a small number of participants added-back another second refrigerator after participating in the program. When these cases were excluded, the best estimate of net savings increased to 600 kWh per year.

• The matched months used to calculate the energy savings did not include the summer months when refrigerators use the most electricity. That may have lowered the net annual savings figure, which was calculated based on the shoulder months of September through November.

• The refrigerators turned in also tended to be older, smaller, and manual defrost models, with relatively low annual consumption. This may have contributed to the lower net annual savings.

   

Cost-effectiveness

Although start-up and administrative costs were spread across a small number of refrigerator pick-ups, the project helped us estimate some reasonable costs that potentially may be used to project the cost-effectiveness of a large-scale program. As a general benchmark, at 598 kWh per year (generation site) saved per unit, a program could spend up to $150 per unit it collects and achieve electricity savings at a supply cost equivalent to 5.2cents per kWh. (This assumes a 7% discount rate, a six-year average remaining life for the second refrigerators, and 10% transmission and distribution losses.) We did not attempt to compute any peak generation capacity savings value. Also, this analysis does not include the value of environmental benefits like the reduction in electricity generation, or safe disposal of the CFC coolant, the capacitors, and the refrigerator hardware.

Partly because of the success of the pilot, Michigan's largest utility--Consumers Power Co.--is now conducting a full-scale second refrigerator pick-up program with a two-year target of 50,000 units. The program began in March, 1992, and customer response has exceeded all projections. To date, over 30,000 units have been turned in. We expect another major utility in Michigan to adopt a similar program within the next year.

In early 1988, when the Michigan Public Service Commission first contemplated running a turn-in program for second refrigerators, there was a limited amount of information available for constructing a large-scale operation. Since that time, several utilities have adopted programs and the old timers have gained more experiences to share. Companies are now running large-scale programs ranging from 5,000-30,000 units per year. Some programs are limited to second refrigerator pick-ups, whereas others include the disposal of primary refrigerators, first and second freezers and/or air conditioners. Most companies use a pre-pick-up screening process to ensure that the units work. Programs offer a range, from nothing up to rebates using $100 U.S. Savings Bonds. Many donate a small number of the most efficient refrigerators they collect to charity. All of the programs recycle their appliances, dispose of the capacitors, and recycle the refrigerant. Electricity savings for these programs are usually based on engineering or manufacturers' estimates. Few companies have conducted actual pre-post removal consumption analysis. In an informal sample of eight utilities, savings estimates for programs ranged from 526 kWh (Wisconsin Electric Power Co., an engineering analysis) to 1250 kWh (American Electric Power, also an engineering analysis).

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