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ISOP Frequently Asked Questions

Q: What is the Industrial System Optimization Program?

A: The Industrial System Optimization Program (ISOP) helps Puget Sound Energy (PSE) industrial customers identify and make no-and-low-cost adjustments that enhance electrical energy efficiency, improve performance, and reduce electricity costs.

Q: What can ISOP do for my facility?

A: The goal of ISOP is to help site personnel learn and adopt operations and maintenance (O&M) procedures that increase electrical energy efficiency when consistently applied. Industrial businesses receive financial, technical, and hands-on support to make fundamental energy improvements. An electrical energy use monitoring system is established at the beginning of the process and used to determine an energy baseline and also to verify improved performance and associated savings.

Q: How is ISOP different from a program that offers incentives for capital projects?

A: ISOP drives energy savings through O&M measures, not large capital projects. To achieve solid savings without capital projects, ISOP provides technical expertise (typically an energy efficiency engineer and an industry specific technician) to work on-site with facility staff to identify and implement no-and-low-cost measures. Following the on-site collaboration, facility personnel are then tasked with implementing the remaining improvements. At the onset of the project, a performance tracking system (PTS) is established to continuously track the performance of the area of focus (whole facility or subsystem). This tracking establishes the baseline, shows the effect of the initial optimization effort, and measures the normalized performance to promote continuous improvement and to guard against backsliding.

Q: Why does ISOP only include O&M projects?

A: ISOP is specialized program being offered to supplement PSE’s other efficiency programs. ISOP focuses on O&M energy savings opportunities because it can yield immediate energy savings at a low cost and are an effective means of saving electrical energy for facilities with efficiency goals but capital constraints. Additionally, reducing energy use through changes to operations and maintenance often has the potential for non-energy benefits such as improved reliability, safety, and reduced maintenance costs.

Q: Who is eligible to participate in ISOP?

A: All PSE industrial customers with the exception of 258 (Large Power User Self-Directed Program) customers are eligible to participate in ISOP.

Q: What facilities or industrial systems does ISOP focus on?

A: All industrial systems are viable candidates for ISOP. However, the greatest potential for cost-effective projects typically lies with those facilities or sub-systems with long run-hours, relatively stable control setpoints and loads, and reliance on industry-standard technology. A scoping visit is performed to determine whether a potential ISOP project has merit. An individual ISOP project may target the entire facility or a single sub-system as deemed appropriate by program administrators and as agreed upon by customers.

Q: Does ISOP also cover thermal systems?

A: No. Only those systems powered by electricity are eligible for inclusion in ISOP.

Q: What are the savings goals and timeframe for the ISOP program?

A: The target is 12 million kilowatt-hours (kWh) from the program initiation on March 23, 2012 through December 31, 2013. Due to the time necessary to complete an ISOP project from beginning to end prior to the end of 2013, the deadline for participation is June 1, 2013.

Q: How are energy savings realized?

A: Energy savings are realized through the combined effort of customer facility staff, an optimization engineer, and a subsystem-trained technician. These three parties collaborate to identify potential areas of energy savings, quantify the potential energy savings, and develop an action plan for implementing steps required to achieve savings. The ISOP engineer and technician work especially closely with facility staff during the Optimization Event, an intense one to five day effort to identify and implement as many energy savings O&M changes as can be reasonably completed in the allotted timeframe. Following the Optimization Event, the ISOP engineer delivers a report to the customer outlining additional action items that can be implemented to achieve energy savings. The customer implements the action items and receives regular support from the optimization engineer over a period of several months.

Q: How are energy savings measured and verified (M&V)?

A: Prior to initiating energy savings measures, a performance tracking system (PTS) is established at the facility. The PTS gathers energy-usage data along with independent variable data that drive fluctuation in a facility’s energy use (weather, production levels, etc.). Data from prior to the Optimization Event is used to establish a baseline performance level. This benchmark performance data is used to create an energy-usage regression model of the facility or subsystem. The model predicts facility or subsystem consumption given the independent variables for a specified time interval. Following the Optimization Event and action item implementation, actual energy use is measured and compared to the expected baseline energy use from the established baseline regression. Energy savings are calculated as the difference between the actual measured energy use and the calculated baseline energy use.

Q: What incentives are available to customers who participate in ISOP?

A: Two different incentives are available to ISOP customers: The PTS Incentive is intended to facilitate the establishment of a tracking system for energy performance. The Implementation Incentive encourages customers to make improvements that realize energy savings at their facility and provides a means of overcoming budget constraints to implementation.

The following table summarizes both incentives:


ISOP Funding Amounts and Milestones

Funding Amount Milestone​

PTS Incentives

Lesser of:

1) $0.0018 times baseline kWh usage; or

2) $10,000; or

3) 100% of documented PTS costs. 

Customer purchases
and installs PSE-approved PTS.

Implementation Incentives

Lesser of:

1) $0.05 times  verified kWh saved minus the PTS Incentive; or

2) $0.05 times 10% of baseline kWh usage minus PTS Incentive; or

3) 70% of action item cost plus PTS cost minus PTS Incentive.​

PSE reviews and
approves the action
item measurement and
verification report.​


Q: What are the steps involved with ISOP participation?

A: See the ISOP process flowchart below:


Industrial System Optimization Program Process Flowchart

Industrial System Optimization Program Process Flowchart