Supervalu Expands Revenue-Generating Energy Program

The retailer is expanding its demand-response energy program to about 200 more stores by the end of its 2012 fiscal year, which ends next February.

At a time when Eden Prairie-based retailer Supervalu, Inc., is cutting costs, the company is expanding an energy program launched in 2006 that brings in revenue and helps prevent blackouts.

The program, called demand-response, was launched in 2006 at Supervalu's Shaw's grocery store locations in New England with the help of Boston-based EnerNOC.

Under the program, Supervalu gets paid-about $400,000 a year-by utility companies in exchange for freeing up electricity at times of peak demand. Supervalu does this by temporarily shutting off some of its lights or turning off the air conditioning at select stores.

EnerNOC acts as the liaison between Supervalu and the utility companies. According to Tom McIntyre, director of research and development of energy and environment at Supervalu, the retailer has a “multi-year” deal with EnerNOC, although he wouldn't say precisely when it ends.

When the demand for surpasses supply, utility companies contact EnerNOC, which reduces the energy consumption at Supervalu locations to free up energy, possibly preventing a blackout in the communities where participating stores are located.

EnerNOC sets up automatic systems in the participating stores, so reducing the energy consumption is done remotely with the push of a button.

According to McIntyre, the reductions take place for four- to six-hour increments throughout the year and vary depending on utility companies' needs. Supervalu spokesman Mike Siemienas said that the number of times Supervalu initiates these reductions will vary each year for each location.

“We are a company that uses a large amount of electricity and we are willing to reduce our power so there aren't blackouts,” McIntyre said, adding that the program benefits areas surrounding Supervalu's stores.

McIntyre said that Supervalu first entered the program several years ago and only its Shaw's locations participated. The company expanded the program to some of its Albertsons stores in southern California last year. Supervalu currently has about 400 stores-or about one-third of its retail locations-participating in the program.

Within the next year, Supervalu plans to expand the program to about 200 more locations, including additional Albertsons stores in Idaho, Acme stores in Philadelphia, and Farm Fresh stores in Virginia. Supervalu's Cub Foods locations are not included in this year's expansion plans, but McIntyre said the company will consider adding those locations to the program in the future.

The expansion of the program comes at a time when Supervalu is working to cut costs. In January, the company announced plans to close 20 underperforming stores by the end of its fiscal year, and last month it laid off about 200 part-time workers at its Twin Cities Cub Foods locations.

Supervalu is Minnesota's fourth-largest public company based on revenue, which totaled $40.6 billion during the fiscal year that ended in February 2010-down 8.9 percent from the previous year. The company's financial figures for the year that ended last month are not yet available.