ACEEE: Energy efficiency still cheaper than new generation - Beckley, Bluefield & Lewisburg News, Weather, Sports

ACEEE: Energy efficiency still cheaper than new generation

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Energy efficiency programs continue to be the lowest-cost resource for utilities, according to a new report from the American Council for an Energy-Efficient Economy.

Efficiency programs cost around 2.5 cents per kilowatt-hour, compared with 7 cents and more for new generation, the organization said — meaning investments in energy efficiency continue to be an effective way to keep rates down for customers.

The numbers came out of the ACEEE report "Leaders of the Pack: Utility Energy Efficiency Programs Innovate, Evolve, and Expand," released on June 20. The organization conducted similar reviews in 2003 and 2008 to publicize effective utility energy efficiency programs.

 

The report comes at a time when West Virginia's electric utilities are considering the future of their efficiency programs.

In the Phase I program offered by FirstEnergy's Mon Power and Potomac Edison in West Virginia starting in 2012, a residential low-income program replaces light bulbs, faucet aerators and shower heads in low-income homes — those within 200 percent of the federal poverty level — and also incentivizes refrigerator replacement for those that qualify and offers partial energy audits. A non-residential program rebates high-efficiency lighting for commercial, industrial and government customers.

FirstEnergy is due to file a Phase II proposal in September with the Public Service Commission of West Virginia.

AEP utilities Appalachian Power and Wheeling Power offer programs that include, for residential customers, subsidized sales of compact fluorescent light bulbs, home energy audits with recommendations for improvements and offers of rebates, and support for the state's Low-Income Home Energy Assistance Program, LIHEAP. To commercial and industrial customers, the companies offer rebates for more efficient lighting and heating and cooling.

AEP has a case before the PSC now seeking financial incentives for its energy efficiency programs.

Both companies' West Virginia programs are modest compared with their own programs in other states and with other utilities' programs. FirstEnergy's program cost less than $2 million in its first year, and AEP budgets $6 million a year; all of the costs are passed on to ratepayers.

For the 2013 review, ACEEE sought nominations in 2012 for innovative utility-based programs funded by customers through rates and other utility revenue mechanisms.

Among the selection criteria were demonstrated energy savings, cost-effectiveness, customer satisfaction, innovation and transferability.

The organization made several general observations from its review of the nominations.

More than half of states now have energy efficiency resource standards — legislatively mandated utility efficiency targets — an increase since the 2008 report. West Virginia does not have an energy efficiency resource standard.

Budgets nationwide for efficiency programs are higher, at $6 billion per year now, up from $2 billion in the 2008 report.

Efficiency programs are growing and increasing in quality in more states, particularly in the southeast.

Among the characteristics of the leading programs, ACEEE found that some tried and true approaches continue to save utilities and customers energy and money year after year, often by revising incentive levels or making other program adjustments.

At the same time, program administrators are finding ways to target segments of their customer bases with tailored programs. They're also finding ways to reach previously underserved customers, sometimes by improving cost effectiveness.

Some of the best efficiency programs have succeeded by becoming more "customer friendly," offering single points of contact and building relationships with customers. Many are helping to eliminate the financial hurdle for customers' energy efficiency investments by arranging financing at terms that can produce a neutral or even positive cash flow — that is, the stream of energy savings is greater than the payments on the loan.