Electric utilities plan to spend millions to reduce sales

By: Daniel Moore |

Electric utilities around Pittsburgh are planning to spend millions of dollars over the next five years to convince their customers to use less of their product.

While it may seem counter-intuitive, utilities have been required since 2008 by state law to reduce the amount of power delivered through their wires by prodding customers to purchase more efficient appliances and evaluate home energy use.

Duquesne Light Co. customers of all sizes are expected to collectively reduce power consumption by 3.1 percent below 2010 levels by 2021. In addition, by encouraging power reduction at peak times, the Pittsburgh utility must reduce peak demand by 1.7 percent.

West Penn Power Co. will encourage customers to cut usage by 2.6 percent and shave peak demand by 1.8 percent below 2010 levels, according to plans approved by the Public Utility Commission last month.

The plans “have helped to save a substantial amount of money for consumers and businesses, and continue to serve as a valuable tool to help make our power grid smarter, more cost effective and cleaner,” said PUC chairman Gladys Brown in a statement.

The third phase of the Energy Efficiency and Conservation plans, which span the period between June 1, 2016, and May 31, 2021, allow Duquesne Light and West Penn Power to recover up to $19.5 million and $23.6 million in spending, respectively. The extension of the programs, which have been in place since 2008, did not come with many significant changes, as utility officials say they have established programs that work.

“This is something that customers want. They want these opportunities to find ways to save energy throughout the home,” said Aaron Ruegg, spokesman for FirstEnergy Corp., which owns West Penn Power and three other utilities in Pennsylvania. “We are receiving positive feedback from this program. [The next phase of] programs are designed to build off that momentum.”

For residential and small business customers, one of the most popular ways to participate in either utility’s program is through rebates on buying more energy-efficient models of appliances, such as refrigerators, furnaces, washers and dryers and HVAC systems. The utilities also partner with contractors to provide discounted energy audits that can craft the best strategy for energy reduction at a home or small business.

“We help drive behavior away from less efficient products,” said Dave Defide, manager of customer programs at Duquesne Light. “We try to look for ways to help customers have an easy transition when they’re purchasing.”

Beginning this year, Duquesne Light will launch a program that will train up to 50 high school students from 12 school districts how to perform energy audits. The students will develop the conservation plans, present them to their school board and compete with the other schools to reduce the most energy.

Not only does the program meet the goal of energy reduction for the utility, Mr. Defide said, “but it also allows for the students to get into a potentially new career choice they may have not considered.”

Some environmental groups have filed suggestions with the PUC that the products that qualify for rebates be reassessed. The groups — led by PennFuture, a Harrisburg group that advocates for environmental policy changes — pointed out that 89 percent of dehumidifiers on the shelves in 2014 have met EnergyStar standards, a federal energy-efficiency designation that Duquesne Light issues rebates for.

It doesn’t make sense to issue rebates for products that have more than a 75 percent share of the market, the groups wrote.

But Mr. Defide said Duquesne Light’s customers as a whole haven’t advanced to the point where they quit buying products that dominate the shelves and seek out little-known, more efficient models.

“Our customers aren’t there yet. They need to be educated first,” he said. “It’s easy for parties to make statements” about products that need to be included, he said, “but in reality, the utility company is who’s on the hook for meeting the guidelines from the PUC.”

Utilities have found that the most effective way to succeed in overall power reduction is to offer the widest variety of rebates for the most common products. “We have 520,000 residential customers, so to create a plan that meets all their needs is quite daunting,” Mr. Defide said.

As the programs continue, the Public Utility Commission is seeking ways to make it easier for utilities to embrace energy efficiency and conservation.

Regulators earlier this month gathered input from experts on alternative ways to structure utility rates, which are based largely on how many kilowatt-hours customers use each month. Most notably, decoupling rates would extract the usage component from a customer bill and thereby eliminate a utility’s natural incentive to bring in more revenue by selling more power.

Electric utilities plan to spend millions to reduce sales