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Opponents: Duke Energy's 'Save-a-Watt' program no bright idea

Posted July 28, 2008
Updated July 29, 2008

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— The head of Duke Energy says changing how it encourages customers to use less power will help appropriately compensate the company.

Ellen Ruff, Duke Energy Carolinas president, testified Monday before the state Utilities Commission. The panel is being asked to approve Duke's energy efficiency plan.

Save-a-Watt would let the utility add an average of 98 cents per month to the bills of its 1.8 million customers in North Carolina in 2009.

The rate could go up or down in following years to help recover much of the cost of building new power plants or buying electricity, along with a profit for the company. The commission regulates the utility's profits.

"We have an opportunity – not a guarantee – of recovering our program costs and achievable earnings comparable to supply-side resources on our energy-efficient investments," Ruff told the commission.

Ruff said customers wouldn't have to pay for more expensive power on the open market if they hold down demand.

“If we're not much more aggressive about energy efficiency, we have to build power plants," added Paige Sheehan, a spokesperson for Duke Energy.

But attorneys and advocates representing the state, utility consumers and environmentalists say Duke's Save-a-Watt plan is too expensive and doesn't save enough energy – only about a 1 percent reduction by 2015.

"We agree with the company that we need to give utilities proper incentives to maximize efficiency and energy conservation in particular," said Gudrun Thompson with the Southern Environmental Law Center. "This proposal is just not going to get the job done."

“We are supportive of cost efficiency for North Carolina and expanding the programs we have," said James McLawhorn, director of the Public Staff's electric division, the state agency that represents utility customers.

However, when asked if he is opposed to Duke's Save-a-Watt program, McLawhorn replied, "Yes."

McLawhorn is proposing a traditional plan in which Duke would recoup its out-of-pocket expenses and lost revenues for three years and would be eligible for a bonus incentive.

“We don't think we can achieve the kind of energy-efficiency savings that we need based on the old models and old approaches,” Sheehan argued.

Duke Energy Carolinas presented the program in May 2007. It is designed in part to meet a state law that required electric utilities to generate 12.5 percent of their power from alternative energy sources or through energy savings by 2021.

The company wants to raise rates to an amount equal to 90 percent of what it would cost to generate the electricity that would have been produced had it not been for the energy-savings plan. If Save-a-Watt doesn't produce energy savings, Duke says it will return what it has charged on a prorated basis.

"The company will take the risk that its programs will perform and that customers only pay for actual results," Duke lawyer Lara Simmons Nichols said.

Duke would create financial incentives and rebates to encourage customers to save electricity by sealing windows and doors, buying fluorescent light bulbs or purchasing energy-efficient appliances.

Duke can do much better than its projected energy savings, according to environmental groups that staged a small protest outside the hearing. They said Duke could reduce energy use by 1 percent annually.

"That's not an energy-efficient program. That's a small drop in the bucket of the world of possibility," said Shana Becker with the North Carolina Public Interest Research Group, one of about a dozen groups that want Duke Energy to withdraw the Save-a-Watt proposal.

Duke Energy plans to call several executives as witnesses this week. The panel also will meet Aug. 18 to hear from Duke Energy chief executive Jim Rogers. It's unclear when the committee would rule.

Progress Energy is proposing an energy-efficiency program that does not include additional fees. The plan would be to split any savings 50-50 between the company and its customers. A hearing on Progress Energy's program is scheduled for September.

11 Comments

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  • jse830fcnawa030klgmvnnaw+ Jul 29, 2008

    Matthew Quigley, conservation happens in both sectors: Duke Energy and the consumer. I conserve, to the point of considering installing solar panels to reduce my carbon footprint. Duke Energy also needs to be more efficient in producing and delivering electricity, including using sustainable and renewable energy-generating technologies. This cannot be just a one-sided effort.

  • Karmageddon Jul 29, 2008

    "the problem with Duke's idea is that they have no incentives to conserve".....It's not Duke who has to conserve, it's you, me, and all the other people who use their power. Are you ready to cut back on your usage?

  • Karmageddon Jul 29, 2008

    "Just want to let ya'll know that it is summer and duke and PE are making a fortune"................Yeah, and this is when the farmers rake in all their money.....let's complain about them too

  • jse830fcnawa030klgmvnnaw+ Jul 29, 2008

    ohmygosh, the problem with Duke's idea is that they have no incentives to conserve or be efficient by just charging the "savings" to their customers. They know the risks in their business since consumer-level energy-use efficiencies are well-known in the industry. They really need to diversify their main business offerings while using their current porfolio as their "cash cow" to fund the diversification. Otherwise, they will be ripe for acquisition by someone else.

  • FromClayton Jul 29, 2008

    Just want to let ya'll know that it is summer and duke and PE are making a fortune. Everyone uese AC which uses more power. They really rake in the money in the summer...and do pretty good the rest of the year. Now is not the time for them to complain.

  • jbyrd Jul 29, 2008

    How do you like that last paragraph?

    "Progress Energy is proposing an energy-efficiency program that does not include additional fees. The plan would be to split any savings 50-50 between the company and its customers. A hearing on Progress Energy's program is scheduled for September."

    Aint they just so generous? Their not going to raise our prices but actually let us keep 50% of what WE saved.

    This kind of garbage makes me so mad I could spit.

  • Karmageddon Jul 29, 2008

    Tobacco is the only other business in this country where the government orders you to force your customers to use less of your product. How do you force your customers? You keep raising the price until they can't afford it.

  • jbyrd Jul 29, 2008

    Just read between the lines (not hard to do in this case). They want us to conserve so they can make higher profits on the same amount of power they are already producing. Nothing more than a price increase for a already highly profitable company. Notice the paragraph talking about increased bonuses. Bonuses for who? Share holders.

  • whatelseisnew Jul 29, 2008

    when it comes to electricity the consumer will never get a break. I use about the half the amount of electric that I used in 1987. Due to rate increases of the years my total costs per year are higher than they were in 1987. Progress Energy is looking for another 16 percent increase this year. I have no room left to conserve further. Most of my savings have come from replacing my heat pump with a unit that had double the efficiency. I switched most bulbs to CFLs years ago.

  • nerdlywehunt Jul 29, 2008

    So Duke wants to get paid for energy it will never have to generate because of conservation???? What a great business plan. The poor consumer just can't get a break!

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