By Frank Vinluan.
RALEIGH - It's a conundrum for a new day: To implement programs that reduce electricity usage, Progress Energy would charge customers for the energy they don't use.
The Raleigh utility now awaits regulatory approval of a slate of efficiency programs, all aimed at reducing the amount of energy the utility must produce to meet demand. The programs range from cycling air conditioner use at homes to promoting construction that meets federal Energy Star standards.
But when customers use less, utilities make less. Progress proposes a charge that would recover the lost revenue from the electricity the utility won't make and won't sell. Most customers would end up paying for it as an extra charge on their monthly bills.
Progress is asking for permission to recover $42 million annually to cover the cost of the energy-efficiency programs.
The programs were mandated by a wide-ranging energy bill that passed the General Assembly last year. The North Carolina Utilities Commission is taking comments on Progress' plans through August. But questions are already emerging.
The commission's Public Staff, which represents ratepayers in utilities matters, takes issue with amount of incentives that Progress proposes it receive for creating the programs. In a filing with the commission, Public Staff attorney Robert Gillam calls the incentives proposed by Progress "excessive," adding that they will "result in a windfall for stockholders."
Progress argues that the proposal benefits ratepayers as well.
"To the extent that the incentives are 'a windfall for stockholders,' as the Public Staff alleges, it must also then be an equal windfall for (Progress') customers," attorney Len Anthony says in a filing.
Utilities observers are aware of Progress' proposal, but opposition is muted so far. John Runkle, attorney for NC WARN, says his group will look at Progress's plans, but for now he's been focusing on Duke Energy's proposed energy efficiency program. The Save-A-Watt program is opposed by a number of groups that say it costs too much and saves too little energy. The Public Staff says Duke will make too much money off Save-A-Watt.
John Wilson, research director for the Southern Alliance for Clean Energy, acknowledges that utilities that have invested in infrastructure still have to recover the cost of that investment. "They lose money for not using that infrastructure," he says.
When energy efficiency programs are approved, they typically come with a plan to spread that cost as a charge among customers. Wilson says his group is withholding a formal position on the Progress plan, saying the alliance has asked questions of the utility and is now waiting for answers.
"We're not likely to oppose a utility for putting forth a program that could be designed better. We're just going to encourage them to improve it," he says.
Shana Becker, attorney for consumer advocacy group NC PIRG, has concerns about the Progress proposal. She says that although Progress is entitled to recover its costs, she thinks the company could be seeking to recover too much for the energy efficiency gains it will achieve.
Becker is also concerned that the cost of Progress' energy efficiency programs will be borne by small residential and business users. The additional charge won't apply to commercial customers who use more than 1 million kilowatt hours per year or to industrial customers, who can pursue their own energy efficiency programs.
The Public Staff has not said outright that it opposes Progress' energy efficiency plans, as it has with Duke's program. But the staff did ask Progress to address issues raised about the allocation of the program's costs and the incentives that the utility would receive. Anthony says Progress intends to discuss with Public Staff its concerns.
