$27 Million Set Aside as Reward for Electricity Demand Reduction by New York State
by Matthew McDermott, New York, NY on 08.28.08
photo: Wally Gobetz
If the wide-ranging renewable energy vision that New York City Mayor Michael Bloomberg articulated last week at the National Clean Energy Summit are to be truly able to have a significant effect on fossil fuel usage, energy efficiency programs and demand reduction efforts will have to be increased. The problem doing that, from the perspective of the bottom line of utilities is that, in general, they make more money when they sell more energy. There isn’t great financial incentive for utilities to overly encourage reduction in energy use.
Utilities Rewarded for Reducing Demand
The state of New York is addressing this problem with a new energy efficiency reward program which targets utilities. Under the program the New York State Public Service Commission has set aside $27 million to be awarded to utilities to develop programs which would assist electric consumers to improve their energy efficiency.
The goal of the program is to forestall expected increases in energy consumption over the next eight years—the specific target set out is to reduce electric consumption by about 694,000 MWh (15%) by 2015.
“Negative Financial Adjustments” for Utilities Which Fail to Hit Targets
The Commission is in the process of finalizing specific reduction targets for the state’s electric utilities. Currently for Con Edison, this means that if it manages to reduce demand by about 255,000 MWh it will receive a reward of $9.92 million. If it fails to meet this goal it would be subject to a similarly sized negative financial adjustment. Different reduction targets will be set for different utilities.
NYC to Get Additional Funds
In addition to the $27 million provided to fund programs throughout the state, an additional $5 million will be made available to fund demand reduction in New York City.
Don't know if it would qualify under this program, but ConEd just announced that it has instaleld a green roof on one of its buildings in Long Island City in an effort to reduce energy usage and storm water runoff.
:: New York State Public Service Commission
Energy Efficiency, Demand Reduction
Resolve for Energy Efficiency
It’s the Efficiency, Stupid: New York Times Gets it Right This Time
Energy Efficiency Improvements Could Save UK Businesses £2.5 Billion per Year
The Archdruid Nails It: Energy Conservation, Not Efficiency, Is Key
Thirsty for more? Check out these related articles:
- How to Find Green Energy Anywhere
- We Want Renewable Energy & Green Jobs Too: Native American Groups Tell Obama
- London’s Mayor Wants Unemployed to be Trained as Energy Efficiency Advisors
- Creating New Jobs By Investing In Renewable Energy And Energy Efficiency
Mitsubishi to Make 2,000 i MiEV Electric Cars in 2009
|
Nanosolar Raises $300 Million, Plans to Further Accelerate Production
|
Utilities lose money when they have to buy expensive peak power, especially in NY, where native generation is way below what we need.
Con Ed has always publicized a lot of efficiency programs. How much more they could afford to do I have no idea. With power bills so high, reduction is a matter of necessity by users, so lets not fork over money for reductions that would have occured anyway!
It sort of makes me wonder why BC Hydro has been promoting electricity conservation for the past 30 years then.
So, would this count as a first step toward decoupling?
'Decoupling' is a horrendous idea, at least if you are talking about legislation. Power companies already push hard for power conservation because it helps to reduce fluctuations which force them to use marginal generating facilities (The cheapest is nuclear, then coal, etc. . . ) The cost of switching on a generating facility is significant, especially when it is then only being used for 'overflow', so to speak -- not running near optimal load.
(There is also the consideration of facility type -- some are expensive to run but cheaper to start and stop etc -- it's not as simple as 'power companies sell power so they want us to use more'. If it were that simple, transmission companies, which make money based on the amount of energy they sell, and deal with a practically fixed operationg cost due to transmission infrastructure, would be pushing hard for more power usage.)
Separating generation from transmission only serves to further insulate end users from the real cost of their power, which in turn perpetuates our cavalier attitude toward our consumption habits.
This is not a problem we can legislate away: As it is, many power companies can't raise prices fast enough to meet costs, because of legislation forbidding price hikes.
In addition to conservation efforts, we should be encouraging generation to be built out while simultaneously enforcing tougher environmental policies. . . this would force real change and bring about real solutions to our energy (and environmental) crisis.