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Has the electric industry got lawmakers in its back pocket, or are charges of bias just smoke?
Fortnightly Magazine - July 1 2000

energy efficiency measurements "could have cost the electric power industry billions of dollars."

Considering that the present gap between gas and electric consumption that has emerged since the mid '70s now stands at over 10 quadrillion Btu, I would say this particular form of corporate welfare for the electric utility industry likely amounts to at least a few billion dollars. So if energy efficiency policies were source-based instead, would these monies begin to flow to the gas utility industry? Hardly. They would flow to consumers and taxpayers, where they rightly belong.

Another issue that was alluded to is how such policies misinform consumers. The extent of such misinformation is best illustrated by simply doing the math, as shown below.


Site vs. Source Efficiency

Space heating example

Site efficiency of electric heat pump (6.8 Btu per watt) / (3.4 Btu per watt)

Site efficiency of gas furnace (78 percent annual fuel utilization efficiency, or AFUE)

Conclusion: Electric is 122 percent more efficient.

= 200 percent

= 78 percent

Source efficiency of electric heat pump (6.8 Btu per watt) / (3.4 Btu per watt) * 29.3

Source efficiency of gas furnace (78 percent AFUE * 90.1 percent)

Conclusion: Gas is 34 percent more efficient.

= 58.6 percent

= 70.3 percent

Water heating example

Site efficiency of electric water heater, 0.88 energy factor (EF)

Site efficiency of gas water heater, 0.54 EF

Conclusion: Electric is 34 percent more efficient.

= 88 percent

= 54 percent

Source efficiency of electric water heater, 0.88 EF * 29.3 percent

Source efficiency of gas water heater, 0.54 EF * 90.1 percent

Conclusion: Gas is 23 percent more efficient.

= 25.8 percent

= 48.7 percent

Clearly, all Btus are not created equal. Rather, it is the relative emissions that accompany energy alternatives that most matter. But once again, consumers are being kept ignorant through lack of proper disclosure. For example, the following table compares how many gas water heaters it takes to equal the pollution of just one electric water heater.

5,041.5 11.1 36.0 2.4


Source: American Gas Association's "The Economic, Efficiency and Environmental Implications of More Stringent NAECA Standards for Residential Water Heaters," Dec. 2, 1993

Given these issues, it is no wonder that EEI values continuing the biases within the site-based energy efficiency policies at "billions of dollars." Just how long can they hold consumers and the environment hostage? As long as they can get politicians and bureaucrats to do their bidding. Yet, according to the impeccable RAND institution, which DOE contracted ostensibly to study these issues, none of this is even relevant.

Mark E. Krebs
Director, Market Planning
Laclede Gas Co.
St. Louis


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