FERC’s new rule on compensation for demand resources tips the market balance toward negawatts. Arguably the commission’s economic analysis is flawed, and the rule represents a covert policy...
Setting the stage for conservation.
would equate to about $8 to $16 per month in savings, or about $100 to $200 a year.
Smart meters also open the door for utilities to use smart rates––electricity prices that reflect a utility’s true cost of electricity. By charging higher rates during peak periods and lower rates during off-peak periods, a utility can defer the need to add new peaking generating and transmission capacity, which can help to keep electricity costs down for its customers in the future. Along with smart meters and smart rates, in-home energy displays, internet energy information dashboards, and smart appliances will help consumers take more control over how and when they use energy, making them smarter energy managers.
Smart meters and smart rates together are the essential underpinnings for most effectively bringing plug-in electric vehicles onto the nation’s highways. The smart grid will enable consumers to charge up during the overnight hours when electricity is cheaper, and then wake up to a car ready for their daily commutes.
These next-generation electric hybrids also will give consumers an alternative energy source for powering their cars and trucks, one that’s three to four times more energy efficient than today’s internal combustion engines. And consumers can get the convenience of filling up through a wall outlet instead of driving to the gas station. Overall, the nation will import less oil and the environment will be happier too.
Ultimately, of course, the success of the industry’s efforts to expand the role of energy efficiency will depend on the customer taking action now and continuing to take action in the future. To reach more of their customers and to hold their interest in energy efficiency, many utilities are moving beyond the traditional means of promoting energy efficiency—bill inserts and advertising.
Many utilities now are using their own web-based energy management and education tools, such as online energy audits, to give customers more insight on how their home uses energy and specific recommendations on how and where they can save.
Many utilities now are working with third-party vendors to promote energy efficiency. One tool becoming more popular is sending out monthly energy reports to motivate customer actions. These reports turn the monthly energy bill into a customized energy report for customers that shows them their energy use and offers a comparison with similar households in their neighborhoods.
Another way third-parties are helping is by providing hardware ( e.g., in-home displays) to help customers better manage their energy use. These efforts often employ a reward system and set goals to motivate customers. Still other utilities are using targeted marketing through community outreach programs to gain and hold their customers’ interest in energy efficiency. In North and South Carolina for example, Progress Energy’s neighborhood energy saver (NES) program is putting the power of community-based approaches to work in helping the company’s low-income customers become more energy efficient.
Progress Energy begins by gaining the support and participation of city councilmen, church leaders, and community service organizations. These influential community members in turn provide grassroots support for Progress Energy’s program. The results