Faced with the relentless growing demand for electricity to power Pennsylvania homes and businesses, Harrisburg regulators had an easy decision to make when they added three years to the life of a successful energy-conservation mandate for utilities.
The conservation initiatives provided under the state’s Act 129 program, enacted in 2008, saved customers an estimated $278 million a year. The program promoting energy-efficient lighting, appliances, and heating and air-conditioning systems was funded through surcharges on electric bills. Conservation advocates estimate that consumers will realize an $8 savings for every dollar invested.
Just as important, the gains extend beyond cushioning monthly electric bills. Controlling the state’s appetite for power helps utilities meet peak demand on the hottest days, trims overall energy costs, and helps stave off the risk of power outages. There are spinoff benefits for air quality, since so much of the state’s power still derives from coal. Finally, the demand for engineers, contractors, installers and conservation educators is said to have generated hundreds of jobs.
So why not keep up the good work? That’s exactly what the state Public Utility Commission did in August by sensibly renewing the program’s goals through mid-2016.
While conservation advocates made a strong case for expanding the energy savings, the PUC decided to stay the course with targets similar to the first phase of Act 129. Energy use across the state would be cut by an average of 2.3 percent over the three-year period.
What appears to be a middle-of-the-road approach, though, has met with resistance in this region from the state’s largest utility, Peco Energy Co., an Exelon Corp. subsidiary. In a legal petition filed this month, Peco asks the PUC to trim the size of the conservation program by as much as 35 percent for Philadelphia-area customers. While consumers would see their surcharges reduced by that much, the region’s energy savings wouldn’t be nearly as robust. And the move would trim conservation statewide — which is hardly in the public interest.
Peco contends it needs flexibility to pursue conservation programs that fall outside the Act 129 guidelines, but its challenge is understandably viewed with alarm by the statewide environmental group PennFuture and others.
Since Pennsylvania, like most states, still sets electricity rates based in part on sales, there’s a tension between utility profits and conservation efforts that trim sales and, thus, net income. But that only makes the case for utility rate reform — a complex and likely long-term process.
For now, most Peco customers probably just want to know how they’re going to save more on their monthly bills.