“Leave the lights on – what the heck!”
The article below describes only one of several utility programs that encourage maximum electricity usage. Both Duke Energy and Progress Energy “are aggressively recruiting new customers for their programs” before the Utilities Commission bans them.
Note that these “leave the lights on” programs led customers to use up to 31% more power during summer peaks, and that these are not the same as “equal payment” programs. Also, both utilities spend millions annually to bring more customers into their service areas, contributing to urban sprawl and water usage.
Simultaneously, both power companies SAY they support energy efficiency – and complain that growing demand is compelling them to build large (and lucrative, if they can be completed) coal and nuclear plants.
Jim Warren
The News & Observer
Saturday, February 23, 2008 Page D-1
Energy billing option called wasteful – State may ban popular utility plans
Can a utility – through its billing programs – tempt customers to waste electricity?
That’s a question North Carolina regulators will soon answer in a case that challenges a popular billing option that Progress Energy and Duke Energy offer to more than 160,000 households in the state.
The state’s two biggest power companies have payment plans that allow customers to pay a fixed amount each month, regardless of how much power they use. The utilities tack on a monthly surcharge of about 11 percent, which results in customers buying the equivalent of 13 months of electricity but getting 12 months of service.
Despite the cost premium, the programs have been popular: Duke Energy signed up about 20,000 customers in less than six months.
But the N.C. Utilities Commission, which regulates electric utilities, is being urged to ban the programs as bad public policy at a time when consumers are being asked to save energy to reduce greenhouse-gas emissions.
Urging the ban are the state attorney general; the Public Staff, the state consumer agency on utility matters; and N.C. Waste Awareness and Reduction Network, a Durham group that advocates efficiency and renewable energy.
“This is the kind of thing that creates a disincentive for saving electricity,” said NC WARN Director Jim Warren. “This is the old utility business model: maximum sales of electricity and talking green to the public.”
The Utilities Commission could rule on the dispute within 30 days. The commission approved the billing programs for both utilities as recently as 2004, but last year the regulators re-opened the case because of the concerns about energy waste. Critics said customers who pay a fixed bill regardless of usage have no incentive to turn out the lights, turn down the thermostat or otherwise conserve, because they pay the same price, regardless.
Those critics appear to be right. According to data from the utilities, customers who enroll in the program show a jump in electricity use that can approach 10 percent over three years.
Duke Energy data show that during times of peak energy demand — blazing summer afternoons when families are running air conditioners and cooking dinner — customers on the fixed payment plans used 31 percent more power than other households.
These plans are not the same as the equal-payment plans that both utilities offer. Under equal payment, a customer’s bill is divided into 11 equal payments. In the 12th month, the customer is credited for overpayments or charged extra for the year.
As the Utilities Commission gets close to issuing a decision, both companies are aggressively recruiting new customers for their programs.
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