The State Corporation Commission has given Dominion approval to proceed with pilot projects to test the viability of nine different conservation programs. The power company is billing the projects, some of which should begin as early as this quarter, as “consistent with the new Virginia Energy Plan” and potentially helpful in advancing the General Assembly’s target of reducing electrical consumption 10 percent by 2022 compared to what it otherwise would have been.
According to Dominion, pilot projects include:
- Cycling central heating and air conditioning units during peak-demand times (1,000 customers)
- Informing consumers about their real-time energy consumption patterns (1,000 customers)
- Promoting programmable thermostats that allow customers to control their use of electricity (1,000 customers)
- Educating customers about the value of reducing energy use during peak-use times (1,000 customers)
- Free energy audits and energy efficiency kits to 150 residential customers, 100 ENERGY STAR new homes and 50 small commercial customers. Plus, 250 new homes will receive energy efficiency welcome kits that include compact fluorescent light bulbs.
- Incentives for commercial customers to reduce load during periods of peak demand by running their generators to produce up to 100 megawatts of electricity — enough electricity to power as many as 25,000 residences at peak.
Bacon’s bottom line
: These are all positive steps, but they barely scratch the surface of what’s possible. In “Conservation Capitalism,” I described a private-sector initiative (with support from Virginia Tech) to pump $500 million into retrofitting office buildings in the Washington metro area. Meanwhile, the potential exists to achieve massive reductions in electricity consumption in Northern Virginia’s ubiquitous, energy-hogging server farms and data centers.
While I insist that investments in energy conservation should be market driven, not government mandated on the basis of arbitrary goals, I do believe that regulatory policy — especially the structuring of electric rates — should be overhauled to reward conservation. Jim Kibler, with AGL Resources, described recently in “Cleaner, Cheaper, Better,” how a “decoupling” rate strategy could encourage natural gas companies to promote conservation. We should explore something similar for electric power. I suspect that we’ll find it ludicrously easy to achieve the state’s 10 percent conservation goal over the next 14-15 years. We should not use these pilot programs, as helpful as they are, as an excuse not to push for more ambitious, market-driven changes.
(Photo cutline: The Wattson, a unit the measures household electric consumption in real time. Photo credit: Conservation Consultants Inc.)