Cost vs. Comfort: The Energy Efficiency ‘Sweet Spot’

A well-designed energy efficiency program is probably a utility’s cleanest and lowest cost route to meeting the growing demand for electricity.

Comprehensive energy efficiency programs can help utilities meet the current demand and offset the need to build new generation or distribution infrastructure. When a utility understands its true cost of service and puts appropriate rate structures in place, it can share cost savings from energy efficiency programs with customers.

Not-for-profit, community-owned public power utilities are leading the way in offering energy efficiency programs that help customers use less energy and save money.

However, when it comes to energy efficiency, you CAN have too much of a good thing. At a certain point, more efficiency may come at a higher cost. To be good stewards of customer funds, public power utilities seek out the energy efficiency “sweet spot,” where customer comfort is balanced with the system benefits of energy efficiency programs.

Energy efficiency programs work only if customers get behind them. Customers may have to sacrifice comfort, make lifestyle changes, and even invest in energy efficient devices and home improvements up front to save in the long run. They may have to adjust to higher or lower temperatures than they like, remember to turn off electronics, weather proof homes and offices, run appliances only at specified times, etc.

In some cases, customers may actually use more electricity after energy efficient appliances or measures are installed as they can buy more comfort without increase in their bills. This is especially true in low-income communities. Some customers may not want their utility to tell them how much energy to use.

Public power utilities are responsive to all needs and balance costs and benefits to the customer’s advantage.

Public power utilities that have earned the Reliable Public Power Provider (RP3) designation from the American Public Power Association (APPA) have demonstrated commitment to energy efficiency. Ninety seven percent of RP3 applicants for 2014 indicated that they’ve implemented energy conservation and/or energy efficiency processes or programs at their utilities.

APPA’s Demonstration of Energy and Efficiency Developments (DEED) program has supported innovation and research in energy efficiency for 35 years now. The program awards grants and scholarships to its members, to help them develop and pilot new programs. The DEED database has a repository of more than 450 completed project reports, including many on energy efficiency, from which member utilities can derive best practices and program ideas.

Utilities that are just embarking on the energy efficiency journey should start with simple programs — installing LED street lighting, conducting voltage upgrades on the distribution system, helping customers transition away from energy intensive light bulbs and old appliances, and offering rebates for high-efficiency thermostats. Anything more complex will require careful planning and budgeting — for equipment, education, and personnel.

Remember, the best energy efficiency programs go far enough to make a difference, but not so far that they diminish customer comfort and choices.



Alex Hofmann is Director of Energy and Environmental Services for American Public Power Association

Morning Consult