Electric utilities offered incentive to develop energy efficiency programs


Garry Brown,
New York State
Public Service
New York, NY, U.S.A. — (METERING.COM) — August 21, 2008 – The New York State Public Service Commission (Commission) today agreed to set aside up to $27 million that would be given to electric utilities as an incentive to develop cost-effective programs designed to assist consumers to improve energy efficiency and reduce anticipated increases in consumer electricity bills.

“The unprecedented rise in energy prices we have seen in recent months is a call-to-action for utilities to find ways to improve energy efficiency and reduce energy consumption,” said Commission Chairman Garry Brown. “By creating these utility incentives, the Commission is providing a valuable incentive for utilities to find ways to improve energy efficiency, which is the most cost-effective, and most immediate, way to reduce the burden of rising energy and environmental costs on residential and business customers.

“Incentives are valuable in securing a long-term commitment by utilities to achieving efficiency goals. The Commission has established energy efficiency as a high priority, due to the benefits that it provides related to customer bills, system reliability, environmental impacts, energy security, and economic development. For that reason, incentives are warranted if they increase the likelihood of achieving our efficiency goals in a cost-effective manner. This new policy ‘taking the carrot and stick approach’ holds utilities accountable to meet targets.”

The utility incentives that are being provided are part of an overall energy efficiency proceeding designed to forestall an expected rise in energy consumption. At current trends, electric energy usage in New York is estimated to be 11 percent higher than current levels by 2015. These factors, combined with expected fuel price increases and supply uncertainty, and the need to reduce greenhouse gas emissions, make it necessary to create energy efficiency programs and quickly find ways to reduce energy use.

The goal of the incentive program is to reduce consumption by up to 693,951 megawatt-hours (MWhs) annually, representing a portion of the Commission’s share of the statewide goal to reduce electricity consumption by 15 percent by 2015.

The incentives will only be paid if the utility meets its goal. Failure to substantially meet the goal would subject the utility to a similarly sized negative financial adjustment.

The new policy applies to electric utilities. Gas utilities will continue to negotiate incentives on a case-by-case basis with the Commission.