Oct 2, 2007 - Knight Ridder Tribune Business News
Author(s): Christopher D. Kirkpatrick

Oct. 2--Duke Energy Corp. chief executive Jim Rogers said Monday he wants to expand his save-a-watt program -- a novel approach to energy efficiency that would allow the utility to make money by persuading customers to use less electricity.

He's generated praise from environmentalists, industry peers and most recently former President Bill Clinton, who runs a nonprofit think tank dedicated to innovative ideas that address global problems, including climate change. First proposed to N.C. regulators in the spring, the Charlotte-based utility filed a similar plan with S.C. regulators Friday. Duke intends to file other energy efficiency proposals within six months in its three Midwest states, Indiana, Kentucky and Oh o, Rogers told the Observer on Monday. Duke and other utilities operate numerous coal-fired power plants that spew heavy doses of carbon dioxide into the air.

The gas is blamed as a cause of global warming and environmentalists have pushed for energy efficiency programs to reduce demand. Seven other utilities announced last week they would join Duke to increase spending on programs under the save-a-watt model, which for the first time would financially reward utilities for ramping down demand. "The idea is that companies like ours are perfectly positioned to provide universal access to energy efficiency," Rogers said. "The plans in place -- and in the past -- have not worked. They have been failures." The missing ingredient -- Rogers says -- is profit.

Under the save-a-watt model, utilities would pay for programs designed to help customers buy energy efficient appliances, weatherize their homes and install special circuit breakers to cycle appliances on and off depending on the time of day. The cost would be passed on to customers through higher rates. Duke would charge customers 90 percent of what it would have cost to provide the electricity that was saved. Duke says that's a 10 percent savings. The utility only gets paid if the programs work. The power savings would be tracked by a third party. The program still needs regulatory approval in the Carolinas.

Critics say the amount charged should be based on the actual cost of the programs -- not the amount of electricity saved, the Carolinas Utility Customers Association said in a regulatory filing. The association, which represents industrial users, believ s save-a-watt is too expensive. The Southern Alliance for Clean Energy said the plan might give the wrong impression that energy efficiency programs are expensive to run, the group said in a similar regulatory filing. Critics also point out that the utility is only acting now because it sees expensive federal regulations to battle global warming coming down the road.

Rather than fight the government, the Charlotte utility and other power companies see the chance to m ke money as they meet the regulations of reducing carbon dioxide output. But Rogers said persuading people to use less electricity is the cheapest way to meet power demand. And Rogers has some heavy-weight endorsements behind him, including New York Times columnist Thomas Friedman, author of "The World is Flat." He called save-a-watt a paradigm shift in an August column he devoted to the subject. Clinton mentioned Duke and save-a-watt in an interview with ABC News that aired last week. His nonprofit think tank, the Clinton Global Initiative, endorsed the plan as one of several breakthrough ideas this year that could change the world.

Clinton's group also announced the creation of an institute for energy efficiency, funded by the elect ic power industry, that would research best energy efficiency practices around the country.

HOW WOULD SAVE-A-WATT WORK? Under its proposed energy efficiency plan, Duke Energy hopes to eventually shave 1,700 megawatts of demand, the equivalent of two large-scale power plants. Duke customers in the Carolinas would be charged roughly $15 a year o average during the first year of Duke's save-a-watt program. Customers' bills would fluctuate depending on how many efficiency programs they were using. Even with the added fee, a customer might end up saving up to 6 percent. If customers don't take ad antage of the program, their bill could increase by 4 percent, estimates Ted Schultz, Duke's vice president for energy efficiency.

Duke's average residential power bill in the Carolinas is about $1,000 a year.

© Copyright 2007 NetContent, Inc. Duplication and distribution restricted.

The POWER REPORT

PowerMarketers.com · PO Box 2303 · Falls Church · VA · 22042

To subscribe or visit go to:  PowerMarketers.com  PowerMarketers.com@calcium.netcontentinc.net