Joint Push for Energy Efficiency; Proposal under Consideration Would Allow Ameren to Profit by Helping Consumers Reduce Power Usage

By Tomich, Jeffrey | St Louis Post-Dispatch (MO), July 11, 2012 | Go to article overview
Save to active project

Joint Push for Energy Efficiency; Proposal under Consideration Would Allow Ameren to Profit by Helping Consumers Reduce Power Usage


Tomich, Jeffrey, St Louis Post-Dispatch (MO)


The business model for electric utilities has always been simple. They made money selling power to run electric devices, from city streetcars in the 1920s to today's iPads, smartphones and plasma televisions. The more energy they sold, the more money they made.

But if state regulators approve an agreement between Ameren Missouri utility and various consumer advocates and environmental groups, the utility will soon have a new profit motive - helping those same customers save energy.

The agreement represents the most ambitious energy efficiency plan ever proposed in the Show-Me state, and the product of years of debate over how to encourage utilities and consumers to work together to reduce electricity use.

"It's a shift toward an energy policy where we partner with our customers," said Warren Wood, Ameren Missouri's vice president of legislative and regulatory affairs.

The three-year plan would directly cost Ameren's customers about $145 million. Consumers would also reimburse Ameren for tens of millions of dollars in fixed costs - investments in power plants, poles and wires used to generate and distribute electricity - that the utility wouldn't recover if energy sales decline.

The Public Service Commission hasn't yet scheduled a vote on the plan, but it will host a public presentation on it Monday in Jefferson City. Ameren hopes to launch the efficiency program in January.

Under the proposal, a residential customer who uses 1,000 kilowatt-hours a month would see electric rates rise by roughly $2 to $3 a month, or about 3 percent based on current rates. The increase represents about 20 percent of the $376 million, 15 percent rate increase that Ameren is currently seeking.

But unlike ordinary rate increases where consumers are asked to pay a higher price for the same services, money spent on energy efficiency will produce huge benefits, utility and consumer advocates say.

"Both the utility and ratepayers are going to win because the benefits are so huge," said Rebecca Stanfield, a senior energy advocate at the Natural Resources Defense Council.

For instance, Ameren estimates the proposed three-year efficiency program will save an estimated 800,000 megawatt-hours by 2015 - the equivalent of the energy consumed by 60,000 homes over the same period.

In financial terms, those savings equal almost $500 million in fuel not burned and power plants and transmission lines not constructed - benefits to be shared by Ameren and its customers.

Public Counsel Lewis Mills Jr., Missouri's consumer advocate in utility cases, is among those who signed off on the program. He said the efficiency programs would benefit everyone, not just those who directly participate by avoiding, or at least deferring the need for new power plants.

"Even if you are not one of the customers to get a rebate, the energy delivered to you over the long term will be cheaper because of the energy your neighbor isn't using," he said.

Just as important, the benefits of reduced energy use, such as an energy efficient furnace, will last far beyond the three years that consumers are asked to pay for the efficiency programs.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Joint Push for Energy Efficiency; Proposal under Consideration Would Allow Ameren to Profit by Helping Consumers Reduce Power Usage
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?