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
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
"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
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. …