Our monopolized electric utilities are one of the major sources of energy waste in our country. There is a built-in system that allows them to build larger and larger power plants, passing along those costs to the consumer. Because most utilities make a fixed percentage on their total revenue, as mandated by local state utility commissions, the only way to make additional profit is to sell you more energy! These utilities have no built-in incentives to help consumers lower their overall energy use, as that would clearly take away from their profits.
Like many energy and pollution related matters, California has been leading the way at solving these issues. Often derided as wacky, California has provided much needed leadership in re-thinking the energy monopoly that the utilities control. Some measures have failed, everyone remembers the rolling blackouts earlier in the decade, however in other areas they have had very positive results.
Specific new regulations allowed utility company profits to no longer be tied to how much electricity they sell. This is often called “decoupling”, and allows utilities to take a share of any energy savings they help consumers and businesses achieve. Now California utilities make money when their customers save money.
So why is this a big deal? Now the utility can make investments in increasing energy efficiency, and make a profit on the long term energy savings. For example if the utility spends $5 million to replace all state traffic lights with new high efficient LED traffic lights, they than can profit in the $10 million yearly savings, not only in the first year, but in future years as well. This causes energy-efficiency investments to become just as important to the utility as building a new power plant.
Sound like a good idea? Some experts are saying that the US could reduce our overall electrical usage by almost half if adopted nationwide. This is a realistic, and actionable, way that we can move towards energy independence. If you agree, call or write your elected officials today and tell them that you want the public service commission in every state to allow utilities to receive the same profits on energy efficiency as they are allowed to receive on generation.
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