Efficiency the size of a power plant (Duke Save-a-Watt resolved!)

Today we announced an agreement with Duke Energy Carolinas (pdf here) to dramatically increase the size of the “Save-a-Watt” energy efficiency program, while at the same time adding features to ensure that it is fair to customers.  If Duke Energy follows through and meets the targets, by 2020 the energy savings will be more than the annual output of an 800 MW power plant – the size of the unnecessary Cliffside power plant that Duke is meanwhile still trying to build.

By 2020, this agreement could result in:
Energy savings 6,700 GWh
Cost savings $2 billion
Jobs created 3,000
Global warming pollution avoided 4.3 million tons


(click image to enlarge)

By our estimate, Save-a-Watt could reduce electricity demand by about 6,800 GWh in 2020, which could be about 9% of forecast sales (assuming 78,000 GWh sales without an energy efficiency program). This result is almost three times more than the original Duke Energy Save-a-Watt proposal would have achieved.

(Our forecast makes the conservative assumption that once Duke achieves its 2015 target, the program will stablize at that level – we would actually advocate for and expect further growth in annual impacts.)

This “virtual power plant” will be the cleanest, safest, and most reliable energy resource deployed in the Carolinas.

What does it look like when a power plant doesn’t get built? It looks like thousands of people getting jobs to install home weatherization, new appliances, better lighting, more efficient industrial processes. Using analysis by ACEEE for North and South Carolina, the revised Save-a-Watt program will create about 3,000 MORE jobs through 2020 than building a power plant would have.

What does it do for the climate when a power plant doesn’t get built (and used)? It is one small, but necessary step toward putting an end to the damage we are doing to our planet’s climatic balance.  Using the average rate of global warming pollution forecast in a recent North Carolina study, about 4.3 million tons of global warming pollution will be avoided.

What does it cost when ratepayers don’t have to buy another power plant? Since energy efficiency is so much less expensive than building and operating a new power plant, it means billions of dollars that “have” to be spent on other things, be it health care, education, or whatever people like. Unfortunately, Duke Energy is presently trying to raise their rates significantly in order to cover such ill-advised investments such as the Cliffside coal plant.

Save-a-Watt costs only about 2.3 cents per kWh.  Assuming the average cost of electricity from new generation is 8 cents per kWh (which is lower than the 10-14 cents per kWh that many nuclear and coal plants cost), by 2020 customers could save a cumulative $2 billion. My rough estimate is that the average customer bill will be about 7% lower by 2020 than it would be if we relied on expensive new generation to meet the same demand.

It has been rewarding to cooperate with Duke Energy, a company we’ve been at odds with for years (and still are on issues like Cliffside), in the process of creating a viable, solid energy efficiency program.

This process has been an incredible (and exhausting) partnership with our colleagues at Southern Environmental Law Center, Environmental Defense Fund, Natural Resources Defense Council, and the South Carolina Coastal Conservation League, along with numerous formal (and informal) advis0rs.  Our consultants, especially Synapse Energy Economics, and financial supporters have been generous and shown great conviction of the importance of this effort.  Thank you for your support.

We’ve worked for two long years, struggling, to achieve this result.  Great credit goes to the North Carolina Utilities Commission and the South Carolina Public Service Commission, who rejected Duke’s initial proposals as inadequate and unfair to consumers.  We look forward to advocating this agreement before both of those regulatory commissions in the near future.

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Consumer and environmental advocates have reached a settlement with Duke Energy Carolinas on its Save-A-Watt program. The agreement, which must still be approved by state regulators, increases targets for energy conservation and caps Duke’s potential earnings from the initiative.

Comment by Charlotte Business Journal on June 12, 2009 2:54 pm

Duke Energy, environmental groups and a state agency that represents consumers reached agreement today on changes to Duke’s save-a-watt energy efficiency program.

For nearly two years, environmentalists and the N.C. Utilities Commission’s Public Staff, which represents consumer interests, had argued that the program would cost consumers too much while saving too little energy.

Duke would profit from the conservation program, originally proposing to recover up to 90 percent of the costs avoided by not building new power plants. More recently, Duke has agreed to reduce its potential profits.

Comment by Charlotte Observer on June 12, 2009 2:56 pm

It was environmental groups that announced a deal Friday with Charlotte-based Duke Energy Co. that will raise rates for residential customers in North Carolina by $1.21 a month. Duke will pocket some of that money, and spend most of it to cut power consumption.

The Duke agreement comes as utilities try to separate traditional ties between the amount of power a customer uses and how much they pay for it. The first step is to charge customers more — in some cases about the cost of a bottle of soda a month — with the extra money going toward creating leaner, greener power grids across the country. Eventually, the amount of power used in homes or businesses will fall.

The idea is that by using less power, utilities won’t need to add costly new generating capacity. Spending a buck or so now can keep even bigger rate increases in check.

Comment by AP on June 12, 2009 6:45 pm

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