posted on Friday, May 11, 2007 3:47 PM
by
Jennifer Rinker
Duke Energy's Save-A-Watt Promotes “Fifth Fuel” — Energy Efficiency
In a May 7 filing, Duke Energy asked the North Carolina Utilities Commission to compensate the utility for meeting growing power demand through investments in new technologies and energy efficiency just as it is compensated for investments in new generating plants. Duke has recently trumpeted its commitment to place energy efficiency on equal footing with new generation investments. According to Duke, "recovering financing costs as [it] build[s,] and implementing a regulatory framework that encourages investments in energy efficiency will result in smaller, more manageable rates."
The proposal would allow Duke to earn 90% of the depreciation and operating costs that could be avoided by not constructing and operating new plants or by retiring aged coal-fired plants. This would translate to a 10% reduction in cost to customers over building and operating new power plants. Duke asks that its plan be applied to all North Carolina rate schedules.
Duke acknowledges that new construction will still be needed to meet a projected 3,400 MW demand over the next four years, but nevertheless believes energy efficiency measures could provide as much as 1,700 MW of that demand over the same timeframe. New low-emission coal, nuclear, natural gas and renewables generation would be coupled with residential energy assessments, an efficiency savings plan pilot, and an advanced power managed pilot to fulfill customers' power needs. As part of another project, Duke also plans to retire 800 MW of aging coal-fired power and invest 1% of its annual retail revenue from North Carolina electricity sales in energy efficiency programs.
Duke's initiative is typical of the industry’s increasing resort to energy efficiency and demand response to meet or eliminate demand. For example, the California Public Utility Commission recently approved Pacific Gas & Electric and Southern California Edison's proposal to enter into agreements with demand response aggregators. Interest is further spurred by recent state-federal collaborations specific to demand response and energy efficiency. Notably, Jimmy Ervin, a North Carolina Commissioner and Chair of the National Association of Regulatory Utility Commissioners co-chaired the first meeting of a state-federal demand response collaboration with FERC Commissioner Jon Wellinghoff. Commissioner Wellinghoff is an ardent supporter of demand response, energy efficiency, and renewable and distributed resources.