Why Utilities are Shoveling Cash to Customer Energy Efficiency Projects

April 26, 2011

Industry News

I came across a blog post over at Daily Energy Report yesterday and I had to share it with you folks. It answers a question that I get asked often.

It’s essentially a statement from an energy efficiency/renewable energy implementation firm VP – talking about why utilities encourage their customers to become more efficient and utilize renewable sources of energy. Karl Rabago, VP of Distributed Energy Services (DES) talks specifically about Austin Energy’s motivations but the message seems pretty universal across all utilities. So let’s dive in.

DES is a third-party contractor who handles the energy efficiency and renewable energy services that Austin Energy, the municipal utility providing electric services to Austin Texas residents. He has first-hand knowledge of the utility’s reasons to offer programs, utility customer questions, and the impact the programs have.

“Let me say that fundamentally, what the utility does today or has to do in the future is not changing. Ultimately, we’re still providing energy services. But no longer can we hide behind the fiction that all we’re doing is selling kilowatt-hours.”

Rabago makes an excellent point here. Utilities are no longer just in the business of selling electricity. There in the business of empowering their customers to work smarter and making their utility facilities accomodating, secure, and reliable. He goes on to explain in more detail how utilities leverage new systems and technologies to help their customers.

“The utility comes at this from two places. First of all, it’s the place that faces the cost of maintaining the infrastructure, the networks, securing the power, ensuring the delivery of that power to customers. Second of all, we have the potential with all these [sic] smartness to orchestrate this for the benefit of our shareholders. As a municipal utility, that’s the citizens of the city of Austin, Texas. If we get smart about taking advantage of smart technologies, we can make smart cars, smart buildings, and a smart grid all work together for the benefit of customers. And again, since we face those costs, we’re the ones who maintain the infrastructure, who make sure that the electricity is on all the time, we have the chance to leverage those smart options for the benefit of all of our customers.”

A lot of customers I work with (not in Austin, TX) ask why their utility is offering money, services, and resources to their customers to use less energy. They believe that using less energy means less money/profitability for the utility but in reality, the costs of infrastructure and power generation/distribution are a big burden on utilities. So energy savings at the customer level are cost savings at the utility level as well. It’s a win-win situation and a necessity for business as usual to continue on as energy costs continue to rise.

Does your utility company offer incentives and rebates to reduce your energy consumption?

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