Duquesne Light and West Penn Power meet state mandate to reduce energy consumption
July 23, 2013 4:00 AM
By Anya Litvak Pittsburgh Post-Gazette
A shiny, new light bulb was the single brightest idea that Duquesne Light and West Penn Power had to lower their energy demand over the past three years.
Southwestern Pennsylvania's two utilities told state regulators they've satisfied the first phase of Pennsylvania's energy efficiency and conservation mandates and reduced their total energy consumption by 3 percent over the past four years.
Much of their success was attributed to programs that incentivized customers to swap their incandescent lights with energy efficient options.
Downtown-based Duquesne Light and West Penn Power, a Greensburg-based utility owned by FirstEnergy Corp. of Ohio, have now moved into Phase 2 of Pennsylvania's Act 129, which gives them another three years to find further energy savings -- 2 percent for Duquesne Light and 1.6 percent for West Penn Power.
Act 129 of 2008 required all large state electric utilities to come up with energy efficiency and conservation plans to reduce overall energy consumption and electricity demand during peak times. The Pennsylvania legislature, like the lawmakers in two dozen other states in the nation, believed that having an energy efficiency standard would make electricity cheaper, greener and more reliable.
The utilities' plans are a combination of rebates for energy efficient lighting and appliances, energy audits, voluntary demand reduction programs and consumer education. Their cost, which is supposed to be less than the economic benefits of the programs, is born by consumers through a surcharge on their bills.
The Pennsylvania Public Utility Commission, which oversees the program, decided Phase 1 worked so well that there should be a Phase 2. That began June 1.
But West Penn is still waiting to hear whether its failure to meet an earlier deadline, a 1 percent energy reduction by May 31, 2011, will end up costing it millions of dollars.
The state legislature set penalties between $1 million and $20 million for non-compliance, but the PUC has yet to levy a fine. The agency has three years to deliberate the point, according to PUC spokeswoman Jennifer Kocher. "At this point, the Commission has chosen to wait until the entire Phase 1 is complete before addressing any compliance issues," she said.
While Phase 1 ended May 31, utilities have until November to file their final reports.
West Penn Power got a rocky start on its energy efficiency and conservation plan. When it began, the utility was still owned by Allegheny Energy Inc., which decided to design and administer the program in-house.
Other utilities, such as Duquesne Light and FirstEnergy's other electric companies in Pennsylvania, relied heavily on outside contractors to carry out programs.
Things that would have been obvious to a consultant doing the work full-time were missed by West Penn Power staff, said Todd Meyer, a spokesman for FirstEnergy.
Designing an energy efficiency and conversation plan is about predicting customer behavior and trying to influence it at the lowest possible cost.
Energy efficiency consultants understood, for example, that customers don't want to mail in rebates for small items such as light bulbs, Mr. Meyer said.
Duquesne Light figured that out quickly and started giving lighting rebates not to residential consumers, but directly to manufacturers and distributors. That way, when a customer would go to buy a new lighting installation, it would already be at the discounted price.
The strategy was so successful it contributed 33 percent of the energy savings for the whole program, the single largest chunk.
When FirstEnergy bought Allegheny Energy in February 2011, it began to align West Penn Power's program with its other utilities'; it dispatched contractors to implement these programs.
And in a scramble to meet its Phase 1 goal, the utility borrowed a cheap idea from another Pennsylvania electric company -- it reduced the voltage supplied to some customers by about 1.5 percent. Picture a light bulb burning 1.5 percent dimmer. The decrease wasn't noticeable to consumers, but that eleventh hour idea may have pushed West Penn over the mandated threshold and contributed to 8 percent of its total energy reduction.
West Penn's Phase 1 plan had a budget of $94.2 million. Duquesne's was $78.2 million.
With the low-hanging fruit pretty much depleted by Phase 1 programs, utilities are turning to a few new strategies to increase energy reductions over the next three years.
Duquesne Light is launching several new initiatives, including a full house retrofit option for residential customers that would subsidize the cost of an energy audit and help consumers implement its recommendations.
Both Duquesne Light and West Penn Power say they're working with gas companies on efficiency measures that might come up as part of an audit and linking up customers with potential discounts or programs on the gas side as well.
"When you go into the house, you want to go in once and do as much as you can," said Dave Defide, manager of Duquesne Light's Watt Choices program.
For Duquesne Light, the hardest to reach customers have been small businesses. Their owners have neither the time nor the capital to evaluate potential energy efficiency projects and weigh their effects on the business.
So Duquesne is trying a direct install program, where its contractor will help businesses do an audit, identify the right energy efficiency projects and seek funding for those.
The PUC also wanted utilities to pay special attention to multifamily housing this time around, so both area utilities will have programs targeting landlords and residents of apartment buildings.
West Penn Power will offer rebates for residential and small commercial customers who buy Energy Star-rated computers and computer monitors. Residential clients will also get rebates for Energy Star-rated televisions.
Commercial customers will be eligible for rebates on large freezers and refrigerators, under the company's new food service program.
Commercial and industrial customers can also get help with the cost of energy audits and the capital expense of improving their building shells to improve energy efficiency.
West Penn's Phase 2 program is expected to cost $71 million. For Duquesne, the expense will run about $58.6 million. The utilities plan to issue requests for proposals for qualified contractors to implement these programs in the next weeks and months.