Pay a Man’s Electric Bill, and You Keep Him Warm for a Month. Weatherstrip His Home, and…

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Governor Terry McAuliffe earned his pay Thursday the old-fashioned way, doing weatherization work in Northern Virginia, Hampton Roads and Central Virginia. Here, he applies plaster to an uninsulated vent at the home of Diane Hunter in Petersburg. (Sorry, folks, I couldn’t get a better shot because there was a mob all around him — and the state police blocked my best camera angle!)

Dominion Virginia Power is expanding its Energy Share program from the poor and elderly to veterans and the disabled.

by James A. Bacon

Mary Jones has lived in her house on Petersburg’s Warren Street for 36 years. Since the death of her husband three years, she’s lived there alone — “just me and the lord,” she says.

She worked most of her life, first at Central State in food service and later as home care worker, but the 85-year-old is retired now. Although she owns her house, she hasn’t paid off the mortgage, and she counts every penny. She doesn’t run the air-conditioning when she’s alone, and she doesn’t leave a lot of lights on. Still, her electric bill runs about $70 per month on average — and that doesn’t include the gas bill for her stove and hot water heater.

Working through the Crater District Agency on the Aging, Jones qualified for an energy-efficiency makeover from Dominion Virginia Power’s Energy Share program. A team of volunteers swooped in to insulate her attic and hot water pump, install LED light bulbs, and apply caulking and weatherstripping. According to Dominion’s estimates, she should save about $20 monthly on her electricity bill. That’s enough to make a difference in her life, she says.

Jones told her story Thursday as part of an annual P.R. blitz Dominion puts on to promote the program. This year, the power company received a big hand from Governor Terry McAuliffe, who spent the better part of his day visiting homes in Northern Virginia, Norfolk and Petersburg, making a show of doing weatherization work, and touting the program. Dominion used the excitement generated by the governor’s visit to hand out energy-efficiency kits (retail value $12) and pass out literature to curious neighbors.

Energy Share started in 1982 as a program in which Dominion employees, customers and friends donated money to help the poor and elderly who had trouble paying their gas and electricity bills. Last year, Dominion expanded the program to include weatherization, committing $57 million to the effort over five years.

“It’s one thing to help people pay their bills,” said Ed Baine, senior vice president-distribution. “It’s another to help them reduce their bills over time.”

Terrence Moore, a customer project designer for Dominion, was one of a half dozen volunteers who took the day Thursday to weatherize Mary Jones's House. Here, Moore installs a carbon-monoxide monitor.

Terrence Moore, a customer project designer for Dominion, was one of a half dozen volunteers who worked Thursday to weatherize Mary Jones’s House. Here, he installs a carbon-monoxide monitor.

Last year Dominion employees donated 100,000 hours of time doing home weatherization, attended 200 events and talked to 120,000 people. This year McAuliffe, who has emphasized energy efficiency in his energy plan for Virginia, challenged the company to extend the program to veterans and people with disabilities, which the company has agreed to do.

The program helps the needy and protects the environment, McAuliffe said in Petersburg. Energy consumption releases C02 emissions into the atmosphere, which warms the climate, which causes icecaps to melt, which causes the sea level to rise. “Sea level rise is real. It’s happening,” said McAuliffe. After New Orleans, Norfolk is more vulnerable to sea level rise than any other U.S. city, and it’s a concern of the U.S. Navy, which bases the world’s largest naval base there. “The Secretary of the Navy wants to know that we’re taking these issues seriously,” he said. Fighting global warming is an environmental issue and a pocketbook issue.

It’s obvious why McAuliffe promotes energy efficiency. But why would Dominion? After all, the utility makes money by selling electricity. Isn’t it undercutting its own business by investing in programs like Energy Share that reduce consumption?

Here’s how spokesman Bob Richardson responded: “The purpose is to encourage customers to reduce their energy consumption which reduces stress on the electrical grid at specific times when demand on the system is high. Dominion uses financial incentives (typically rebates) to customers to reduce consumption or make it financially easier to install measures to save energy.”

Besides Energy Share, Dominion has six energy-efficiency programs aimed at residential customers, including a $40 rebate for cycling air-conditioning on high-use days, energy audits, heat pump tune-ups, heat pump upgrades, duct sealing, and replacement of old, inefficient appliances with energy-efficient ones. The company offers comparable programs for non-residentual customers, as well as incentives for users to shed load during peak demand by operating customer-owned backup generators.

Dominion has proposed other energy conservation programs but they have not passed muster with the State Corporation Commission. One program would have installed WiFi-connected, programmable thermostats in houses and tracked how customers used them so Dominion could design future programs around the technology. The SCC disagreed with assumptions in Dominion’s cost-benefit analysis and said the cost of the program was too high, says Richardson.

The SCC has rejected other programs, but later approved them after Dominion went back to the drawing boards. For example, says Richardson, the SCC denied a small business improvement program due to concerns about eligibility; Dominion revised the program design, and the SCC accepted it. Another program encouraged non-residential customers to upgrade to higher-efficiency lighting. In rejecting that program, the commission indicated that additional cost-benefit justification was needed. Dominion addressed the concerns, says Richardson, and the commission gave its OK.

Ultimately, the decision for funding utility-sponsored energy-efficiency programs is up to the SCC, which is charged with balancing cost, reliability and environmental considerations. Critics say Virginia lags other states in embracing energy efficiency, bu it harder to justify charging energy-efficiency programs to ratepayers in Virginia than in many other states because rates are lower than the national average, which offers a lower payback for the same investment. However, environmentalists argue that well-executed investments are cheaper than building new gas-fired gas plants, while programs that shift electricity demand would make it easier to integrate carbon-free solar and wind electricity into the electric grid.

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17 responses to “Pay a Man’s Electric Bill, and You Keep Him Warm for a Month. Weatherstrip His Home, and…

  1. Residential energy efficiency has a big payback with lower income residents especially because they typically live in lower quality dwellings that make up a disproportionate percentage of peak energy use. Helping improve the energy efficiency of those buildings not only lowers the utility bills for the residents, it significantly lowers the utility’s cost to meet the peak. Which is all the more reason to promote these types of programs – they benefit everyone.

    Such savings are typically returned to all ratepayers, but between now and 2022, during the rate freeze, all such savings will be retained by Dominion.

    “Critics say Virginia lags other states in embracing energy efficiency, bu it harder to justify charging energy-efficiency programs to ratepayers in Virginia than in many other states because rates are lower than the national average, which offers a lower payback for the same investment.”

    Rates in Virginia are just a few tenths of a cent below the national average. Energy efficiency typically costs in the 2-3 cents/kWh range. There is no state where energy efficiency investments in this range would not have a significant benefit to the building owner. I am not sure where that statement came from but it is a gross distortion of return on investment from well planned energy efficiency investments. It sounds more like the type of economics that are often presented with utility promoted energy efficiency programs.

  2. “Dominion has proposed other energy conservation programs but they have not passed muster with the State Corporation Commission. One program would have installed WiFi-connected, programmable thermostats in houses and tracked how customers used them so Dominion could design future programs around the technology. The SCC disagreed with assumptions in Dominion’s cost-benefit analysis and said the cost of the program was too high, says Richardson.”

    “The SCC has rejected other programs, but later approved them after Dominion went back to the drawing boards. For example, says Richardson, the SCC denied a small business improvement program due to concerns about eligibility; Dominion revised the program design, and the SCC accepted it. Another program encouraged non-residential customers to upgrade to higher-efficiency lighting. In rejecting that program, the commission indicated that additional cost-benefit justification was needed. Dominion addressed the concerns, says Richardson, and the commission gave its OK.’

    “Ultimately, the decision for funding utility-sponsored energy-efficiency programs is up to the SCC, which is charged with balancing cost, reliability and environmental considerations.”

    This level of involvement and oversight is wholly unjustified and inappropriate and in my mind HARMS the interest of consumers.

    I cannot believe the SCC has this kind of power and it’ vested in someone who is a government bureaucrat who is asserting their judgement over those that would actually have the expertise and judgement to engage in activities that could save consumers money.

    I cannot believe the SCC has this kind of power. It’s beyond the pale.

    I am NOT advocating that we let DVP or other monopolies run amok but limiting their ability to innovate is just plain dumb.

    I’m starting to think the problem is not solely with DVP … we need to change the way the SCC is doing business. Unbelieveable.

  3. “Ultimately, the decision for funding utility-sponsored energy-efficiency programs is up to the SCC, which is charged with balancing cost, reliability and environmental considerations.”

    This statement is true, but ONLY for those programs that Dominion wants its customers to pay for; it is free to spend all its shareholder money it wants on energy efficiency efforts.

    I didn’t intend this to be a response to Larry, but consider it one.

  4. re: ” I didn’t intend this to be a response to Larry, but consider it one.”

    ????

    at any rate – so … DVP wants the public to know it TRIES to do these innovative things but the SCC won’t let them and all along they could but they propose it as an additional cost to customers so it can get shot down instead and they can say “oh we tried”?

    I think I’ve gotten downwind of something fetid…. here…

    are they really that cynical?

    • It’s a reply to your continued misunderstanding of the role of the SCC. You “cannot believe the SCC has this kind of power and it’ vested in someone who is a government bureaucrat who is asserting their judgement over those that would actually have the expertise and judgement to engage in activities that could save consumers money.”

      You being a cooperative customer may not care how Dominion spends its customers money, but I can assure you, as a Dominion customer, I certainly care how it proposes to spend mine. The SCC puts the kibosh only on programs that do not pass economic muster, i.e., a cost-benefit test. You assert that the SCC is simply a bunch of “government bureaucrats” unable to understand how a utility works. Boy are you misguided. They have engineers, economists and accountants, with thousands of man-years experience in reviewing utility plans and their books. If Dominion produces a plan designed to make itself money at the cost of its customers, I for one am glad to have the SCC watching out for me and saying either “No” or “Come back with a better plan.”

      Those guys running the utility are looking out for their shareholders; that’s something you, as a coop member, seem not to realize.

  5. DVP wants the public to know it TRIES to do these innovative things but the SCC won’t let them…

    That’s not the way it is. I’m sure Dominion wants the public to know the innovative things it does, but it was only in response to my questions that they talked about the oversight role of the SCC. I don’t think Dominion wants to piss off the SCC.

    • Nor piss off DVP! Energy efficiency programs are hugely contentious and far from obviously in the ratepayers’ best interest if poorly designed.

      Even the best designed are often unpopular. The utility gets blamed for pandering to those few wealthier, better-educated residential customers who benefit most from the subsidized efficiencies offered, and for seeking little more than feel-good publicity at ratepayer expense. Verification that the utility-paid-for efficiencies were actually implemented is a problem for a company that normally goes out of its way NOT to know what customers do with its product. And ratepayers aren’t vocal supporters before the SCC; the biggest benefit to ratepayers often isn’t even understood by most of them: the future reduction in growth of the annual peak demand, the primary statistic which drives utility planning and construction. And many residential customers conclude, the avoided-cost-based compensation offered to sign up isn’t worth the hassle. Commercial/industrial customers ought to be an easier sell: they are focused on energy economics, they may even have someone on staff who can implement an interactive load management program as well as more conventional energy savings, and the opportunities and rewards are greater. But even with them, energy efficiency programs are a difficult sell.

      Then there’s the utility’s own ambivalence. The utility with low rates, like DVP, already has a commendable focus on cost containment and it’s hard to build executive support inside the utility for a fuzzy, feel-good program premised on interfering with how the customer uses the electricity he’s purchased. And then you ask the finance guys in the room whether cutting growth is the long term strategy they recommend.

      So — I agree with TomH, energy efficiency makes lots of sense as a utility investment alternative to new construction that should be funded by ratepayers — but it’s a tough sell all-around, especially inside the utility.

      So why would the SCC fail to approve a DVP energy efficiency initiative? I’d read the SCC’s orders for their own explanation. Maybe it was ill-conceived and too costly, or benefited too narrow a set of customers; maybe there was better technology around the corner, or already available elsewhere.

      As Jim notes, Virginia is not at the cutting edge in this activity — which means other utilities, other regulatory commissions, have already sorted through these choices and come up with a short list of good programs. DVP and the SCC both should not try to reinvent the wheel but learn from others.

  6. that sounds a little bit better than the optics…

    but..

    I always considered the “helping old folks ” idea to be pure PR BS. The TV commercials for it are just over the top pandering.. that’s ok …. that’s what companies do sometimes….. “look at us – we LIKE people – especially kids and old folks”!!! throw in some wagging puppy dog tails… and … kumbaya!

    the FIRST THING – that I think of when I see that commercial is how many old folks DON’T get helped… all the others not in the commercial?

    next, the idea that ratepayers are not interested in conservation flies in the face of the evidence that many are buying LEDs and interested in SOLAR and ARE ALSO concerned about pollution and yes global warming….

    Finally -there is something truly incongruous about a faceless bureaucrat deciding what is best for the ratepayer interests and competition , innovation and markets especially when it appears that the SCC functions as the GA’s go-to-agency to protect DVP’s monopoly from would-be 3rd party competitors.

    I still think the SCC’s reach and scope is far, far more than is needed or justified to simply insure that DVP is not abusing it’s monopoly status rather than do that role, then stand back and let the markets for conservation and innovation – work – unfettered.

    What the SCC seems to be doing in addition to protecting ratepayers short-term IS – protecting DVP monopoly in a way that is NOT in ratepayers interests longer-term.

    The recent approval of SOLAR by DEQ rather than SCC involvement is an example of innovation going forward in spite of what the SCC would have done – and the reasons why DEQ is doing these and not the SCC is still not clear

    I think that the SCC role as a utility regulator is very, very different in Virginia than that role is done in other states judging from how other states are going forward in areas of innovation and conservation and Virginia is not.

    • You say, “The recent approval of SOLAR by DEQ rather than SCC involvement is an example of innovation going forward in spite of what the SCC would have done – and the reasons why DEQ is doing these and not the SCC is still not clear.”

      This is happening pursuant to a law passed, of course, by the GA, back in 2009, which exempted solar and other “small renewable generation” projects below 100 MW from the SCC’s jurisdiction over generating stations. And in 2012, DEQ was directed by the GA (see VA Code sec. 10.1-1197.6) to create a “permit by rule” process to exempt these plants even further from bureaucratic oversight. In other words, once again, the GA micromanaged the situation.

    • As far as “in spite of what the SCC would have done” is concerned — I don’t think you are correct. Broadly speaking, the SCC has jurisdiction over licensing the construction of new electric generating plants by anyone, not just by regulated retail utilities. Take that unified consideration and ” one stop” licensing away and you’re left with the local zoning and building permit process, and DEQ. That’s s no easier for the developer of a small solar project; that’s harder, maybe impossible in a suburban setting because of NIMBY. To which the GA responded by giving DEQ the whole problem instead of the SCC — why, I don’t know. I imagine the SCC would have developed its own expedited licensing process for small solar by now, on its own without GA “instruction” to do so, if it was still in the loop.

      • Solar and wind plants built by regulated utilities still must obtain a CPCN from the SCC. The permit by rule enables only independent projects to go forward without going through the CPCN process at the SCC.

  7. One of the ways to benefit both ratepayers AND DVP and their investors is to let DVP engage directly in consumer services such as energy home improvements. Backup generators, storage units, solars arrays – all designed and configured to be compatible with and standardized to DVP’s grid infrastructure.

    Why is that – not something that can be allowed?

    I get a water heater from REC and they maintain it in exchange for a box that lets them turn turn it off at high demand periods.

    I’d be glad to engage in other collaborative transactions with them over other things like backup generators, solar panels – that they can control when needed in exchange for my benefit also.

    If DVP can have for-profit subsidiaries for some things – why not others?

    I note that my propane/natural gas supplier also sells gas appliances and installs them…

    • “Why is that not something that can be allowed?”. Well, it IS allowed, and many electric utilities do sell appliances etc. There are two problems. The first is regulatory:. Such activities are not considered part of the regulated, monopoly business of providing distribution and electricity services — so usually, to help simplify the segregation of the monies involved, things like appliance sales are handled by a separate affiliated company. The second is cultural. The regulated business is a “public service company” with some of the same attributes as government. The primary cultural focus within the company is not profit but service. Whereas, selling appliances is, pure and simple, a for-profit business. I don’t want to make too much of this distinction because there’s a lot of overlap — but separating these into separate companies, perhaps even deliberately separate names, makes sense from the point of view of corporate culture and is usually what’s done. A third difference is, the utility side tries to avoid getting involved in what the customer does with the electricity he buys — privacy and liability and all that; but selling appliances is the opposite.

      • A fourth reason is, ironically, to protect the competitive market for non utility services. Think Dominion could lever its vast buying power to price other sellers of generators out of the market? HVAC installers? That’s why Virginia law limits the lines of business that a regulated monopoly can enter into.

  8. My HVAC contractor called to tell me about several new Dominion programs. They left a message…but I am curious what that is all about.

  9. I certainly applaud Dominion for helping low income people to reduce their energy use and save money that is very important to their budgets. However, the total amount available from those programs will not make the kind of difference in demand levels that are available or savings being seen in other states with a wider vision.

    “By far the biggest driver of the declining emissions is energy efficiency. Americans are using less energy overall, even as our population grows and our economy expands. Dominion and other gas-happy utilities are betting that once plants are built and consumers are on the hook, regulators won’t want to see them idled ten years from now just because renewable energy has made them obsolete.”
    http://www.theenergycollective.com/ivy-main/2386920/the-fuel-thats-helping-america-fight-climate-change-isnt-natural-gas

    This slide at the above cite shows 10 years of CO2 reductions and where they came from. It is very descriptive.

    My point is that building efficiency is capable of driving a whole lot of demand reduction. To do that kind of efficiency reductions real monies need to be ready for loans. PACE is used for deep retrofits and on-site solar generation for commercial buildings. An On-Bill program, financed by the utility, is good for residential efficiency. The 25% of Fortune 500 companies that are looking to create sustainability with solar are also looking for the ability to do PPA’s. The SC will have to OK a rule change now before them to use a PPA in VA.

    This is also not Demand Reduction during peak power by calling on on-site backup power for an hour or two. Other utilities are doing that with technology, not with back-up diesel generators. Some are doing it by working with solar installations to shift their direction slightly to create power during peak hours, some are starting to use on-site storage and even car batteries.

    Dominion’s low-income programs are very worthwhile, but we need to see efficiency at a different level.

    • I don’t want to disparage energy efficiency, but that slide that Ivy has posted is full of surmise. Notice that the Sierra Club starts with usage as of 2005? And then continues its “Business As Usual” emissions line upward using 2005 demand and growth? Well, beginning in 2007-8 demand fell off the table with the big recession. Virtually all the decreases in CO2 emissions that the Sierra Club attributes to energy efficiency are simply demand destruction. The reductions from fuel switching and new renewable generation are calculable; those arising from energy efficiency cannot readily be teased out of the overall reduction in demand.

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