We can argue in endless circles whether Dominion and other Virginia power companies need to build major new power plants, or whether conservation and renewable energy sources can meet Virginia’s energy needs for the foreseeable future. What is not up for argument is that Virginia can do far more than it currently does to encourage conservation.
All you have to do is look at California. According to today’s Wall Street Journal, California regulators use a carrot-and-stick approach to incentivize power companies to conserve. The regulatory scheme rewards electric utilities cash equal to 12 percent of the costs they avoid if they meet or exceed conservation targets, but punishes them if they fall far short.
Thus incented, PG&E, which serves northern California, has subsidized the sale of 7.6 million compact fluorescent lightbulbs so far, and expects to raise the total to as many as 20 million — enough to fill 10 percent of the light sockets in northern California homes. The CFLs use only a quarter of the electricity of regular bulbs. And the CFL subsidies are just the most visible program. PG&E has some 85 programs in all, employing 462 people, to help customers cut energy use: from helping Safeway Inc. choose more efficient chicken rotisseries to paying computer manufacturers to supply more efficient power-supply units.
PG&E has one big advantage over Dominion in encouraging conservation: It’s electric rates are so much higher that consumers get a much higher payback on their investments in energy efficiency. Dominion can hardly be criticized for keeping its electric rates low. Indeed, I say, thank you very much. But low rates are no excuse for Virginia’s failure so far to put into place regulatory incentives and rate structures that encourage conservation where it makes sense. Give us the option, please. Let us make the decision ourselves.
Update: Dominion has just issued a press release noting that sales of CFL bulbs have reached 558,000 in the first three months of its light bulb initiative. Dominion provides a $1.50 discount on single bulbs and $3 for multi-packs. The company’s goals now are to sell 5 million over three years.
