ApCO, Wheeling Power efficiency programs cutting bills - WOWK 13 Charleston, Huntington WV News, Weather, Sports

ApCO, Wheeling Power efficiency programs cutting bills

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Energy efficiency incentives offered by Appalachian Power and Wheeling Power cut demand by about the amount of power typically used by 4,400 homes in 2012, the first full year of the AEP companies' programs in West Virginia.

"I am happy to say that we got to 101 percent of our target," said Appalachian Power Manager of Energy Efficiency and Consumer Programs Jim Fawcett. "We were able to save nearly 66 million kilowatt-hours."

The cost was about 9 cents/kWh, right in the range of the cost of new generation capacity — but those same savings will continue year after year with no additional investment for as long as the new insulation and more efficient light bulbs and heating and cooling systems continue to operate.

Cutting demand

Appalachian Power and Wheeling Power together serve more than 400,000 homes and more than 480,000 total customers in the southern and western parts of the state and part of the Northern Panhandle.

Efficiency programs are both needed and challenged in that service territory.

Federal data show electricity usage in that territory was 23 percent higher in 2011 than in FirstEnergy subsidiaries' Mon Power and Potomac Edison service territories in the northern and eastern parts of the state.

One reason may be older, less well insulated housing stock. In addition, a much higher share of Appalachian Power and Wheeling Power customers heat with electricity: nearly 49 percent, according to information shared by customers when they signed up for service, compared with 29 percent among FirstEnergy West Virginia customers in 2009.

Utility efficiency programs aim to do two things. They reduce routine demand, or the number of kilowatt­-hours consumed. They also reduce the need for generation capacity, either passively by reducing routine demand or actively by seeking industry commitments to cut back during high-load periods such as August afternoons. AEP's current West Virginia programs reduce that need passively.

Investments in efficiency reduce ratepayer cost and, ultimately, offset the need for investments in generation capacity.

The programs

The utilities obtained approval from the Public Service Commission in 2010 for three residential efficiency programs and one commercial and industrial program and ramped them up through 2011.

The residential programs include subsidized sales of compact fluorescent light bulbs throughout the service territory, online or in-home energy audits with recommendations for improvements that include offers of rebates, and support for the state's Low-Income Home Energy Assistance Program, LIHEAP.

The online and in-home assessments look at the furnace, insulation, light bulbs and other items that can waste or conserve energy and offer rebates for upgrades. The two approaches achieve essentially the same end but serve different demographics, Fawcett said: one comfortable collecting information about, for example, the type and age of the furnace and entering that over the Internet, and one that has no Internet access or would prefer to have a certified auditor walk through.

In addition to these residential programs, the companies offer rebates to commercial and industrial customers for more efficient lighting and heating and cooling.

All told, as programs got under way in 2011, customer participation saved 22 million kilowatt-hours.

Preliminary results show that in 2012, the first full year of the program, participation may have saved 66 million kilowatt-hours: 24 million of that residential and 42 million commercial and industrial, according to Fawcett.

That 66 million kilowatt-hour reduction took, on average, 8 megawatts off of the need for generation capacity.

Selling efficiency

Meeting the kilowatt-hour target for 2012 wasn't easy. It takes time to develop awareness of and interest in these programs, Fawcett said.

Residential programs are promoted through bill inserts, radio and television advertisements, home shows, direct mail targeted at higher-use customers, and social media.

Commercial and industrial customers are contacted directly, and also are targeted through advertisements — for example, a testimonial from Toyota, which installed lighting that illuminates quickly and so does not have to be left on in order to be ready when needed.

Payback for a lot of the initial commercial and industrial efficiency investments can be quick, Fawcett said. Savings can begin as early as a year and a half or two years, and can be significant.

Still, it takes time to develop participation even in those.

 "A customer has to have the awareness, then they have to come up with the funding to do the project — the incentives help defer the cost but the projects we're talking about are generally very expensive," he said.

Future efficiency programs

The utilities will continue to offer their programs into 2013 and expect that, mid-year, the PSC will approve them into 2014, Fawcett said.

"We're definitely supportive of doing these energy efficiency programs and it's just a matter of building them up responsibly over a period of time so that it's not a big hit to the ratepayers," he said.

FirstEnergy's utilities offer a different set of efficiency programs and have not yet reported a full year of data.

A draft bill modeled on other states' experience and expected to be introduced in the upcoming legislative session would establish more aggressive efficiency targets for the utilities.

For a list of rebates AEP offers, visit www.aeprebates.com.