HD6 - Reviewing the Existing Conservation Programs of Each Virginia Electric and Gas Utility
Executive Summary: Introduction Senate Joint Resolution No. 155, adopted during the 1981 session of the General Assembly, requested that the Virginia Coal and Energy Commission conduct a study relative to the role of electric and natural gas utilities in promoting conservation in the Commonwealth. This task was subsequently assigned to its "Energy Preparedness Subcommittee." Based on the Subcommittee's findings, the Coal and Energy Commission reported to the General Assembly during the 1982 session that additional study relative to the utilities' role in conservation efforts was warranted. The General Assembly in February, 1982, in the form of House Joint Resolution No. 32, requested that the Virginia State Corporation Commission review utility conservation programs. In December, 1982, an interim report (*1) was submitted to the General Assembly by the State Corporation Commission. That report detailed the efforts of gas and electric utilities in promoting energy conservation among Virginia consumers. This final report summarizes the current status of the conservation efforts by the utilities. Concurrent with the State's efforts in the area of Energy Conservation, the Federal Government (Department of Energy, Office of Conservation and Renewable Energy) has moved to require certain large gas and electric utilities to provide specific residential consumer services relating to energy conservation. The DOE proposed a Residential Conservation Service plan to be implemented by State regulatory agencies as Part I, Title Il of the National Energy Conservation Policy Act, as amended by Subtitle B of Title V of the Energy Security Act. For those states which elected to participate, the NECPA required substantial and detailed state activity. For those states which chose not to participate or whose RCS plans were not approved by the DOE, a Federal Standby Plan was proposed. Hearings were held and the final Rules and Regulations for the Residential Conservation Services Federal Standby Plan were published in the Federal Register (Vol. 48, No. 188, Pages 44146 - 44162, September 27, 1983) to become effective October 27, 1983. Virginia elected not to participate in the RCS program. Eleven Virginia utilities fall under jurisdiction of DOE for implementing the Federal Standby Plan as "Covered Utilities". The following utilities under the Commission's jurisdiction are subject to the Federal Standby Plan: Appalachian Power Company, Delmarva Power and Light Company, Old Dominion Power Company, The Potomac Edison Company, Potomac Electric Power Company, Virginia Electric and Power Company, Northern Virginia Electric Cooperative, Washington Gas Light Company, Columbia Gas of Virginia and Virginia Natural Gas. These utilities will be notified by order of the Assistant Secretary of the Office of Conservation and Renewable Energy if they are required to implement the RCS Federal Standby Plan. If so ordered, the utilities will report to and be monitored by the DOE for these activities. Discussion The interim report made to the General Assembly in December 1982 described and categorized the conservation programs being pursued by the gas and electric utilities serving Virginia residents. Each of the programs were placed in one of the following nine groups: Customer Information Energy Audits Direct Load Control Weatherization and/or Equipment Financing Time of Use Rates (TOU) Interruptible Rates Cooperative Advertising Add-on Heat Pump Research Studies and Programs Operative programs for each utility are indicated by category on the chart attached to this summary. The next section of this report provides details of current programs of the electric and gas utilities. At the end of that section, a "Program Categories Summary" is included. The Appendix to this report details the utilities and provides information relative to the number of customers served, customer mix, and the average cost of providing service to those customers. For the investor-owned electric and gas utilities, maps are presented depicting the service areas of those companies. Additionally, for the electric generating utilities, information relative to fuel used for generation is presented together with the relative fuel expenses by fuel type. The following definitions were used for each category to assist in the grouping of conservation programs. • Customer Information - Includes all forms of information relative to conservation and/or the efficient use of energy as well as the potential for both in terms of reduced utility bills. Customer information includes, but is not limited to, the following: distribution of brochures and newsletters, mailing of bill stuffers, publishing advertisements, radio or television broadcasting, participation in workshops, distribution of educational materials to schools, providing specific information upon request, e.tc. • Energy Audits (Residential, Commercial and Industrial) - Energy audits typically refer to an on-premise inspection of a customer's residence -or business by the utility to determine what, if any, cost effective measures should be implemented to effect reduced consumption and an attendant reduction in utility bills. • Direct Load Control - Refers to the use by a utility of electronic or radio signals to physically remove certain appliances from the system during peak periods to accomplish a reduced load. Typically, electric hot water heaters, heat pumps and central air conditioning units are primary candidates for such direct load control. • Weatherization and/or Equipment Financing - In such a loan financing program, utilities generally make available to their customers a specified sum of money at a designated interest rate and loan period. This money is to be used for a specific purpose such as insulation and weatherization and/or the installation of energy efficient equipment. • Time-of-Use Rates (TOU) - Daily or seasonal time-of-use rates refer to Commission approved rate schedules, the charges of which are intended to reflect whether energy is used during the on-peak vs. the off-peak period or season. These charges are reflective of the fact that, depending upon the time of day or season of the year during which a customer imposes load upon the utility, the cost associated with providing service varies. TOU rates are generally designed to encourage off-peak usage when lower production cost base loaded capacity is available. • Interruptible Rates - Such rates are typically offered to large industrial customers. They generally have a provision whereby service is provided at a lower cost than otherwise would be the case. The utility can, however, upon relatively short notice, discontinue service to such customers during peak periods or in the event of an unexpected loss of capacity. • Cooperative Advertising - An advertising program wherein the utility shares, with the equipment manufacturer or dealer, the expense of advertising energy efficient equipment. • Add-On Heat Pump - The Add-On Heat Pump innovation combines a fossil fuel furnace with an electric heat pump. In such installations, the heat pump operates when temperatures are moderate but is turned off at temperatures between 30°F. and 35°F. when the fossil fuel furnace begins operation and fulfills the heating requirements of the building. • Research Studies and Programs - Refers to a broad range of research activities relative to promoting energy efficiency and/or conservation. As is shown by the chart attached to this summary, the major emphasis of the implementation of conservation measures has been directed towards the larger Virginia jurisdictional utilities. This is appropriate in that such programs will have a greater impact because of the large customer base. As such programs are proven to be cost effective they can be implemented as appropriate for the smaller utilities. Conclusions Currently energy conservation efforts are becoming more widespread both because of energy supplying utilities' efforts in consumer education and because of the monetary constraints caused by high energy prices currently facing most consumers. The continued emphasis on the need for energy conservation by both utilities and other public and private entities should provide greater continuity in energy supply and demand as utilities and the consumers search for cost effective energy sources. While conservation efforts may temporarily defer new plant construction, even the most concerted efforts will not permanently eliminate that need. If, as economic forecasters expect, the growth in electrical energy continues to parallel the growth in gross national product, conservation and load management efforts will only succeed in smoothing the growth, not eliminating it. Energy supplying utilities will eventually face the need to construct new generating capacity or find new energy sources to meet the demand. The selection of specific conservation methods by both utilities and consumers should continue to be based on the individual assessment of needs and the circumstances relating to that special environment. Because of differences in service areas, it is doubtful that any one strategy for conservation would be equally effective for all utilities. By providing support for a wide range of conservation methodologies, the State Corporation Commission can allow each utility to select those methodologies which best fit its load characteristics and consumer mix, and which provide the best balance between utility and consumer needs. _____________________________ (*1) Commonwealth of Virginia, House Document No. 8, "Report of the State Corporation Commission to the Governor and the General Assembly of Virginia on Utility Conservation Programs". 1983, Richmond, VA |
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