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Summary:

Electric utilities are increasingly offering energy-efficiency programs, but there’s a good chance their customers don’t know about them. That’s according to a survey by market research firm Gartner that found that while the vast majority of respondents said they were willing to participate in programs that […]

Electric utilities are increasingly offering energy-efficiency programs, but there’s a good chance their customers don’t know about them. That’s according to a survey by market research firm Gartner that found that while the vast majority of respondents said they were willing to participate in programs that could help them reduce energy bills, more than half said they were unsure if such programs were available from their utilities.

Is the problem that utilities need a lesson in marketing 101? Well, not really. The problem, according to Gartner analyst Zarco Sumic, is that most utilities are regulated in such a way that they make money from producing more electricity, not less (the exception is states that have decoupling laws, like California). That means they have little incentive to encourage customers to reduce energy use, even if they have energy-saving programs in place. Twisted? Yes.

“They are interested in selling as much power as they can,” Sumic said. “They are not interested in enabling consumers to use less of their products.” So while government or regulatory policies might be pushing utilities to offer energy-efficiency programs, many utilities are approaching them halfheartedly. They might offer rebates for energy-efficient products or provide a web site with information on how to better insulate homes, but little else. In short, they do “as little as they can” to meet mandates and they do a poor job of marketing the programs they have in place, Sumic said.

That said, there is a reason behind the utility business model: It was put in place when the primary goal was to provide customers with reliable and reasonably priced energy. But in light of changing energy policies and consumer attitudes, that’s quickly becoming too limited a goal, the study concludes.

The study predicts that about two-thirds of utilities in the developed world will have some form of energy-efficiency initiatives in place by 2012. In the latest example, southern Californian utility SDG&E announced today that it has nearly $40 million in rebates and incentives available to local business customers this year for qualifying energy-efficiency projects.

U.S. utilities, in particular, may soon get a regulatory kick in the pants when it comes to energy efficiency initiatives. As it stands now, The American Energy and Security Act currently working its way through Congress would require utilities to reduce 10 percent of their electricity demand by 2020. If that act, or other policies, drives utilities to get more serious about energy efficiency, the good news is that they’d have at least a few positive models to follow.

Some regions or jurisdictions — California; Ontario, Canada; Victoria, Australia; and the Netherlands, to name a few — have utilities that are rolling out effective initiatives for customers to reduce energy use, Sumic noted. One reason the utilities are more aggressive with these energy-saving initiatives is because they operate under regulatory environments, often called “decoupling,” in which the revenue they generate is not directly tied to how much power they produce — in essence, driving down their customers’ energy bills won’t affect their bottom lines. As a result, utilities regulated in this way are offering programs like time-of-use billing and demand response.

Some are bullish that decoupling will eventually make it to the federal level, instead of being driven by progressive states. The stimulus package gives a nod to utility decoupling but shies away from more aggressively enforcing it.

  1. I have given Ontario Hydro a bit of beating in the past ( http://www.energycircle.com/blog/2009/05/15/smart-meter-has-arrived-hydro-hasnt/ ) But you are right that they are among the utilities willing to unveil new programs to increase efficiency and market them. I recently picked up a brochure at a Home Depot in Toronto, which is working with Hydro to offer $25 in store credit for returning an inefficient AC unit, and $10 for a beater humidifier. In addition to immediate incentives, Hydro is attempting to galvanize neighbourhoods and communities by offering MacBooks and baiting, “the greenest ‘hood?” Their site, also playing off the (I think clever and genuinely motivating sense of community), is http://www.countmeintoronto.ca.

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  2. [...] more: Electric Utilities Fail to Promote Their Energy-Efficiency Initiatives Share and [...]

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  3. [...] more here: Electric Utilities Fail to Promote Their Energy-Efficiency Initiatives Share and [...]

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  4. Fifteen years ago the utilities were promoting these programs — my firm helped develop and market some in Connecticut, Delaware, Oregon, Washington, Texas, California and the District of Columbia.

    We reduced a lot of wasted energy consumption by helping promote more cost-efficient appliances and building retrofit measures.

    Twenty five years ago I worked at PG&E, where we pumped millions into energy efficiency, along with all the other utilities in the state — and that was before we were given incentives.

    Markets change, regulatory frameworks change. They will change again and again.

    Americans can and do improve energy efficiency without the assistance of utilities — they do so by simple conservation steps — and by a desire to lower utility bills.

    I think this time the drive for an efficient economy may stick. It depends on whether American’s believe that turning off a lamp when a room is unoccupied is a good thing or a bad thing.

    I run into people every day who really believe it is a bad thing. Why? I don’t know. Maybe they have an overdeveloped sense of privilege. But I find a lot of people who look at this as a political issue, rather than as an economic or national security issue.

    It’s like a division between republicans and democrats — a division so strong that common sense cannot prevail.

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  5. The Strategic Energy Group has been a leader in assisting NW utilities in the design and implementation of continuous improvement processes that focus on energy efficiency. We have found that the utilities on Oregon, Washington, Montana and Idaho to be very responsive to promoting energy efficiency in various different implementation models. I must also note that BC Hydro must have the most agressive and well marketed and well designed energy efficiency program (Power Smart) in North America. Also note that BC Hydro practices what they preach on energy efficiency with thier internal efficiency program called “Walk the talk”. Out of the 145 utilities I can deal with Bc Hydro is the only one who has an agressive internal energy efficiency program. Thats sets them apart from the others. Keep these regional utilities on your energy efficiency radar screen as the NW is focusing on changing behavior and supporting it with technology incentives.

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  6. [...] aren’t publicizing their alternative energy or energy efficiency programs very well at all (http://earth2tech.com/2009/06/10/electric-utilities-fail-to-promote-their-energy-efficiency-initiati…) it seems that most alternative energy solutions have an uphill battle to get people to install [...]

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  7. [...] is particularly disturbing,” Earth2Tech’s Katie Fehrenbacher has written, “because it reminds me that those billions allocated from the stimulus package would [...]

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  8. Energy efficient programs will really help people and the environment to conserve our energy in its simplest form. As an additional aspect of helping one could also use house materials as part of their energy efficiency improvements which can also help in the conservation of energy and electricity. One example of this type of products are window tints which can be commonly found in our home windows and car glasses. These window tints can block summer heat and improve winter heat retention. To know more about this kind of materials, visit http://www.Tintbuyer.com.

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