Utilities ordered to boost energy-saving efforts

Md. regulators order utilities to boost their energy-efficiency efforts, helping consumers reduce electricity

Maryland regulators ordered the state's electric utilities to boost their efforts to reduce power consumption, setting one of the most ambitious goals in the nation.

The move drew praise from consumer and environmental advocates, but Baltimore Gas and Electric Co. called it a "challenging" mandate and said it wasn't sure how it could be achieved.

The Public Service Commission directed BGE and the state's other utilities to enhance electricity efficiency offerings made the past seven years under the Empower Maryland program, with a goal of achieving an annual savings equivalent to 2 percent of their sales. Utilities would be expected to gradually increase efforts beginning in 2017.

The rate-setting panel also called for efficiency programs targeted to help low-income consumers and for a parallel effort to curb consumption of natural gas, though it left the details to be worked out later.

"It's aggressive but achievable," Paula Carmody, head of the Office of People's Counsel, said of the 2 percent savings goal. She said the decision "continues to put the pressure on the companies" to offer consumers opportunities to save.

Only Rhode Island and Massachusetts have hit energy saving levels higher than 2 percent, according to the American Council for an Energy-Efficient Economy. In Maryland, utilities overall were achieving savings equivalent to 1.3 percent of sales in 2013, the most recent year for which comparable information is available.

Since Empower Maryland began in 2007, electricity consumption has declined by 15 percent, as consumers took advantage of rebates and other incentives offered by utilities to invest in energy-saving measures such as upgrading insulation or installing more efficient lighting or appliances. But activists have argued more could be done.

While utilities in Maryland are allowed to adjust their rates to compensate for reduced demand, Carmody said, energy efficiency remains a net benefit for consumers. Those who participate by investing in efficiency measures do lower their individual utility bills, she said. But even those who do nothing benefit, she added, because reducing demand for power puts downward pressure on electric rates.

Aggressive efficiency efforts also reduce air pollution and mitigate impacts of climate change, environmentalists say, by reducing the need to build or expand power plants. Mike Tidwell, director of the Chesapeake Climate Action Network, called the commission's action a "win-win" for the environment and consumers.

"We now hope other states will follow suit at this same high level," Tidwell said.

BGE welcomed the commission's decision to continue Empower Maryland. But Wayne Harbaugh, BGE's director of pricing and regulatory services, called the 2 percent savings goal "challenging to achieve," because it is so much higher than the existing goal and so many consumers already have taken steps to improve their efficiency.

More than 300,000 customers have taken advantage of BGE's incentives to install more efficient lighting and appliances, tune up furnaces and air conditioning, and other energy-saving measures, Harbaugh said. Collectively, residential and commercial customers who've participated are saving more than 2 billion kilowatt-hours of electricity annually, he said.

A BGE spokesman said it was too soon to say how the company would enhance its current programs to achieve the higher goal.

tim.wheeler@baltsun.com

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