Puget Sound Energy Announces Reexamination of Energy Efficiency Efforts

On January 28th, Puget Sound Energy announced at a hastily scheduled meeting of stakeholders its intent to file a much lower 2010-2011 I-937 conservation target than it had been planning earlier in the month. PSE had been anticipated to establish a 2 year target in the range of 70 aMW, but instead used the “5th Plan Calculator” option to define its goals –which produced a much lower 42.7aWM target. This is about a 40% reduction over the two year period. PSE has been subjected over the last two months to an “investigation” process initiated by the WUTC staff of certain elements of its tariff filing related to conservation expenditures. WUTC staff, along with Public Counsel of the Attorney General’s office, called into question PSE planned expenditures in areas such as information based programs, market research, evaluation, and contributions to the Northwest Energy Efficiency Alliance (NEEA) and how those expenditures contribute to energy efficiency realization. Moreover, PSE was jolted by initial strong opposition to rate reform legislation (see story above) and tepid support from some stakeholders in whom PSE was counting on for positive testimony. As a result, PSE decided to file a lower than anticipated I-937 target and commence a review of its overall approach to conservation. PSE expects that process to extend over the coming weeks. NEEC understands and supports a utility’s commitment to strong market research, evaluation, and consistent information sharing with end use customers. These types of efforts are foundational to making a robust energy conservation program successful. When taken as a whole, they represent a small fraction of overall expenditures (which are a small fraction of the cost of generation alternatives) but absolutely necessary for long term program effectiveness. NEEC also supports an investor owned utility’s ability to earn a reasonable rate of return on conservation spending. Yes, such a return will cause upward pressure on rates, but that rate pressure will be far less than that imposed by the alternative future – dominated by a utility’s spending on costly new generation resources.