Why should utilities care?

Why should utilities care about actions their customers take if they do it without the utility’s financial assistance?

I get asked this question often.  Where do I start?

  1. Conservation is a resource.  Just like a power plant, reductions in energy use represent new capacity, and should be accounted for in planning.  A utility might not need more conservation right now (perhaps they have enough to meet their short term goals or mandates), but not acknowledging conservation resources is like ignoring construction crews as they construct a power plant in your neighbor’s back yard while you plan to build your own five years from now.  You might learn later that you didn’t need to build yours, or you could have delayed the construction of yours by five more years, or maybe you could have build a smaller one.
  2. Market insights.  Utilities tend to only track conservation that comes through their programs.  But what about the jobs that are done without utility incentives?  If you are a utility sending out flyers for insulation, wouldn’t you want to know which homes just did insulation last year?  Or is there a chance that someone who just invested in insulation might be more receptive to messaging about a new heating systems or windows than someone who did not? Targeted utility marketing starts with an understanding of the market; the more specific the insights, the better the opportunity for targeted messaging.
  3. Targets = Opportunity. Utilities have targets that say: “pursue all cost effective conservation”, and utilities promote conservation.  It does not say: “pursue conservation, but only track those savings that would have occurred absent your efforts.”  The rules used to set a target are the rules used to enforce a target.  Targets incorporate “achieveability factors” which say nothing of utility programs, causality or influence.  If the conservation occurs, and if you are directed by the state to “pursue” conservation, then by all means count it, and don’t worry about why it happened.
  4. Conservation reduces risk.  Build a power plant or use less energy; this is the high level picture. Utilities that support conservation can reduce the need to buy power later by helping their customer use less energy now.  (And the utility can still charge for the fixed charges for infrastructure, etc.)  A surplus utility – one that generates more energy than they need – can commit sell more power (which means more revenue, more predictability, and lower risk).

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