Customer Conservation Stretches Muni Funds

Facing tightening regional electricity supply, Southern California municipal utilities are struggling to meet rising customer demand for energy conservation with relatively static public-benefits-charge funds. In response, some munis, such as the Los Angeles Department of Water & Power (LADWP), may allocate new sources of money to expand efficiency programs in the years ahead. ?In 1999, we couldn?t spend the money,? said Mike Bacich, interim programs and services manager for Riverside Public Utilities. Today, the muni has to carefully budget efficiency funds to avoid turning its customers away. Riverside dispenses 46 percent of its public-benefit revenues to efficiency. Customer interest in conservation incentives has resulted in oversubscription of other muni incentive programs. LADWP ran out of funds for its lighting efficiency program four months before the end of its last fiscal year?just before an April hot spell spiked power demand. To avoid such shortages in the future, the department wants increased flexibility to transfer money between various efficiency incentive programs, according to Gary Gero, LADWP?s director of energy efficiency. Demand for efficiency dollars also increased as munis targeted new segments of their customers with conservation messages. Riverside, for instance, is in the midst of retrofitting lights in 1,000 small businesses this fiscal year, Bacich said. While public-benefit revenues grow with increased population and business activity, per capita revenue remains relatively static at an average 2.85 percent per customer. Consequently, aggregate energy-efficiency program funding among Southern California munis has remained largely level, although power demand surges. ?We?re sensitive to the projections of power shortages this summer,? said Mike Ebbing, business and community programs specialist for Anaheim?s Public Utilities Department. Anaheim hopes to roll out new conservation measures after completing pilot projects. After reserving 20 percent of its public-benefit revenue for future purchases of renewable power, the utility has had to tap into its business retention program budget to maintain some of its energy conservation programs. A 2004 Southern California Public Power Authority report shows that munis allocate efficiency funds in vastly different ways. LADWP spends 19 percent of its public funds, or about $3.50 per resident, on conservation. This reduces its load by 14 MW (out of a 4,700 MW peak), Gero said. With 14 million people, more than one out of five of whom live below the federal poverty line, the department spends 30 percent of its public funds on low-income assistance. With that demographic, Gero said, energy efficiency and low-income assistance have a nexus?including giving away compact fluorescent light bulbs at senior centers, incorporating energy-efficiency measures into low-income housing, and replacing ?energy guzzler? refrigerators for fixed-income residents. In contrast, Anaheim?where 14 percent live in poverty?spends 5 percent of public money on low-income assistance programs and 44 percent on energy efficiency. Spending $11 per resident per year in the city of 343,000, the muni shaved its 514 MW peak load last year by more than 6 MW, according to Anaheim.

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Customer Conservation Stretches Muni Funds

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