Utilities seek stimulus money to improve energy efficiency

McClatchy NewspapersDecember 19, 2008 

WASHINGTON — A utility association that represents 70 percent of the U.S. power industry joined environmental and energy groups Friday in calling on Congress and the new administration to jump-start the economy by helping Americans save energy.

The groups suggest that any economic recovery package Congress passes early next year include $33 billion that mostly would go to state and local governments for programs such as weatherizing houses, schools, businesses and government buildings. To get some of the money, states would have to agree to follow the lead of Idaho, California and other states and let public utilities make money on efficiency investments.

"In our industry, energy efficiency is now a core business," as important as building power plants and transmission lines, said Tom Kuhn, the president of the Edison Electric Institute, an association of the nation's shareholder-owned electric companies, which joined in making the recommendations.

Energy experts say that saving energy is the quickest, cleanest and cheapest way to add to energy supplies and reduce global warming. For utilities, improved efficiency is a less expensive way to make more energy available than building new plants is.

Kuhn's organization joined with the environmental group Natural Resources Defense Council last month in calling for regulatory changes nationwide that would allow utilities to charge ratepayers for investments in energy efficiency. Friday's proposal would require states to make those changes in order to qualify for some of the federal money that the groups want to see spent on energy savings in buildings. Congress is expected to debate a stimulus plan early next month.

The investments that utilities make include such things as installing programmable thermostats or "smart meters" that show residents how much electricity they're using and how much it costs at any given time. Utilities also would be allowed to adjust rates so that they don't lose money from selling less electricity.

Some states already have incentives, but Kuhn's group wants them spread nationally so that energy-efficient buildings become as common as recycling bottles and newspapers is today, he said.

New technology makes it possible to save energy without sacrificing comfort, Kuhn said. Utilities, he added, can improve efficiency on such a large scale that the costs are reduced and the savings are significant.

The United States is the largest energy user in the world and the least efficient one among developed countries, said Kateri Callahan of the Alliance to Save Energy.

She said that the recommendations to spend federal money on efficiency projects would create tens of thousands of construction jobs, lower monthly power bills and help build a more sustainable energy system.

They'd also reduce greenhouse gases by the amount that Germany produces annually, said Peter Lehner, the executive director of the Natural Resources Defense Council.

There's a "tremendous backlog" of energy savings available, and the return on efficiency investments will be paid "many times over" to Americans, Lehner said.

Even California, where energy use is 40 percent less than the national average, "has really only begun to scratch the surface of energy efficiency," he said.

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A summary of the groups' recommendations

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