Ameren gears up for a new energy efficiency program
Ameren Missouri is getting plans in place to implement the energy efficiency programs the Missouri Public Service Commission gave a green light to earlier this month. These will constitute the largest energy-savings plan in the history of the state.
Ameren expects the effort to save nearly 800 million* kilowatt-hours — the equivalent of the average electrical use of 60,000 homes — through the introduction of seven residential energy efficiency programs, and four programs for commercial clients. The plan calls for Ameren to invest $147 million over the next three years, and it expects customers to gain about $500 million in benefits by reducing people’s energy use and avoiding, or at least postponing, the need for expanding generating capacity.
“It was important for us to make sure we have a benefit ratio that exceeds costs for all of our customers,” said Warren Wood, Ameren Missouri vice president of regulatory and legislative affairs. “Let’s say we saw the need to build a power plant. All the costs show up in our rates. Energy efficiency provides us a means to (push) off needs for power plants, distribution, fuel costs. When we see savings in those areas, that’s what benefits everybody.”
Ameren customers will begin to see more public information on energy efficiency programs beginning January 2013. Residents who choose to participate in Ameren’s energy efficiency programs will see options such as rebates on energy efficient products, programs focused on efficient heating and air conditioning units, and refrigerator recycling.
For businesses, Ameren plans to implement programs that promote cost-effective products and save electricity, and for industrial customers, the utility company will have a construction program that focuses on energy efficient building as well as a retrofitting program.
The plan is the first to be approved under the 2009 Missouri Energy Efficiency Investment Act. It is the product of negotiations and a unanimous settlement among Ameren, the Public Service Commission members, consumer advocates and environmental groups.
PJ Wilson, the director of Renew Missouri, one of the nonprofit organizations involved in the negotiations, said that if the plan is successful, it will be a big step forward for Missouri. In 2011, Missouri was ranked 44th in energy efficiency, according to a joint press release from the three environmental groups involved in Ameren’s negotiations.
“What they’re doing here is nothing that hasn’t been done in other states. In fact Missouri is lagging far behind. So the good news is that they were able to model on other states so they have a high degree of confidence in their programs,” Wilson said.
Illinois already has similar programs in place, and there the utility companies are required to invest in energy efficiency. The Missouri Act provides financial incentives for investing in energy efficiency, but it is not a requirement.
“We’re very hopeful that this works. but we’re going to be watching very closely to see that customers are aware and that the utilities are actually advertising the programs. We hope, we think, that the framework is in place, but without the requirement in place, it’s kind of soft,” Wilson said.
Wood acknowledged that this plan is different from Ameren’s usual product. The company is working on a strategy to ensure that customers will be excited about participating in the programs in January.
“This involves advertising, working with trade allies and vendors, consultants and experts. To be successful it does require engagement with community, and for them to be excited about the programs,” Wood said.
The cost of the energy efficiency program makes up about 20 percent of the $376 million, 15 percent, rate increase that Ameren is seeking. It will cost about $2 to $3 a month for the average residential customer who uses 1,000 kilowatt-hours.
Despite these rate increases, consumer advocates endorsed the plan because Ameren says the energy savings will shrink monthly utility bills by a greater amount. Wood said that energy usage has gone up 36 percent in the past 20 years, and this plan should help slow that growth.
“Although the population is predicted to keep increasing, the demand for electricity doesn’t necessarily have to keep increasing,” Wilson said. “The curve will be a little less steep, and if all the programs are implemented, it will go down.”
*The story as originally written said 800 kilowatt hours of saving instead of 800 million kilowatt hours. And it said Ameren was looking at saving of $500 million instead of customers seeing a reduction of $500 million over the next two decades.