Archive for Wednesday, July 7, 2010

Black Hills Energy touts benefits of efficiency program

The company had an opening meeting today to talk about the proposed increases.

July 7, 2010


Fewer than a dozen Black Hills Energy customers showed up for Tuesday night’s public hearing in Lawrence.

The meeting was the first of six to take place throughout the state. The Kansas Corporation Commission is gathering input from residents regarding a proposed cost increase for natural gas customers. Black Hills Energy provides natural gas service to the Lawrence area.

On March 31, Black Hills Energy filed an application with the KCC requesting permission to implement a new energy-efficiency cost-recovery surcharge. The company estimates that it will cost close to $2.5 million a year, over a five-year period, to provide energy-efficiency programs to its customers.

The programs are designed to help residents and businesses consume less energy. For example, a homeowner could receive a rebate from Black Hills Energy by purchasing an energy-efficient furnace. Also, the company is offering free in-home audits to help customers identify areas where they could make changes in their home that would save on natural gas costs.

The average residential customer would pay about $13 more per year the first year. That amount could increase to more than $25 by the fifth year of the program.

Matt Daunis, director of energy efficiency for Black Hills Energy, addressed the group at Tuesday’s public hearing. He provided an outline of potential savings for customers. He said special programs would be available for low-income families and organizations such as Habitat for Humanity.

Daunis said a residential customer could save as much as $1,650 through rebates.

Niki Christopher, an attorney who represents The Citizens’ Utility Ratepayer Board, said at the hearing that few residents would reap the benefits of these programs and most would simply have a higher utility bill.

“Not all customers want to pay for energy efficiency that doesn’t save them money,” Christopher said.

She told the group that about 18,000 out of 97,000 Black Hills Energy customers would benefit, with the majority paying for the rebates and other incentives.

“Believe me, we’re going to be buying these programs from the utilities,” Christopher said.

Two residents addressed officials at the public hearing. Each had concerns that their bills would increase without any benefit to them.

The KCC will conduct other public hearings in Wichita and Dodge City. Video conferencing will be available in Goodland, Garden City and Liberal.

Public comments will be collected through Sept. 2. An evidentiary hearing on the proposed cost increase will be Sept. 13.

Comments may be sent to the KCC through e-mail at, by mail at KCC Public Affairs and Consumer Protection, 1500 S.W. Arrowhead Road, Topeka, KS 66604, or by phone at 800-662-0027.


Ken Lassman 7 years, 9 months ago

So this is an open question to David Springe and CURB members: you are supposed to be supporting energy efficiency programs that help customers save energy and don't cost an arm and a leg. If you don't like the cost-benefit ratio of this program, give some examples of programs that end up cutting energy use that you DO like better.

And I'm talking about helping ALL consumers, including poor folks who don't have the cash to fork over to even buy a new hot water heater. Those are the folks who need the help the most, and if this program helps 18,000 folks do that, then in my book it's a good start. Sounds like the program can expand if the demand is there--so show me a better program cost-benefit wise that does as much for the residential and low income consumer.

jafs 7 years, 9 months ago

A government funded tax program, which exist, would be better, in that we're not paying for guaranteed utility profits.

And, the easiest way to lower utility use and bills is to simply conserve, which anyone can do.

George Lippencott 7 years, 9 months ago

Well, once again I am humbled by my failure to clearly state what I meant. I was one of the public speakers last night. I support energy efficiency and I belive that CURB does also. The issue is not energy efficiency. Income transfer programs that move money from all rate payers to the low income side of the spectrum already exist. Remember all the utility is doing is taxing people to fund incentives to encourage that which is already economically favorable to the consumer. Just how much profit shoud we pay them to do that? Profit is the real question.

Centerville 7 years, 9 months ago

Our state utility regulation has slipped the bounds of rationality. The best conservation occurs naturally with people know how much they are paying per unit and adjust their budgets accordingly. Making some people pay for someone else's "free" in-home audits and rebates and insulation is going 180 degrees in the wrong direction. We can't get a new KCC soon enough.

George Lippencott 7 years, 9 months ago

KCC has not ruled on this yet. Last night and over the next xweeks they are seeking public comment - that is you. Just write what you think and send it to them at the address above.

Bill Griffith 7 years, 9 months ago

We already pay for others freebies on our utility bills. Large customers get discounts we could only dream of. The lower income folks can get assistance that comes from us regular folks monthly payments. Net metering allows a miniscule subsidy as well. This modelbeing considered is also seen in more and more states. So this isn't outside the bounds of rationality-it is just new to Kansas.

It is not true the best conservation occurs naturally.. There is no "natural" in the utility system as it is a hybrid private-government blob with a guaranteed rate of return that makes the utilities weak on the business end. However they have great demographic info on their customers and they can offer major front end discounts on large ticket items that people blanch at forking over the money upfront in order to get a payout over 10 years. A home energy rater isn't "natural" either but he is a trained professional with the right equipment to get the info a customer needs and if a utility is paying some or all of his 350 dollar fee you will have a larger number of people getting this important service.

George Lippencott 7 years, 9 months ago

Let's see. You invest $5000 of your own money in a new super efficient furnace. By your calculations that will reduce your monthly bill by $50.00 yielding a payoff in (much simplified) a little over eight years. Black Hills wants to charge you to pay their share holders 5% of that savings because you have reduced the need for their services. This is in addition to charges to fund incentives to low income consumers and to paying their costs for the energy generated and the marketing of energy efficiency programs. Just why is it in our interests to pay these people a profit on private investment made in most cases without any effort on their part?

For the record CURB (and others) have supported the notion of having an entity other than the utilities to manage the federal, state, local and consumer money dedicated to energy efficiency. The idea is to leave the utilities to that which they know best - generating energy - and using a dedicated group to promote and manage energy efficiency programs. A far cry from what Black Hills proposes and the accusation levied above at CURB. A number of states have already done just this and it works well

One of the points I keep trying to make here, is that just because something is good for all of us does not mean we should overlook the process by which that good is delivered and in our zeal create another "Wall Street” where unwarranted profits are accrued at the expense of all of us. Sound business practices by our government entities must be encouraged. Over rewarding energy companies for “good” programs executed with public or personal funds does not sound like a good business practice.

I also might point out that the other public speaker was not questioning rates but public funding to utilities so that they might compete better against him? For example, Blackhills provides a free energy audit (paid for by all of us) and markets their heating and cooling equipment to the consumer possibly gaining an unfair advantage over our local heating and cooling contractors. .

jafs 7 years, 9 months ago


I called the KCC and voiced my opposition to this program and encourage all others who oppose it to do the same.

George Lippencott 7 years, 9 months ago

There has been some speculation they might minimize the opportunity offered by the heat pump.

Bill Griffith 7 years, 9 months ago

There is supposed to be a provision in the docket to prevent mischief you are mentioning. I know Westar has promised not to disallow natural gas as a replacement for electric appliances.

Sharon Nottingham 7 years, 9 months ago

"Energy Efficiency Cost-Recovery Surcharge". . .nothing but a fancy program name to cover the stench of what it truly is. Are they proposing to rob Peter to pay Paul? There is no way that it should cost $2.5 million over a 5 yr. period to provide energy-efficient programs to customers. People can research on their own how to be more energy efficient. There are several FREE programs in place, not to mention a plethora of advice on the internet.

How about Black Hills Energy provide an incentive to just REDUCE the rate on residential bills to those who have lower energy rates from their previous year's bill during the same month as a REWARD for being efficient?

Bill Griffith 7 years, 9 months ago

The problem with people researching on their own to be more energy efficient is that most won't do this. Where this affects the rest of us is that the more natural gas used the more the price will go up. So by having BH be involved in the process more gas will be saved and that will be a price modifier in the future. I do agree that the price they are asking for should be carefully examined and performance incentives and penalties should be added.

I do like your last idea.

Bill Griffith 7 years, 9 months ago

A good question about Westar. Westar has recently filed for an ee program that would include a home energy audit. Basically, the audit would be free if you would do some of the recommendations the auditor recommends. If you decline to do any, you would pay for the audit. I believe there will be a guarantee of savings over the previous year's electric bill with regards to the ee upgrades you would have done at your abode. You would pay no upfront money for the improvements but Westar would keep some of the savings for themselves until they have paid off the work done at your home. Caveat: This is a general overview of what they want to do however I have not gone through the docket filing as of yet to look at specifics. Midwest Energy is already doing this out in the Hays area with pretty good success.

jafs 7 years, 9 months ago

Well, that's a bit better than what BH is asking for.

They state bills will go UP for all of us.

Centerville 7 years, 9 months ago

Yes, it would be nice, Mr. Moderate, if we left utilities to the business of generating cheap energy. Unfortunately, our KCC believes that Kansas utilities exist for them to play Romper Room. Thus, they build in all sorts of extra charges so the utilities can afford to keep stroking the KCC's vanities.

George Lippencott 7 years, 9 months ago

The cheap energy thing is loaded and that is not what I believe

Do you have some specifics on the Romper room comment?

Ken Lassman 7 years, 9 months ago

Once again, I ask folks to come up with a better plan. Lippincott stated that several states had better plans, but didn't say which ones they were. Another suggestion, which I like, too, is to reward customers who save energy with some kind of financial reward--it's simple and straightforward.

Everyone seems so concerned about how utilities are making a profit from selling energy efficiency, and I, too agree that the margins should be looked at carefully, and it's why I keep asking for a better program from some other state--I'm sure they exist.

But nobody seems to see a problem with the conflict of interest for utilities who DON'T want us to cut our energy consumption, because that's the only way they make money. If you were a business owner, would you spend money telling folks how to NOT buy your product? Would you plan for the day that you could SHRINK the number of jobs your business generates?

Profit is not the main issue, even, at least for me. The less energy we consume per capita means the fewer coal fired plants spewing mercury into the air to our west, the less CO2 emitted, etc. If you don't think prices are going to go up for those reasons, then you really are sticking your head in the sand. Energy efficiency is the best return on your dollar of investment compared to building new power plants, whether they be coal, nukes, solar, or wind.

jafs 7 years, 9 months ago

That conflict of interest is exactly why they shouldn't be in the business of energy efficiency improvements.

If everyone reduced their consumption right now, we could all produce fewer emissions and save money.

If we as a society want to encourage energy efficiency, then government funded rebate programs might be a way to go.

Many states have had rebate programs - we could also offer a federal one.

jafs 7 years, 9 months ago

And any government program will have the benefit of not providing more profit to Black Hills - it would simply help people buy more efficient appliances, etc. which would then help the people with them save money, not spend more money for the privilege.

George Lippencott 7 years, 9 months ago

Doug County. Check Energy Vermont among others.

Exactly what role do you see for utilities.

They make us reduce our energy on behalf of social justice and get paid for it?
They get paid because I reduce my energy with my money?
They market the non regulated portion of their companies that compete with Lawrence businesses through tax payer funded programs?

I am not suggesting we not pay them for their costs with a responsible profit - I am told BlackHills is at 10+%. Just what risks are they taking that justifies that level?

Remember the KCC sets rates and has increased them in response to market economics (not the utilities) so as to encourage energy efficiency. Government has stepped in to help those without economic resources to make such changes (essentially another tax on those who do have resources).

So now you want to make the utilities an arm of the governmment to enforce government policy for profit???

Ken Lassman 7 years, 9 months ago

Am I missing something here? Are you really saying that energy efficiency programs should be taken away from the utilities and run by the state?

Exactly what role do you see for the state? Yes, they oversee utilities, a necessary role, but it doesn't make them an arm of the government. But take away the possibility of utilities shifting gears from producing power to helping finance the transition to more energy efficient residential, business and industrial infrastructure? By giving this over to the state???? Seems to me that that's much closer to taking a whole business sector and turning it over to the state. What's with that?

Lexus is correct: the legislature will never go for this. Give me another state who is running a viable energy efficiency program that will actually fly for the state of Kansas.

And still you haven't answered my question about why you expect a private company to spend money showing folks how to buy less of their product. Talk about conflict of interest!

George Lippencott 7 years, 9 months ago

And a utility in Kansas is not a private company with share holders that want to be rewarded for what I spend on EE (not your money but mine).

Actually some of the states including Energy Vermont put the management of EE out to contract and it is administered under government supervision and not with government employees.

You speak as if this money is not government money. If the utilities take the money from tax payers as directed by the government and give it back to different tax payers is the money not a tax? So you want for profit companies to collect and dispense taxes.

By the by, much of the currently available money for EE is government money and is managed in Kansas by the government.

jafs 7 years, 9 months ago

If energy companies don't have an incentive to improve energy efficiency, then they obviously shouldn't be the ones running those programs.

jafs 7 years, 9 months ago

Aren't we helping the utilities enough with guaranteed profits and rate increase whenever they want them?

George Lippencott 7 years, 9 months ago

Somehow I think you think I am opposed to energy eficiency. Not!!! I am opposed to utilities getting paid for what I do with my money. If we want to pass money from all rate payers through the utility to less affluent people - fine - as long as the government and not the utilities sets the pace. But there is a better way. See Energy Vermont

Bill Griffith 7 years, 9 months ago

Energy Vermont is a great concept in Vermont-a small state in a geographical sense. There is some question of whether that model will work in Kansas but EV does have an impressive track record. However, it is a moot point since the KCC will not consider this type of model for Kansas and the legislature sure as hell won't. I know Dave Springe likes this program as well because it takes the ee decisions from the utilities and gives it to an entity just dedicated to ee.

George Lippencott 7 years, 9 months ago

Then we pass the money through the utilities, we create another conflict of interest, we hire more people to try to preclude it and we endure ever increasing energy rates as more EE is obviously better than little EE.

Yes, I know Dave supports it - been there done tha...

George Lippencott 7 years, 9 months ago

Oh by the way is it geography or population driving your argument about size?

Bill Griffith 7 years, 9 months ago

Geography mainly. Vermont is much smaller and the staff can go all over the state in one day making sales calls. Western Kansas would be a challenge. I think the concept is great-but it will take courage for a large state to try something like Vermont did.

Bill Griffith 7 years, 9 months ago

Another thing challenging about Kansas is that it has more rural electric cooperatives than any other state and the fragmentation poses numerous problems today. It made sense in the 30's to get electricity out to folks but now it is an anachronism that hinders progress.

George Lippencott 7 years, 9 months ago

OK. We might remember that there are several power companies both for profit and not for profit scatterd across Kansas. That does not represent necessairly a single organizing element. In fact they are coming in for differing EE programs with, as I understand it, BlackHills the first to ask for profit on the reduction in sales created by consumers doing smart things with their own money.

George Lippencott 7 years, 9 months ago

Doug County

And a utility in Kansas is not a private company with share holders that want to be rewarded for what I spend on EE (not your money but mine). Yes theer are some co-ops but not here

Actually some of the states including Energy Vermont put the management of EE out to contract and it is administered under government supervision and not with government employees.

You speak as if this money is not public money. If the utilities take the money from tax payers as directed by the government and give it back to different tax payers is the money not a tax? So you want for profit companies to collect and dispense taxes to implement something inconsistent with their historical role.

By the by, much of the currently available money for EE is government money and is managed in Kansas by the government.

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