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Archive for Sunday, July 11, 2010

Utility rates likely to rise with energy efficiency plans

State commission to review companies’ proposals

July 11, 2010

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Along with the price of using energy, utility bills across the state could soon include the cost of conserving it.

In the past few months, public utilities have come before the Kansas Corporation Commission with energy efficiency plans. These plans will ultimately be paid for by an increase in the rates charged to customers.

“Consumers need to be aware that this is happening, that there are costs and there are regulatory questions,” said Dave Springe, the consumer counsel for the Citizens’ Utility Ratepayer Board.

Traditionally, Kansas has ranked among the bottom tier of states in its efforts for conserving energy, according to a scorecard published by the American Council for Energy-Efficient Economy.

Dorothy Barnett, director of energy and transmission for the nonprofit the Climate and Energy Project, views the utilities’ proposals as a promising sign.

“We know energy efficiency costs at least half as much as any new generation,” she said. “Energy efficiency is really our first fuel.”

In her 2007 State of the State Address, then-Kansas Gov. Kathleen Sebelius asked energy producers to take on efforts to reduce energy consumption. In response, the KCC requested that investor-owned utilities come forward with energy efficiency plans.

Energy resource

KCC sees energy efficiency as an energy resource, similar to coal or wind, that is needed to meet existing and future energy demands, KCC communications director Cara Sloan-Ramos said.

“They have determined that reducing or postponing the need for construction of big generation plants or reserving the capacity of natural gas are goals that will benefit all utility customers,” Sloan-Ramos said.

Springe agrees that energy efficiency programs make sense for electric companies, where reduction in energy use allows utilities to avoid having to build expensive power plants to meet the peak demand that occurs during hot summer days. In those cases, even those who don’t participate directly in energy-saving programs would pay less by not having to contribute to the cost of a new power plant.

However, he doesn’t see an equal benefit for natural gas utilities, where only those who access the programs benefit, he said.

Last week, the KCC had a public meeting in Lawrence to gather input on Black Hills Energy’s energy efficiency plan.

It’s the first comprehensive plan to come before the commission. As Black Hills seeks approval from the KCC, Sloan-Ramos speculates that other utilities are waiting to see what gets passed before submitting their own plans.

Springe, who spoke out against the Black Hills plan, saying it was far too expensive and offered unwarranted incentives for the utility, worried that the KCC’s request for individual plans will produce a piecemeal approach to energy efficiency throughout the state.

“If you are going to make energy efficiency a priority, you need to offer it to everyone and it should not be based on where you happen to live,” he said.

He would prefer to see an independent state agency that oversees all energy efficiency programs.

‘Tailor the program’

While different models of energy efficiency programs are popping up throughout the country, Gina Penzig, manager of consumer services for Westar Energy, said it makes a lot of sense for the utility companies to be the ones offering the programs.

“We already have a relationship with our customer and we are in a good position to know what they are looking for because of those relationships. So we can pretty easily tailor the program to reach those needs,” Penzig said.

Third party providers of energy efficiency programs have been successful, such as a statewide agency established in Vermont, Barnett said. But those programs also come with a substantial bump in the cost of energy.

While Barnett said that it would be nice for everyone in the state to have access to the same program, the majority of Kansas customers are served by either KCP&L or Westar. Both of the electric companies has energy efficiency programs in the works.

The trick is providing an incentive for utilities and their investors to offer energy efficiency programs, which cut into how much of their product is consumed. And, finding out what incentives utility companies will get is exactly why the Black Hills case in front of the KCC holds so much interest.

“If a utility can show it has delayed the need for building expensive new generation at a cost lower than the new generation, we all win. The rates stay lower, pollution is reduced and consumers save money for today and tomorrow,” Barnett said. “We think it is important that shareholders are rewarded for their prudence. And we hope that is the direction they will head.”

Comments

Zachary Stoltenberg 4 years, 5 months ago

His is just an excuse to nail their customers with additional fees and extra charges under the guise of "peak" usage and "efficiency". Mark my words. Smart meters = tripple your energy bills. Soon no one will be able to buy here, shop here, or live here. We'll be just like California, at least they have beaches and nice weather...

jafs 4 years, 5 months ago

Actually, according to Black Hills' own proposal, costs would definitely, not probably, go up for all customers to pay for this program and guarantee profits for them.

Bill Griffith 4 years, 5 months ago

Guaranteed profits are standard in the investor-owned utility business. That has been the business model since its inception. I do think the amount BH desires is a starting offer as that is how the game is played over at the KCC and then CURB and others will come back with a lower number and staff studies it and makes a recommendation to the commissioners. The cost would be a little over 2 dollars a month per customer and will probably get knocked down some by the commission staff. However, the customers who get the work done on their homes will save significantly more than this on their monthly bill. The benefit to the rest of us is less gas used and to keep gas prices stabilized.

jafs 4 years, 5 months ago

If people simply used less, that would save gas.

If the government ran the program, it would save gas and save money for those of us who use less without rewarding Black Hills with extra (and guaranteed) profit.

devobrun 4 years, 5 months ago

Coal-fired power plants must be built to supply peak demand. With smart meters, peak can be limited by not allowing too many demand machines ,like ovens, clothes dryers, ac, etc, to be on at the same time.

This allows utilities to invest in smart meters instead of more generation capacity.

They refer to a green mentality and ask for subsidies, raised rates and other revenue generators instead of building more generation capacity and charging for "green" solutions. Either way, energy is provided and the utilities get their money.

Oh.....and wind and solar become less attractive because they do not replace generators. Thus, generation is operated closer to the margin of its capability. But alternative energy sources will make it more difficult to manage the grid. So rate increases will ensue

Again, the utilities win by getting bigger. They diversify into non-coal solutions (which cost more) and they still build coal solutions.

You pay more for a product you like less.

Bill Griffith 4 years, 5 months ago

Natural gas is used for peak demand not coal. It takes too long to ramp up a coal unit. You should know this-or you are being disingenous.

LogicMan 4 years, 5 months ago

Often, yes, but coal is used for peaking generation too. Older, and typically smaller coal fired units are moved from base to peak/backup for their golden years. For example, there are smaller coal units here at the Lawrence plant that can are brought on-line as needed. But yes, they do take longer to spin up.

devobrun 4 years, 5 months ago

coal and natural gas are hydrocarbons. Yes, coal has a lot more carbon to hydrogen ratio than methane and the output of coal produces more co2 to h2o than methane, but they are both fossil fuels. Greenies don't like either one. Natural gas is also quite a bit more expensive than coal.
Power generated by coal is the cheapest. When load variations occur, or when supply variations occur, it costs more to generate the electricity.

Smart meters are used in houses so that each represents a limited load. I had a friend whose new house in Boulder, Co had such a panel in 1980. It cost more up front, but he received a break on his $/kw-hr rate. I don't know how it worked out, because he soon got a divorce, moved out and didn't really have time to evaluate the system.
So utilities can reduce the number of idle generators if they control demand. But now there is more variability in the supply side (solar and wind), so the job of regulating the grid has a new source of difficulty.

But when alternative supply-side technologies are subsidized and alternative demand-side technologies are subsidized, the involvement with the government becomes greater.
And when it all gets too big for the government to manage, it fails......just look at the fiasco in the Gulf of Mexico. Yep, there are laws, rules and regs. But if some suit from BP comes onto the platform and starts kickin' butt, the rules are bent and there are no government men there to stop it.

I don't trust all these subsidies, programs, and regs handed down from the government. I think it spreads the blame around too much. If the thing doesn't work, then let it fail and find out before taxpayers get it in the shorts again. Make the utility pay for costs, and then charge the customer. If it doesn't pay, then it doesn't pay. Quit hidin' behind the government's skirt.

George Lippencott 4 years, 5 months ago

Thank you LJW. It is important that our citizens understand that our for profit utilities are not spending their own money but are "taxing" us to provide their services. We provide the actual capital to make the EE improvements.

Yes, they will sell less energy. Isn't that what a market is all about? Sales go down you lose revenue. Yes, particularly with the capital-intensive power utilities we will benefit from not spending our money to build more infrastructure. In effect, we will borrow less from the utilities shareholders so why should we pay them more?

If the utilities do not want to be good citizens then we should use a third party as proposed by our legislatively established advocates. It will cost no more, avoids conflict of interest, and more uniformly implements EE programs. The money comes from the same source as it does for the utilities - us. The argument that the utilities know us better is specious. When was the last time that a KCPL, Westar or Black Hills representative called you to see how you were doing. The information they have on usage can be made available to the third party.

That said there are real initiatives to be undertaken by the utilities (this is not an all or nothing issue). Where metering can help with power management - we should pay them for that and make sure that it is done equitable so we do not hurt people who can not make the adjustment or already have. Incentivizing a utility to reduce usage means somebody will cut your power or charge you a lot more and no social consideration will be there. Shift workers, the very old, the very young (and mothers) the infirmed, police, fire and many others are home during peak power usage periods. They should not be held to the same standards as those who are at work and will not fully experience the projected higher costs of usage during those periods. Remember this is an implementation of public policy and public policy should determine the process not a for profit company. Yes there must be conservation but within reason.

This is a complex issue and the public should have an opportunity for real input, as it will affect them significantly.

Bill Griffith 4 years, 5 months ago

George, "incentivizing a utility to reduce usage means somebody will cut your power or charge you a lot more..." is a statement with some holes in it. Utilities do have voluntary programs to reduce power at peak times but they cannot do them without our permission. Any program approved by the KCC will have costs associated with it. However, energy efficiency and conservation programs cost less than new coal, natural gas, wind, or solar investments so I strongly take issue with the concept that they will be a great deal more than other rate increases we have seen.

Remember as far as the "market" goes that this is not pure capitalism. Utilities under the guidance of the state are like companies in Sweden-it is a decidedly socialistic system because we the people decided that heat, water, and electricity should not be left to the vagaries of the market. Because this is a different market than on Wall Street, the rulemaking is critical. In the past, the utilities were rewarded for selling as much power as possible. But that leads to more societal costs and building more expensive power plants and those huge rate increases (see KCPL's rate increases over Iatam II). Now we have seen proven in other states the idea that rewarding utilities for conserving power can be good for us.

I know Vermont's program is good-but the legislature ain't going to go for it.

jafs 4 years, 5 months ago

We should reward customers who use less and, currently, we do by charging them less each month.

De-coupling would change that for the worse.

It is far from a socialistic system - such a system would be run by the government as a non-profit entity, which might make more sense than the current proposals.

What it is is a private company which the government regulates in such a way as to guarantee a certain level of profit for the company which, by the way, given that it's guaranteed, is pretty generous.

Bill Griffith 4 years, 5 months ago

By definition a privately-held company tightly regulated by a government entity is socialism. I have heard this openly acknowledged in the House Utilities Committee in Topeka.

jafs 4 years, 5 months ago

Socialism is defined as government-owned means of production, not tight regulation of private companies.

Bill Griffith 4 years, 5 months ago

No, that is communism. Socialism is how companies in Sweden, like Volvo, are run.

jafs 4 years, 5 months ago

Look it up - you're wrong.

Socialism is the government or collective ownership of the means of production.

Communism goes further than that, and attempts to hold all property collectively.

Tight regulation of private companies that can be traded on stock exchanges, like utility companies, is not socialism at all.

devobrun 4 years, 5 months ago

"However, energy efficiency and conservation programs cost less than new coal, natural gas, wind, or solar investments" Really? So does Black Hills have a program that will pay for new windows in my house? Or more insulation in the attic? Is it cost effective for them to send out an energy auditor to evaluate, then install energy saving stuff in my home? Better than just putting in another coal-fired steam turbine?

Because if that program is as you say, it doesn't need government subsidy. If the energy companies go the the Corp. Commission with a program that saves energy, money, and everybody comes out ahead they'd be all over it. I once did a project in the north Maine woods in the summertime. After 2 weeks straight of work, I had a day off. I rented a canoe from a guy on a lake and took off for about 12 hours. When I returned that evening he was working on one of his houses, putting in insulation. I asked him if he was replacing or enhancing the insulation. He said neither, it was the first time these houses had been insulated and they were about 50 years old. Northern Maine, no insulation! Now that was cost effective. Going from 9 inches to 12 inches of fiberglass in my house probably won't save so much.

Bill Griffith 4 years, 5 months ago

I will answer this including all 3 utilities that have filed rate cases along these lines-with the understanding that Black Hills is approaching this a little bit differently in its filing but the concept of receiving a return on investment for certain ee investments is valid for it as well.

Windows-no. They are not considered low-hanging fruit. Insulation- Westar and KCPL yes-Black Hills should but I have not read through their docket for specifics as of yet.

Furnaces, Water Heaters, Central Air, Heat Pumps-Yes

Cost Effective for a Home Energy Audit- For customers, most of the time absolutely. For the utility it is paramount so they can have a baseline to measure energy savings for themselves and to report back to the commission and staff.

What the utilities are scared of is loss revenue due to less of a power demand. They do not want to be penalized for this ee effort. Check out Midwest Energy's HouseSmart program. If you want, call up Michael Voelker, ME economist and ask him how it is working for the people in their territory.

On a question of whether more insualtion is needed-the Home Energy Rater will let a customer know if the upgrade being scrutinized is worthwhile or not.

jafs 4 years, 5 months ago

Generally I agree completely.

Not sure why anyone thinks that the utility companies are the right organizations to run programs like these.

lawrencenerd 4 years, 5 months ago

Why bother putting in smart meters or whatever. They already seem to have a good plan that needs no extra infrastructure. Charge more money for less energy. People will use less because they can't afford it, therefore saving energy. Problem solved, all you need to do is screw the consumer.

George Lippencott 4 years, 5 months ago

I believe the ultimate plan is to charge incrementally related to the presumed cost of generating the power at the moment of delivery. By the by, the plan only applies to residential customers - commercial customers are charged differently. Those who are not home during the peak power periods can set their air conditioning to a much higher setting than those in the home who actually experience the heat. Is that fair? Does it do any more for influencing people to invest in EE than the general increase in rates we are all experiencing? (Air conditioning has a lot to do with power generation requirements).

If we incentivize power companies to reduce your consumption just how high might that incremental charge rise after they deduct the cost of generating power for everyone other than residential customers. In affect, those unfortunate people will pay the highest rate (the incremental kilowatt). To me that is bad public policy.

The information efforts by the utilities are useful but can and are being done by others. Energy audits compete with private companies. If we subsidize energy audits, they should be subsidized for all providers. Real EE will be done by the property owner and will likely result from rate increases. By the by, one of the speakers at the KCC hearing noted that the large rate increases in gas a few years back has presumably through EE efforts led to demand reductions of 30 or so percent. Rates work. We already have methods to help the poor. Do we really need to make this too complicated to understand, to administer and to apply equitably?

Bill Griffith 4 years, 5 months ago

People won't use less because they can't afford it. Westar's rate increase might be a few cents a month. That will not even get the retiree three doors down from me to turn off her 24-7 incandescent porch light. Nobody is getting crucified here and many people will actually pay less per month even if their rate goes up.

George Lippencott 4 years, 5 months ago

And your point is??? People will do what economics suggest. If the rates increase high enough investment in all kind of things becomes worth your money.

Do you have a government centered solution where we are made to invest regardless of whether it benefits the individual?

Second point - absolutely.

Bill Griffith 4 years, 5 months ago

My point is that ee investments are small rate increases compared to building new power plants and will not get people to change their behavior based on price. Heck, I am not sure the KCPL monster rate increases will change a great deal of behavior since electricity rates in the midwest are fairly low to begin with.

Bottom line is if my rate goes up 4 cents a month and I am saving 20 dollars a month with ee upgrades to my home after a home energy audit paid by my utility and the program is open to all residential customers-it is a good deal.

jafs 4 years, 5 months ago

As a confirmed "eco-nut" I am against this idea and have no interest in the power company controlling my thermostats.

Katara 4 years, 5 months ago

This is the program you are referring to.

http://www.westarenergy.com/corp_com/contentmgt.nsf/publishedpages/wattsaver%20landing

Not sure I am sold on it but it may be beneficial for others. Supposedly the savings can be up to 20%.

George Lippencott 4 years, 5 months ago

Actually they can do that without your permission - they own the meter.

In many ways Lawrence is behind the rest of the country. We had the cycling ability back in VA a decade ago. It had no noticable effect on the actual temperature.

One of the big problems with EE is how to deal WITH RENTAL PROPERIES WHEre THE EE INVESTMENT BENEFITS THE RENTEE AND NOT THE RENTER BUT the renter owns the property and if investment is to be made he/she must do it. Ideas welcome.

Bill Griffith 4 years, 5 months ago

The Efficiency Kansas program addresses rental units. A landlord and tenant jointly agree to an energy audit of the property and the last 12 months utility bills are provided to the technician. A menu of recommendations is given to the owner and tenant and upgrades are agreed upon. There is no money given by the owner or the tenant up front. The savings are taken off of the monthly utility bill but some savings will be passed on to the tenant. When the amount of the upgrades is paid for in full the full savings is passed on to the tenant. If the tenant leaves before that time, the next tenant gets the benefit of the savings but must be informed of the program before he/she signs the rental lease agreement.

Bill Griffith 4 years, 5 months ago

Upgrades could be a new furnace, water heater, or air conditioner and it would be installed by a company that you choose which does this type of work. It could very well be insulation added to the structure, too.

Bill Griffith 4 years, 5 months ago

Upgrades could be a new furnace, water heater, or air conditioner and it would be installed by a company that you choose which does this type of work. It could very well be insulation added to the structure, too.

Bill Griffith 4 years, 5 months ago

I am not a big fan of utilities cycling our power during the day and switching the peak more towards evening. They would still need your permission to do this.

George Lippencott 4 years, 5 months ago

belexus

Yes. However we pay for the energy audit through our rates. My issue is with tjhe capital investment to make the property more EE efficient. The landlord does not pay the utilities but would have to make the investment while the tenant would reap the lower costs of utilitires while not investing in the process. Are we really suggesting that all of us subsidize throughn our rates the investment by the landlord in his for profit property??

George Lippencott 4 years, 5 months ago

I do agree with programs where the tenant and landlord share the costs and reap the rewards jointly without investmen tby the rest of us.

You know I wonder why we do not have landlords marketing "green apartments" where they have made the needed investments and ask the future tenant to share the savings in future rent payments. In our :green" town you would think that renters would jump at the chance?

Bill Griffith 4 years, 5 months ago

It probably is being done somewhere-but Kansas usually is a late adopter to most things new.

Bill Griffith 4 years, 5 months ago

No, George, you need to read Westar's docket filing. The energy audit is not paid for through our rates but through the savings that are experienced when upgrades are done to the structure. If the savings is hypothetically 50 dollars a month then Westar might keep 40 dollars per month to pay back their investment including the audit and the customer will get a 10 dollar savings per month until the company's investment is paid for.

With Black Hills you would be correct that the audit would be paid for with a rate increase.

Flap Doodle 4 years, 5 months ago

Remember, merrill says that brownouts are an excellent way to enforce energy conservation.

Centerville 4 years, 5 months ago

Welcome to Green Energy: quit complaining about the cost - it fuels our delusions.

Centerville 4 years, 5 months ago

And, it would be interesting to find out why the LJW goes to David Springe for an opinion. He cashed in his credibility with the Westar scam.

George Lippencott 4 years, 5 months ago

Or bought in to a well presented scam like the one we are discussing. Industry is very smart - that is why they are well paid. They know we are all enamored with "global climate change" and are using that to increase their profits at essentially no cost to them. It is kind of like the Westar scam. EE does not have to be awarded sole source to the utilities - they have no special capability in improving dwellings and there are other options.

Bill Griffith 4 years, 5 months ago

Westar, Black Hills, and KCPL did not develop this program. The state of Kansas through the State Energy Office formulated it. The utillities gave the state comments on the mechanics the program-but again, it was the state who came up with the program. This should negate the idea of a utility conspiracy or scam, if you will.

Where did the state come up .with the idea? From Midwest Energy where the program is VERY popular with the customers. So you have a model that gets a thumbs up from customers in one utilities area, the state crafts a program similar to it and proposes it to all the utilities and 3 of them decide to try it out. Kansas Gas Service does not and I don't know about Empire's position on this concept. But if it is a cash cow for the utilities, how come they all aren't piling on board? The money Westar is asking for is chicken feed for them and frankly for us as well.

The utilities are not improving the dwellings-private contractors are and the home energy raters are private contractors as well.

George Lippencott 4 years, 5 months ago

You have now completely lost me. I am talking about Black Hills? What are you talking about?

Bill Griffith 4 years, 5 months ago

All three utilities have filed dockets on this concept so I included the trio in my statement about this not being a scam but a copy of a very popular program from western Kansas that the state has adopted and these three companies have decided to try out.

Bill Griffith 4 years, 5 months ago

All three utilities have filed dockets on this concept so I included the trio in my statement about this not being a scam but a copy of a very popular program from western Kansas that the state has adopted and these three companies have decided to try out.

George Lippencott 4 years, 5 months ago

What program? As I have said over and over I am not against EE. I am not particularly against utility involvement in EE- in fact I support some aspects of it. I do think there is a better and competitive answer to a lot of EE concepts that may cost us all less and deliver more. I am against paying the utilities for my personal investment. – essentially guaranteeing utility sales regardless of how we all take action to reduce them.

The state of Kansas supports EE. It has left to the individual dockets the notion of guaranteed sales.

Are you affiliated with a utility or just enamored with EE and oblivious as to how it is delivered?

Bill Griffith 4 years, 5 months ago

Neither. I have never been affiliated with a utility and I am on record that along with financial incentives there should be penalties for poor performance on commission-approved ee programs that the utilities undertake.

As I mentioned in the July 12th 2:10 PM post to you I am alluding to the adoption of the MIdwest Energy "HouseSmart" program.

The utilities get guaranteed returns for investments in coal, wind, and natural gas-why not also in proven ee programs? If they don't perform them at a high level they should get penalized for it.

George Lippencott 4 years, 5 months ago

I think we agree except for the role of the utility. Lets us talk housesmart

  1. The utility is spending our money so all they are doing is administering a program that is at odds with their primary mission.

  2. Most EE things I do on my home are not utility centered. Local competitive businesses provide the services. Increasingly they will provide the energy audit - for a cost - just like the utilities charge for that service. I have no perspective that utilities know anything more about caulking, insulation, appliances or the like than those local businesses.

  3. All these utilities run non regulated services that compete with the local businesses I mentioned. Do we really want to provide our business to North Dakota rather than to our neighbors?

  4. I can do almost all of what the utilities are planning to provid with a competitively selected, no more costly, non-conflicted contractor whose jobs is to sell EE and not compete with the local business that provide the products and services that implement EE.

  5. Why in heaven would you want to guarantee the utilities’ current and future profits at the expense of those of us that invest in EE? They are for profit - if demand for their primary services goes down they lose profit. We may have to pay more for the investment they make but we can and should do that - move to an ROI payment scheme rather than a ROS scheme. Why should the rest of us subsidize them getting into a new business because the word energy is in it?

Bill Griffith 4 years, 5 months ago

Thanks, George for the thoughts...

On number one-you are incorrect but I understand your thinking. The money for the program comes from the energy savings going forward on the monthly bill. The utility collects most of the savings differential until the investment in the customer's dwelling is paid for. Then the bulk of the savings from the upgrades is released to the customer. The utility is acting more like a bank in this instance.

Number 2: The utility is not doing the upgrades nor directing it. The home energy rater is directing it and the homeowner is selecting the people to do the work-private companies-in other words. The home energy rater is an independent businessman/woman the homeowner selects off of a list they can get from the State Energy Office or the utility. I already have a bid from a local insulation company for a house I own and am waiting for this program to kick in.

Number 3 is answered by number 2.

Number 4 is answered by number 2.

Number 5- I understand your problem with this. Hopefully answer number 2 helps some. I realize you aren't a big utility fan-and neither am I. But I have come to realize that in other states that utilities have been able to make a large impact in demand by investing in proven energy efficiency programs-more so than customers doing it at their own pace. This then translate into less pressure to build a power plant and we get hit with a really big rate increase. Plus, it does cut down on pollution emissions noticeably faster than any other method we have conjured up. The utilities aren't looking at profit first in this instance (not saying they do not attempt to make a usual rate of return) but they are more scared of losing money from lost power sales and that is why there has been this movement to guarantee a certain rate of return IF they do a good job giving customers quality ee programs. If they don't, they need to be penalized by the commissioners.

Now that being said, Westar is asking for a very small rate increase on their filing, that is not for the ee upgrades for its customers but for something tied to the program (I need to look at this probably this weekend) but either a banking need, administrative cost, or something along these lines. I don't know if they deserve it or not but staff and commissioners will look at their request. I may or may not have the expertise to figure out if it is legit. Black Hills, on the other hand, is asking for more of an increase and their program is not tied to the meter like Westar's and part of KCPL's program-but theirs is a much smaller service area. I do not know if that number they are asking for is correct or should be lower (probably lower as that is how the game is played at the KCC) but I do support the concept that they do not lose money for assisting customers in saving money. Hope this helps-it does get complicated.

Richard Heckler 4 years, 5 months ago

Brown outs in Kansas are very unlikely. This might work in Los Angeles or New York City.

Actually who needs smart meters?

How about smart users.

How about using less on our own?

A Westar rep once explained that Kansas does NOT need more power just cleaner power.

Also he said if ratepayers would learn to control their use all would work out great.

WE should not need expensive meters,corporations or government to make us change our ways. WE just need to do it.

My best guess is that the corporate producers are wanting to increase rates in the event customers decide to think frugal. In their mind they might be losing money. In real terms it is more like they will not be raking in as much as before however not actually losing money.

What may be the most fiscally responsible is to cut CEO wages,BOD wages,other executive wages, reduce share holder dividends and DUMP GOLDEN PARACHUTES rather than living beyond company means. This is a new concept.

INSTEAD of making ratepayers always pay more and more and more to keep up with yester years laissez faire business practices.

Wind Power is developed cheaper therefore cost less yet pays back quickly. Hydro power the same.

Bear in mind TAXPAERS today are responsible for insuring and construction of coal and nuke power. How many times do WE TAXPAYERS want to pay? aka getting duped.

kansasmutt 4 years, 5 months ago

Why dont we just give our checks to the state and they can hand out water and bread like the good old days.We can all live in state owned tents and take train rides to ? We can all shave our heads and be nice and thin, no smoking, drinking or mingeling. Sounds like the overall plan as i see it.Owh and we get free healthcare and funeral coverage in the 6 per hole deal in the state owned cemetary. Now that is the ideal world our leaders see in the next generation. Who wants to join in ? My name is on the list.

George Lippencott 4 years, 5 months ago

belexus73 (anonymous) replies…

So basically you are arguing for a program where the utility loans me money and charges all the rate payers for the cost of that money and uses the reduction in the price of energy to pay back the loan? Where does the capital come from? Since the cost of all this is going to drive up the rates the homeowner is going to end up paying more to service the loan but avoiding costs they might have had if they did not invest.

How do we manage the determination of who gets to use the program? Does the utility determine? How much debt can they incur (how fast does it go)? Who pays for default. What cut of the savings does the utility get because we use less energy? The latter is what I am bothered about. Note a third party could do that too but we would not have to pay them for the energy we do not use? The utility will in a sense be competing with banks? Maybe banks should offer the program?

Bill Griffith 4 years, 5 months ago

Nobody loans the customer money and charges all rate payers for the monetary costs. Westar and KCPL (not Black Hills) are paying for work. The money for Efficiency Kansas came through the federal stimulus grants in 2009. There is no default-if a renter or homeowner leaves the residence then the next resident sees reduced savings (but still gets some guaranteed savings) on their monthly bill. The utility cut for Midwest's program is around 70% (estimate without me checking) until they are paid back for the work done on a home.

I understand your thoughts about a third party but that is not a reality in Kansas. Plus, the third party in Vermont gets renumerated for power saved as well.

Any homeowner or landlord of a smaller rental unit (duplex/triplex-not sure of the limit) in the franchise area is eligible for the program.

The utility is not competing with banks because no bank does this program.

George Lippencott 4 years, 5 months ago

OK, what you are talking about is money from the feds for EE that Energy Kansas is distributing for the state. I.e.: the capital comes from the feds. That is a long way from the Black Hills proposal. I really do not expect the feds to expand this program much and they may end up cutting it. It is aimed at low-income families. How do we deal with everybody else? I remember a version of this program from the collaborative. In that version, rates were increased significantly to create a large pool of capital that was dispensed by the utilities. Is that your plan? Do you work for Energy Kansas?

Can you really demonstrate that for most Kansans moving their own capital through the utility actually saves them any money they would not save doing their own EE? I accept that some money needs to be raised from the ratepayers to support a continued investment for low income Kansans. When we do that we need to be careful that the pace of investment (rate increases) does not increase rates to the point that we experience a revolt by rate payers.

The rate increases all of this will yield when added to rate increases already in works for renewable energy will swamp the average family. By the by, avoidance of new generating capacity may be a bit specious as we are creating new capacity with wind energy. It looks to me like the challenge will be how to manage power with such an uncertain source – coal plants on standby to cut in when the wind dies – or we just cook you in your homes – or we buy expensive energy over the system from Duke Power?

Your point on third party is correct. My point remains conflict of interest. Incentivizing a third party to encourage EE does not conflict with generating power. Incentivizing the actual provider of power to not produce power can yield perverse incentives where in order to gain income the utility is turning off the power to grand-ma. There is a better way.

Have you ever though of Energy Kansas managing a third party contractor for EE for the masses where the individual spends his/her own money - as they will have to if they are not poor. Maybe arrangements can be made with the banks for special loans. The same incentive to rate payers to make the investment can be offered. The utilities just do not provide capital. Payment for all of that (except capital for private investment) comes from the ratepayers.

The approach Kansas has taken to spending federal money does not need to be generalized to the expenditure of private funds. It can be built upon to make a better, generalized system that is not government centered.

Bill Griffith 4 years, 5 months ago

Thanks George for your thoughts.

This is NOT a low-income program per se-all residential customers are eligible. Not sure where you picked that up. However, your credit score does not matter on this program-that will help some folks out.

I do not work for the State Energy Office/KCC.

The feds cannot cut the program-Kansas has the 30 million dollars or so for the program already. Expand the program or not renew it-depends on elections, etc.

There is no need to raise a pool of capital from rate payers. Relax.

I mostly agree that a third party could be better-but as an example, KCPL has done a pretty good job with their new ee programs they have rolled out. Yes, you have to watch them like a hawk but if the program is designed well by the utility and the KCC staff for the customer it can be a good thing. Of course, a poorly designed program can fall on its face.

Again, with Efficiency Kansas, ratepayers aren't moving their capital through the program. Westar's "ask" is around 4 cents a month. No revolt there-but even that will probably get knocked down a bit by the commissioners. I don't know why Black Hills is doing there docket differently-or whether 26 bucks per year on the bill is the right number-probably should be lower. But the people taking advantage of it will keep some decent amount of change in their pocket. degree. They are also a fairly new player in Kansas.

Coal plants will not be on standby-natural gas will be. Westar has a couple of new gas turbines down around Emporia specifically for wind integration. I disagree with the "swamp" theory. If Westar gets the whole 4 cents (not sure on KCPL as they have a good deal more bells and whistles on their file-I will try reading it this weekend.) that is just not going to matter to anybody. I agree a new wind farm will be a larger rate increase than these ee programs but still cheaper than new coal or nuclear.

I think the real challenge will be falling demand plus adding wind power because of mandates and how the utilities will handle this conumdrum.

I wouldn't want the SEO who is managing Efficiency Kansas managing a third party like Vermont. This is due to the SEO being stretched on manpower. If the legislatuare bulks them up-maybe. An oversight board made up of professionals and not political appointees would be my cup of tea.

Sunflower bank makes low-interest ee loans. Check them out on the web.

I don't think Kansas's approach is leading towards the expenditure of private funds. It is going to be a stimulus to private contractors, lead to major upgrades in many residences-based on Midwest's track record, and have a high satisfaction rating on customer feedback. I do think I have met my match in you with regards to loathing of utillities-but I have seen them in recent years come up with some good programs-you just have to watch them closely.

.I have never seen evidence of your turn off granma's power statement.

George Lippencott 4 years, 5 months ago

Thank you. Since I don’t know who you are, I cannot determine the validity of your perspective on the future. That said you do know a lot. $30M will go about as far as my backyard to work the need. Capital - capital - capital.

My Grandma comment is all speculation - my worst-case scenario 1. We move to dynamic rates 2. We put the highest kilowatt on the residential customer 3. Grandmas house is old and she lacks the money to do enough EE as fast as the rates change 4. Grandma cooks or loses her home.

I would love to retire coal plants or find a way to "clean coal". I did not know about the gas turbines. Nuclear works too.

I do not loathe the utilities. They do what they do well. I loathe the idea of

  1. Moving them into a new line of business sole source
  2. Protecting them from market forces
  3. Paying high profit when risk has been significantly reduced.
  4. Dissembling

I have an interest in keeping them healthy but I have no obligation to make their leaders wealthy nee wealthier.

Bill Griffith 4 years, 5 months ago

Agree that 30 million isn't a huge amount but it is 30 million more then before.

I invite you to research the efficacy of gas turbines used with wind for yourself.

Utilities are already protected from market forces. I have sat in their meeting rooms and observed what 10% annual return for decades does for a bottom line. The profit isn't high on these investments compared to new power plants-but there is profit. I think many utilities are wanting to begin getting credit for carbon-reducing work and get ahead of the regulatory curve-even if they don''t make as much ROI.

Feel free to send me a message if you want to bounce other thoughts on this kind of stuff around.

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