Allegheny Power's tough sell
Allegheny Power has a tough sell on its hands.
It has asked the Maryland Public Service Commission for permission to implement a volunteer program in which it would install mechanisms in 1,140 homes and businesses in Urbana so it could control certain appliances remotely.
Smart thermostats would allow Allegheny to control central air conditioners and switches would allow the company to control electric water heaters or other appliances (such as washers and dryers) that use a lot of power.
When demand on the grid increases, Allegheny would be able to control those appliances to conserve energy. The idea is to see how much energy the company can save by powering down appliances when demand is high.
The company intends to run the program for 12 to 15 months at a cost of $4 million, a price it would spread around to its 245,000 customers in Maryland. A home that uses 1,000 kilowatts of power per month would pay a surcharge of 30 cents, the company estimates.
In other words, the state's 245,000 customers would have to pay 30 cents a month for 4.5 years — or $16.20 each — to pay off the estimated $4 million.
That's where the hard sell comes in.
Would you be willing to pay $16.20 so some of your neighbors could receive mechanisms that would decrease their electric bill?
What if you have already taken steps to reduce the amount of power you use by installing a programmable thermostat or buying compact fluorescent light bulbs? You've already done your part. Why should you pay for your neighbors to do theirs?
This so-called Advanced Utility Infrastructure pilot program is one of 14 projects that represent Allegheny's response to the EmPower Maryland Energy Efficiency Act of 2008, which targets a 15 percent reduction in energy use statewide by 2015.
All told, Allegheny estimates that these 14 programs will cost $7 million a year, which it hopes to recoup with surcharges on customers' bills. The surcharge would depend on a customer's use and vary depending on the type of customer — residential, business, industrial, etc.
Allegheny estimates that residents could expect their bill to increase up to 1.5 percent per month, but that the projected energy savings and unquantified environmental benefits will offset the cost of the project.
We aren't so sure.
We still have the bitter aftertaste of Allegheny's failed program to "give" compact fluorescent light bulbs to its customers last year in hopes of spreading their use.
Allegheny touted the light bulbs as free, but placed a surcharge on customers' bill to pay for the bulbs. It reimbursed customers only after the Maryland General Assembly and the Public Service Commission became involved.
It seems to us that better alternatives exist to encourage customers to use less electricity.
How about a tiered rate system like many water utilities use to encourage conservation? The first 1,000 gallons of water costs less than gallons 20,001 to 21,000.
How about providing customers with a chart of average electrical use based on the size of their house, allowing customers to compare their use to that of their neighbors? The company could even give a discount to the house that uses the least.
Allegheny Power has some programs to encourage conservation — the company's Web site even has a link to a flier that helps you determine how much it costs you to run your appliances — but clearly it's not enough.
If it were, we would not be talking about potential surcharges designed to decrease use.