This blog was written by John D. Wilson, former Deputy Director for Regulatory Policy at the Southern Alliance for Clean Energy.Guest Blog | October 13, 2017 | Energy Efficiency, Energy Policy, Utilities
Yesterday we reported on how Duke Energy leads the Southeast in energy efficiency, and Florida Power & Light is providing the worst results in the region. But what about the rest? There are a lot of great stories to tell, but first here’s a reminder of the overview.
We report on the recent performance of Southeastern utilities’ energy efficiency programs in the blog series Energy Savings in the Southeast.
As discussed in yesterday’s blog, across the region SACE works in, utility management commitment, state regulatory or legislative policy, and stakeholder engagement are the critical factors that determine success. Today’s blog will review the rest of the Florida utilities, Southern Company, and the South Carolina utilities.
(The rest of) Florida’s Utilities
Yesterday, we explained how Duke Energy Florida and Florida Power & Light (FPL) had very different responses to the gutting of Florida’s energy efficiency goals by the Florida Public Service Commission. Surprisingly, Gulf Power and Tampa Electric have also maintained their energy efficiency program impacts at levels similar to those achieved under the previous goals.
Gulf Power was once the regional leader in energy efficiency, setting the pace not only in Florida but for the Southern Company system. Unfortunately, its programs have stagnated due to lack of support from its regulators. Given its historical leadership experience, and its opportunity to reach all its customers (there is no industrial opt-out in Florida), it is a shame that Gulf Power is not encouraged to do more. Similarly, Tampa Electric has historically maintained its program levels at the lower levels achieved by Duke Energy Florida and FPL. Tampa Electric was recently acquired by Emera, and we are waiting to see if the utility’s new management works to update its energy efficiency offerings.
(The rest of) Southern Company’s Utilities
Another remarkable finding this year is that Gulf Power’s cousin, Georgia Power, surpassed Gulf Power for the first time ever for energy efficiency program impacts in the Southern Company system. There are several key differences between Georgia Power and Gulf Power that help explain the emerging role of Georgia Power as the energy efficiency leader within the Southern Company system.
While both utilities are managed similarly (executives with an interest in energy efficiency are routinely rotated between Southern Company’s central office, Gulf Power and Georgia Power), there are differences in state regulation and stakeholder engagement. Georgia’s Public Service Commission does not champion energy efficiency with the same vigor that it does solar and nuclear power. For example, Georgia regulators have not seriously considered establishing an industrial energy efficiency program, which could elevate the state’s economy and energy productivity.
Yet neither have Georgia regulators given serious consideration to the anti-efficiency message pushed by FPL and accepted by the Florida Public Service Commission. In particular, Georgia regulators have insisted that Georgia Power engage with stakeholders in a three-year energy efficiency planning cycle — SACE is a member of this Demand Side Management Working Group. While it doesn’t measure up to Duke Energy’s collaborative process in the Carolinas in terms of meaningful engagement, Georgia Power has been open to input and does share meaningful information with stakeholders in this process.
Mississippi Power is also demonstrating increasing support for energy efficiency. As a result of the Mississippi Public Service Commission’s “quick start” programs, Mississippi Power’s programs have achieved a 0.2% annual savings rate for two consecutive years. That’s comparable to where Georgia Power was five years ago, so we can hope for improvement in the future.
In contrast, Alabama Power remains resolutely disinterested in energy efficiency programs. It lacks any of the three key elements to support energy efficiency programs: Its management remains disinterested, its regulators barely regulate Alabama Power in any matter whatsoever, and its stakeholder engagement is cursory and certainly not collaborative. It was tough to pass Alabama Power over for the “worst in the Southeast” designation yesterday, but at least Alabama Power isn’t actively trying to suppress the energy efficiency goals of other utilities.
Nuclear Overbuild Drags South Carolina Down
South Carolina’s two major utilities (aside from Duke Energy, discussed yesterday) are in the news daily as the consequences of the Westinghouse bankruptcy continue to emerge. Less well understood is that South Carolina Electric & Gas (SCE&G) began responding to the excessive investment in nuclear power years ago, by scaling back what were once promising energy efficiency programs. Over the past four years, SCE&G has slashed its energy efficiency programs in half, over the objections of SACE and our allies, but with little discouragement from the state’s consumer advocate, the Office of Regulatory Staff (ORS).
Santee Cooper, South Carolina’s state-owned cooperative utility system, doesn’t publicly report its energy efficiency programs (which are mainly delivered through its member cooperatives), but its federal reporting data for 2016 should be available soon. Its relatively modest program offerings have been steady over the past few years.
TVA Stalled for Another Year, With Trouble on the Horizon
In 2010, the Tennessee Valley Authority established a vision of being the “Southeast’s leader in increased energy efficiency.” While TVA does maintain some effective energy efficiency programs, its progress has stalled and TVA seems to have lost interest in new program ideas and expanding the reach of its energy efficiency programs.
Today’s TVA is going in the opposite direction. If TVA implements its “New Pricing Paradigm,” it will reward greater energy use by the customer. This could lead to increases in bills for thrifty energy consumers who may be charged for the increased costs of new generation resulting from TVA’s volume discount rates.
To make matters worse, TVA’s reversal on energy efficiency is being coordinated with a behind-closed-doors strategy that includes a rollback of public participation in its regulatory decisions. TVA is unregulated by any state or federal authority – other than itself.
Southeast Still Lags the Nation
While Southeastern states have consistently ranked among the worst in the nation in the American Council for an Energy Efficient Economy’s annual state energy efficiency rankings reports, we are seeing progress. Florida took the lead in the Southeast ranking on the basis of strong building codes and decent state efficiency initiatives for its own buildings and facilities. Florida’s best work on efficiency is done, unfortunately, without much leadership from its electric utilities.
One big reason that the Southeast still lags the nation is the lack of explicit energy efficiency policies, such as energy efficiency resource standards. Most energy efficiency policy is set by utility management; where regulation exists, the regulators tend to defer to the utility executives. The most distressing exception to this is in Florida where, as discussed above, FPL pressed its regulators to ignore recent legislative direction and slash energy efficiency goals. The most positive example of state energy efficiency policy is in North Carolina, where the state’s renewable energy policy also provides an option for energy efficiency to achieve partial compliance and cost savings.
As a result, considering only ACEEE’s utility energy efficiency program scores, North Carolina, leads the Southeast. This reflects the consistent (although nationally unremarkable) support from North Carolina’s regulators for utility-led energy efficiency. However, even our “leading” state still ranks in the bottom half of the country according to ACEEE’s tally.
Similarly, ACEEE’s new (in 2017) utility energy efficiency scorecard ranks the Southeast dead last in the country, averaging 25% of total possible points. Two of the top three utilities in the Southeast are Duke Energy’s two Carolinas utilities, but with 35% and 28% of total possible points, even these regional leaders would be at or below average in any other region of the country. Clearly utilities in the Southeast can still do more to help their customers use energy efficiently. Investing locally in energy savings is a much wiser economic strategy than importing fuel from outside the region – not to mention the reduction in both global and local environmental impacts.