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Arizona’s Energy-Efficiency Ruling to Save Utility Customers $9B over Next Decade

The Arizona Corporation Commission (ACC) has voted in favor of a measure that now requires electric utilities to reduce the amount of power they sell by 22 percent by 2020 as part of its drive to help businesses and homeowners conserve energy, reports The Arizona Republic.

Arizona’s measure mirrors a national push by utility companies to increase energy-efficiency efforts as one way to reduce the need for multi-million-dollar power plants and transmission line projects that are financed by customer rate hikes, according to the newspaper.

The effort also will help reduce air pollution and excessive water use resulting from power plants burning coal or natural gas to supply customers’ electricity.

Utilities have mixed feelings on the ruling. TEP, Arizona Public Service (APS) and some of the state’s electric cooperatives said they support energy efficiency but are concerned that the 22 percent use reduction would be difficult to meet, reports Arizona Daily Star.

The newspaper also reports that TEP has filed formal objections to the rules stating technical feasibility and cost reasons. TEP said the rules don’t provide a mechanism for utilities to recover lost revenues from the reduced consumption.

The Southwest Energy Efficiency Project said in the article the measure will save Arizona utility customers nearly $9 billion and Tucson ratepayers $1.4 billion in energy costs over the next decade.

The rules also require regulated utility companies to design programs that promote energy efficiency or reduce peak demand through mechanisms such as time-of-use electric rates, according to Arizona Daily Star.

As examples cited in the article, “demand-side management” programs include weatherization, home energy audits, promoting the use of compact fluorescent light bulbs, and replacing home appliances with more efficient models.

Existing demand-side management surcharges on monthly customer bills, which costs, for example, 83 cents monthly for the average TEP ratepayer, will pay for the new energy-efficiency programs. However, the surcharge may increase.

Starting next year, utilities must show increasing amounts of electricity saved until 2020, but they can take credit for efficiency projects funded since 2005, according to The Arizona Record.

Arizona’s regulated utilities also are mandated to get 15 percent of their power from renewable sources by 2025.

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2 thoughts on “Arizona’s Energy-Efficiency Ruling to Save Utility Customers $9B over Next Decade

  1. Making more efficient use of electricity is a good thing. But, have the savings from energy efficient compact fluorescent light bulbs been oversold?
    Electric utilities in states like California and Arizona have been directed to implement programs to reduce consumer demand for electricity. In Arizona, the Arizona Corporation Commission implemented rules that require investor owned electric companies to reduce electricity sales by 22 percent over the next 10 years. To achieve this aggressive energy efficiency target, the utility companies are implementing programs, like subsidizing the cost of CFLs, which are more energy efficient than incandescent bulbs.
    But, evaluations done by regulators in California indicate that energy-saving CFLs, burn out faster than expected thereby reducing the expected cost effectiveness of the program.
    The ACC should keep the California results in mind as it moves forward with implementation of its energy efficiency rules. Is the aggressive EE target set by the ACC realistic or achievable and when should it be tweaked? http://arizonaic.org/blog/331-lights-out

  2. Studies by the DOE indicate that CFLs save far more energy during their lives than is spent to produce them. And since they do last so much longer, they more than pay for themselves in terms of $ savings on energy.

    In addition, the ACC target is achievable. In addressing climate change, we need to set agressive goals early on. If we avoid doing so, we only create worse problems for ourselves down the road – with even worse economic and environmental consequences.

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