Oklahoma's Corporation Commission is looking at ways it might be able to encourage electrical customers to conserve power. Possibilities include everything from offering rebates to customers who buy more energy-efficient appliances to allowing utilities to charge higher electricity prices, based upon when the juice is used. Even smart meters designed to control how much electricity is used during certain periods of the day are a possibility. The commissioners are looking at those possibilities as they ponder crafting a rule that must be approved by Oklahoma's Legislature. Technically, the rule would require Oklahoma's largest two electricity providers to limit their overall future electricity needs by developing conservation programs with their customers. The proposal is getting positive feedback from diverse groups, ranging from utility companies to consumer advocates and environmental lobbyists. But these groups also suggest refinements to the proposal. Many groups also are asking the commission to take its time, particularly when considering how utility companies will be allowed to recover their costs to develop and implement the conservation programs. Commissioners have until April 1 to submit rules to Oklahoma's Legislature. It will be a big job, Commissioner Jeff Cloud said. "First of all, there is a lot to choose from when we are talking about demand-side management,” Cloud said. "But if we could get something that would encourage energy efficiency, then that would be a good thing because we would use less energy and help our conservation. We have got a lot of work to do.”
How to reduce demandThe Power Partners — an organization with the American Public Power Association, the Large Public Power Council, the Edison Electric Institute, the Electric Power Supply Association, the National Rural Electric Cooperative Association, the Nuclear Energy Institute, the Tennessee Valley Authority and other entities as its members — provides good examples of demand side management programs. In a residential setting, demand can be managed by using better energy-efficient appliances and by building more energy-efficient homes. Heat pumps are better than traditional heating and air units. Newer heating and air units and refrigerators and freezers use less power than older ones. Fluorescent lighting is better than incandescent bulbs. Demand side management has been in Texas for seven years, after its electrical system was deregulated. Programs there are of two general types: standard offer programs and market transformation programs. American Electric Power, which owns Public Service Co. of Oklahoma — the electricity provider for many Oklahomans — has been involved in Texas' program since its start. Billy Berny, demand side management coordinator for AEP, said a typical example of a standard offer program is one that encourages homeowners to install more efficient heating and air systems in their homes. In Texas, the contractors who do that work get money from the customer's utility company for doing the job. The contractors are required to inform the homeowners they are getting the money, and customers can ask for some of it to be applied to their job costs to save them money, Berny said. Market transformation programs are ones designed to provide information and education to consumers about making their homes more energy efficient. In those types of programs, utility companies have contracted with and paid businesses to provide that information to their customers. Similar types of programs are being developed in Arkansas, which adopted demand side management rules in 2006, Berny said. Oklahoma Gas and Electric Co., which also serves much of the Sooner State's power needs, has conducted demand side management programs here for decades, even though a rule requiring it does not yet exist, its officials said. The utility introduced a program in the late 1970s, for example, to drop peak electrical usage during summer months by using compressor regulators on air conditioners that shut the units down after they had operated for a specified length of time. Customers who asked for those to be installed on their equipment received breaks on their bills. OG&E also has done free energy conservation evaluations on customers' homes, and provided customers with self-help kits containing weather stripping, caulking and other materials as part of the inspections. It also offers residential customers time-of-use pricing today, where the electricity they use during nonpeak hours costs less than it would if they were a customer with a traditional rate structure. During peak hours, their power would cost more than a traditional customer's would, but at the end of the month, if their bill would be cheaper using traditional rates, then that's the bill they would get, company officials said.
What is the payoff?If the programs are done right, consumers could get price breaks for energy efficiency improvements to their homes, lower energy bills once the work is done and lower energy bills over a longer period of time as Oklahoma's electrical distribution system uses less power. Statewide, more energy conservation would mean less pollution and more available electricity for new needs. For electrical providers, the payoff is they wouldn't have to generate as much electricity during peak use periods. OG&E's Gary Marchbanks, manager of its demand side management program, said one of the utility's challenges is to help its consumers use power wisely. That helps keep utility bills reasonable, helps the economy and helps the utility because its ratepayer base is stable, he said. OG&E uses a load management system to keep adequate power available, and Marchbanks noted that demand side management is another part of the same equation. "In some cases, it is cheaper and more economical to reduce demand instead of building another plant,” Marchbanks said, "and if we aren't having to expend capital to build the plants, then that is better for our shareholders.” PSO officials agreed. "When we can make our systems operate more efficiently, we can not only serve more customers, but do it with fewer service interruptions,” Berny said. "That makes us more productive, more efficient, and our shareholders will have a better return. And our customers are more satisfied.”