Power Companies Halt Energy-Saving Programs

by Danielle Knight

"Utilities are retreating from commitments just when they should be stepping up to the front line as the United States and other nations battle to bring down their carbon dioxide emissions," said Adam Markham, director of the Climate Change Initiative at World Wildlife Fund.

"While we are living through a global heatwave, the electric utilities are presenting a worse than business as usual scenario as they slash programs in energy efficiency," he told reporters.

"As the production of electricity gets more competitive there is a race to the bottom as many utilities slash their expenditures on energy efficiency, renewable energy development and assistance to low-income households," said Howard Geller, director of the American Council for an Energy-Efficient Economy.

Such programs ranged from forms of consumer education to rebates or low-interest loans -- especially for low-income consumers -- for the purchase of new products such as efficient water heaters, lights, shower heads, air conditioners and heat pumps.

Consumers usually welcome such help with installing these devices since their use brings down the amount of electricity used and therefore the electric bill.

While environmental groups supported deregulation efforts that tried to cut costs to consumers, they said such restructuring actually was leading to more air pollution or greenhouse gases and higher bills.

"Utilities are putting profits ahead of their customers' interests," said John Coequyt, a researcher with Environmental Working Group, a Washington-based advocacy organization. "Competition among electric utilities should not come at the costs of higher bills for consumers and dirty air."

In addition to increased air pollution from burning fossil fuels -- such as oil, gas and coal -- at power plants, environmental groups also were concerned that cutting energy efficiency programs would increase the emissions from these facilities -- generally held responsible for global warming.

"Consumers are getting more than they bargained for from their utility companies -- more pollution, and more greenhouse gases," Markham said.

According to government scientists, average global temperatures were at an "unprecedented" high in the first eight months of 1998. The global average for January through May jumped half a degree over the same period for last year.

Scientists also found that 1997 was the warmest year on record and that nine of the past 11 years set new records for warm temperatures. Over time, these increases could cause changes in climate-including increasingly frequent and intense storms, floods, heat waves, and droughts.

To address this climate change, industrialized countries drafted a binding treaty in Kyoto, Japan last year that aimed to reduce emissions of six greenhouse gases by an average of six percent below 1990 levels. The agreement mandates reductions be completed between 2008 and 2012.

The least expensive policies and programs that had a large impact on reducing these harmful emissions -- and saved consumers money -- were precisely those energy efficiency programs being cut by utility companies, according to a joint report prepared by the World Wildlife Fund and the Environmental Working Group.

Based on documents that utilities must file with the United States Department of Energy, the report found that U.S. utilities cut their combined investment in energy saving programs by 45 percent, or $736 million between 1993 and 1997.

"This means that the actual spending on energy efficiency in 1997 was well less than half of one percent of the $276 billion in revenues reported by the utilities," the report said.

Electric corporations were giving priority to profits over savings for the customer or environmental programs, said the report. "American Electric Power paid its president and CEO, Linn Draper, four times more in 1997 ($2 million) than its 10 operating companies combined spent on energy efficiency in the same year, which amounted to $500,000."

"If energy efficiency programs had been fully funded in 1997 utilities would have avoided emitting 11 million tons of global warming gases and 79,000 tons of soot and smog forming pollutants," the report declared.

"This trend need not and should not continue if individual states and the federal government require the continued existence of these programs," Geller added.

President Clinton, for example, had introduced legislation called 'Public Benefits Programs' demanding a fee on utilities that would go toward energy efficiency programs.

"By adopting 'public benefit programs' in conjunction with utility restructuring, states and the federal government can revive utility energy efficiency programs, thereby benefiting consumers, businesses and the environment," Geller said.

"Decisive guiding policies and actions -- like the establishment of a national public benefits fund -- are needed to serve the public interest in an increasingly competitive electricity marketplace."