Commentary: New England's Energy Lesson: Less Is More

California's struggling utilities must be envious of their counterparts in New England. Several times during the past few years, New England utilities have stood on the brink of blackouts like those that have lately plagued California. Each time, however, New England was saved because it had already adopted aggressive energy-conservation programs to cut electricity demand--and power outages were averted. It was a hard-won victory, "the story of what didn't happen," remarks Susan E. Coakley, executive director of Northeast Energy Efficient Partnerships Inc., a nonprofit group that works to encourage energy efficiency.

There is a lesson in this for California--and for the rest of the nation. The energy crisis there has provoked massive debate over how best to increase energy supplies quickly. The state is racing to build new power plants. President George W. Bush has cited the crisis as backing for his plans to drill for oil in the Arctic National Wildlife Refuge and other environmentally sensitive areas, even though California has no oil shortage. But the New England experience suggests that easing energy woes is not just about increasing supply. It is also about reducing demand.

In New England, utilities help consumers and businesses use more efficient lighting, heating, and air conditioning by performing on-site inspections and by offering rebates, often around 75% of the extra cost of buying more efficient new equipment. Customers who participate need less juice and enjoy lower electric bills. The program saves consumers and businesses millions of dollars. It also reduces pollution and cuts emissions of gases that contribute to global warming.

THERE'S PROFIT IN IT. Other regions could easily adopt the same strategy. How did New England do it? For starters, state regulators from across the region got together to prod utilities with incentives to run conservation programs, which work like this: A utility is allowed to add a tiny surcharge to its rates to fund a conservation program. If it meets its predetermined goals--such as reducing demand by a certain number of megawatts in a particular area--the utility gets to keep a profit.

The gains from encouraging such basic conservation measures can be enormous. A recent report from the American Council for an Energy-Efficient Economy suggests that relatively painless conservation measures, such as increasing air-conditioning and lighting efficiency, could eliminate 40% of the growth in peak electrical demand over the next decade.

That would go a long way toward insuring the sturdiness of the nation's electrical system and reducing the risk of emergency blackouts. And it avoids the nasty not-in-my-backyard arguments associated with finding sites for power plants. "The stuff we're recommending is almost universally cheaper than building power plants," says one of the report's authors, Fred Gordon, president of Pacific Energy Associates Inc. in Portland, Ore.

Why, then, have states not rushed to adopt such programs? Until now, it's been hard to sell customers on making their houses and businesses more efficient because energy has been so inexpensive. Independent technicians who install the gear, moreover, often don't have the proper training to fine-tune for maximum efficiency. But with energy prices on the rise, conservation programs such as New England's could thrive.

California once was a leader in energy conservation, encouraging utilities to work with customers. But facing the uncertain economic climate of electricity deregulation in the mid-1990s, utilities trimmed spending on energy-efficiency programs. Cheap energy dulled consumer interest. Now California is living with the consequences. But there's a better way out of this mess than building more plants.

By Paul Raeburn

Senior Writer Raeburn covers science and the environment.

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