Decentralized electricity, cogeneration, and conservation options. [Conference paper]

Abstract

An early evaluation o the Home Insulation Program indicates that it is possible to carry on major conservation programs that result in a substantial saving to Tennessee Valley Authority (TVA) customers both from reduced electric bills and from reduction in electric system cost. The evidence from the TVA program strongly indicates that many utilities could realize benefits for themselves and their customers by implementing a comprehensive program for decentralized electricity, load management, cogeneration, and conservation. Of course, any financial benefit to the utility would be contingent on the treatment of costs associated with these programs on the balance sheet, on the income statement, and in allowable rate of return calculations. In particular, utility financing of customer installation of energy conservation and renewable energy systems must be treated in a manner that allows the utility to earn an acceptable rate of return. The Pacific Power and Light (PPL) Residential Energy Efficiency Rider is an example of how this can be handled. The program is beneficial to the utility because the entire cost of the weatherization measure can be added to the rate base with the customer paying the carrying charges on the capital. The customer benefits from the borrowing at themore » utility's cost of capital until the time of sale, at which time the value of the improvements is realized as a higher sale price for the house. While the value of such programs must be calculated on an individual basis, the authors feel that many utilities, particularly those that are in a position that makes it difficult to add new conventional capacity, could profit from the implementation of these programs. 1 reference, 2 figures, 6 tables.« less