Utilities (and Matthew McConaughey) want us to save energy: How utilities drive smarter demand and smarter supply

How utilities drive smarter demand and smarter supply

That Matthew McConaughey is so hot right now. I recently saw him as a tiny cowboy in Dallas Buyer’s Club, then watched him pound his chest in The Wolf of Wall Street, and later heard his drawl during my weekly commute to work because, believe it or not, he’s the voice of Reliant Energy. And he’s telling me to save energy.

Like any woman between the ages of 16 and 56, I’m inclined to do whatever Matthey McConaughey suggests without thinking twice. But since it was actually the utility company talking, I was skeptical. Why would a utility company – who profits each time I watch “Failure to Launch” on my big-screen TV with surround sound – want me to stop using its product?

Why would utilities want us to spend less?

Utilities are even offering programs to help us save electricity. They have provided homeowners smart thermostats like the Wiser home management system, and provided rebates for installing Energy Star appliances. The Minnesota Valley Electric Cooperative ran a summer “Beat the Peak” contest challenging consumers to reduce electricity usage on demand. My own Oncor in Texas mailed me two oak trees to strategically plant and shade my house, therefore reducing my bill by 20%.

Utility companies want us to use less energy so as to be less taxing on their aging infrastructure. It is cheaper for Oncor to send trees than build a new power plant. “Energy efficiency and demand reductions are the least-cost alternative to adding supply-side resources” says Lee Gabler with Xcel Energy. Utilities are also feeling pressure from homeowners and industry regulators that demand a reduction in energy usage, or an increase in renewable energy sources.

Utilities pressured to reduce and optimize energy use

One demanding group is the Public Utility Commissions (PUCs). Each state has a PUC responsible for regulating the rates and services of a public utility. Many require utilities to put roughly 1% of their earnings into energy-efficiency programs. In Texas, utilities “shall administer a portfolio of energy efficiency programs” to meet energy reduction goals.

Utilities can benefit from a successful energy-efficiency program. If utilities hit their program goal, the PUC could allow them a rate hike. A Texas clause states, “A utility shall establish an energy efficiency cost recovery factor (EECRF)…to timely recover the reasonable costs of providing a portfolio of cost-effective energy efficiency programs pursuant to this section.” According to these state spending and savings tables, nine utilities submitted for EECRFs in Texas for 2012. Oncor requested over $53M in EECRF with an estimated monthly impact to residential customers of $0.98/month. They spent over $48M in energy-efficiency program costs.

It’s a win-win-win situation for homeowners, utilities, and the environment. Even with these energy-efficiency programs, however, our reliance on electricity grows globally. The ultimate solution will not only involve smarter demand, but also smarter supply. Schneider Electric enables utilities to be smart grid-ready by supporting five key domains:

  1. Flexible distribution
  2. Smart generation
  3. Demand-side management
  4. Efficient homes (including electric vehicles)
  5. Efficient enterprises 9buildings, industrial facilities, and data centers)

It’s time for Matthey McConaughey to turn around and tell the utilities how Schneider Electric’s smart grid-ready products and solutions can help them be energy efficient.

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