WASHINGTON -- October 1998 -- By cutting energy efficiency programs almost in half, electric utilities are sticking consumers with bigger electric bills and dirty air, concludes Unplugged, a new study by the Environmental Working Group and World Wildlife Fund.
To raise profits in a deregulated energy market, utilities are eliminating or drastically cutting these programs which save consumers money and reduce air pollution and greenhouse gas emissions. As a result, consumers paid an extra $1 billion each year for the next decade due to cuts in energy efficiency investments, concludes the report.
The report ranked the nation's largest utilities on their commitment to energy efficiency programs and found a wide variation between power companies and regions of the country. For example, the City of Eugene, OR, whose utility serves some 73,000 customers, invested more in energy efficiency than the combined outlay of Southern Company, Entergy, Commonwealth Edison, and American Electric Power, which serve more than 12 million customers. Forty-two of the largest electric utilities completely eliminated their investments in energy efficiency.
"Utilities are putting profits ahead of their customers' interests," said John Coequyt of EWG, author of the report, "and to keep up with soaring demand, utilities have turned to antiquated, dirty power plants. Competition among electric utilities should not come at the cost of higher bills for consumers and dirty air."
Unplugged is based on documents utilities must file with the U.S. Department of Energy and finds that cuts in energy efficiency programs totaled $736 million between 1993 and 1997. The cuts have also meant dirtier air across the U.S. According to the study, 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.
"Consumers are getting more than they bargained for from their utility companies -- more pollution, and more greenhouse gases," said Adam Markham, director of WWF's Climate Change Campaign. "Consumers want more energy efficiency and cleaner air, but our utilities, which should be on the front lines of America's effort to halt global warming, are letting us down."
The utilities have eliminated a range of energy efficiency programs including home energy efficiency audits and rebates for new energy efficient appliances, such as water heaters, light bulbs, showerheads, and refrigerators. These strategies are proven to cut energy usage and pollution. For example, compact fluorescent light bulbs use one-quarter the electricity of incandescent bulbs. Replacing just one incandescent light bulb will save a consumer $50 and reduce carbon emissions by 1,000 pounds over the life of the bulb.
The report recommends all states create a public benefits fund in which a small percentage of consumers' bills is set aside for energy efficiency programs.
Although the most immediate consumer benefit of energy efficiency programs is economic, "far more than electric bills are at stake," noted Markham. "Global warming is a pervasive and ever growing threat to all life on Earth and the ecosystems that support it. Utility companies can and must play a role in reducing that threat," he said.
Environmental Working Group, a project of the Tides Center, is a non-profit research organization with offices in Washington, DC, and San Francisco. Known around the globe by its panda logo, World Wildlife Fund is the world's largest conservation organization; it leads international efforts to protect endangered species and their habitats through its Living Planet Campaign.