Utilities aren't sweating the high temperatures

Staff WriterJuly 29, 2010 

Heat records have come and gone this summer, but the state's two giant power companies haven't set sales records.

It's a noteworthy difference from past years, when Progress Energy and Duke Energy routinely set peak-demand usage records nearly every time the thermometer hit a high.

Since 1999, Progress customers have set eight peak-demand records in North Carolina during heat waves and cold snaps, when air conditioners and heat pumps work overtime.

With the recession closing businesses and limiting the number of new customers, it would be tempting to see the scarcity of energy-demand records as a telling, if unorthodox, economic indicator.

Indeed, Jason Walls, a spokesman for Duke Energy, said the recession is affecting energy use.

"2007 was the last time we had a peak-demand record," Walls said. "2007 was a different economy than we have today."

But other factors also are playing a role. The companies are now offering energy-efficiency programs and have seen a broader acceptance of such green efforts on the part of customers.

For example, Progress Energy customers bought 1 million energy-efficient compact fluorescent light bulbs, or CFLs, in the first six months of the year under a promotional discount sponsored by the company.

Another factor: As older appliances wear out, they're replaced by new, energy-efficient models, said analyst Philip Adams of Gimme Credit, a corporate bond research firm.

That trend could be accelerated by Progress offering customer incentives of as much as $300 for buying energy-efficient appliances as part of a statewide initiative to reduce energy use.

This year the N.C. State Energy Office also promoted efficient appliances by offering incentives of $300 or more from the federal stimulus program.

Record or no record, Duke Energy of Charlotte and Progress Energy of Raleigh are expected to reap the rewards of the unseasonably hot summer when they report second-quarter earnings Tuesday and Friday, respectively. The heat wave almost certainly has boosted sales for both utilities, as extreme weather generally does, which means customers will pay whopping utility bills.

Rising temps and bills

Progress experienced a 6 percent increase in electricity use in the first half of the year. The company started running radio ads in June alerting customers that bills could be 10 percent above normal or higher for the typical residential customer. Duke is warning customers to brace for bills that are 12 percent to 19 percent above normal.

Progress has 1.3 million customers in North Carolina, and Duke has 1.8 million.

July temperatures have been 4 degrees above normal in Wake County, while June readings were 6.8 degrees above normal. Temperature readings at Raleigh-Durham International Airport set two records in June and four records in July.

When those heat records were set also factors into peak usage levels. Most of the July heat wave, when the RDU thermometer peaked at 102 degrees, took place over a weekend, when many industries and businesses were closed. The June 24-25 records - two back-to-back 99-degree days - were scorching for June but not hot enough to set a summertime peak.

Even so, Progress customers came within a hair of setting records during this period, Progress Energy spokesman Mike Hughes said.

It has been awhile

For Progress, the 6 percent increase in energy use through midyear is significant. The company last reported an annual increase in energy use in 2006-2007, logging a 2.5 percent increase just before the recession hit. The following year, retail energy use dropped 1.6 percent, and then it dropped an additional 1.8 percent in the 2008-2009 period.

In the first quarter of this year, however, total retail sales for Progress were up 8.1 percent over the same three-month period last year. Progress customers even set a winter peak-demand record in January, when temperatures dropped into the single digits in parts of the company's service areas.

"Our energy sales have been very high," Hughes said.

john.murawski@newsobserver.com or 919-829-8932

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