As critics scowl, Duke praises Save-a-Watt

RALEIGH -- Placards and denunciations kicked off what's expected to be a contentious week of regulatory hearings on Duke Energy's proposal for energy efficiency, Save-a-Watt.

The Charlotte utility on Monday began defending Save-a-Watt against charges that it would gouge Duke Energy customers and benefit the company's shareholders. Duke Energy touts Save-a-Watt as a national model for energy efficiency that would provide power companies a generous financial incentive to promote energy conservation.

The company is seeking approval from the N.C. Utilities Commission to offer the program to its customers in the state and charge extra to administer it. Extra chairs were brought in to accommodate about 75 people who packed the normally sparsely attended commission hearing.

"Our proposal will allow us to be more successful in pushing energy efficiency to our customers," Ellen Ruff, president of Duke Energy Carolinas, told the utilities commission. For much of the afternoon, Ruff fended off technical questions from the state Attorney General's Office and other lawyers representing the public.

Before the hearings began in Raleigh, about a dozen people staged a rally featuring speakers from N.C. Public Interest Research Group, Clean Water for North Carolina and the N.C. Public Service Workers' Union.

Critics say Save-a-Watt is thin on efficiency and fat on corporate profits. According to an analysis by the Public Staff, the state's consumer advocacy arm, Duke is seeking a 61 percent margin on Save-a-Watt. Instead, the company should be allowed a margin of about 6.8 percent, the Public Staff recommends. Later this week, the Public Staff plans to have three experts testify against Save-a-Watt.

More than a dozen organizations -- church groups, consumer advocates, environmentalists, businesses and the city of Durham -- oppose Duke's proposal. On Monday, they urged regulators to reject the plan.

"They're trying to take advantage of people's good will for energy efficiency," said Shana Becker, staff attorney for NC PIRG, after the public rally. "They're trying to make the most money that they can without affecting their business model, which is to try to generate energy."

Duke Energy, with 1.8 million customers in the state, has lined up a dozen experts and executives to defend Save-a-Watt.

What's at stake

Duke proposes to install new technologies, such as remote-controlled thermostats, and offer discounts and rebates to customers who invest in energy efficiency appliances and other upgrades for the home and office. All customers would pay for the efficiency program through their monthly bills.

The dispute is over how much is a reasonable amount for a company to be paid for running an efficiency program.

Duke officials say that efficiency must come with financial rewards to motivate a corporation to choose conservation over building power plants. Otherwise, efficiency will always remain the last option, not the first.

What makes Duke's proposal different from other energy efficiency plans is that the company would not be paid for the actual cost of running Save-a-Watt. Instead, Duke says it should be paid 90 percent of the cost of building new power plants. Duke officials describe Save-a-Watt as a 10 percent savings for customers on the cost of new power plants that would otherwise have to be constructed to meet energy demand.

"Under the company's ... plan, energy efficiency is treated as a virtual power plant," Ruff said. "However, instead of iron in the ground, the company is proposing ... saving watts instead of generating watts."

Critics say the company proposes generating profit. The Public Staff estimates that under Save-a-Watt, Duke customers would end up paying $18.23 for a compact fluorescent light bulb that can be bought at Wal-Mart for $1.65.