Energy savers' lament

PSNC Energy, the natural gas company that serves much of the Triangle, is the latest utility to seek a rate increase from the state based on customers doing the right thing. The idea is that with average gas usage gradually declining, as customers figure out ways to conserve and appliances become more fuel-efficient, the company needs to charge a bit more for its product to keep its revenue picture in good shape.

Electric company giants Progress Energy and Duke Energy already have proposed plans to the state Utilities Commission that would allow them to charge customers higher rates (although not necessarily send them higher bills) if they take steps such as turning out lights and dropping the thermostat a few degrees in the winter. For North Carolina ratepayers, these plans are counterintuitive and belong under the heading of no good deed going unpunished. Regulators shouldn't approve them without thoroughly considering the implications.

The approach may make more sense in the case of the electric companies. The legislature has mandated that in coming years they must squeeze a portion of power generation out of renewable sources (solar, wind, etc.) and conservation programs. That legal requirement puts a burden on Progress and Duke to drive down use. For the electrics, the legislature's point in ordering conservation partly was to lessen the need for new power plants. Not having to build one coal-fired or nuclear plant represents savings in the billions.

All of these companies are private and survive because stockholders are willing to invest in their businesses. Their rates are set by the Utilities Commission, but they are entitled to a reasonable return on investment. At the bottom of the natural gas debate is whether higher rates, reflecting an adjustment for less gas sold, are needed to maintain that reasonable profit. Or will the extra revenue just amount to gouging ordinary North Carolinians who don a sweater in the winter and make other conservation sacrifices?

Conservation-based rate increases are new territory. Regulators need to craft a policy that doesn't unfairly penalize customers who simply want to be frugal in their spending and prudent with their use of a finite natural resource.