New fee for less?

Wednesday, July 15, 2009

Reducing electricity consumption is cheaper than building new power plants, and utility companies should be able to pass along the cost of promoting energy efficiency, according to Gov. Jay Nixon, utility companies, environmentalists, the states' public service commission and its utility consumer advocate. But it may be a hard sell for customers.

Nixon signed legislation this week that allows utility companies to charge for energy-reduction programs. The new law goes into effect Aug. 28. To qualify for the program, power companies must demonstrate that their programs actually reduce consumption.

Advocates say this approach is better than spending hundreds of millions of dollars for new power plants and passing along those costs to customers. If state and utility officials are correct, the overall cost to consumers over the coming years will be lower.

Another program provides free programmable thermostats to residential customers that can be controlled by the utility company during peak demand. Supporters of this program say this also reduces customers' bills.

Meanwhile, utility companies are planning new power plants, which means customers face paying for energy-reduction programs while the cost of electricity goes up to pay for construction.

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