Today virtually everyone agrees that energy conservation is a good thing. However, even such a laudable goal as energy conservation may have a downside. The less energy that is consumed, the less revenue for the energy utility. In turn, that utility may have to increase rates to make up for lost revenues. No one likes rate increases. The Washington Utilities and Transportation Commission (“WUTC”) recently started a proceeding to examine the conundrum created by the need to increase energy conservation and the need to keep energy rates low. The WUTC has started the process of looking into whether new regulations are needed to govern conservation incentive mechanisms or to address declines in revenues due to company-sponsored conservation or other causes of conservation. The WUTC filed a “Pre-Proposal Statement of Inquiry” that starts a formal rulemaking process but has not decided whether it needs to enact new rules. In a notice issued on April 8, 2010 the WUTC laid out a schedule for receiving input and for a series of workshops to focus on the need for either substantive or procedural rules to address the issue of lost revenue due to gas or electric utility-sponsored conservation. The Commission invited interested parties, including energy utilities, representatives of ratepayers and other stake holders to send what they perceive to be the issues they are interested in to the WUTC by April 23, 2010. The following issues will be addressed in this proceeding:
- Various mechanisms available to address revenue declines due to conservation;
- The various incentive mechanisms for the utility sponsored conservation programs;
- How the incentive mechanisms achieve conservation;
- How the conservation achieved can be evaluated, measured and verified;
- The impact of lost revenues due to conservation incentives on utility rates; and
- The need for rules or policy statements for utilities to achieve conservation.
The WUTC has reviewed mechanisms to address lost revenues due to conservation in previous dockets but has not done so for approximately ten years on a comprehensive basis.
After receiving Statements of Issues on April 23, 2010, the Commission scheduled work sessions for May 4 and June 29, 2010 in the Commission’s Hearing Room in Olympia. Interested parties will be provided the opportunity to provide comments on June 4 and June 18, 2010.
Further information about this proceeding is available through the WUTC’s website at www.utc.wa.gov/1005.