That might as well be the title of the
Wall Street Journal article Surprise Drop in Power Use Delivers Jolt to Utilities.
An unexpected drop in U.S. electricity consumption has utility companies worried that the trend isn't a byproduct of the economic downturn, and could reflect a permanent shift in consumption that will require sweeping change in their industry.
OH NO!!!! Americans using less electricity and this might be something permanent rather than simply a lousy economy.
Now, as for the 'lousy economy', as we have yet to hit bottom and have a long way to go, hard to assert (yet) that it is not economic distress that is driving reduced energy use. Perhaps people are 'turning off lights' to save pennies in the face of economic distress. And, patterns begun in economic turmoil could become life's new patterns. Thus, unlike what the WSJ's coverage might suggest, there is much to hope for as to a start in a shifting of American culture toward more energy efficient patterns.
The utilities ...
Most utilities plan around an assumption of rather constant and predictable electricity-demand growth curves.
This provides "certainty" of planning for generating facilities and other capital investment. Introducing energy conservation and energy efficiency into the equation can threaten these plans.
Households are considered "the most stable group of consumers," thus drops in household demand executive attention.
Dick Kelly, chief executive of Xcel Energy Inc., Minneapolis, says his company, which has utilities in Colorado and Minnesota, saw home-energy use drop 3% in the period from August through September, "the first time in 40 years I've seen a decline in sales" to homes.
No, it isn't foreclosures according to Kelly. Three percent drop in one year: that could be simply through the introduction of CFLs. And, let us be clear, Obama's green stimulus package could drive these reductions across the broader society.
It isn't isolated to Xcel Energy.
Duke Energy Corp.'s third-quarter electricity sales were down 5.9% in the Midwest from the year earlier, including a 9% drop among residential customers. At its utilities operating in the Carolinas, sales were down 4.3% for the three-month period ending Sept. 30 from a year earlier.
American Electric Power Co., which owns utilities operating in 11 states, saw total electricity consumption drop 3.3% in the same period from the prior year. Among residential customers, the drop was 7.2%. However, milder weather played a role.
There is a debate in the industry as to the driving factor: 'simply' a bad economy or, again, a fundamental change. If we are to have hopes in relation to Global Warming, we should hope that it is the second, that people are learning, changing, and applying that learning to help solve real problems.
Again, there is a real problem here for the WSJ.
Michael Morris, the chief executive of AEP, one of the country's largest utilities, says he thinks the industry should to be wary about breaking ground on expensive new projects. "The message is: be cautious about what you build because you may not have the demand" to justify the expense, he says.
Conservation and efficiency are not good for expanision plans.
Contemplating implications ...
This Wall Street Journal article simply doesn't mention any non-expansion planning implications, looking at this issue from a very narrow (not unimportant, but narrow) perspective. Here are some additional elements to consider:
Improving Energy Efficiency. The #1 near-term answer, across
the entire economy, to our energy and environmental challenges is reducing inefficiences (waste) in energy use both through changed behavior ('conservation') and introduction of energy saving technologies/designs. This is both to 'turn out the lights' when not using them and changing the lights from incandescents to compact-fluorescent bulbs. These are 'negawatts'. Quite roughly, electricity delivered to the customer in the United States costs about 9.5 cents per kilowatt hour (KwH). Study after study, real-world effort after real-world effort highlights that energy efficiency can cut demand by 20+% at prices just a fraction of that (with a wide-range of opportunities if priced at, let us say, 4 cents per KwH). Could the reduction that utilities be seeing be a leading edge indicator of both changed behavior and energy efficiency penetrating into the general public and general use?
What about clean investment? Within the utilities' plans (or some of them) for increasing electricity power production capacity are clean (solar, wind, geothermal, etc) facilities. Will reduced demand (not slowing inflation of demand, but actual demand destruction) drive down the investment in these clean energy sources? Honestly, hopefully not, and hopefully the regulatory environment will drive greater investment and deployment of clean energy sources so that, in combination with energy efficiency, coal plants can begin to be shut down and shuttered.
What will happen with focused leadership? These reductions have occurred amid economic malaise and generalized discussion of global warming/energy issues/reduction of waste. While the Republicans dismissed (actually, 'dissed') President-Elect Obama's discussion of energy efficiency during the campaign (especially related to inflating tires as a path to reduce gasoline use, and therefore cost, immediately), perhaps this sort of message (from Obama, state and local politicians, prominent figures, religious leaders, etc) has taken root with enough of the population to begin to impact aggregate levels of energy use. What might happen if, as seems likely at this time, President Obama takes the bully pulpit to encourage all Americans to pursue "energy efficiency in your lives, homes, and businesses"? Will the reductions this article discusses simply be a bow wave of massive reductions in the coming few years? What does this say about the ability to eliminate coal from our electrical grid?
Global Warming implications. This article doesn't point out that the 50% of American electricity coming from coal (and, to a lesser extent, the 22% coming from natural gas) are the largest single contributor to US GHG emissions. (As well as mercury and other pollution.) Cutting into US electrical demand, with the 'non-produced' (shut off) power principally from coal-fired plants, is one of the paths toward significant near-term reversal of growing US GHG emissions.
Thus, perhaps the most interesting things from this article, beyond the facts of reduced household electrical use, are not what it discusses but what it doesn't discuss.
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Excellent Post! I wonder if sales of CFL’s can be charted alongside the drop…?
Our power company was actually giving rebates last fall for people who purchased CFLs. And now they are surprised? Who are the people who run these companies anyway?
Thanks for the post.
Thanks to Eureka Springs for opening up the digg
The take home point: Improved efficiency = less price volatility.
Minimizing energy price volatility over the long haul is a foundation for having a stable economy. Even though demand is down and prices are down, this is the perfect time for a moonshot approach to improving efficiency. Creating some new jobs in the process would be nice.
we have gone off the grid but it’s not cheap. solar/wind is the way of the future. need to mass produce.
Hey Es thanks for opening the Digg up!!
Does my home Solar System help drive the overall consumptions levels down?? /s
We are close to going online, the new power panel has been installed and the wiring in for the actual Solar will be done on Monday. then all we will be waiting for is for PG&E to approve the installation and then it will get turned on!! Can’t wait..
I heard this story on the radio the other week about Low-E window glass. Coolest stuff ever that was developed in Berkeley 30 years ago during the last energy crisis and is now expanding: Low-E glass
not possible, we WILL have electric autos and they WIll power up on the grid
Yes but mostly in the off hours when demand is way down! During those times there is excess electricity in the system and they have to figure out what to do with it. And as a bonus at least here in California you can get a time of use meter that charges you less for your power if it is used in the off hours! Yes the total demand will keep growing but just not as fast if everyone just converts to CFL bulbs!
I loved his remarks about no little yappy girly dog, but a robust substantial dog. Big dogs are gentler (less hyer and high strung) and generally more communicative.
the inspection/approval took 3 weeks here in sd. good luck. intrested in your configuration if you don’t mind. we are @ 6.5 kw with sunny boy controller. works great. from 350 to 20 per month. got ta love it.
love the big ones myself but even the yappers are cute.
well.. that’s some good news at least. This being said, I think the recession has something to do with energy use changes clearly. CNN quickpoll on t-day travel:
Are you traveling for Thanksgiving?
No 74% 141128
Yes, by plane 3% 6115
Yes, by car 22%
Customarily, that’s around 11% by plane. That’s a lot less CO2 burned right there, since our country is poor now and everybody has to ride around in oxcarts and rickshaws.
Good for you nahant. It’s been fun following your installation diaries.
friend of mine in dallas has a scooter. he be upper middle class now.
“Minimizing energy price volatility over the long haul is a foundation for having a stable economy..”
OK..in a deregulated energy industry, where energy providers(the utilities)no long can own their own generation(and thereby gain some control over their costs over the short and long term), how is there any control over energy price volatility?
There isn’t any. Yes, there are plans for consumers boasting ‘fixed costs’, but these are just ‘guesses’ by utilities and ESCOs. Deregulation has been a complete disaster, both for consumers and for utilities. Utilities did NOT chose to deregulate; it was FERC who has forced this. Taking away utilities’ generation capacity has only done one thing for consumers: Given them the illusion that they have a choice in who DELIVERS their electrity or gas to their homes. The utility I used to work for was able, through economies of scale, generate its electricity from it’s plants for 2.5 cents a kWh. When the PSC forced the company to sell the plants, the buyer had to borrow money to do it, so the new owner has to figure in the debt cost in its cost of generating. In addition, there are now multiple entities in between the generator and the consumer: The generator, the utility(which owns the pipes and wires that the energy goes through), and the delivery entity(called an ESCO). Every entity along that path from the generating plant to the consumer gets to put their charge on the energy - the consumer will never gain any savings from this: That original 2.5 cents a kWh is now much more because the new owner of the generating capacity must pay debt service in addition to costs for coal, fuel oil or gas to run the turbines(and we all know what happened to the prices of oil and gas this year due to speculators). On top of that are the delivery charges and other charges that the utility and the ESCO place on that. Utilities have no ‘cushion” in the process anymore - the difference between the 2.5 cents and what they used to sell it for was used to do things like: repair and expand infrastructure, have manpower enough to handle emergencies, design and investment. There is no money for that any longer - so when consumers switch off the lights and use less energy, it really hits them hard. They have to maintain revenues for stockholders and the analysts. They have to generate enough revenues so that they can still keep line crews on staff for repairs and maintenance; they have to generate enough revenues to replace and repair poles and lines and pipe — but the state regulators will only allow them to raise prices so much. They are now caught in a no-win —
Until federal and state regulators understand that the power grid is a national public asset, which must be invested in, expanded and maintained, all this discussion about solar and wind is moot. The grid is too small already — and utilities(who own the grid)neither have the revenues nor the incentive to expand it further.
Listen to Darth Veep in 2001:
Like that bloodthirsty crook would know ‘personal virtue’ if it bit him on the neck.
ooo, Teddy, you are making me think of a vampire named “Personal Virtue”(you know, how like the Puritans used to name their kids things like “Goodness” and “Mercy”.
PG&E paid down the cost of my most recent CFL purchases at Cliff’s Hardware on Castro Street. 49 cents per bulb, no mail-in rebates, no coupons; just being unpacked when I was shopping there last week. At 49 cents, I can’t really afford not to buy them. So I bought a lot.
Here’s another one for you, nahant:
“If the 100 largest cities in the world replaced their dark roofs with white shingles and their asphalt-based roads with concrete or other light-colored material, it could offset 44 metric gigatons (billion tons) of greenhouse gases, the study shows. That amounts to more greenhouse gas than the entire human population emits in one year, according to a recent article in the Los Angeles Times. The strategy could also offset the growth in carbon dioxide emissions, which account for about 75% of greenhouse gases, for the next 10 years…..In warm climates, white roofs have the additional benefit of lowering the cost of air conditioning by up to 20% in hot months.
It´s this second reason of reduced cooling costs that prompted the state of California to require in 2005 that flat-roofed commercial buildings have white roofs. In 2009, the state will require that new and retrofitted residential and commercial, with both flat and sloped roofs, be installed with heat-reflective roofing. The requirements are part of California´s energy-efficient building code.”
http://www.physorg.com/news140875649.html
I will help America! I promise to leave my lights on all night!
Who are they? Clearly, the same kind of people who’ve been running the big auto companies (and the government, for that matter), using what they learned at the Magic Thinking School of Business.
And these people get paid big bucks and get hired as “experts”? Sheesh, my dog is smarter than that.
Wow.. I could make a fortune selling them for a couple a bucks a bulb on the side of the road here. SOmeone needs to brings few truckloads to the Ozarks.. Best Wal Mart prices are around 4 bucks a bulb.
you live in gods country. lucky you.
who said shrub hasn’t contributed to energy efficiency standards? He be a smart man - instead of bothering with all that capital intensive R&D for greater fuel efficiency, cleaner power plants, etc etc, he just made us all broke, so that our cars have been repossessed and we just sit at home in our cold, unheated post-foreclosure tents ;-P
actually, he HAS done a lot fer us. we will never fergit that sob. i personally will follow him ta his grave. america had to go this far to learn, imo.
Depends which utility and where. Some utilities actually make a profit by helping reduce electricity use (decoupling of the charging of transmission/distribution from kwh in terms of profit motivation). And, well, other utilities give out things like coupons because they’re forced to … not because they want to sell less electricity.
Ah, I read somewhere that when the big 3 dudes were hired the CW at the time was they needed someone from outside the industry who would have new ideas.
Well, they got them.
Now what? HAHAHAHAHAHAHAHA!
Obama is strongly emphasizing efficiency, such as during his speech in Manassas, VA, the evening before election day.
Oh, I forgot, none of these guys has been there longer than five years. It takes usually about 12-15 years to bring a really new car into production so I don’t think it’s quite fair that they are getting blamed for not having green cars yet. They are trying, sort of. Most of the really bad decisions about this stuff were made on the previous guys watch. Oh well, not to say that they aren’t still really stupid compared to the amount of money they make!
Sadly, recession (or depression) is no substitute for a smart energy or climate policy, even if the short-term impacts on overall energy use might be similar.
Well, the amount of efficiency possible to wring from the system without extreme efforts could handle basically 100% of transport demand.
Really, though, I agree with you that electrified transport will (hopefully) create a new source for major electricity demand. Hopefully, we will mount renewable power faster than electric transport requires.
For a discussion of this, White Roofing as Silver Bullet to slay Global Warming?
This is just an excuse for the electric companies to go up on their rates and nothing else.
I don’t agree with most of that. I’ll just say there there is no place in the US where electricity can be supplied for an average of 2.5 cents/kwhr. And that has nothing to do with “deregulation” or the decisions of your state regulator. Fuel prices alone would be that much. Capital/fixed costs add more, and that’s just the generation. Add in transmission, distribution/metering, administration, and you’re closer to 7-9cents if you’re lucky, and much higher in regions that rely less on cheap/dirty coal and/or hydro.
wrt to the main post, the average price may be around 9 cents, but it’s important to keep reminding people that the marginal cost of electricity changes radically every single day. It can be 2 cents in early a.m. and 20 cents during peak hours. The marginal costs at any moment depends on which plants (and fuels) are on the margin of the dispatch at any given moment, and during peak demand hours, the plants on the margin tend to be less efficient gas-fired plants. When gas prices are high, that meants marginal costs can be very high. The time to use less energy is during peak hours. During early a.m. hours, it doesn’t matter that much.
Finally, wrt to coal plant displacement, we’re not even close to having enought demand response or renewable to push most coal plants out of the dispatch. Since their marginal operating costs are fairly low, they tend to be dispatched most of the time. When you add a new wind mill, it doesn’t displace coal, it pushes the supply curve to the right and pushes the most inefficient gas plants off the dispatch. We need massive, massive amounts of alternative resources and demand-side response to change this picture.
The best demand-response programs being done by utilities start by getting retail rates structured better, which means actually charging people what it costs in each hour. Early hours should be prices at lower marginal costs; later hours should be priced higher; peak hours should be priced the highest, because that’s when the most expensive plants are being dispatched and when demand reduction has the most value. A few states are starting to do this, but not enough. In some regions, the price changes every hour, and the largest customers (industrial) see their retail rates change every hour.
Scarecrow - I did not say that electricity was being SUPPLIED for 2.5 cents/kWh - I said the utility was generating it for that cost. Generating is one thing - supplying it to the customer is a whole different deal. They were not supplying it to the customer at that price — at that time, they were probably supplying it to the retail customers for 8-10 cents/kWh. The difference in the cost between what it was costing them to generate - that 2.5 cents - and what the customers were paying is what paid for all the maintenance, line crews, engineering for new infrastructure and so on.
This past summer Consolidated Edison, our local electricity provider, offered to replace with CFLs, free of charge, as many incandescent bulbs as we wanted replaced, which totaled 36.
The bulbs replaced were in our own unit in the 5,000+ square-foot, five-unit frame building we own, live in and manage, which dates from 1885. We pay utility charges for our own five-bedroom triplex as well as for a three-room unit and a studio. Bulbs were not replaced in either of these rented units. We hoped for some savings, but nothing like the savings we actually experienced.
For service from June 30 to July 30, before the wholesale bulb replacement, our Con Ed bill came to $505. For service from July 30 to August 28, the bill dropped to $473.54. For the period from August 28 to September 29, I was floored when I saw the amount due: $299.18. From September 29 to October 28, the bill was even lower: an unbelievable $204.77.
In four months, CFLs have helped us lower our electric consumption markedly and lower our bills by around $300. More important, this experience has spurred other energy-saving moves–like using night lights in hallways when it’s just the two of us at home, which is most of the time. And unplugging all those instant-on plugs when we’re not using the appliances to which they connect.
The only bummer I noticed in this article is that it may inhibit the construction of new generation capacity including clean electricity production. That would mean less demand for windmills, solar arrays, etc. But as someone mentioned, there will be increased demand when more electrical cars come onto the market. This applies to not just the Tesla, but also to any of the plug in hybrids that are presently being developed.
Since solar panels and windmills are not particularly reliable in that they generate only when conditions are right, that means that costs for a particular time of day will probably be different from what they are now. I can see that windmills along the coast will be at peak production during the morning and late afternoon, while in the midwest they would probably be generating at peak capacity during most of the afternoon. Obviously the solar generators will work only during the daytime. Geothermal would not have any particular daily pattern. Tide generation would peak twice a day, and wave generation would vary depending on weather rather than time of day.
As for charging according to the time of day, that seems like a good idea. Here we are charged on a sliding scale depending on the amount we use per month. The first bit costs less per kwh with each level being increasingly more expensive. I believe we have three levels although personally I generally have to pay only the first and occasionally sneak into the second. To charge by the time of day would go a long way to creating more efficient economic conditions for the generation plant.
Thanks for another great post!
Our kilowatt usage per month is now running 10-20% LESS than each comparable month last year, even after adjusting for weather. We had to replace our geothermal furnace after 18 years it was worn out. We invested in the latest top of the line, most energy efficient unit available, with dual run levels and a new small hot water heater tied in between it and the water heater serving the house. All heat recovered from the water loop of the geothermal system in summer feeds our hot water supply. The big hot water heater will barely have to kick on except in the coldest of winter months. I highly, highly recommend geothermal heating/cooling, combined in the single units. The generation now available are incredibly robust and efficient, and effective.
As part of the above project, we finished out insulation in the front third of our attic. We discovered the original builder had shorted in that area. No wonder that front bedroom on the third floor was impossible to head and cool. Now it is like the rest of the house.
When we finished off the bottom of the three levels, which is half sunk into a slope, with southern side exposed with windows, we had the contractor double out the framing, so that instead of four inch there are now eight inch insulated walls on all three exposed or partially exposed sides. That lower level temperature is constant and perfect as a result, requiring very little effort to heat or cool, whatever the season.
We have also made the move to compact fluorescent bulbs in most lamps, including the chandeliers on the main level rooms. We plan to migrate the ceiling inset flood lamps to fluorescent over the next year, except in the hallway stairs to the lower level, where we want the instant brightness of fluorscent (but where the bulb is not left burning).
We have many computers around the house (I am a computing professional, my wife uses them for her profession), we are talking a total four servers and eight desktops and one laptop. Only the servers are allowed to run 24×7, since two are outward facing Internet serving web and mail servers. But we have started the practice of turning our workstations off at night, not even letting them slumber, or forcing them to go into hibernate mode and turn off the monitor after a period of inactivity. Leaving your PCs/Macs running 24×7 without doing this is a tremendous drain on power unnecessarily. Over the past 12 months I also rebuilt most of the PCs and replaced the power supplies with the latest generation more energy efficient (and quiet) power supplies. The newer generation or much better at power management.
All of these steps have added up to tremendous reduction in kilowatt usage in a house that is all electric. We have no gas or oil for any services, period. We have a fireplace and a pile of wood laid in out back in case of winter emergency power failures.
Of course our power bill is only a few dollars shorter each month compared to last year’s, because the utilities have ramped the rates up. But that is another story.