Nova Scotia Power could face customer backlash over hiking power rates $2 per month next year to cover the cost of spending almost $42 million on energy conservation programs, a U.S. energy consultant told government regulators Tuesday in Halifax.
"If you ramp up too fast, people become more aware of the cost (and) less thinking about the benefits. If you go too fast, you get a ratepayer reaction because it becomes centred in people’s minds and they raise the questions about equity. ‘What am I getting out of this?’ " testified H. Gil Peach, of Beaverton, Ore.
Peach was appearing before the Utility and Review Board on the second day of a hearing into Nova Scotia Power’s plans for energy conservation programs in 2011.
The private utility wants to spend 3.5 per cent of the utility’s revenues, or $41.9 million, on energy conservation, which is among the highest rates in North America.
The proposed 2011 budget for energy efficiency would increase to $41.9 million from $22.6 million in 2010.
These measures include energy-saving light bulbs, expanding a small business lighting program and a $200 rebate on energy-efficient clothes washers.
The company argues that if customers reduce their electricity consumption, it will generate savings of more than $190 million because the utility will be burning less fuel to generate electricity.
Peach said Nova Scotia Power’s plans are ambitious. He’s aware of three electric utilities in Ohio, Indiana and Pennsylvania that spent about two per cent of their revenues over the past two years.
The consultant said most electric utilities can count on everybody supporting energy conservations programs because it’s a "sensible approach," but he suggested a cautionary approach to introducing the programs.
"A dollar to a low-income person means so much more than a dollar to an upper-income person. All those things have to be thought of. There has to be awareness of these things," he said.
"It’s an obligation of duty whenever you take dollars from a ratepayer, even for a good purpose, to make sure they are spent wisely, they give the highest return you can get and a consideration of balance and equity among the various ratepayers groups."
Peach said the utility must communicate with residential, business and large industrial customers the benefits of the programs and ensure each dollar is spent wisely.
"As in all things that are regulated, there has to be balance. There has to be ramp-up. You have to be aware of keeping all the ratepayers happy — as many of the groups as you can," he said.
John Merrick, the province’s consumer advocate, referred to the plans as "robust," and wondered how important it is to ensure they are balanced and accessible to customers.
"The dollars are collected from large industry, who might use those dollars elsewhere to invest in (their) plant, equipment and jobs, or from low-income customers for whom a couple of dollars might be everything they’ve got discretionary. So, you’ve got this heat-or-eat thing that goes on," said Peach, who was hired by the board to evaluate the current programs.
Merrick has questioned the company about how it determines which programs are priorities and how they will be evaluated.
Later this year, the utility will transfer responsibility for implementing the conservation programs to a new government agency called Efficiency Nova Scotia Corp.
The board has reserved its decision.
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