- The Washington Times - Wednesday, April 4, 2007

Local electricity provider Pepco today will lay out its plan for spurring energy conservation and using innovative technologies like smart meters to combat global warming, save customers money and avoid midsummer blackouts.

In a filing before the D.C. Public Service Commission, Pepco says it will install smart meters in every home to enable customers to save money and energy by curbing power use during daily peak periods when fuel prices are high and electricity is scarce. The new meters will enable Pepco to remotely detect and correct outages more quickly, and provide bills based on actual rather than estimated power use.

The utility, which provides power to 745,000 Maryland and D.C. residents, also will offer to install smart thermostats that can automatically adjust the temperature in homes at night and when residents usually are away at the office and school.

It also is proposing to give customers credit on their utility bills for installing high-efficiency air conditioners and fluorescent light bulbs, and for allowing the utility to cycle their air conditioners and electric heaters off-line during peak power periods.

Pepco filed a similar plan with the Maryland Public Service Commission two weeks ago, as has its Delmarva Power subsidiary in Delaware.

The plans are aimed at helping the utility and its customers comply with mandates to curb greenhouse gases that will come into play in Maryland in June when the state is scheduled to join seven Northeastern states in a regional plan to curb the carbon-dioxide emissions many scientists think contribute to global warming.

“Energy efficiency is the lowest cost and the cleanest way to address future energy needs,” said Dennis Wraase, president of Pepco Holdings Inc. (PHI), the parent company of Pepco. “If we can provide tools for PHI’s nearly 2 million customers to reduce their electricity usage, we can make a measurable contribution to meeting the nation’s environmental challenges and at the same time help customers keep their electric bills affordable.”

The plan comes a year after Pepco sharply raised rates for District and Maryland customers, citing soaring prices for the natural gas and oil it uses to fire small “peaker” power plants that meet demand during the hottest days in the summer air-conditioning season. While the wholesale cost of power usually ranges from $60 to $100 per megawatt, the company said the price can soar to as high as $1,000 on exceptionally hot days.

The thrust of the energy-saving plan is to get customers to cut back on use of air conditioners and other electrical appliances during such peak periods, to avoid the exorbitant charges. A study sponsored by PJM Interconnect, the electricity transmission operator for 13 states and the District, and the Mid-Atlantic utility commissions found that a 3 percent savings in energy use during such periods could save Pepco customers $10.6 million and avert the risk of summer blackouts as well as the need to build new power facilities.

“There is a real potential for savings considering the shortage of transmission lines in the Mid-Atlantic region which can send wholesale power prices soaring during a heat wave,” Pepco officials said in internal documents on the rate plan. The Washington area in several studies has been designated high risk for brownouts and blackouts during the summer peak power season.

“Lowering demand even a few percent or less at critical times lessens transmission constraints and may mean some power producers don’t have to turn on their most expensive natural gas and oil generators to meet demand. Such ‘peaking’ plants often operate fewer than 100 hours a year and in combination with transmission constraints could have a disproportionate effect on the wholesale price of electricity,” the documents said.

Pepco noted that its plan responds to a federal law passed in 2005 that requires states to consider utility proposals that differentiate pricing during the day to encourage energy savings. While rates would spike during the afternoon when use is the highest, they would fall at night and on weekends when use is low.

The Pepco plan would pave the way for increased use of solar power and plug-in electric cars by enabling electric car owners to take advantage of low nighttime and weekend rates to recharge their cars. Homes and offices that use solar power would be able to sell any surplus electricity they produce to Pepco.

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