SAVING A kilowatt hour of electricity costs less than 4 cents, while generating the same amount of energy costs at least 8 cents. So as utilities and government regulators plan for the state's future energy needs, conservation ought to be the highest priority. That principle is a signal part of the new energy legislation unveiled by the Patrick administration and legislators last week. The bill's provisions for efficiency and greater use of renewables would save consumers money and reduce greenhouse gas emissions.
So far, utilities' investments in efficiency have largely been limited to those funded by the small fee tacked onto consumers' bills. The new legislation, which builds on a measure introduced by House Speaker Salvatore DiMasi earlier this year, would foster much more ambitious efforts. Utilities would directly help customers buy new lighting, improved appliances, and weatherproofing.
While the Legislature weighs this shift of efficiency from the margin to the mainstream, the state Department of Public Utilities is nearing a parallel decision that will give companies that distribute electricity a greater incentive to push for conservation.
These companies' rates now hinge on how much electricity a household uses - so their own revenues decline if they help customers conserve. To turn utilities into partners in conserving energy, the DPU is proposing to decouple distribution rates from consumption. Consumers would pay a flat amount for their connection to the grid. But they would still have an incentive to turn off unneeded lamps, because they would still pay for each unit of power they use.
The bill would also seek to make renewable energy a larger part of the state's electricity diet. The goal is now 4 percent by 2009. Under the bill, that would ratchet up 1 percentage point a year after 2009, unless the Legislature votes to suspend the annual increase.
The legislation would also remove a barrier to more renewable generation. Right now, regulators pressure utilities to sign only short-term contracts with electricity generators. Meant to promote an active competition among power suppliers, this approach instead creates uncertainty in the renewable industry. The energy bill would, on a limited basis, allow utilities to sign long-term contracts with wind and solar providers.
Other measures would offer incentives and cut red tape for homeowners and businesses installing wind turbines, solar panels, and other equipment. Buyers of hybrid cars could get a $2,000 state income tax deduction.
The bill's goals are ambitious: total energy consumed in the state is to be reduced by 10 percent by 2017, and greenhouse gases are to be cut 20 percent by 2020. But the bill steers the state, utilities, and consumers all in the right direction by placing negawatts - power not consumed - above megawatts.
