California Senator Announces Plan to Reward Electricity Conservation

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San Jose Mercury News

In a move that would financially reward consumers for conserving energy, State Sen. Don Perata unveiled a proposal Monday that would provide $ 1 billion in rebates to California residents who reduce their electricity use this summer.

Under the plan, which Perata hopes to see up and running by May 1, consumers would receive a 10-cent rebate on their utility bill for every kilowatt-hour of electricity that they save.

During a Monday press conference, Perata stressed the need to act swiftly.

“If this is a crisis, let’s race, let’s sprint,” Perata said.

Politicians, consumer groups and Gov. Gray Davis‘ office, while intrigued by the idea, all said they needed to see more information before deciding whether to support the proposal. Perata is expected to introduce the bill later this week. It will be one of 130 energy-related measures, many of them dealing with conservation, filed in the wake of the state’s power problems.

The Oakland Democrat said his plan would also convince California residents — half of whom think the entire crisis is fake, according to recent polls — that the energy crisis is indeed dire.

“The majority of the people in this state still do not think that there is an energy crisis” said Perata, whose staff is still hammering out the details of the legislation. “If we do this, they’ll catch on that it’s serious.”

The amount of the rebate would be determined by how much electricity a household conserves this summer when compared to last summer. For example, a family that reduces their July 2001 usage by 300 kilowatt hours from July 2000 would see a “California Summer Conservation Rebate” of $ 30.00 on their bill.

Individual bills can vary widely depending on factors such as the size of a home and the weather. PG&E said its the average residential customer uses 500 kilowatt-hours per month. The utility does not calculate a summer versus winter average, because coastal areas of California are so different from inland areas.

The plan would need the cooperation of utility companies like Pacific Gas and Electric to work because the credit would show up directly on consumers’ bills. PG&E declined to comment on the plan.

Cash incentives are crucial, Perata said, because the state still faces an enormous chasm between the supply of electricity available and expected summer demand. Energy analysts predict that widespread rolling blackouts are inevitable this summer, particularly as air conditioners kick on with the hot weather.

“We know right now that we are at least 2,500 megawatts short this summer,” said Perata, who chose a power plant near Jack London Square as the backdrop for his well-attended morning press conference. “We have no energy plan today that will get us through May, June, July, and August.”

Paying a rebate to conserve electricity will help to shift the balance of power back into the hands of consumers, and in turn will assist the slowing California economy as a whole, Perata said. And by curtailing the state’s overall demand for electricity, Perata said, electricity prices should then fall.

Perata said he just thought of the Conservation Rebate legislation 10 days ago, while kicking conservation ideas around with a friend.

Many Republican and Democratic colleagues in Sacramento declined to comment, but expressed interest in seeing the details of the plan. Word of Perata’s proposal is just beginning to make the rounds up in the Capitol.

“As Republicans, we typically favor any efforts to shrink government,” said Jamie Fisfis, press secretary for Assemblyman Bill Campbell, the GOP leader. “If that means giving money back to consumers, I think that’s interesting. We’d have to see Perata’s language before commenting further.”

Consumer and environmental groups also said that they would need to see more details, and some questioned how it would be fair. One concern is that an electricity guzzling family could earn a large rebate by reducing usage this summer, while a family that has always been extremely conservation-minded would receive very little in terms of a rebate. But the initial response was positive.

“This would have the double power of not only addressing shortages, but also getting back at the power generators who are depending on our consumption to gouge us,” said Doug Heller, an advocate with the Foundation for Taxpayer and Consumer Rights. “There’s something to be said for creating incentives to conserve.”

Perata proposes paying for the rebate by using $ 1 billion of the state’s surplus — a surplus that is dwindling as the state scrambles to buy power. He also said that he may ask Gov. Gray Davis to sign the plan into law by executive order. A spokesperson for Davis, who was traveling in Washington, D.C. Monday, said that Davis is always interested in efforts to encourage conservation.

Consumer Watchdog
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