Louisville Gas & Electric is warning customers it plans to end three programs incentivizing energy efficient upgrades in people’s homes. But the changes still need approval from Kentucky’s public utilities commission, and advocates for low-income ratepayers and the environment are opposing the end to the programs.
Among the programs on the chopping block:
- Home Energy Analysis Program that offers customers up to $1,000 for making energy-saving improvements on their homes
- Home Energy Rebates Program that offers customers $50 to $750 for purchasing energy efficient appliances, windows, window film and heating, ventilation and air conditioning systems
- The Fridge and Freezer Recycling Program that offers customers $50 per appliance for hauling away and recycling old, inefficient refrigerators and freezers
LG&E notified customers via bill inserts in February that the programs will be discontinued at the year’s end. The inserts said the programs are no longer cost-effective and customers have until the end of the year to take advantage of them.
Weighing The Costs
According to the company, there are two forces driving the decision: the fact that consumers might be making the changes anyway, and the market.
LG&E’s Director of Customer Energy Efficiency David Huff, said it’s not worth it for the company to incentivize energy efficiency — and ask ratepayers to pay for it — if customers are going to improve their homes anyway.
“It becomes an issue of, are we using money to get more energy efficiency than what customers would do otherwise on their own?” Huff said.
In addition, he said the costs customers pay for electricity have fallen as fuel prices come down across the nation. And according to LG&E’s bill insert, over the last decade, customers have saved enough electricity to prevent the need for a new power plant.
“If you don’t need that additional energy generation for 30 years then there is no cost that we are avoiding to offset and pay for the [energy efficiency programs],” Huff said.
Ending the programs would save customers with LG&E and Kentucky Utilities between $1.84 and $2.19 per month on their electric bills, said Gregory Lawson, energy efficiency planning and development manager.
Advocates For Retaining Programs
The decision to discontinue the energy efficiency programs has advocates concerned that consumers will be left without affordable help.
“There is so much room for improvement remaining in existing customer homes that it’s appalling LG&E would even consider eliminating this program,” said Sarah Lynn Cunningham, executive director of Louisville Climate Action Network.
Cunningham said flat-lining sales are motivating LG&E to end the programs and increase profits for investors. And ultimately, she said it’s the environment and public health that will suffer.
LG&E did not consider the environmental and health benefits of the programs when weighing the cost-effectiveness of the energy efficiency programs. That’s because the state’s regulatory body, the Kentucky Public Service Commission, only has jurisdiction to regulate rates and services, said PSC spokesman Andrew Melnykovych. Kentucky law requires investor-owned utilities prove they’re providing electricity in the least-cost, most-reliable way.
The commission focuses on the economic side of electricity generation like the long-term need for more capacity, Melnykovych said.
Cathy Hinko, executive director with the Metropolitan Housing Coalition, argues those standards are outdated.
“Using externalities that include other things like health, are very important to us, and we want those introduced into the standard,” Hinko said.
Huff, with LG&E, would not say whether cutting the programs will take a toll on the environment or public health, but said he believes customers are taking steps on their own to make environmentally conscious decisions.
“I would say that our customers throughout the state have really gotten the message, they’re taking up the banner and they’re doing things that promote energy efficiency,” Huff said.
The Kentucky Public Services Commission has suspended the proposed changes until June 4. The commission will try to make a recommendation before the suspension date, Melnykovych said.
LG&E will continue to offer other energy efficiency programs regardless of the outcome. Right now, it has plans to offer $13.5 million worth of energy efficiency programs in 2019.
- March 31: Residential customers have until the end of March to purchase appliances for the rebate program, earn incentives with the on-site energy analysis program or perform an online energy analysis.
- September 1: Residential customers need to complete applications and send supporting documents for the energy rebate program. Customers taking advantage of the energy analysis program have until September 1 to make improvements and sign up for the verification inspection.
For more information on the programs, visit LG&E’s website.