Denver – Rural utilities are on their way to creating market-based solutions that will expand energy efficiency investments and create energy savings thanks to a bill sponsored by Sen. Gail Schwartz (D-Snowmass Village) and Rep. Kathleen Curry (D-Gunnison). The bill passed out of the Colorado State Senate today by a vote of twenty five to nine with one abstention.
“We can spur investments in energy efficiency and conservation by creating green price signals,” said Sen. Schwartz. “Energy efficiency is key to increasing our energy security while saving money on our energy bills.”
For years, water utilities have encouraged water conservation through a method called the inclining block rate, where the price of water rises with increasing usage. Some member-owned rural electric cooperatives in Colorado would like to use the same method to deal with their own rising power costs.
“Efficiency and conservation are our most important resources,” said Dan McClendon, general manager of Delta Montrose Electric Association, who testified on behalf of the bill. “Helping our members become more energy efficient greatly benefits our local economy, an increasingly important aspect of these efforts.”
Both Delta-Montrose Electric Association of Delta and Holy Cross Energy of Aspen are supporting the bill.
“Block rates are one piece of an overall conservation strategy,” said Del Worley, CEO of Holy Cross Energy headquartered in Glenwood Springs. By creating a market incentive for energy efficiency, we can save money for all our customers.”
Environmentalists hailed the move as another step toward creating sensible energy markets that benefit the economy and Colorado’s environment.
“Energy efficiency will let us have our cake and eat it too,” said Pam Kiely, legislative director of Environment Colorado. “By creating incentives for energy efficiency, we can cut everyone’s electric bills while also cutting global warming pollution.”
According to studies by The Brattle Group, a global economics consulting firm, tiered pricing will likely result in electricity prices dropping from one to four percent and customer bills dropping one to five percent. Over the long run, customers are expected to purchase more energy efficient appliances for their homes at three times the current rate.
“We’re about providing options that benefit our members,” said Ray Clifton, executive director of the Colorado Rural Electric Association. “Block pricing is about reducing energy consumption and encouraging our members to make decisions that will spur clean energy solutions.”