U.S. Markets open in 5 hrs 1 min

Miss. regulators consider energy efficiency rules

Jeff Amy, Associated Press

JACKSON, Miss. (AP) -- A number of utilities and consumer groups say they support proposed rules that would require Mississippi electric and gas utilities to implement programs to save energy.

However, Mississippi Power Co. says it opposes the rules because bills could rise for customers who don't make homes or businesses more efficient.

The Public Service Commission began considering energy efficiency rules in early 2010. A number of states have adopted similar rules.

"We can no longer afford to waste our energy resources and financial resources," said Brent Bailey of 25 x '25, a group that wants the United States to produce 25 percent of its energy from biomass sources by 2025. The Canton man was among those who spoke in favor of the rule at a Tuesday public hearing. The commission could vote on the measure as early as July.

If the proposed rules are adopted, utilities would be required under "quick start" provisions to begin improving efficiency. Those programs could include energy audits, tuning customer heating and air conditioning systems, appliance and lighting rebates, weatherizing homes, and paying builders of new homes and commercial buildings to make them more efficient.

Within three years, utilities would have to file more comprehensive plans. They would be allowed to recover the costs of implementing those plans by raising rates on all customers.

That's the cornerstone of the opposition of Mississippi Power. The subsidiary of Atlanta-based Southern Co. says that it's unfair to charge customers who don't take advantage of efficiency programs to pay higher power bills.

"The rule will result in upward pressure on customer rates, particularly within the residential class," said Melvin Wilson of Mississippi Power.

An economic impact study that was demanded by public commenters says the proposals could cost utilities $90 million in the first year, in addition to $70 million that customers would spend after rebates. Long-term benefits could include the need for fewer new power plants.

Mississippi ranked 51st on a scorecard of states and the District of Columbia put out earlier this year by the American Council on an Energy Efficient Economy. The council cited the lack of PSC policies and reports showing little spending on conservation and little energy saved. The Consortium for Energy Efficiency and Tennessee Valley Authority reported that the 2010 electric utility energy efficiency program's budgets were $12.5 million. No natural gas efficiency programs were listed in Mississippi.

All electric utilities and private gas utilities that have more than 25,000 customers would have to start offering quick-start services within three months. That would include electric cooperatives, but those entities say the Public Service Commission can't force them to adopt such measures. The PSC has limited regulatory authority over cooperatives, and doesn't generally rule on the rates that cooperatives set.

An Entergy Mississippi representative said the state's largest private electric provider is in basic agreement with the plan, and would only suggest that implementation be delayed by "a couple of months" to allow more time for planning.

Karen Bishop, director of the Mississippi Development Authority's energy division, said utilities could spend money on saving energy, instead of spending money on expensive new power plants. Julia O'Neal, an Ocean Springs resident and Sierra Club member, said that could mean that customers would pay less for Mississippi Power's $4.3 billion coal-fired power plant in Kemper County.

"It's time to end the characterization of Mississippi as a state of tarpaper shacks with old window unit air conditioners running 24-7," said O'Neal, a Kemper opponent. "An efficiency program would bring some relief. They can't charge you for what you don't use."

"These new rules will create a new conversation that will allow utilities to use conservation as a least-cost, least-risk resource," Bishop said.

Dallas Baker of the Mississippi Department of Environmental Quality said that agency also favors adoption. Baker cited MDEQ's own experience in cutting energy use at its Jackson headquarters after a 2009 energy audit.



Mississippi's energy efficiency ranking: http://aceee.org/sector/state-policy/mississippi


Follow Jeff Amy at https://twitter.com/jeffamy