Arizona mandates 20 percent cut in amount of electricity that utilities can sell

Encouraging energy efficiency is one thing, but utilities across the nation need to find new sources of revenue.
Written by Heather Clancy, Contributor

Intriguing report in the Environmental Leader today that should have utility company executives sitting up and taking notice. Apparently, the Arizona Corporate Commission, which rules utility policy in the state, passed a measure this week that will mandate that regulated electric utilities serving the state reduce the amount of power that they sell by at least 22 percent over the next 10 years.

The idea is for utilities to play a key role in inspiring businesses and residential households to strive for better energy efficiency. The holy grail is potential savings of $9 billion.

Pause and think about that. These utilities were just told to cut sales, not grow them. I get that. But even I will admit that this is a pretty darn aggressive goal. It also makes me wonder: As utilities are asked to encourage reduced consumption, because of the potential environmental benefits, what (exactly) is inspiring them to invest in the technology we need to make the grid smarter?

Utilities are already known to be extreme laggards when it comes to technology investments. I don't see moves like this inspiring a change to that behavior. One potential way that utilities could make this up, I guess, is by offering the consulting and integration services that businesses and households will need to invest in to achieve this reduction. So, for example, stuff like home weatherization projects or energy audits or replacing appliances and climate control systems.

Hmm, seems like we're in for a complete rewrite of what it means to be a utility company and something tells me the smart grid is just one teeny piece of the answer.

This post was originally published on Smartplanet.com

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