The Public Utility Commission this week began an investigation into cost-effective and reasonable efforts that natural gas and electric utilities can take to help consumers conserve energy or use it more efficiently.

“As we anticipate another winter of high energy prices, there is an acute need to find ways to assist utility customers in dealing with high natural gas and electric bills,” said Commission Vice Chairman James Cawley in the motion initiating the investigation “Any comprehensive plan must necessarily include efforts to encourage customers to reduce their use of energy through conservation and energy efficiency. The best way to reduce a customer’s energy bill in this environment of intensifying world energy prices is by empowering consumers to take action to be more efficient and continuing to educate customers on how to use less energy and to efficiently use only what is required.”

The Commission voted unanimously to reconvene its Demand Side Response Working Group asking them to provide specific recommendations that will allow the Commission to act on their findings and conclusions before May 15, 2007.

Commissioner Bill Shane offered a friendly amendment to the motion that asked for further examination of a program offered by Toronto Hydro-Electric System Limited, which they call the “10/10 Program.”

“The program focuses on rewarding residential and small commercial customers for achieving specific conservation goals,” Commissioner Shane said. “I have often felt that many believed that demand response programs have been the domain of large commercial and industrial customers. It seemed to me that frequently, the potential for small customers to also participate had been greatly discounted.”

During the course of the investigation, the working group will examine:

· Energy Efficiency and Conservation by suggesting ways to encourage consumers to reduce usage and increase energy efficiency as partners with utilities and other service providers while doing so in a cost-effective manner.

· Demand Side Response by exploring different approaches to create incentives for customers to reduce energy usage during peak cost periods thereby reducing energy bills and simultaneously enhancing overall system reliability.

· Advanced Metering Infrastructure by examining more closely the potential benefits and costs for utilities and consumers such as reduced operational costs, improved customer service, quicker emergency response, improved reliability and better capability to participate in demand response programs and retail choice alternatives.

· Rate Making Mechanisms by exploring the usefulness and appropriateness of ratemaking mechanisms that remove any disincentives that might presently exist for energy utilities to pursue aggressive energy conservation initiatives.

The goal of the investigation is to permit the Commission to review available evidence of the need for and the costs and benefits of various programs and approaches that will support moving forward with a comprehensive and consistent energy policy.

The Demand Side Response Working Group originally was created following a Demand Side Response Roundtable held in November 2000. The purpose of the meeting was to start the discussion on how electric use could be curtailed during peak demand periods.

9/29/2006