It seems counterintuitive – a business that pays you to buy less! Why?
The confluence of social good, business strategy, and politics makes “now” a very interesting historical period for both electric and natural gas utilities – and their customers. Building new capacity is expensive; permitting, constructing and operating a new plant and upgrading distribution networks costs a lot of money. As it turns out, it’s more lucrative for the utility to promote conservation through Renewable Energy and Efficiency instead of building MegaWatts of additional capacity. The utility instead pays customers for NegaWatts – energy that the utility doesn’t need to produce, the energy saved by increasing efficiency or renewable energy at the customer’s location.
This practice is supported by State regulatory agencies who aim to meet requirements for efficiency and renewable portfolio standards. So the first win is a social win – there are societal benefits to grid stability, clean air, and clean water. The regulators then allow the utilities to recover the costs for these programs – making it a financial win for the utility. Yes, there is a cost to the consumer (see the sample bill, below for the Ameren Illinois DS-3 rate), but remember, there would also be a cost if additional Megawatt capacity were being built. And there’s a big difference – there are now incentives and rebates for Energy Efficiency and Renewable Measures available to both residential and commercial customers. The payments for increasing the Negawatt capacity can go to you! That makes it a win for savvy customers, who not only get an immediate payment, but savings for years to come.
ERG has worked on projects where 100% of the cost of the study and improvements were paid for by incentives. Typically, up to 20% of the cost can be covered by incentives. Here is an example of work we performed for a local university where the project qualified for over $100,000 of incentives from Spire and Ameren. As result, the building now enjoys a 25% reduction in electrical consumption and 44% reduction in heating energy use. This energy efficiency project will save over $120,000 per year and pay for itself in 2 ½ years.
Details on applying for these programs can be found here: Ameren Missouri, Ameren Illinois, Spire.
If exploring the details seems a bit much for you, we can help. Energy Resources Group (ERG) is a Trade Ally for Ameren Missouri, Ameren Illinois, and Spire. Currently ERG is the top producer (2020) for Ameren Missouri’s Bizsavers program, and we’d be more than happy to help you become one of the savvy consumers taking advantage of this peculiar moment of incentivized non-consumption.
