CPS Energy Weighing Next Generation of Efficiency Programs

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Carlos Abad, Fanny Reyes, Supratim Srinivasan, and Eduardo Casilda look on as Luis Medellin works on the roof. Photo by Scott Ball.

Scott Ball / Rivard Report

Contractors install solar panels on a CPS Energy customer's roof. Programs to encourage home solar use have been part of the utility's Save For Tomorrow Energy Plan.

With CPS Energy set to exceed energy efficiency goals set in place a decade ago, utility officials are now considering how best to continue encouraging customers to use less energy and avoid paying for expensive new power plants.

Officials with the municipally owned electric and gas utility are considering the next generation of energy efficiency and demand response programs they will undertake after the completion of CPS Energy’s Safe For Tomorrow Energy Plan, or STEP.

“Energy efficiency” refers to reducing power consumption full-time by using more efficient technology or by changing behaviors, while “demand response” refers to scaling back use during times of high demand, especially hot summer days.  

Creating the next round of programs would involve a City Council ordinance similar to the one passed in 2009 that started STEP. The ordinance set a broad goal of reducing enough customer demand to avoid building a brand-new coal or natural gas plant.

“It has been better than building a plant because when you build a plant,” CPS Energy Chief Customer Engagement Officer Felecia Etheridge said, “it’s not just building it, … you have all the operating costs, you have the capital investment, and then you have all the costs and the debt associated with running that plant for 30 or 40 years.” 

In line with its Flexible Path that charts CPS Energy’s power generation mix through 2042, utility officials are calling this next round of programs FlexSTEP. The specifics are still up in the air, and the utility is soliciting customer feedback on what the next generation of STEP should look like in an online survey. 

Out of the 697 people who responded as of Oct. 16, 22 percent said they participated in at least one STEP program, and 46 percent said they would be willing to pay an additional $1-5 per month on their CPS Energy bills to keep the program going. Past STEP efforts have cost residential customers between $3-5. 

“Every customer pays for this program whether they use it or not,” Etheridge said. “We have to be very thoughtful about what measures we carry forward.”

FlexSTEP will be also critical for San Antonio to meet the goals of its recently passed Climate Action and Adaptation Plan, which calls for the city to drop its emissions of greenhouse gases to net zero by 2050. Energy use in buildings accounts for the largest share of greenhouse gas emissions in San Antonio, the plan states. 

Many environmentalists and energy efficiency advocates say CPS Energy should do a better job signaling its customers to conserve through its pricing.

For residential customers, CPS Energy charges 6.9 cents per kilowatt-hour, plus another nearly 2 cents per kilowatt-hour in peak summer months. These flat rates could be restructured to charge customers more during times of the day when electricity supply is tight, prices on the grid are high, and cutting back would do the most good. California is making such rate structures, known as time-of-use rates, mandatory starting this year.

However, those hurt by such policies include low-income residents dependent on window air conditioning units in sweltering summer months, Etheridge said.

“While on its surface it makes 100-percent sense and it seems to be the right thing to do for the environment and for managing costs, if you live in areas like … San Antonio where it’s 115 degrees and you can’t control your usage — you may be a renter, you may just be unable to do anything in your home — then it turns into a true penalty,” she said.

Austin, which has significantly lower per-person electricity use than San Antonio, has a five-tiered rate structure, with rates jumping from 2.8 cents per kilowatt-hour to 10.8 cents, depending on how much an Austin Energy customer uses per month. Cyrus Reed, conservation director of the Lone Star Chapter of the Texas Sierra Club, said that “might be a little extreme,” but it’s important to send some price signal.

“Having some tiered rates where you pay less per kilowatt-hour for the first 750 kilowatt-hour and then more for the next 750 is a way to encourage people to conserve,” he said. “You don’t have to make it really steep, you just have to make it a little bit steep and then educate people about it.” 

All of the STEP initiatives have been voluntary, with CPS Energy offering financial incentives for its customers to scale back their energy use and save money on bills. Since the program began, CPS Energy has paid rebates to approximately 236,000 customers, said Rick Luna, interim director of product and technology innovation.

Those rebates helped pay for home solar installations, energy-efficient appliances, and weatherization. CPS Energy customers can get money back from the utility when they buy efficient central air conditioners, window units, pool pumps, LED lighting, attic insulation, shade trees, and Wi-Fi-enabled thermostats. 

On the demand response side, CPS Energy asks residential and business customers to cut back through its Reduce My Use program. The utility can remotely lower its customers thermostats by a degree or two during high use periods, when electricity prices on the state power grid skyrocket. 

Low-income customers can also get an average of $5,000 in energy efficiency upgrades at their homes for free through CPS Energy’s Casa Verde program, with contractors installing insulation, sealing leaks, and upgrading to more efficient lighting. The utility is on track to weatherize nearly 30,000 homes through the program.

Despite the slew of incentives, Etheridge acknowledged that it’s been tough to get many of the utility’s customers enrolled in the programs. Utilities across the country have had the same problem – even in California, where such efforts have been underway since the 1970s, said Etheridge, a former director of customer engagement at Pacific Gas and Electric. 

“We are constantly marketing these programs, but it’s not breaking through,” she said. “We have really wracked our brains on how to get people really saying, ‘Yes, I’m going to take advantage of this program.’”

Some customers are also wary of giving CPS Energy data or providing access to their thermostats, officials said. Despite people’s willingness to give away their data to Facebook and other online advertisers, CPS Energy encounters resistance to programs like Reduce My Use, which allows CPS Energy to remotely turn up customers’ thermostats slightly during hot summer days when demand is high. 

“People give data away to everybody and their dog, but the minute they think that we’ve got data – and we’re prohibited from doing anything with anybody’s data – they go … ‘It’s Big Brother,’” Etheridge said.

In the end, many of the policies that will encourage energy efficiency would have to come from the City, not CPS Energy. These include changes to the building code to require more efficient construction and disclosure requirements to tell homeowners how energy-efficient a home is. Both are ideas mentioned in San Antonio’s climate plan.

Overall, Texas utilities aren’t doing a good enough job conserving compared to their counterparts in other states, said Reed, who recently completed a clean energy scorecard that gave most of the state’s electricity providers failing grades. Getting them to improve requires “political will,” he said.

“It’s having either the Legislature in the case of the investor-owned utility or the cities in case of the [municipal utilities] saying, ‘We want you to take this more seriously,’” Reed said.  

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