Energy efficiency plan urged to cut power costs

Electricity rates in the Tennessee Valley will rise in May for the third consecutive month.

But a study released Monday suggests that Tennessee and Georgia consumers could offset such increases if new efficiency standards and incentives are adopted.

The Tennessee Valley Authority announced Monday that wholesale electricity rates will rise another 1 percent in May and likely will go up again in June and July under its monthly fuel cost adjustment. Next month's increase will cost the typical residential electricity user nearly $1 more a month, according to TVA.

PDF: Energy efficiency in the South PDF: TVA Fuel Cost Adjustment By the numbers* $22 -- Average monthly savings for residential consumers in Tennessee from aggressive energy efficiency program* $26 -- Average monthly savings for residential consumers in Georgia from aggressive energy efficiency program* 15,600 -- Additional jobs for Tennessee from aggressive energy efficiency program* 32,200 -- Additional jobs for Georgia from aggressive energy efficiency programSource: Georgia Institute of Technology and Duke University study

But researchers from Georgia Tech and Duke University estimate that consumers could still cut their electricity costs if the federal government adopts stricter energy efficiency standards for homes and appliances and offers incentives for individuals and businesses to undertake more conservation measures.

Georgia Tech's Dr. Marilyn Brown, a nominee for the Tennessee Valley Authority board who shared the 2007 Nobel Prize for her climate change research, said Tennessee and Georgia rely too much on electricity. Relatively cheap power from TVA has encouraged residents in both states to use disproportionately more electricity, creating more opportunity for conservation, she said.

According to the Energy Information Administration, Georgia's per capita consumption of energy ranks eighth and Tennessee ranks 14th in energy use among the 50 states.

"The Southeast is the Saudi Arabia for energy efficiency," Dr. Brown said. "Much more of the heating and cooling in Tennessee is done with electricity as opposed to other parts of the country."

The study, written by Dr. Brown and others, estimates that Tennessee and Georgia could curb the growth in power consumption by 8 percent in the next decade and save the typical household $260 a year by 2020 if the government does more to promote energy efficiency with new building codes, appliance efficiency standards and tax incentives.

Without such changes, energy use is projected to jump another 15 percent by 2020.

"Tennessee is absolutely poised to save consumers millions and billions of dollars," said former TVA Director Susan Richardson Williams, one of the co-founders of the Tennessee Business Leaders for a Clean Energy Economy.

The study released Monday suggests that Tennessee could gain 15,600 jobs and Georgia could get another 32,200 jobs if stricter efficiency measures are adopted by government.

Steve O'Neil, who started Applied Energy Conservation Systems in Chattanooga four years ago to help businesses improve their energy efficiency, is among those employed in the growing business of conservation.

"Without replacing much equipment, we are often able to improve the energy efficiency of the commercial and industrial clients we work with by anywhere from 10 to 25 percent," he said.

But critics of some of the government incentives urged by Dr. Brown, Ms. Williams and others question why the government has to adopt more regulations or give more tax incentives during a period of growing budget deficits.

Ben Lieberman, a senior research analyst for the conservative Heritage Foundation, said government intervention in the market tends to distort consumer choices.

"I've never been a believer in the federal government creating more efficiency in anything," he said. "Too often when the government tries to set standards or mandates, then you tend to spend more on bureaucracy and take longer to accomplish the efficiencies you desired."