The New Orleans City Council utility committee advanced a resolution on Thursday approving $58 million in energy efficiency programming over the next three years. The program, Energy Smart, is administered by local utility Entergy New Orleans has existed for nearly a decade.
The program includes weatherization services, aid for new energy efficient home appliances and consulting on behavioral changes that can lower customer bills. If approved by the full council, the program will also include, for the first time, “demand response services,” which, in some cases, will allow Entergy some control of high-energy appliances and equipment during peak use times. The program would be voluntary, and participants would be eligible for credits on their bills.
Funding for Energy Smart has historically come from inconsistent, one-time sources, often from settlements at the Federal Energy Regulatory Commission. But if Thursday’s resolution passes through the full City Council, the program will have its first permanent revenue source.
The funding source will be Entergy New Orleans ratepayers. The average residential customer will contribute $4 per month to the program through their monthly bills. The average commercial customer will pay $34 a month and the average industrial customer will pay $480 a month.
But the City Council, Entergy, affordable energy advocates and affordable housing advocates at Thursday’s meeting said that customers will save more on their bills from Energy Smart than they will have to pay. That goes for customers that directly participate in Energy Smart programs and those that do not. Every speaker at Thursday’s meeting spoke in support of the resolution.
“Over the next 15 years, we would expect that if we didn’t spend this money now, rates would go up even more,” Emma Hand, one of the council’s utility advisers, told The Lens.
Last year, the council passed a new comprehensive resolution — called a rate case resolution — that set rules for how much Entergy can charge customers on monthly bills. The council estimated that the new rates would save east bank customers $2.86 on their monthly bills, while west bank customers would see no change to their bills. The Energy Smart bill increases were already factored into that savings calculation, according to Andrew Tuozollo, Chief of Staff for Councilwoman and utility chair Helena Moreno.
However, it is likely that average residential bills will soon go up by $8 a month once Entergy starts charging customers for its new gas plant and solar plant in eastern New Orleans later this year.
According to an implementation plan created by Entergy, Energy Smart will pour $31.7 million into programs for large commercial and industrial customers over the next three years. The second largest investment will be for residential customers with $23.6 million. small commercial customers would get the lowest investment with $6.7 million.
When it comes to energy efficiency programs, cities around the country and world are faced with a similar conundrum: how to ensure the benefits are evenly distributed. Wealthier residents and homeowners are usually in a better position to make investments on their homes that will result in long-term savings. There is an especially large gap between property owners and renters.
There is little financial incentive, for example, for a landlord to invest in weatherization or a more efficient air conditioning unit when it only leads to cost savings for their tenants through their energy bills.
“It’s a struggle everywhere,” Hand said. “We’ve been working on the problem for years now. Publicly funded institutions are also hard. Many don’t pay taxes so tax breaks don’t help them, so they have higher hurdles than the average commercial building.”
She said that the Energy Smart program has tried to add and bolster services specifically geared to these hard-to-reach customers. One of them works with owners and managers of multi-family residential housing, as well as their tenants, to implement energy efficiency measures. Energy Smart also includes a special program geared towards publicly funded institutions.
But even without programs geared towards renters and publicly funded institutions, Hand, Entergy officials and Alliance for Affordable Energy Executive Director Logan Burke said that all customers will financially benefit because of system wide savings.
“Even non participants benefit from these programs for a couple reasons,” Burke told The Lens. “It reduces fuel costs, energy capacity costs, reduces congestion on the grid which then reduces costs for customers. There are numerous benefits even for non participants.”
Putting an exact number to those savings isn’t always easy however.
“”It’s hard to say,” Hand said. “Because the customers who participate get a lot more than what they’re paying. For any individual, non-participating customer it’s difficult to trace exactly what’s going to happen.”