There are nearly 3,000 utilities that sell electricity or natural gas in the United States alone. They range from large investor owned utilities that serve millions of customers to publicly – owned municipal utilities that serve metropolitan areas to electric cooperatives that serve a huge percentage of rural customers. Despite this complexity, there is one thing that many of these utilities offer that every commercial and industrial energy user should know about and strive to take advantage of – rebates for investing in and improving energy efficiency.
Utilities offer rebates to incentivize customers to behave in certain ways; think of them as a market signal. The goal of all rebate programs is for the utility to measurably improve its operating efficiency in serving the needs of its customers, and to accomplish this in a less expensive way than borrowing money to build new generating or transmission capacity. The rebate programs are designed to meet specific system improvements or to minimize the need to buy power or gas from other parties when it is most expensive. The programs are reviewed and approved by whatever regulatory body governs the utility, and results and costs are carefully tabulated over time to determine their cost effectiveness.
In general, the rebates provide cash to customers who invest in energy efficient buildings, equipment, and systems, and are intended to reduce the capital required for this investment to an acceptable level. Where do the funds for these rebates come from? They are generated by collecting a small amount of money from every energy end user in the rate class for which the rebate is offered. It’s like a poker game, where everyone antes. Whether you know it or not you are likely paying this ante now; the question is whether you understand the rules of the game well enough to play and win.
So now you should understand why utilities offer rebates, and what they are hoping to accomplish with them. In the next installment in this series, we’ll address how you can leverage them to drive ROI in your energy efficiency program.
Burton Energy Group provides integrated energy management solutions for the commercial sector. Their services include strategic planning and risk management, utility bill management, energy procurement, energy and water conservation, utility budgeting, energy audits, sustainability programs, and management reports. Burton Energy Group represents owners and managers for some of the most respected companies in the commercial sector. Visit the company’s website at www.burtonenergygroup.com for more information.