This guest column by Seth Heald originally appeared in the Rappahannock News on July 18, 2013.
A little-noticed announcement earlier this month about an energy-efficiency pilot project in South Carolina could mean good news for the hundreds of thousands of Virginians who get their power from electric cooperatives.
Both South Carolina and Virginia have numerous electric cooperatives that provide power to customers in rural areas (and these days some no-longer-rural areas). These co-ops date to the 1930s, when Congress passed the Rural Electrification Act to provide loans and establish co-ops to help bring electricity for the first time to people in areas where investor-owned utilities were unwilling to go.
South Carolina’s “Help My House!” program showed that a creative financing measure called on-bill financing can help co-op members pay for efficiency upgrades to their homes that reduce their electricity consumption by more than a third on average. The program paid for contractors to upgrade heat pumps, add insulation, seal ducts, and take other common-sense measures to make customers’ homes more comfortable and energy-efficient.
With on-bill financing the South Carolina co-op members didn’t have to pay upfront for their home improvements. Instead they pay over time on their electric bills. And because electricity consumption was significantly down, customers’ total electric bills generally went down even with the loan-repayment charges tacked on. Efficiency contractors benefited too, which can create good local jobs.
That’s about as win-win as you can get—home improvements and lower electric bills, and more jobs, with no sacrifice of convenience or comfort. And once the loans are paid off, electric bills go down even more. The co-ops win too, because reducing customers’ electricity consumption on a broad scale can postpone or eliminate the need to build expensive new generation plants.
Electric co-ops are owned by their customers, so the South Carolina co-op boards and managers deserve great credit for undertaking this new program, which promises so many benefits to their member-owners.
So why can’t we do this here in Virginia? The short answer is we can. And we should. Soon.
But some Virginia co-op managers and board members have been reluctant to move forward aggressively on efficiency programs, preferring the old-fashioned method of building more generation capacity rather than helping members make efficiency upgrades. And some Virginia co-op managers and boards seem to worry more about their total revenues than about helping their customers lower their bills. Some co-op boards apparently are unconvinced that efficiency measures on a broad scale can benefit not only customers but the co-ops themselves.
That’s begun to change in Virginia. My co-op has launched an efficiency pilot program. But Virginia still has a lot of catching up to do to achieve the remarkable results that South Carolina co-ops have now shown are possible.
One thing essential to South Carolina’s success was 2010 state legislation that allowed on-bill financing, including having the loan obligation “stay with the meter” if a customer sells his home before paying off the loan. The South Carolina co-ops pushed for that change and got it.
Virginia co-op members, and more importantly their influential managers and boards, should press our state legislators and regulators to make the changes needed to allow on-bill financing here. If anything can win bipartisan support in Virginia, it ought to be a simple measure that can help hundreds of thousands of hard-working electricity consumers improve their homes with no upfront costs while also reducing their power bills.
Seth Heald, of Rixeyville, is a lawyer and a member of Rappahannock Electric Cooperative, which is one of the Virginia co-ops that co-own Old Dominion Electric Cooperative.