You might think that there isn’t much difference between the utilities within each state’s borders (I know I didn’t). We give them money, and in return they make sure we have working electricity. Seems simple enough, right? How much more could there be?
As you may have guessed since this is an article and not a single paragraph, there’s a lot more to it than that. But, rather than compare every single utility within each state, we’ll focus on the differences between Georgia Power and Alabama Power which are both owned by Southern Company.
Specifically, we want to examine the differences in terms of how much money each company spent on energy efficiency compared to how much energy they are saving through those programs. But first, a little background information.
Each year, most utilities spend money that is supposed to go towards incentive programs that help customers save energy.¹ Most utilities channel a portion of the money that we pay them into energy efficiency programs, often being forced to do so by regulators because they don’t normally like selling less of their product. These programs exist to incentivize consumers to make upgrades on their homes and businesses, which is much cheaper than building a new power plant.
But not all utility energy efficiency is created equal and we have to take a look at the reality on the ground.
As of 2019, Georgia Power spent $16.5 million dollars, through various programs, on residential customers if they invested in cleaner energy efficiency for their homes. For commercial customers, Georgia Power spent $24.8 million dollars on energy efficiency. With that money, residential customers saved 95,124 megawatt hours (MWh), while commercial customers saved 295,968 MWh. That’s a total of 391,092 MWhs saved in 2019 alone! For comparison’s sake, the average Alabama home uses between 1 and 2 MWh per month.
Since Georgia Power and Alabama Power are owned by the same parent company, wouldn’t it make sense for Alabama Power to offer similar opportunities to their customers? Sadly, neither Alabama Power, nor Alabama regulators, seem to think so.
Unlike Georgia Power, Alabama Power only spent about $3.3 million dollars (of which just ~$5,000 were for incentives) on residential energy efficiency, and $84,000 for commercial customers. With that paltry sum, residential customers only saved 5,486 MWh and commercial customers just 192 MWh.
Why does Georgia Power spend so much more than Alabama Power? The price that consumers pay each company is fairly similar. So what’s going on here?
It comes down to monopoly control. Utilities do not want you to save energy, they want you to buy energy from them. It is the job of the regulators at the public service commission to protect consumers from monopoly abuses. Some regulators force utilities to invest in lower-cost energy efficiency since a monopoly would not do so on its own. Some regulators have even gone so far as to change the way utilities are paid in order to give the utilities a financial incentive to promote energy efficiency. Neither of those things happen in Alabama.
Part of it is that Alabama Power wants to build power plants, because they earn profit from how much new construction they do, regardless of if the construction is needed. In order to justify new construction, they need you to use more energy, not less. Don’t forget that Alabama Power customers are now on the hook for more than $1 billion in new gas plants…
I digress. The point is that we are giving utilities an arm and a leg, but we aren’t getting out what we put in. We’re already paying enough on our utilities bills to work towards the future and switch over to clean energy. Georgia, though they’ve just begun, has the right idea, and even they are behind the curve compared to many other areas of the country. So why is Alabama Power falling further behind? And why are we letting them get away with it?