BG&E's proposes rebates to promote energy saving

December 18, 1991|By Kim Clark

Starting early next year, Baltimore Gas and Electric Co. will pay homeowners up to $700 for buying high-efficiency heating and cooling equipment for their houses, if the state approves its latest conservation plan.

Utility officials, environmentalists and consumer groups have agreed that the Baltimore utility should go ahead with three new conservation programs, including rebates to homeowners.

But the negotiators said yesterday that they had reached an impasse in the long-running negotiations aimed at turning economic tradition on its head and giving BG&E an incentive to conserve (not sell) energy.

And they have asked the Public Service Commission, the state agency that sets electricity rates and utility profits, to settle the remaining disputes. One of the most important disputes is over how much of a surcharge will be added to bills to pay for the conservation programs.

The three new programs, which are expected to be approved by the PSC before the end of the year, will offer:

* Rebates of $80 to $200 for homeowners who replace inefficient gas boilers with more efficient ones. The rebates are supposed to cover the difference in costs between an average boiler and an energy-saving one.

* Rebates of $400 for homeowners who replace old gas furnaces with very efficient ones.

* Rebates ranging from $150 to $550 for homeowners who replace old central air conditioners with more efficient machines.

* Rebates ranging from $200 to $700 for homeowners who buy new, highly efficient heat pumps.

* Cash payments of up to $20,000 to developers who incur extra design costs when they start work on energy-efficient commercial buildings.

* Agreement by BG&E to pay the difference between standard equipment and whatever energy-saving equipment or insulation commercial developers install.

* Incentives for manufacturers to study and replace motors, compressers and other machines. BG&E will pay most of the study costs and most of the difference between a standard replacement motor and an energy-saving one.

S. Edward Hargest, the manager of BG&E's economic research department, said the company hopes to start paying out industrial incentives Jan. 15 and residential rebates by Feb. 15. It will gear up the commercial building program by May 1, he said.

The company also hopes to settle the remaining disputes over how it will get paid for the conservation programs and draft additional programs by next June, he said.

After about six months of negotiations, environmentalists, consumers and the utility have agreed that consumers should pay the costs of the program in the form of a small surcharge on their monthly bills.

But the parties could not agree on how big that surcharge ought to be, or how much profit BG&E should add into the surcharge.

No matter what the PSC decides, the surcharge is likely to amount to a few pennies a month for the average residential ratepayer and a comparably small amount for businesses, said Leonard Rosenberg, who heads the Building Owners and Managers Association of Baltimore.

Mr. Rosenberg, who was one of several customer representatives who helped negotiate the new conservation program, said the surcharge will encourage customers to reduce their energy consumption.

"He who conserves saves. . . . He who doesn't pays more," Mr. Rosenberg said.

He said he wasn't disappointed the negotiations had bogged down.

Early this year the PSC, concerned that the traditional profit motive was pushing utility companies to encourage wasteful use of energy, announced that it wanted to all Maryland utilities to negotiate a conservation incentive system with consumers, environmentalists and state officials.

The Potomac Electric Power Co., based in Washington, was the first utility to do so.

After negotiating with conservationists and consumers this summer, Pepco established a wide-ranging program that will provide free, energy-efficient light bulbs and free conservation fix-ups for small businesses.

But BG&E's negotiations have been more complex because BG&E has big industrial customers, such as Bethlehem Steel Corp., Mr. Rosenberg said.

Though the negotiations have been hard work, Mr. Rosenberg said the parties were not disappointed they could not reach total agreement and had to turn to the PSC for help in deciding tough questions.

"Not everything can be talked out around the table. . . . Sometimes you need a third party," he said.

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