Sen. Perata on energy conservation rebates

Date: Mon, 26 Feb 2001
From: "Perata, Don" <Don.Perata [at] sen.ca.gov>
Subject: Energy Upate (Vol. 10)

Today, I unveiled legislation to return $1 billion in state surplus revenues to consumers for conserving energy.

While I am co-authoring legislation to establish long-term conservation
programs aimed at promoting energy-efficient appliances and increasing the use of alternative power, I believe that the inevitable summer electricity shortage requires a plan to encourage immediate conservation.

Under my legislation, the state would pay consumers $.10 for every kilowatt
hour (kwh) conserved, in addition to the average $.12 per kilowatt hour the
consumer already saves for not using that energy to begin with. Total
savings would amount to $.22 per kilowatt hour.

The benefits of this legislation are numerous. Most obvious, it makes more
sense from both a fiscal and a conservation standpoint to pay consumers not to use power, rather than buy power from price-gouging generators. The state is paying at least $.25 per kilowatt hour - nearly twice the market rate - for electricity on the spot market. At times, the price has been as
high as $.35 kwh. Prices will increase during the summer months when demand
is higher. Under my proposal, the state pays consumers less to conserve than
it would cost to purchase the power from generators. Most experts believe
that, without conservation, there will not be enough energy available this
summer to avoid blackouts. The effect on our economy will be serious and
long-standing.

This conservation plan will also reduce prices. Reduced need for
electricity generation would reduce the environmental impact, and could
potentially reduce the cost of gas, which is often used to produce
electricity. Finally, under this proposal, California dollars would remain
in the state, benefiting the state's own economy, rather than fortifying the
economies of states like Texas or North Carolina, where out-of-state
generators are located.

For more information on this legislation, please visit my website at
http://democrats.sen.ca.gov/senator/perata. As always, I value your
comments and suggestions.