Panel considers energy efficiency in natural gas

AP News
Posted: Nov 30, 2009 4:56 PM

The South Dakota Public Utilities Commission should adopt a general policy that makes it clear energy efficiency is a priority in regulating utilities that sell natural gas in the state, commission chairman Dusty Johnson said Monday.

The PUC met to consider its response to a federal law that established natural gas energy efficiency standards for consideration by states. The commission will vote on the issue later.

The PUC regulates investor-owned electric, natural gas and telephone utilities in South Dakota.

Johnson said he believes the commission should adopt a general policy recognizing that energy efficiency is a priority in the natural gas industry so commissioners and the public will continue the effort in the future. Energy conservation got a lot of attention in the 1970s, but not much was done about it in the next two decades, he said.

"I think making that clear to everybody is not without value," Johnson said.

The commission is less interested in passing specific rules on how to deal with energy efficiency when setting the rates that natural gas utilities can charge, Johnson said.

Johnson said the three utilities that provide natural gas in South Dakota _ MidAmerican Energy, NorthWestern Energy and Montana-Dakota Utilities Co. _ already promote energy efficiency. For example, customers might get a rebate if they buy more efficient furnaces or water heaters, he said.

Several members of the commission's staff said the PUC may not have to adopt a general policy supporting efficiency in natural gas utilities because conservation measures already are included in the companies' programs.

Staff member Brian Rounds said energy efficiency is different for electrical utilities because those companies have many choices of fuel for generating power. Natural gas only comes from wells, he said.

In a separate case, the PUC also is looking at the efficiency issue in electric utilities.

The federal law also lists rate-setting options as part of the effort to promote efficiency in natural gas consumption.

One of those options would impose separate charges on customers, with one charge for fixed costs such as a company's equipment and staff and another based on the volume of gas used by a customer. Commissioners said that option could cause problems by putting too much of the cost on customers that use small amounts of natural gas.