National Grid wants $220M program for upstate to offer incentives for home upgrades

By LARRY RULISON, Business writer at TimesUnion.com
First published: Tuesday, May 6, 2008

ALBANY -- National Grid is proposing a $220 million energy-efficiency program in upstate New York that would save customers $350 million.

The three-year program, which must get approval from the state Public Service Commission, would cost the average residential customer about $3 a month on combined gas and electric bills, although the exact amount will be lower than that in the first year and rise the next two.

In return, National Grid would offer customers a wide variety of incentive programs to buy energy-efficient appliances and make home upgrades such as adding new windows and roof insulation.

Based in the United Kingdom, National Grid is the dominant utility in the Capital Region with about 1.5 million customers in upstate New York.

National Grid's plan is required by a PSC initiative to reduce energy consumption in the state by 15 percent by 2015. The idea was first proposed by former Gov. Eliot Spitzer, and is now embraced by Gov. David Paterson.

"National Grid is doing its part in achieving this goal," said Tim Stout, National Grid's vice president of energy efficiency.

National Grid outlined the plan in a filing made with the PSC April 30, and held a conference call with reporters Monday. The company wants the plan approved quickly so it can get under way by October.

Although customers have to be proactive to reap economic benefits from the program, the potential savings are large -- especially for people who own their own homes. For instance, National Grid will pay 75 percent of the cost of upgrading insulation and sealing in a home, up to a total of $5,000.

To illustrate the impact energy-efficient moves can have on electric bills, National Grid pointed out that replacing five traditional incandescent light bulbs with compact fluorescent ones can reduce a home's electric bill by $9 a month.

National Grid spokesman Patrick Stella said he believed the program would provide retailers with incentives to lower the cost of such bulbs, which are priced higher than incandescent bulbs.

Under the current billing structure, when National Grid customers use less electricity, the company makes less money.

Under this new proposal, National Grid will recover lost revenue through the $3 charge to customers, and will share in the savings that customers realize if it meets certain goals.

That way it's in the best interest of both customers and the company to reduce energy usage.

"This is a shift," Stella said. "It's a shift in thinking."

Larry Rulison can be reached at 454-5504 or by e-mail at lrulison@timesunion.com.