Will high pump prices affect utility customer behavior at home?

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Will high pump prices affect utility customer behavior at home?

With $5.00 gas a reality in some parts of the country, the pain at the pump is starting to make consumers more aware of the energy they use while driving, and likely will change some wasteful habits. People already are trying to economize—not driving when they can avoid it, planning necessary trips more efficiently, and taking greater advantage of public transportation. And some might buy—or at least consider buying—a more fuel-efficient vehicle, or even an electric vehicle (EV). But how much will such consciousness-raising extend to other forms of energy consumption—both at the office and at home? And does the situation present an opportunity for electric utilities?

The trend toward greater awareness of energy issues is as slow as it is inexorable, but the barrage of messages, both sublime and subtle, eventually will get through to consumers and cause significant shifts in behavior. Indeed, the messages are inescapable.

Increased attention to the price of gasoline fuels a resurgence of interest in battery-powered vehicles. While sales have been slow to date, both the awareness and popularity of plug-in hybrids (PHEV) and battery EVs is growing constantly. Annual sales are just over 3 percent of all vehicles sold in the U.S. today, and analysts predict that continual advances in battery technology will steadily increase EV market share.

The use and price of oil—in a barrel or at the pump—has been an issue of national importance for decades, and it rises in urgency along with prices. Our national security depends on energy independence, or so politicians keep telling constituents. The Obama administration instituted new corporate average fuel economy (CAFE) regulations that will nearly double mileage to 54.5 miles per gallon (MPG) by 2025, while other politicians continue to advocate more exploration and drilling to lower the price at the pump.

Then there are all of those stickers reporting every vehicle’s MPG and every appliance’s annual power consumption and cost. Consumers are being told to look for the ENERGY STAR label, and a growing percentage actually do.  And whether one loves or hates them, compact fluorescents and LEDs are replacing Thomas Edison’s incandescent bulbs nearly everywhere. This change is providing consumers with a primer on Watts and lumens, further indoctrinating them to language of energy.

Last but not least is the debate over global climate change. The science, despite claims to the contrary, is solid, and people are becoming increasingly aware of their own carbon footprints. However, the costs of dealing with this problem, one way or another, receive little attention. A tax on greenhouse gas emissions—or the technology to capture and sequester them—will be expensive, and will undoubtedly drive up the cost of electricity. So what’s a utility to do to inform its residential customers about their options for saving energy and money?

By Louis Szablya

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