In 1897, when Samuel Insull engineered the first franchise between the city of Chicago and the Commonwealth Electric Company, he could not have imagined that two contracts later a major issue would be what is loosely called conservation. When the city signed that first contract with Insull, and even in 1947, when Chicago renewed the exclusive franchise held by the successor Commonwealth Edison Company, electrical power was an exciting, expanding industry. Today, electricity is a drain on the economic resources of the nation–especially in Chicago, where rates are among the highest in the country–and the plants that produce it are a scourge on the environment.
A 1988 assessment of excess capacity during the peak summer months that was made by the North American Electric Reliability Council, an industry-supported organization, found that Com Ed had produced 21.8 percent more power than it needed in its service area in July, 26.1 percent more in August, and 28.9 percent more in September. The industry considers 15 percent to be a good safety margin.
The service model posits a rate structure that allows a utility to earn a fair return on its investment, with some of that investment directed to finding energy by conserving it. When the public installs a variety of conservation measures in its homes, offices, and factories, less electricity is used and bills are likely to go down, even if rates go up. And since less electricity is manufactured, the environment gains. Obviously, Com Ed would stand to lose some of that 19.5 percent profit by encouraging conservation. However, Ralph Cavanagh, an energy specialist with the National Resources Defense Council in San Francisco, points out that “these conservation methods offer very substantial net benefits to the utility as they replace new additions to capacity in the Edison system.” New England utilities estimated that one massive conservation project would cost 6 cents per kilowatt hour saved, compared to a cost of 8 to 9.5 cents per kilowatt hour of electricity produced by building new plants.
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ERC said, “These programs do not reflect the state of the art in the industry, either now or when they were proposed.” Furthermore, Edison’s efforts to minimize expenses “limited their successes.” The pilot programs “lacked clear, measurable DSM goals,” and “reflect inadequate recognition of market realities.”
In preparing itself to recommend a course of action to the mayor and City Council on the expiring Com Ed franchise, the Mayor’s Energy Task Force has put much of its emphasis on conservation, seeing this as the most effective way to cut electric bills, reduce waste, and protect the environment while still serving the city’s growing need for electricity. A steady stream of energy conservationists has appeared before the task force. Anne Hallett, cochair of the task force and a member of the Chicago Energy Commission, says, “There’s a rich range of technologies on the drawing board today, in addition to all that we already have, so life may very well change a lot over the next five years. We have to have a much shorter franchise so that we can review the issues again in, say, five years, in the light of new technology.” In July, the task force passed a resolution that said, “Demand Side Management and equitable distribution of benefits thereof should be a principal component of any new energy supply arrangement for the City of Chicago.”
Energy-saving home refrigerators have been on the market for some time, but there has been no serious effort to market them in Chicago. In states such as Washington, Oregon, California, and Wisconsin, however, utilities pay rebates to consumers who buy low-energy household appliances. During a pilot program, Com Ed did offer after-sale rebates of $30 to $50 in Cook County for the purchase of certain high-efficiency refrigerators that sell for about $700. About 8,000 rebates were handed out.
Ralph Cavanagh of the National Resources Defense Council is urging that the city’s new franchise agreement with Com Ed require the utility to give the bulbs away door-to-door to ensure that they enter widespread use. Cavanagh says the utility would pay one cent per kilowatt hour less to save electricity in that way than it would to produce it in a fossil fuel plant.
