Why winning some political battles could cost you the war

Why winning some political battles could cost you the war

Based on the results of last year’s elections, and what we’re seeing over the past few weeks, it looks like 2015 will be a particularly contentious year in American politics. And the epicenter of the battlefield could be energy policy. Fresh off election wins, Republicans immediately introduced bills to block regulations related to fracking and expand offshore drilling.

Many looming battles will likely be related to electricity production (particularly via coal-fired power plants) and air quality. These include the Cross-State Air Pollution Rule (CSAPR), the Mercury and Air Toxics Standards (MATS), Regional Haze Program, and Section 111(d) (the Clean Power Plan), just to name a few. We can expect legal challenges, with politicians lining up against each other, joined by the utility industry, environmental advocates and even citizen groups.

There are battles brewing within individual states as well, with many focused on two issues: reducing or eliminating residential solar credits and/or energy efficiency requirements. While the 30% federal investment tax credit for solar is not set to expire until the end of 2016, some states like Florida, Arizona and Indiana have made such moves, often against intense opposition by environmental groups. These bills and rulings also include the elimination of energy efficiency goals/standards, or in the case of Indiana, allowing utilities to determine such goals.

Throughout the year ahead, utilities must carefully consider their stance on these issues, keeping in mind how their positions on renewable energy, energy efficiency, and air quality mandates and targets can impact their customers’ perceptions and their overall reputation.

Shelton’s recent Energy Pulse study shows broad support for both energy efficiency rebates and incentives and renewables – particularly solar. Nearly two-thirds of respondents believe it’s important that their utility offer energy efficiency programs. In addition, 60% said it’s important that their electric utility make an effort to generate or purchase at least some part of its power through renewable energy sources. And we know that Americans are particularly sensitive to air quality issues that could impact their health.

So if your utility is going to pursue restructuring rates for residential solar, make sure to pair that with announcements about utility-scale solar projects and/or plans to help increase residential solar deployment.

In general, fighting against energy efficiency initiatives/mandates is problematic from a PR standpoint. But utilities can continue to show their support by facilitating/embracing connected home technologies. The recent Consumer Electronics Show exemplified the growing interest in connected home products, some of which help homeowners save on their energy costs. Getting involved in this market signals to your customers that you are technologically innovative and supporting ways to help them better manage their energy consumption. It can also get customers more engaged with you and help protect against encroachment from other industries.

Actions like these could show your customers that while you may be battling some issues, you are still fighting for them.

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Posted on

February 5, 2015

About the Author

Jim Lyza

Jim is a former contributor to Shelton Insights.

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