Utility tax could help save energy

If the Public Service Commission approves Progress Energy's request for a base rate increase of about 30 percent, local governments that charge utility and franchise taxes will get an unexpected boost in their tax collections next year. And St. Petersburg City Council member Karl Nurse knows exactly how he would like the extra revenue used in his city: Help pay for energy efficiency upgrades to homes and businesses that would reduce the use of electricity. While there are significant details and policy issues to work out, it is an idea worth exploring further.

Progress Energy already offers customers rebates of one-third to one-half of the cost of upgrades to for energy efficiency. But Nurse said if St. Petersburg used its additional utility tax and franchise fee money to create an additional layer of rebates, some of the less expensive upgrades such as window film, duct repair, additional insulation and energy-efficient lighting could be free or close to free. Even renters then could afford some upgrades to lower their electric bills.

Consumers who wanted to participate would get Progress Energy to perform a free energy audit of their homes to learn what upgrades they needed and the cost. Then the consumer would arrange for the work to be done by an approved vendor. Progress Energy's rebate and the city's rebate would be subtracted from the bill for the work. The electric company already has agreed to the plan, Nurse said.

Why not just return the additional tax money to electric customers and let them use it as they please? Nurse argued that his rebate plan has advantages over refunding a few dollars a month to customers, including boosting the inventory of energy-efficient buildings in the city, reducing the need for electricity, and creating jobs in the construction trades as homes are retrofitted. The rebates, Nurse said, would provide an incentive for residents to do "what is in our long-term best interest."

PSC hearings on Progress Energy's request have just begun, and any rate increase would not take effect until January. Nurse estimated that if the company gets approval for half of its request, the city would get an extra $3 million between January and the end of the fiscal year in September 2010.

On Thursday, Nurse will ask a committee of the St. Petersburg City Council to forward his idea to the city staff for study. No final decisions can be made, of course, until more details about the scope of the program are ironed out and the PSC decides the outcome of Progress Energy's rate case. But a study would provide some clarity about the issues involved, and it is a reasonable approach to an innovative idea that would promote energy conservation and provide residents an affordable way to reduce their use of electricity.