How One Energy Company Is Going To Cut Consumer Costs—And Emissions

“Isn’t it marvelous outside today?” a friend remarked to me as we casually strolled around our neighborhood last week. I told her that I agreed, though a cloud of remorse soon fell over both of us. There we were, standing outside without coats or long sleeves in the middle of February in Ohio. The delight we felt over the (may I say, surprisingly?) warm weather was diminished by the realization that we were partially the cause of it.

According to the World Meteorological Society, this past year was by many measurements the hottest year on scientific record, yet it also appears to be part of a frightening trend. The National Oceanic and Atmospheric Association (NOAA) claims that sixteen out of seventeen of the hottest years on record occurred since 2000. Michael Mann, a prominent climate scientist at Pennsylvania State University, said that “[o]ne could argue that about 75 percent of the warmth was due to human impact.”

The political debate over climate science is often framed in terms of a clash between environmentalists and energy companies. For instance, the recent nomination of Secretary of State Rex Tillerson, a former CEO of Exxon Mobil, came under intense criticism by environmental groups who saw his appointment as a threat to environmental policies. Rhea Suh, the president of the Natural Resources and Defense Council (NRDC), said that “[h]anding over US global policy to Big Oil is an epic mistake.”

The harsh words exchanged between these two sides over the issue of climate change are somewhat understandable. The relationship almost appears to be inherently adversarial: environmental groups and regulators see energy companies as necessarily at odds with their mission to curb pollution. However, this sort of Manichean framing fails to consider the wide potential for synergy existing between the different sides.

A few weeks ago, the Public Utilities Commission of Ohio (PUCO) approved the latest phase in a plan put forward by American Electric Power (AEP) to substantially reduce pollution while additionally saving its consumers money. The plan is part of a project called “gridSmart,” which is part of AEP’s initiative to implement grid modernization across the state of Ohio. This latest installment of gridSmart allows AEP to install advanced metering infrastructure (AMI), or “smart meters,” that will allow individual consumers to track and manage their everyday energy usages.

Evidence already suggests that smart meters will reduce consumer costs and help the environment, because it will encourage individuals to save energy when they do not need it. Additionally, by monitoring energy consumption through smart meters, AEP will no longer need to deploy its representatives to check on individual meters every month, which will reduce the miles driven by AEP workers by 440,380 annually (the equivalent to taking 40,000 cars off the road). This new operational efficiency is therefore a boon to AEP, the consumer, and the environment.

The PUCO decision to authorize the AEP plan was made possible thanks to a settlement with a number of individuals, including representatives from a number of environmentalist groups. One of these groups, the Environmental Defense Fund, lauded AEP’s project for putting forth a “forward looking and cost effective plan.” The authorization of AEP’s project demonstrates the ability for energy companies to work alongside conscientious advocates of regulation, while advancing the goals of every group.

This last year may have been the hottest year on record, but it is refreshing to hear that innovative solutions are being put forward by both energy companies and environmentalists. As the new presidential administration begins to structure its environmental policies, I would encourage it to take a look at this latest PUCO decision. Elements of AEP’s gridSmart plan were motivated by former President Obama’s so called “Green Button” initiative, which calls for greater consumer accessibility to individual energy consumption data.

AEP has demonstrated that market-based methods can be successful in tackling climate change. New technologies also make the job easier. Let us hope that we will see more companies follow AEP’s lead to help the economy and our planet.

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