Cutting Summer Cooling Costs With Special Programs

Cutting Summer Cooling Costs with Special Programs From Your Utility Provider

Summer is coming, and in many parts of the country, that means higher electric bills due to air conditioning.  If you’re in an area that uses air conditioning, take some time now to see if your electric provider has any special programs to cut costs.

For example, my energy company has two different programs:  Peak Rewards, and Smart Energy Rewards.  Your provider may offer programs similar to either or both of the these programs.  They will have different names and different details, which is why you have to do some investigation.

User Controlled Programs

Smart Energy Rewards is an example of a user-controlled energy usage reduction program.  People who are enrolled in the Smart Energy Rewards program receive notifications when energy demand is particularly high.  If they choose to reduce their energy consumption during that time period, they receive a cash credit on their electricity bill.  For example, let’s say July 24th is very hot, and the electricity provider knows that they’ll have high demand.  They send out text messages and emails asking customers to reduce their usage between 1 and 7 pm on that day (your hours may vary.)  If customers choose, they can make smarter energy choices such as running their dishwasher at night, unplugging unused appliances, and turning up their thermostat a few degrees.  My provider pays a cash credit of $1.25 for every kilowatt hour that your usage is lower than average.

Utility Controlled Programs

Peak Rewards is an example of a utility provider controlled energy usage reduction program.  Customers who are enrolled in the Peak Rewards program allow the utility company to install a control on their air conditioning system, either through a switch on the air conditioning unit itself, or with a special thermostat.  On high energy usage days, the electric company can control the amount of air conditioning that runs, within the guidelines set up with the program.  For example, my company offers three levels of participation:  50%, 75%, and 100%.  With 50% participation, the energy company can turn off my air conditioning up to 50% of the time during a peak day.  75% and 100% work the same way.  We used this program the last time we lived in this area, and we selected the 75% level.  There were only 2-3 peak energy days each year, and I never noticed the reduction in air conditioning usage.  (I think the system worked harder during the 25% of the time that it was turned on.)  In return for this power, the utility company provides bill credits each summer.  In my area, those are correlated to the program you choose:  $50 per summer for 50%, $75 per summer for 75%, and $100 per summer for 100%.  (My company also offers a first-year bonus in the amount of the yearly credit, so double savings the first year.)

In some areas, these programs are run by 3rd parties.  I don’t completely understand why, but it is true.  For example, in the San Diego area (and possibly other parts of California), there is a company called OhmConnect that offers payments for user controlled energy usage reduction like my company’s Smart Energy Rewards.

Many energy companies have developed creative programs to encourage their customers to use less energy during the hottest and highest demand days of summer, and most of them offer some sort of financial incentive to participate.  Take some time today to learn your options, reduce your usage, and keep your bills down this summer.

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.