Legislation that Gov. Ed Rendell signed recently requires the utilities to cut annual electricity usage by at least 1 percent by May 31, 2011, based on usage estimates made by state regulators, who can take into account a major anomaly, such as an unusually hot summer or a substantial surge in demand from a new user, such as a factory.
To ensure that utilities take the task seriously, the new law allows up to $20 million in penalties for failure to meet the benchmarks for electricity usage cuts.
"That certainly should get the companies to look at what's been going on around the country and adopt some of the more successful programs," said Sonny Popowsky, the state's utility consumer advocate and a supporter of the new law.
Utilities will have to find ways to get people and businesses to use less electricity on the hottest summer days, when electricity is the most expensive. That could include enrolling the owners of homes and office buildings in a program to temporarily switch off hot water heaters or air conditioners.
To cut electricity usage at all other times, utilities will have to get more fluorescent lamps into light sockets to replace less efficient incandescent bulbs.
They will have to figure out how to entice people to insulate their homes to save electric heat and replace old, energy-sucking refrigerators and other appliances with newer, more efficient models.
Electricity usage in the Pennsylvania and the United States grows at a rate of about 1 percent to 2 percent annually.
By May 31, 2013, utilities have to cut usage by at least 3 percent, as well as slash 4.5 percent from electricity usage during the 100 highest-use hours of the year.
Utilities said they are still in the early stages of developing proposals for how they will approach the mandate and did not want to speak about their specific plans.
They acknowledge that the law will force them to adopt new usage-reduction tactics beyond a raft of education programs they have, including Web sites that dissect each residential customer's electric usage and how to reduce it.
"It's a big number. It's going to take some changes in terms of what we do and what we've done in the past, but it's not an insurmountable number," said Scott Surgeoner, a spokesman for FirstEnergy Corp., the Ohio-based power company that owns Pennsylvania Electric Co., Pennsylvania Power Co. and Metropolitan Edison Co.
By July 1, each utility must file a plan with the Pennsylvania Public Utility Commission to achieve the cuts. The commission must hold a public hearing on each plan and has about four months to approve or reject them.
The electricity conservation efforts will be expensive, and utilities can bill ratepayers for that cost, up to 2 percent of their revenue from 2006. Utilities must be able to show that savings from the plans will pay their own cost at least within 15 years.