In the report, the Harrisburg-based public policy group said demand for electricity will increase 1.5 percent annually. If new power plants are built to meet that demand, the cost would be about $17 billion. "Pennsylvania is at a clear fork in the road," said John Hanger, president and CEO of PennFuture.
"If we do nothing, as our energy appetite increases, our state will have to make room for at least 12 new 300-megawatt power plants." He hopes the Legislature, which has begun a special session on energy, will adopt a proposal in Gov. Ed Rendell's energy plan that utilities first use conservation to meet increased demand for electricity.
Requiring utilities to install "smart" electric meters that can do time-of-use pricing is another part of the governor's package. The report was written by John Plunkett, a partner in the Green Energy Economics Group in Vermont. Pennsylvania could hold electricity usage close to its current level by implementing energy efficiency and conservation measures, he concluded.
"Both Vermont and California have successfully implemented such programs, and their results can be duplicated here," Plunkett said. The report says tougher construction standards for new homes and office buildings could achieve positive results in increasing energy efficiency.
Other suggested methods are replacing central air-conditioning units with more efficient units. Replacing commercial lighting with more efficient lighting can reduce electricity consumption in buildings by 15 percent to 20 percent, the report says. "Smart" electric meters would enable customers to volunteer for time-of-use pricing, in which the price of electricity varies throughout the day instead of being offered at a flat rate.
Hanger has long pushed for this sort of demand-side management program. He said electric consumers will pay for either a construction or a conservation program, but conservation would cost less.
Another question to be resolved would be who should administer a demand-side management program - utilities or an independent administrator. The report suggests utilities in Pennsylvania are ill-suited to administer an efficiency program because of lack of experience and a conflict of interest.
Michael Love is executive director of the Energy Association of Pennsylvania, which represents electric and gas utilities. He said he doesn't think utilities have a bias against conservation. He agreed with the premise of the report - that conservation and energy efficiency would save money. But he couldn't say whether the $9 billion to $12 billion in savings predicted by Plunkett would come to pass.
All members of the association accept the need for efficiency and conservation, he said. Love said it will be 15 years before new nuclear plants will come on line, and about the same period of time before carbon dioxide sequestration technology makes large, new coal-fired power plants feasible. Use of natural gas to produce electricity is not in the best interests of the country, Love said.
"The real trick is getting people to accept change," he said.