In a Twist on their Usual Profit Scheme, Utilities Trying to Push the Dollar-and-Cents Value of Conservation

Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

Utilities Unite in Energy-Conservation Push

• Summary: A broad coalition of utilities, government regulators and consumer advocates have come together to produce a National Action Plan for Energy Efficiency, which seeks to put regulations in place to reward utilities for promoting conservation. Currently, utilities in most states lose revenue for conservation. The announcement came on the heals of the week ended July 22 was, a record week for electricity use in the U.S. do to a national heatwave, during which utilities furnished consumers with 96,314 gigawatt hours of electricity, or nearly double the consumption logged in 1982, the baseline year for a utility consumption index by the Edison Electric Institute, a leading industry trade organization. Conservation practices are urgently needed to reduce stress to the electric grid, relieve upward pressure on electricity prices and cut emissions from power plants and the plan is to reimburse utilities who push conservation, on the regional and federal level. Among the coalition participants are 23 utilities, including several operating in multiple states such as Duke Energy Corp. (DUK), Southern Co. (SO), American Electric Power Co. (AEP), Xcel Energy Inc. (XEL), and others; state utility boards and regional grids in Arkansas, California, Connecticut, Iowa, Kansas, New Jersey and Vermont; and large retailers such as Wal-Mart (WMT).
• Comment on related stocks/ETFs: For more on the implications of the recent heat wave on the companies mentioned in this piece, see David Jackson's Heat Wave Raises Power Consumption -- Implications. Also, note the related recent conference call transcripts for American Electric Power and Southern Co, as well as Rob Zenilman's recent Chart: Utility Stocks - Annual Earnings Growth.