MY TURN: The bottom line on encouraging customers to use less of your product

NIPSCO has put the pedal to the floor in the last four years with the launch of several new customer programs – quickly going from zero to more than a dozen offerings that make it easy for businesses, schools, nonprofits, residents and other customers to save energy and money.

Yet, a question I am often asked is, "Why would any company promote ways for customers to use less of its product?"

Not many people recognize these counterintuitive program offerings provide a range of benefits to our customers and the company.

Giving our customers greater control over their energy consumption improves our customer relationships. By strengthening the local environment, we help retain and attract more people who want to live and work in this area. And, by contributing to local job and economic growth, we are able to help foster the long–term sustainability of strong and growing communities across northern Indiana.

Let's dissect the first and most apparent benefit – improving customer service. Plain and simple, giving customers the tools to lower their bills equates to happier customers.

NIPSCO's operational costs and revenue stream are embedded in the "delivery cost" portion of your bill, which is a relatively flat cost month–to–month, making up a minor percentage of overall bills during the winter months. Conversely, the gas commodity costs, typically accounting for the largest portion of a monthly bill, are a direct pass–through, with no mark–up by NIPSCO. So, any efforts to improve energy efficiency will help keep money in your pocket.

The second benefit – strengthening the local environment – is primarily the result of conserving the natural resources required to provide the energy we rely on each day. The reduction in carbon emissions associated with both the generation and ultimately the consumption of electricity pairs nicely with the ongoing investments we've made, and continue to make, to improve air and water quality.

But, the environmental benefits don't end there. Our appliance recycling program, for example, pays you $35 for your old, inefficient refrigerator or freezer. We'll haul it away for free and the parts for each unit are dismantled and recycled in an environmentally conscious way. A compact fluorescent light (CFL) bulb discount program is also available to give an incentive to customers to purchase CFL bulbs. These bulbs last longer, use less energy, and save you money in the long run. This translates into fewer bulbs in the trash and lower emissions from our power plants. Every little bit counts.

Contributing to new job creation and economic growth – the third benefit – can be both directly and indirectly attributed to the expansion and adoption of these programs. Each of these programs provides upstream benefits to the appliance manufacturing, engineering and new home construction sectors as older, less efficient appliances are replaced with new, more efficient ones. The availability of incentives to purchase and install these more efficient products and build more green homes and businesses continues to drive growth.

Additionally, each program has created new jobs that didn't exist prior to their availability. As an example, the home energy audit program – which is now being offered statewide as part of a unique partnership with other utilities, the state, and other consumer groups – required the addition of trained energy inspectors to conduct the home audits and assess customers' levels of energy efficiency. Pike Research forecasts that the home energy auditing business market will nearly triple in size, becoming a $23.4 billion industry by 2014, thus increasing the overall number of locally–based jobs.

Finally, these programs help our customers and the company, as the energy saved can be viewed as a low–cost resource alternative that can help defer the construction of a new power plant. While the expected growth in energy demand will ultimately require new energy resources, our energy efficiency programs can help lower this trajectory and slow the need to build.

The bottom line is that encouraging our customers to be more energy efficient will offer substantial benefits beyond the basic opportunity to lower your bill. And, while NIPSCO continues to explore new ways to help customers save, the existing programs have already demonstrated their ability to improve the environment, support economic growth and provide better customer service – three important business objectives at the top of our list.