The September/October issue of the American Public Power Association's "Public Power Magazine" features an article that highlights Sagewell and our long-time client Belmont Light. We are excited to see that electrification is receiving more attention in the industry.
The article, From the ground up: Building electrification, explores the efforts of two public power utilities—Sacramento Municipal Utility District (SMUD) and Belmont Light—to drive electrification in their territories. Both cities are focused on decreasing their overall carbon emissions, and electrification of heat and transportation are vital aspects of those efforts. Additionally, customers will see cost savings by switching to electric, and the utility will increase sales and improve margins. The article also highlights the importance of marketing and customer outreach to increase adoption and impacts.
The last section of the article focuses on some of Sagewell's key insights into the importance of electrification and load growth. Marginal revenue is high in fixed-costs businesses like utilities. The cost of creating each additional kWh of electricity is very low, particularly when load is during off-peak hours. In one particular example we often use, a 5% increase in off-peak sales would nearly double the income of the utility. This increased income could be paid back to the community as "payment in lieu of taxes" (PILOT) or as an electric rate reduction for all customers.
Electrification is the way for utilities to reduce carbon emissions, save their customers money, and turn back declining kWh sales.