Omaha By Design: Omaha, Only Better

by Ken Mayer

Seems to me there are a couple of major justifications for energy conservation and sustainability. One is concern for the future of the planet. Regardless of what you think about human activities and global warming, there remains the specter of having to break off a piece of air before you breathe it.

The other approach is more practical and financial. Simply put, we should not waste if we can avoid it, and we have a right to expect a return on our conservation efforts.

I tend to be more in the latter category. Not that I don’t have concerns about the future of humanity on earth. But since I don’t have kids, it doesn’t cause me to lose any sleep. Though I do remain baffled by parents and grandparents who aren’t more worried, but that’s another column.

As we have endured a pretty nasty winter, I’ve had a bit of a bad dream about a cold front moving through my personal finances in the form of rate hikes by our local utilities.

Back in October, I wrote about my personal energy conservation efforts amounting to more than a 30% reduction in natural gas use. I figured that was a good start on getting a decent return on my investment in insulation, windows and furnace despite the bad timing of the upgrades causing me to miss out on the energy tax credits.

Then I read that the OPPD approved a 4.9% rate increase, MUD increased rates by about 1.2%, and the city council rejected a request from a homeowner asking to install a wind turbine. The OPPD increase alone has caused me to rethink the timing of upgrading our air conditioning condenser to increase efficiency.

The chill that came over me was the prospect of perpetually being in competition with the utilities and government to simply stay even.

Both OPPD and MUD, to their credit, are trying to hold the line on costs. OPPD cut more than $20 million in planned spending this year and more than $20 million from next year’s budget. MUD’s rate increase was scaled back to 1.2% from the 3.3% originally requested, and the proposed construction of a $16.5 million building project is under scrutiny. Omaha by Design is working with the city to draft new environmental rules for inclusion in the master development plan that will accommodate new green technologies.

Still, this is cold comfort, in my opinion. The demographic and economic realities should, in theory, mandate constant or decreasing utility rates. Omaha’s population continues to grow modestly through births, migration and annexation, but without significant numbers of new hookups, energy use won’t grow much. So, as energy is conserved and use decreases, the only way to maintain revenues will be to continue to raise rates.

Likewise, as we become more energy efficient and alternate sources are implemented, particularly at the residential level, energy demand will also decrease and that, in turn, will decrease the quantity and costs for the raw materials that are used to produce the energy needed to serve demand. Lower demand for commodities like gas and coal usually means lower prices.

My bad dream is that, 20 years from now, I may have made a lot of low ROI improvements simply because rates keep increasing. Because Nebraska’s utilities are public, they tend to function as governmental subdivisions. Like all government entities, they will resist downsizing and cannot change their stripes by offering other services to shore up revenue.

Given the recent bad behavior in and out of government, I would feel a whole lot more comfortable if I had confidence that my investments in conservation had a reasonable chance of earning a long-term return and keeping me out of competition with my own city.