Following a nationwide trend by major utilities promoting energy conservation, Potomac Electric Power Co. has engaged in a widespread public relations effort aimed at wasteful Washingtonians.
Why is a company that sells energy asking people to use less? The answer, according to Larry B. Barrett, director of Pepco's "Waste Watchers" program, is simple -- recent high capital costs and interest rates have forced regulated utilities to reduce peak demand power requirements.
An industry analyst stated as long as the cost of borrowed funds remains well above the company's fixed rate of return of approximately 9 percent the utility will avoid building any new plants. Since all utilities must receive approval by area regulatory commissions on what rates they may charge consumers, building a new plant puts a utility out on a financial limb where recovering expendutures is dubious.
A Pepco spokesman said promoting conservation especially during peak demand periods such as the middle of a humid Washington summer can help a utility defer or perhaps cancel the costly construction of a new power station. The company has been actively promoting conservation since the Arab oil embargo of 1974.
Barrett said that conservation efforts over the past decade have enabled Pepco either to cancel or postpone construction of facilities that would have more than doubled its present capacity.
Pepco officials estimate consumers can reduce their energy bill from 15 to 20 percent by following the "Waste Watchers" program.
The U.S. Department of Energy, which also publishes an energy-saving guide, estimates that at current price levels, cost-effective suggestions can save the average homeowner from $100 to $500 a year.