Why Doesn’t Eagle Mountain Offer Energy Rebates?

I have been asked by residents why Eagle Mountain doesn’t offer rebates for purchasing energy efficient appliances and lighting fixtures.  I would like to shed some light on the subject (pun intended).

Along the Wasatch front, there is one primary organization that has organized the rebate program, and that is UAMPS.  UAMPS is an energy provider.  They organize municipal power suppliers and invest in energy production projects, as well as in some distribution infrastructure.  The reason they organized the rebate program is because they want to stretch the capacity of their projects as far as possible.  This is a good thing!

Eagle Mountain is a member of UAMPS, and we get some of our power from that association, though this does not mandate that we participate in the rebate program.  So why don’t we participate in the program?  This is a valid question.  The answer is purely economic, and I would love to explain.

First let me explain the mechanics of why a municipal power provider would choose to enter in to a rebate program.  I’ll use a dramatic illustration to explain.  Let’s pretend the city of Las Vegas had a new hotel being built.  This hotel was designed with several fountains with big electric water pumps, hundreds of thousands of light bulbs for the hotel and parking structures, air conditioners running around the clock, and a larger-than-life electronic sign.  Lets pretend that portion of the city were being serviced with an electrical system that was capable of handling x load, and they were at 90% of x before the hotel came online.  The next question is naturally, how much load will this new hotel add to the infrastructure?

Lets say that the power needs of the hotel represent 15% of the load capacity of the power delivery infrastructure.  Well, the simple math tells us that the current system is at 90% capacity, and the new hotel would add 15% capacity, bringing the infrastructure to 105% capacity.  Think of this problem like connecting a drinking straw to the spigot of your house and trying to water your plants with it.  You need a lot more water than that drinking straw is able to deliver, so your garden suffers.

Lets now say that the power company has the responsibility to meet the needs of the growth and must deliver the power.  They only have a few options.  First, they could try to hook up the new hotel and try to manage the usage of the power users.  This overloading of the system typically results in brown-outs, or if the system is severely overloaded, black-outs.  This is not a good option.  The second option would be to build new infrastructure.  This means a new power sub-station, new transmission lines, new power generation sources, and new power supply agreements.  In short, this would cost a LOT of money!  The last option would be to find a way to stretch the infrastructure.  Here is where the rebate comes in.

The power supplier can not simply say, “You must use less power, or else!”  That wouldn’t work.  They could say, “I will pay you x amount of money in rebates to use more energy efficient fixtures and appliances.”

Coming back to our example, lets say that the power supplier estimates that they could cut the power load demand by 7%, by incentivizing everybody to use more efficient fixtures.  Well, if we look at the power needs under our example of 105% capacity with the new hotel, and we subtract the 7% from the new fixtures, we can now fit the new hotel on the existing system without the threat of brown-outs or black-outs.  Viola!  Problem solved.  New infrastructure did not have to be built and the power supply company kept all the customers happy.

There is a cost to the rebates of course, but it is far less expensive than building a new power grid that would only be used at 5%.

The status of Eagle Mountain’s power grid is far different from that of Las Vegas, or any other major developed city.  Through use of bonds, Eagle Mountain has built infrastructure ahead of the growth, so that new houses or businesses will not need to wait while the power system is being built.  In short, we have excess capacity for transmission of power, as well as supply of power.  Because rebates are paid directly by the power company (the city of Eagle Mountain in our case), that would come out of the city’s enterprise funds.  There is no need to expand our system currently, and nothing to be gained economically by stretching the system.  This would be a net cost with no financial benefit.

How much would this subsidy cost the city?  That all depends on how many people apply for the rebate.  I have looked in to this with our Energy Director already, and the estimates fall somewhere in the range of $35,000.00, though this is admittedly not an exact science.  It could be far above that and it could be far less, though based on the participation rates from other cities, $35k should be in the ballpark.

As we go through the budget process I am happy to bring this before the council, though it is an additional cost to the budget and it won’t save our city any money under the current circumstances.  I hope that all makes sense and I’m happy to answer any questions if you have them.

By the way, we still encourage you to use energy efficient appliances and fixtures!  While it may not benefit our infrastructure, it will certainly benefit your pocketbook in the long run, and the overall health of air breathers everywhere!  I’d say that is a good thing.

5 thoughts on “Why Doesn’t Eagle Mountain Offer Energy Rebates?

  1. Friendly tip: if you shop Costco sometimes they offer a manufacturer rebate as well as I believe a Rocky Mountain power rebate on light bulbs. I’ve seen it at sandy & lehi costco. There will be a sign above the lights showing the discount, but they do not advertise it in the coupon books. Don’t have to live in that city to get it either.

  2. Thanks you for explaining this. I appreciate your willingness to give us background on the decisions that are being made in our city.

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