By Janice Francis-Smith
Reporter
As printed in The Journal Record, September 23, 2008.

Paul Renfrow works for electricity utility OG&E, serving as vice president of corporate affairs. But he's also a customer, and he feels your pain.

"If you're like me, you open that bill and you're going, 'Damn electric company!'" Renfrow told the group gathered for an alternative-energy forum at the state Capitol on Friday, lightening the mood in an otherwise serious discussion about Oklahoma's energy future.

There isn't much the state Legislature or the average Oklahoman can do about rising fuel prices, but there are many ways to cut energy costs and it will take a combination of many efforts to secure Oklahoma's energy security, members of the panel agreed. The panel focused on the use of tax incentives to encourage conservation and the development of alternative energy sources.

"Ultimately, the market will choose the fuel," said Jason Smithermon, risk manager for the city of Oklahoma City, "but you can kind of push it."

Former legislator Clay Pope acknowledged that many lawmakers are hesitant to offer tax credits because they object to the idea of the government interfering with the free market.

"You want to be careful in ideological debates," said Pope. "Theory and reality often clash, and sometimes the government does have to push a little, with either a carrot or a stick. The purpose of tax credits is to encourage people to do something they otherwise wouldn't do because it's not profitable or they would just break even."

Many new energy technologies have not yet been developed to the point where they can be implemented cheaper than traditional fossil fuels can be used. But that day is coming soon, and when the price of traditional fuels forces Americans to curb their usage and look for alternatives, Oklahoma has to be ready, said several panelists.

The days of cheap, plentiful energy are over, said Oklahoma Deputy Secretary of Energy Bobby Wegener. Neither the United States nor the world as a whole is running out of energy, he said, but consumption of traditional energy sources is outpacing production.

Global demand for energy will continue to grow at a staggering pace into the future, as China and India - which together account for one-third of the world's population - grow their economies. Now that those and other developing countries are competing for fuel on the global market, supplies of oil, natural gas, coal and other energy sources are becoming ever more precious.

The easiest, cheapest and most obvious way to reduce energy costs is to use less, said Wegener.

"Efficiency is a resource, not a sacrifice," he said. "It's the lowest-hanging fruit available." Companies like OG&E are working to help customers conserve energy, a practice known as demand side management, or DSM. For instance, OG&E offers new meters that help customers see how much the electricity they are using costs at different times of the day. The information may help alter behavior, if a customer decides to run their washer and dryer later in the evening, after peak consumption hours, for instance.

Wegener said the state needs to give OG&E and other utilities an incentive to encourage conservation, perhaps in the form of tax credits.

"Under the current structure, the only way a utility can make money is by selling electricity," said Wegener. "We cannot ask the utility to do a disservice to its shareholders." Already, the Oklahoma Corporation Commission is working with utilities to develop a new system that provides financial rewards for encouraging energy conservation.

OG&E is also working to improve its transmission infrastructure in ways that will allow greater use of wind-generated energy. Though the new technology requires a significant investment up front, the wind blows for free, and customers are already enjoying savings afforded by wind.

Steve Rhines of the Noble Foundation stressed the importance of research and development efforts to make cellulosic ethanol from switch grass. Using switch grass instead of corn not only eliminates the debate over food-versus-fuel, but the technology promises to produce a more powerful product.

This article appeared in The Journal Record, www.journalrecord.com, on September 23, 2008.