Power to the People is a column by D. Maurice Kreis, New Hampshire’s Consumer Advocate. Kreis and his staff of four represent the interests of residential utility customers before the NH Public Utilities Commission and elsewhere.
Addendum: Literally minutes after this column hit the internet, the Senate Finance Committee adopted an amendment to HB2 — the so-called “budget trailer” bill — that would remove from that measure the House-passed language essentially freezing energy efficiency charges on electric bills at their 2020 levels on a permanent basis. This is the best development on the energy efficiency front in New Hampshire so far this year! I’d love to be able to claim it was the result of my column, but I doubt even the most avid readers of Power to the People consume it that fast. Here’s hoping the offending language does not appear in the version of HB2 that reaches the Governor’s desk for signature, once the state budget has run the conference committee gauntlet.
The legislative struggle over the future of ratepayer-funded energy efficiency will persist in any event. A different bill, HB 549 sponsored by Representative Vose, would have a similar effect. It was retained in committee and will resurface later this year.
DONALD M. KREIS, Power to the People
Residential ratepayers of New Hampshire, as the person tasked by statute with advancing your interests, I have made a colossal blunder. Please accept my apology, along with the following explanation.
Since I took office in early 2016, I have made no secret of my opinion that the most valuable thing I can deliver to my constituency is energy efficiency. My reason is simple. Energy efficiency is the cheapest thing we can do to meet the next unit of demand.
In particular, it’s cheaper than all of the supply-side options, whether it’s buying natural gas acquired via ‘fracking,’ generating electricity from coal, breaking atoms apart in Seabrook, displacing indigenous people in northern Quebec, building wind turbines in the Gulf of Maine, or putting solar panels on our roofs. Negawatts beat megawatts every time.
Energy efficiency – squeezing more work out of every unit of electricity or natural gas we use as utility customers – is not the cheapest option out to infinity. There does come a point where supply-side options would be less expensive. But we are so far from that point, as the New England state that is dead last when it comes to energy efficiency (according to the American Council for an Energy Efficient Economy), that for all intents and purposes we can press the energy efficiency accelerator as hard as we want.
Thus – and here’s where my huge mistake comes in – I was pounding my fist on the (virtual) table a year ago, arguing that we should invest as much money as possible in the ratepayer-funded energy efficiency programs that fly under the “NHSaves” banner.
Others in the (virtual) room, particularly employees of the Public Utilities Commission (PUC), argued that a massive increase in what we spend on the NHSaves programs would engender political backlash. I said we should just do the right thing and worry about the politicians and the political actors later.
And so it was that the Office of the Consumer Advocate, joined by organizations like Clean Energy New Hampshire and the Conservation Law Foundation, persuaded the utilities (which administer the NHSaves programs) to agree to spend nearly $400 million on energy efficiency over three years. Almost all of that money would come from electric and natural gas customers via charges on their bills that cannot be evaded or bypassed.
Compared to 2020, this would have meant increasing energy efficiency charges on electric bills by 2023 by anywhere from 33 percent (for residential customers of Eversource) to 168 percent for the company’s commercial and industrial customers.
You may be wondering: Am I nuts?
I am not. For one thing, energy efficiency charges comprise a small fraction of electric and natural gas bills. Far more importantly, every dollar we ratepayers spend on the NHSaves programs passes a rigorous cost-benefit test.
To apply that test, we ignore the cost savings achieved by the customers who actually receive the energy efficiency upgrades at their homes and businesses. We focus on whether all ratepayers save money compared to what they pay via those non-bypassable charges. And, as I said above, negawatts are cheaper than megawatts.
The PUC held hearings on the $391 million triennial energy efficiency plan in early December and was supposed to issue an order by year’s end. We’re still waiting, almost five months into the triennium.
A group of Republican lawmakers, led by the influential chairman of the House Science, Technology, and Energy Committee – Representative Michael Vose of Epping – asked the PUC in November to keep the 2020 spending levels in place. The state’s Business and Industry Association echoed the request. Both wrote letters to the Commission but did not actually participate in the PUC’s proceeding.
They, of course, have gotten their way by default because the PUC is either unable or unwilling to act. Meanwhile, it appears that when the dust settles on the current legislative session there will be statutory language in place that prohibits increases for energy efficiency on electric bills unless the General Court endorses any PUC decision approving such an increase.
This means that, for all intents and purposes, the NHSaves programs will be frozen at their 2020 budget levels in perpetuity. Ergo, New Hampshire will be New England’s laggard in energy efficiency for the foreseeable future, potential savings will go unrealized, and the focus will remain on supply-side options.
Our utilities – Eversource, Liberty, the New Hampshire Electric Cooperative, and Unitil – do a great job administering the NHSaves programs. They employ some of the best energy efficiency experts in the business. They deserve praise for joining a broad stakeholder coalition in proposing a laudably aggressive energy efficiency plan to the PUC last year.
Still, I am disappointed in these companies. I would be less resigned to defeat if Joe Purington, Sue Fleck, Steve Camerino, and Bob Hevert – to name the top New Hampshire official of each utility – were standing at a podium somewhere with me, making the arguments I have been making for five years about ratepayer-funded energy efficiency.
But the utilities do not invest any of their political and social capital in promoting energy efficiency. Come to think of it, they don’t invest any of their financial capital either. The NHSaves programs are paid for entirely with ratepayer money.
My blunder was not foreseeing, a year ago, where we would be as a state – politically, economically, and administratively – in May 2021. In these circumstances, I intend to sue for peace.
Even though I emphatically disagree with them, the energy efficiency skeptics have a point. The PUC needs more guidance from the Legislature. The commercial and industrial sector would bear the brunt of the huge spending increase we proposed; as businesses they, perhaps, need a faster payback than NHSaves is able to offer.
Freezing our energy efficiency spending at 2020 levels forever would be a serious mistake. Ratepayers deserve more than that – but how much more is not for me to determine.