A lame rallying cry NH: ‘We’re Number 20!’

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Donald M. Kreis, New Hampshire Consumer Advocate

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. It is co-published by Manchester Ink Link and InDepthNH.org and distributed as a public service to news outlets across the state.

D. Maurice Kreis, NH Consumer Advocate

Although the USSR has been defunct for more than a quarter century, jokes about the Soviet Union never grow old.  Here’s a classic:

The USSR challenges the USA to a two-car automobile race.  The Americans win.  The official Soviet news agency TASS puts out a story with this headline:  American Capitalist Dogs Finish Next to Last in Auto Race!  Glorious Driver of the Communist Motherland Comes in Second!

This came to mind recently upon reading a press release from NHSaves, the consortium of New Hampshire utilities that delivers the state’s ratepayer-funded energy efficiency programs.

“NHSaves Partners Help Granite State Break into ACEEE Top 20,” proclaimed this ratepayer-funded news release.  This refers to the recently issued annual scorecard of the American Council for an Energy Efficient Economy.

Yes, New Hampshire has moved up one notch since the release 2018 ACEEE scorecard.  But New Hampshire remains dead last in New England.  In fact, you have to go all the way to Delaware before you come to another state with a worse ranking for energy efficiency than ours.

Why does this matter?  Because energy is expensive.  High energy costs are bad for the residential utility customers whose interests my office represents.  And high energy costs make New Hampshire lose ground to the neighboring states with which we compete for economic opportunities and skilled workers.

Given that energy is expensive, it’s a no-brainer to pursue the cheapest way to meet the next kilowatt-hour of demand for electricity or the next BTU of natural gas.  Energy efficiency is that cheapest option.  It is also the option that adds no climate-disrupting carbon emissions to the atmosphere.

“It is exciting to be a part of New Hampshire’s Top 20 ranking, which is a testament to the state for recognizing the economic and environmental value energy efficiency delivers to families, businesses, and communities across the region and beyond,” bubbled Penni Conner, Eversource’s Senior Vice President and Chief Customer Officer, in that NHSaves news release.

(And did I mention that ratepayers paid for that news release?  No shareholder dollars were expended.  Indeed, the shareholders actually get incentive payments to motivate them to back energy efficiency.)

Conner, in particular, should know better than to brag about such a mediocre outcome.  As someone with responsibilities across the Eversource tri-state footprint, she is aware that her company is delivering energy efficiency programs in the top-ranked state for efficiency.  That would be Massachusetts.

Why is Massachusetts number one? 

Well, there are a bunch of reasons.  The ACEEE scorecard is a 120-page document, assessing how well the nation’s 51 jurisdictions (the 50 states plus the District of Columbia) are doing across a broad range of energy efficiency realms – ranging from transportation policy to appliance standards.

But where Massachusetts really stands out is in the category of what the ACEEE calls “utility and public benefits programs and policies.”  In plain English, they’re talking about energy efficiency programs funded on a mandatory basis by utility customers.

Much like Massachusetts, we ratepayers fund our energy efficiency programs via nonbypassable volumetric charges on electric and natural gas bills, proceeds from the Regional Greenhouse Gas Initiative (RGGI, whose costs are embedded in electric bills to the extent we burn fossil fuels to produce electricity), and income from selling energy efficiency-created ‘negawatts’ into the regional capacity market that is part of the way wholesale electricity is traded.

But where Massachusetts gets 20 out of a possible 20 points from the ACEEE in this category, New Hampshire earned only 9.5.  Why?

Again, this is something Penni Conner could easily expound upon in a news release.  Both states rely on their utilities to deliver ratepayer-funded energy efficiency (unlike Maine and Vermont, which rely on independent entities to provide these services).  Both states have a so-called Energy Efficiency Resource Standard – an official commitment to “all cost-effective energy efficiency.”

However, even when adjusting for the respective sizes of the two states, Massachusetts is spending vastly more on energy efficiency programs according to the data in the ACEEE scorecard.  Focusing on electricity, in 2018 Massachusetts spent a sum equal to 6.42 percent of sales while the Granite State was far behind at 2.02 percent.

The results achieved by that spending are likewise starkly divergent.  In 2018, New Hampshire’s electric utilities saved 0.75 percent of sales (relying on the previous year’s sales figures) with newly added ratepayer-funded energy efficiency.  The comparable figure for Massachusetts was 2.82 percent – almost four times the energy efficiency New Hampshire is achieving for electric customers.

Why is our energy efficiency resource standard only one-fourth as potent as the Bay State’s?  Because we lack the courage to increase our energy efficiency budget (and thus the energy efficiency-related charges on utility bills) to the necessary level.  That’s true even though the overall result is all customers, both residential and business, saving money.

Imagine if people like Penni Conner – or Bill Quinlan, president of Eversource subsidiary Public Service Company of New Hampshire – issued news releases, gave speeches to business leaders, and testified at the State House in Concord about how we could give Massachusetts a run for its money when it comes to energy efficiency.  They know how to do it because their company, Eversource, is doing it while we in New Hampshire are watching it happen.

This is not to say that the ACEEE scorecard is immune to criticism.

In my view, the ACEEE is unfairly reducing its calculation of how much energy New Hampshire is saving because it does not approve of the way we convert “gross” savings to “net” savings.  (This involves an adjustment for so-called “free ridership,” or “savings attributed to a program that would have occurred even in the absence of the program.”)

Likewise, the ACEEE is withholding points to New Hampshire for not doing enough in the realm of combined heat and power.  This ignores the entirely plausible reality that in a state such as ours, which is relying less and less on heat-producing industrial processes to drive our economy, harnessing waste-heat is less of a priority.  We have bigger fish to fry, in the restaurants of our service economy.

We would be ranked higher than 20th on the ACEEE scorecard without these arguably unfair aspects of our grade.  But New Hampshire would still be last in New England.

Next year is an important one for ratepayer-funded energy efficiency in New Hampshire.  Stakeholders, including the utilities, will be sitting down and hammering out a new three-year plan for implementing our Energy Efficiency Resource Standard.  Will we continue losing the race while issuing press releases implying that we are winning?

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