Power to the People is a column by Donald M. 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.
By DONALD M. KREIS, Power to the People
At the heart of last Friday’s astonishing, destructive, and radical order from the Public Utilities Commission (PUC) is a gaping hole.
But before leaping into that hole, let’s start with wisdom from media critic and New York University journalism professor Jay Rosen. Because, let’s face it, even though I hung up my reporter’s spurs 28 years ago when I graduated from law school, this column is journalism, at least kinda sorta.
Rosen urges journalists to reframe what they do, at least when covering politics and public policy, so as to get out of he-said-she-said reporting mode. Instead, Rosen thinks journalists should start by asking people what they care about – and then finish by pressing public officials about those things.
Confession: As the state’s Consumer Advocate, I don’t know what my constituency (residential utility customers) wants. But I think I know: They want their electricity, natural gas and water to be as inexpensive and reliable as possible.
Here’s how Amory Lovins put it, in his now-famous 1976 article in Foreign Affairs, titled “Energy Strategy: The Road Not Taken:” “People do not want electricity or oil, nor such economic abstractions as ‘residential services,’ but rather comfortable rooms, light, vehicular motion, food, tables, and other real things.”
In that article 45 years ago, Lovins saw a nation at an energy crossroads: a “hard path,” consisting of continued reliance on legacy technologies like fossil fuels and nuclear technology, or a “soft path” that would give people what they want more simply and affordably (and without contributing to climate change which, yes, he did mention). And at the top of Lovins’ ‘soft path’ list was energy efficiency – simply squeezing more work out of every unit of energy consumed.
Since taking office in 2016, I have enthusiastically supported New Hampshire’s ratepayer-funded, utility-provided energy efficiency programs (which fly under the NHSaves banner) not because I want to give Amory Lovins an “I told you so” or even because energy efficiency is the ultimate low-carbon, low-impact resource. I like energy efficiency because it is the cheapest way to meet the next unit of demand.
That’s not true out to infinity – but almost. Because New Hampshire lags so far behind our neighboring states on energy efficiency, we could deploy a more energy efficiency measures before we would have to start worrying about whether it would be cheaper simply to make more electricity. A lot more.
Last Friday, the PUC issued a bombshell order that will, if allowed to stand, eviscerate the NHSaves programs. You don’t have to love energy efficiency, or groove on energy policy, to be outraged. You just have to care – and I think you do care – about comfort, light, transportation, food, tables, and other real things.
Which brings me to the gaping hole at the center of the PUC’s order. That hole consists of the notable lack of any reference to anything that happened from 2014 to 2020. Why does that period matter?
In September of 2014, at the direction of the Legislature, the administration of Governor Maggie Hassan issued New Hampshire’s first official Ten Year Energy Strategy. Front and center was a recommendation to “increase investments in cost effective energy efficiency,” which, the report noted is “the cheapest, cleanest, most plentiful energy resource.”
The 2014 Ten Year Energy Strategy called for the establishment of an “over-arching statewide goal” for energy efficiency. One mechanism, the report noted, is the creation of an Energy Efficiency Resource Standard (EERS), which involves the adoption of specific energy-savings targets rather than simply setting a budget and buying as much savings as possible
The following year, the PUC opened a docket and met the Energy Strategy’s challenge. On August 2, 2016, the Commission approved the creation of the EERS, setting specific savings targets for an initial triennial period from 2018-2020. In particular, the PUC noted the EERS was “a significant step toward addressing the business community’s concerns about remaining competitive in today’s economy.”
A broad coalition of stakeholders, including the state’s electric and natural gas utilities as well as the Office of the Consumer Advocate, supported the creation of the EERS. The coalition then came together again to develop a specific plan for the first triennium, which the PUC readily approved.
Finally, on December 30, 2019, the Commission adopted a new, coalition-built cost-benefit test for use in determining whether a particular energy efficiency program is worthy of ratepayer money. Sweeping away decades of muddle about ‘societal benefits’ and the like, the new “Granite State Test” is based on the straightforward principle that if all ratepayers save money via their utility bills, the program is cost-effective.
If you read only the PUC’s November 12 order about energy efficiency, you’d think none of this had happened. There is simply no mention of it, even though the PUC reached back to decisions on energy efficiency from the early days of electric industry restructuring more than 20 years ago, that were more to its taste.
The fate of the Granite State Test for cost-effectiveness is especially galling. The PUC dismisses it now as “overly dependent upon subjective factors such that any desired outcome could potentially be obtained from its application.”
The two commissioners who ruled last Friday adopted that statement even though one of them signed the December 2019 order approving the Granite State Test, proclaiming that it will “improve energy efficiency program screening by placing a greater emphasis on the utility system impacts,” i.e., ratepayer impacts (since it’s the customers who pay for the utility system).
That 2019 order also praised the utilities and other stakeholders, noting that they had “consistently worked in a collaborative manner and serve as an example of how constructive stakeholder processes can aid the Commission in its decision-making duties and allow parties to reach a result in line with their expectations.”
So much for that! The proposed 2021-2023 triennial energy efficiency plan, swatted away by the Commission, was hammered out by the same broad coalition of stakeholders that had been working successfully together since 2016. All of that coalition’s good and hard work has now been wiped out.
Look. The Public Utilities Commission is not a court. In the regulatory realm, there is essentially no stare decisis – the idea that the tribunal is bound by its precedents. Just because your predecessors – or even you – liked the work of the stakeholder coalition then does not necessarily mean you have to like it now.
But there are limits. The PUC is bound by the case law of the New Hampshire Supreme Court, which knows how to constrain rogue administrative agencies. In New Hampshire, an agency like the PUC can’t make arbitrary decisions and it can’t make stuff up. It has to base its rulings on the evidence before it, even in cases where all the parties are asking for “yes” and the Commission wants to say “no.”
Even if you don’t care what standard of review will apply when the PUC’s order reaches the New Hampshire Supreme Court, you probably like having a comfortable home with light and heat that you can afford. And you would like to be able to do that not just during the upcoming winter but for something closer to forever.
It’s the forever part the PUC has just tried to decimate. But it doesn’t necessarily get the last word.
