Energy-efficient programs to be less costly under state deal

CONCORD – Starting in 2018, New Hampshire utility companies must meet certain energy efficiency benchmarks to receive related financial incentives from the state.

The New Hampshire Public Utilities Commission this week approved a deal establishing a state Energy Efficiency Resource Standard, which requires utility companies to offer programs that make it less costly for people to make their homes more energy efficient. The intent is to reduce the amount of energy delivered to customers annually.

While the new standard will raise electric and gas rates, participation in energy-
efficiency programs will counter that for consumers, the deal’s advocates say.

"It’s a big step forward, because obviously as a state we want to become less carbon-intensive. We want to contribute less to greenhouse gas emissions that are a threat to civilization," New Hampshire Consumer Advocate Donald M. Kreis said Wednesday.

Marc I. Brown, president of the Concord-based New England Ratepayers Association, disagrees, saying most studies about the benefits of energy efficiency are based on models, and not practical data.

A study by the University of California at Berkeley and the University of Chicago looked at practical energy-efficiency data and shows there’s no cost benefit to making residential energy-efficiency investments, he said. That study, released in 2015, examined energy use in 30,000 Michigan homes, with a quarter of them being encouraged to make energy-efficiency upgrades with financial assistance. The study found the cost of the upgrades was about double the energy savings realized.

With that in mind, ratepayers shouldn’t be subsidizing energy-efficiency upgrades for people who couldn’t otherwise afford to make them, Brown said.

"If something isn’t good to undertake with your own private capital, it’s definitely not a good thing otherwise," he said.

To provide adequate funding for the
Energy Efficiency Resource Standard, the system-benefits charge billed to Eversource customers will increase from 0.00383 cents per kilowatt hour in 2017 to 0.00488 cents per kilowatt hour in 2018, to 0.00631 cents per kilowatt hour in 2019 and to 0.00850 cents per kilowatt hour in 2020, according to the order.

The result for a residential customer using 625 kilowatt hours of electricity per month will be an increase of 33 cents per month in 2017, 65 cents per month in 2018, 90 cents in 2019 and $1.37 in 2020, the order said.

Liberty Utilities’ electric customers will see their system benefits charge increase from 0.00381 cents per kilowatt hour in 2017 to 0.0048 cents per kilowatt hour in 2018, to 0.00615 cents per kilowatt hour in 2019 and to 0.00825 cents per kilowatt hour in 2020, according to the order.

The result for a residential customer using 625 kilowatt hours of electricity per month will be an increase of 32 cents per month in 2017, 61 cents per month in 2018, 85 cents in 2019 and $1.31 in 2020, the order said.

Instead of the system-benefits charge, natural gas companies use what’s called a local distribution adjustment charge.

To provide adequate funding for the new energy-efficiency standard, the local distribution adjustment charge for Liberty Utilities’ customers will increase from 0.0643 cents in 2017 to 0.0724 cents in 2018, to 0.0817 cents in 2019 and to 0.0907 cents in 2020, according to the order.

The result for a residential customer using 783 therms of gas per month will be an increase of 38 cents per month in 2017, 53 cents per month in 2018, 60 cents in 2019 and 59 cents in 2020, the order said.

Utility companies will explore additional funding sources to augment the ratepayer funding of the standard, according to the order.

As part of the New Hampshire Public Utilities Commission order, electric companies are required to reduce energy delivered to customers by 0.8 percent of the 2014 statewide delivered sales in 2018, an additional 1 percent in 2019, and an additional 1.3 percent in 2020.

Natural gas utilities will have to reduce the energy used by their customers by 0.7 percent of 2014 statewide delivered sales in 2018, an additional 0.75 percent in 2019 and an additional 0.8 percent in 2020, the order said.

Electric and natural gas companies must meet the goals individually and collectively. The order doesn’t say whether utility companies face penalties if they don’t research the goals, but does indicate they’d lose out on the financial incentives.

New Hampshire is the last state in New England to adopt an Energy Efficiency Resource Standard.

The New Hampshire Public Utilities Commission began proceedings on establishing the standard in May 2015, eight months after the Governor’s Office of Energy and Planning released a 10-year State Energy Strategy. The document noted, among other things, that New Hampshire needed to implement more cost-effective energy-efficiency programs to reduce energy costs. The report then went on to say the commission should open a proceeding looking into establishing an Energy Efficiency Resource Standard.

The standard will go into effect in January 2018, and replace the state’s Core Energy Efficiency Program, which began in June 2002. The Core program, which offers electric and gas customers incentives for making their homes and businesses more energy efficient through upgrades such as updating windows, lighting and insulation, will continue through the end of 2017.

The utility companies administer the Core program, and will continue that role with the Energy Efficiency Resource Standard program for at least the first three years of it, according to the order.

However, the New Hampshire Public Utilities Commission will retain the authority to approve the energy-efficiency initiatives available for utility customers.

Electric and gas companies will be required to file, for the commission’s review and approval, annual updates on their efforts to meet the standard.

The order also sets up a formula to compensate utility companies for the revenue they expect to lose under the new standard, and raises the percentage of energy-efficiency funds allocated for low-income residents from 15.5 to 17 percent.

Amanda O. Noonan, director of consumer services and external affairs for the New Hampshire Public Utilities Commission, said in a news release from the agency that low-income households face more obstacles than others when it comes to investing in energy-efficiency measures. The increased funding, she said, will help address this.

Meghan Foley can be reached at 352-1234, ext. 1436, or mfoley@keenesentinel.com. Follow her on Twitter @MFoleyKS.