My Turn: New Hampshire needs to invest in ‘negawatts’

For the Monitor
Saturday, March 19, 2016
New Hampshire’s cheapest source of energy is not megawatts but “negawatts” – the use of energy efficiency measures to squeeze more work out of each unit of electricity or natural gas we consume. But we are dead last in New England in meeting this key challenge, according to the American Council for an Energy Efficient Economy, and we are poised to miss a great opportunity to do something about it.

We buy energy efficiency via the System Benefits Charge on our utility bills. It is costing around 3.76 cents per kilowatt hour. Compare that to last year’s average retail price of electricity for residential customers of 18.52 cents.

Because energy efficiency is such a fantastic bargain, the Public Utilities Commission opened a docket last year to establish an Energy Efficiency Resource Standard that will put New Hampshire on the path to achieving the gold standard: all cost-effective energy efficiency. But as the PUC proceeding nears its conclusion, we are heading toward simply slapping an EERS label on a set of unambitious commitments and targets. This would be a big setback for utility customers.

There is understandable resistance to increasing the SBC; it looks, after all, a lot like a tax. But we do ourselves a disservice if we refuse to spend money that will actually cause a substantial net reduction in our electricity bills, and which really amounts to buying the cheapest form of energy.

Skeptics will point out that energy efficiency savings are hard to see. But ratepayer-funded energy efficiency measures are subject to strict evaluation, monitoring and verification protocols; the savings are anything but pie in the sky.

The nonprofit Acadia Center determined last year that during the harsh winter of 2013-2014, wholesale electricity prices in New England would have been 24 percent higher without the effect of ratepayer-funded energy efficiency programs.

If you are still skeptical, consider the analysis performed by ISO New England. As the federally regulated organization responsible for reliably operating our region’s electricity grid, ISO New England acts with banker-like conservatism when it comes to relying on energy efficiency to relieve pressure on the system. According to ISO New England, thanks to energy efficiency New Hampshire alone will save 349 gigawatt hours of electricity – that’s 349,000 megawatt hours – in the years 2019 through 2024. The ISO is using that forecast as it plans ahead for keeping the lights on. If they can rely on those numbers, so can we. In fact, we can and should prove ISO New England is being too conservative.

Some people cling to a business-as-usual approach, warning against increasing in the SBC and arguing that a full commitment to all cost-effective energy efficiency “may prompt customers to challenge the EERS even though the targets are intended to create long-term savings,” as the utilities themselves recently testified.

How regrettable that the utilities apparently lack confidence in their own ability to achieve, prove and then tell the story of the efficiency gains they proclaim themselves so good at producing. And how foolish of us as a state if we don’t understand that 3.76-cent power is clearly a better bargain – not to mention cleaner – than 18.52-cent power.

Jeffrey Loiter, the expert hired by the sustainable energy and environmental groups participating in the EERS proceeding, thinks that for the years 2017 through 2019, we should set firm energy efficiency savings targets of 3.1 percent of sales for electric utilities and 2.5 percent of sales for gas utilities. That’s what a real energy efficiency resource standard would look like.

We should not be afraid to achieve it, even though, right now, we seem to be afraid even to talk about it.

(Donald M. Kreis is a consumer advocate in Concord.)

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