Clock running out on bid to step up New Hampshire’s energy-efficiency efforts

As New Hampshire increases its national energy-efficiency ranking, state regulators are still debating when and how much to increase rates – particularly among commercial/industrial customers – in order to step up conservation efforts.

At stake is the state’s three-year energy-efficiency plan, backed by utilities and environmentalists but opposed by the Business and Industry Association and Public Utilities Commission staff, which want to delay its implementation or cut it still more.

But the three-member PUC, which is the midst of holding hearings on the proposal, is trying to make a decision before the end of the year.

The latest settlement agreement, reached on Dec. 3 by all parties except PUC staff, would slightly cut back on energy-efficiency initiatives.

The original plan, proposed by the utilities on Sept. 1, would have increased the current goal of cutting back on electricity usage by 3.1% and another 5% on top of that at by the end of 2023.

The agreement cuts it by 4.5%.

To do that, the new plan would increase spending on energy-efficiency programs by $151 million, to $337 million, as opposed to the original goal of $351 million. Nearly all of that increase will go to programs that benefit commercial and industrial customers, particularly Eversource customers who would save the most.

Efficiency standard

The money to pay for the program would come from the system benefits Charge, or SBC, which is paid by all electricity customers. The SBC has been funding both energy-efficiency and energy-assistance programs for low-income residents since 1996, but it was bulked up considerably in 2017 after the PUC — joining the rest of New England — instituted and Energy Efficiency Resource Standard, or EERS.

Before the EERS, New Hampshire was behind the rest of the region in energy efficiency, but since it was instituted it has been catching up, said Madeleine Mineau, executive director of Clean Energy NH.

New Hampshire now ranks 18^thin the country, according to the 2020 energy-efficiency scorecard released Dec. 17 by the American Council for an Energy Efficient Economy. The state ranked 20^thlast year, and its rise is partly due to the EERS, noted the ACEEE.

Under the current standard, all electric customers pay the same SBC rate of 0.743 cents a month per kWh, but under the new standard, there would be different rates for commercial/industrial and residential customers, as well as among the different utilities.

The biggest focus has been on Eversource’s commercial customers which would have paid a 2.42-cent rate by the third year. Although Eversource itself proposed the change, maintaining that the plan’s long-term savings – estimated to be $1.3 billion before the settlement – would economically benefit all its customers, including those that don’t participate in the program, thanks to lower transmission and distribution costs.

However, PUC staff was concerned that the increase would hurt larger users in the short term in the midst of a pandemic, a concern echoed by the BIA.

In attempt to allay those concerns, the settlement agreement reduced that rate to under two pennies (1.994 cents to be exact) an 18 percent drop. It also upped Eversource’s new residential SBC rate, the lowest among all utilities, would rise from eventually go up to 1.185 cents.

That still wasn’t enough for the BIA, which argued that the new plans reductions “do not nearly go far enough to alleviate the harm they would cause New Hampshire ratepayers,” wrote president BIA President Jim Roche in a comment to the PUC

It would still cost some large users “hundreds of thousands of dollars,” David Creer, the BIA’s director of public policy.

‘Disastrous situation’

It also wasn’t enough for the PUC staff which – in an unusual move – did not join the settlement, which included all other parties to the proceedings, including all the utilities, clean energy and environmental groups and the consumer advocate.

“It’s everyone against the staff,” said Mineau. “We feel we have compromised a lot, and are not willing to compromise any more on energy goals.”

She said that, by slashing goals further, the PUC might have to redesign the program and re-examine many previous decisions to figure out “which program we are going to cut. It is a little frustrating coming at the 11th hour.”

The staff’s aggressive question, she said, had already pushed the hearing process to Dec. 21, making it harder for the PUC to come up with a decision during the holidays before Dec. 31.

That would effectively end the funding altogether – which she called a “disastrous situation.” “At a bare minimum,” she would rather have the PUC at least level-fund the program.

A delay or level funding is not only what the BIA wants, but the newly elected Republican leadership of the Legislature does as well. They sent a letter asking the PUC to avoid increasing the SBC during a pandemic.

“We felt the circumstance warrant asking the PUC, not in their roll as regulator, but to show some compassion until we get over this pandemic,” said Michael Vose, R-Epping, the newly appointed chair of the House Science and Technology Committee. Vose made it clear that this was just a request, and that he knew of no effort in the Legislature to overturn the implementation of a new SBC.

“I don’t think that is possible,” said Vose.

That’s because the previous Democratic majority left that three-year decision in the hands of the PUC, though it did allow lawmakers to veto the next one.

Vose is planning on introducing a bill that would go one step further, putting the EERS into law and leaving it up to lawmakers on how to fund it. He said that would make the process “more transparent.”