‘It essentially dismantles all of the progress’: Energy efficiency decision sends a chill

Energy efficiency programs in New Hampshire are in for a big change if a decision issued by the Public Utilities Commission late Friday is enacted.

In that decision, the commission rejected an energy efficiency plan to increase spending and then took it a step further, slashing funding for energy efficiency over the next two years to return to 2017 funding levels. The contentious order may face legal challenges: Consumer Advocate Don Kreis has already announced that he may ask for a rehearing, which would be the first step toward an appeal. 

Proponents of energy efficiency say the order would gut the state’s programs, which operate under NHSaves and offer rebates and incentives to residents who weatherize their homes or buy energy-efficient appliances, for instance. Those rebates have already been in short supply, and the decision would further reduce availability and likely the amount offered.  

“It essentially dismantles all of the progress of the past three years,” said Sam Evans-Brown, the executive director of the nonprofit Clean Energy New Hampshire. He called the decision “horrendous.”

Kreis said the effect on energy efficiency programs would be devastating. “It would so ratchet them down that they would be a shadow of their former selves,” he said.

A contractor for the NHSaves program, energy auditor Eric Chabot of Turn Cycle Solutions in Nashua, said he expects energy efficiency companies will have to lay off employees and sell equipment that was purchased when they were told to ramp up programs.

“We’re trying to crawl back into the dark ages,” he said. “I really just don’t get it.”

The order ignores more than a decade of decisions from the utilities commission, erasing a period from 2004 to 2020, Kreis said. “Thinking has evolved since the year 2000 and 1998, and the commission just ignored all that history,” he said.

The decision would lower residential electric bills by a few dollars per month. Energy efficiency is funded through what’s called the System Benefits Charge, one portion of a resident’s monthly electric bill. Right now, the charge is around $4 a month for the typical household. Under Friday’s order, that would go down to around $1.80 a month by 2023. Instead of paying about $40 per year in SBC charges, a household in 2023 would pay around $20 a year. The rejected plan would have cost a household up to $70 a year.

Energy efficiency measures reduce demand for electricity, which can keep the most expensive power plants from running – pushing rates for electricity down. 

Rates for commercial and industrial customers also increased in the rejected plan, which was a sticking point for some. The Business and Industry Association raised concerns on behalf of members who said they would pay half a million dollars in SBC charges. Kreis said that still would have been a small fraction of those businesses’ overall electric or natural gas bill.

A spokesperson for the Business and Industry Association declined to comment on Friday’s order, saying they wanted to better understand the basis of the PUC’s rejection of the proposed triennial energy efficiency plan.  

Rep. Michael Vose, an Epping Republican who has long argued that the Legislature and not the utilities commission should have control over SBC rates, called the savings under Friday’s decision relatively significant.

“It might not sound like a lot of money to someone who has a really good paying job, but to a senior citizen or a part-time working mom, those dollars could be important,” he said.

Vose is a sponsor of House Bill 549, a bill that would allow for slight annual increases to the SBC – inflation plus .25 percent – although he said the bill could be amended in the Senate to conform with Friday’s order, postponing any increases until after 2023.

He said he was surprised to see that the order decreased rates for 2022 and 2023, but that the arguments in the order made sense to him. He said decreasing rates is a good direction to go in, although he is “open to arguments to the contrary.”

Contractors who work with NHSaves, like Chabot, say the decision on Friday will be a big blow to business. Many have testified that months of inaction from the utilities commission has already been a big challenge because of the uncertainty it’s created.  

“Two years ago, they said, ‘We’ll increase the funding so you need to buy more trucks, hire more people, have staff trained up,’ so that’s what we did,” Chabot said.

He said the decision from the utilities commission is surprising and confusing. For one, there’s a disconnect between what he hears on the job – that the program helps New Hampshire families – and the decision to defund it.

“Every day we talk to people that are only involved because they’re able to get the incentives, that they have been freezing their asses off in their houses for 15 years and just found out about NHSaves, and it’s like a godsend to them,” he said. But he was also confused why the new plan is coming from the regulators, not the utilities, or the consumer advocate, or the large group that worked together to put together the plan that was rejected.

Evans-Brown said: “I think when people hear about this and they hear that a group of unelected bureaucrats have rolled back a program that is cost-effective and popular, I think elected officials will learn about their constituents’ dissatisfaction.”

The state’s utilities are also evaluating their response to the order, which removes what’s called the performance incentive, a mechanism for compensating the utilities for doing a good job on the programs. The utilities then pass the returns on to shareholders.

“Liberty is committed [to] ensuring our customers can access all cost-effective efficiency, and we are currently examining the options for doing so in light of this surprising order,” said Emily Burnett, a spokesperson for Liberty, in an email.

Alec O’Meara, a spokesperson for Unitil, said the company’s stance on energy efficiency has not changed but at this point Unitil is reviewing the order and looking at how to comply with it rather than questioning the decision.

“That’s not where our head is at in this moment,” he said. “That doesn’t mean we will or won’t.”

The utilities have to submit an updated energy efficiency plan to the utilities commission by Dec. 15.

“Our focus is reviewing the order we have received and figuring out what the next steps are to do what the PUC has requested,” he said.

A spokesperson from Eversource said the company is reviewing the order and evaluating its next steps.

Kreis said the utilities “know that the commission is wrong and they know that energy efficiency is good for their customers and that the NHSaves program works.”

“They have proclaimed to me time and again that they are committed to those programs,” he said, “and now is the time to show it.”