By D. Maurice (Don) Kreis
What does 2017 portend with respect to energy in New Hampshire, in light of emerging political and policy realities? From my perspective as the state’s consumer advocate, tasked with representing the interests of residential utility customers, I see 2017 as the year of energy efficiency.
Thanks to a settlement agreement signed by a coalition of stakeholders including all of the relevant utilities, and later approved by the Public Utilities Commission (PUC), we will spend 2017 planning for the implementation at year’s end of an Energy Efficiency Resource Standard (EERS).
This is a big change. Under the existing system, the PUC establishes a system benefits charge to be paid by all customers, adds a limited pool of money from the Regional Greenhouse Gas Initiative and the regional market for electric capacity, and directs the utilities to spend the available funds on deploying cost-effective energy efficiency measures. Under the EERS, we set as our objective the adoption of all cost-effective energy efficiency, we tell the utilities to reduce their sales of kilowatt-hours by a specified percentage and we commit the financial resources necessary to get the job done.
We’re the last New England state to adopt an EERS. Our plan, to reduce sales by about three percent over three years, is a cautious one – the least ambitious in the region. But it’s a laudable start.
The danger, especially in these times, is that as we work to meet the EERS, we will leave some folks behind – people of modest means who might have difficulty obtaining loans or folks who don’t own their dwellings or business facilities.
That’s where inclusive financing – or, as it’s been known in its highest and best form for many years, PAYS (pay as you save) — comes in.
There aren’t too many things in New Hampshire that I am specially qualified to opine about, but this happens to be one of them. That’s because when we became the first state in the union to pilot a PAYS program, I was a fledgling staff attorney at the PUC, and it was my job to shepherd the pilot through the process in the auspicious fall of 2001.
PAYS is the brainchild of two smart Vermonters, Paul Cillo and Harlan Lachman, and owes its existence in New Hampshire to former PUC Commissioner, Nancy Brockway, and former Consumer Advocate, Meredith Hatfield. Their tireless advocacy on behalf of an inclusive approach to energy efficiency teaches that, in this field, people matter.
Unlike the states immediately to our east and west – Maine and Vermont – we rely on our utilities to deliver ratepayer-funded energy efficiency programs. I predict we will continue to do so. It is counter-intuitive – utilities usually make more money by selling more rather than less of their product, after all – but when you think about it this approach has much to recommend it. Utilities know their customers, in almost every sense of the word. They have the data, thanks to meters, and they have a lot of insight about what customers need and want.
But they also have a lot of things that compete for their attention and resources, as we all do. Should utilities use their capital to fund a bigger and better PAYS program for NH? Capital is a finite resource for all business organizations, utilities included. Shall we ask utilities to make PAYS a higher priority for their EE program staff? The reality is that other pathways are less challenging than PAYS.
That’s why I’m convinced that the way to get New Hampshire back to the top of the PAYS pile is through grassroots activism. I’m not talking about torches and pitchforks; I am talking about reaching out to the utilities and urging them to renew our state’s commitment to inclusive financing.
They already know it works. It’s worked especially well for municipalities, as Eversource has proven. On-bill financing (a generic variation on PAYS) works for residential ratepayers, as the New Hampshire Electric Co-op has proven. As to actual PAYS, the results when it comes to residential customers are a bit more uncertain, putting me in mind of the time someone asked Gandhi what he thought of western civilization and he answered “I think it would be a good idea.”
What exactly is this “good idea?”
- It is not considered credit, so eligibility is not tied to credit rating.
- The customer pays for energy efficiency measures via the utility bill.
- There is strict measure screening and conservative assumptions so that customer bill will definitely be lower than it was prior to measure installation.
- The obligation “runs with the meter” not the customer.
- The utility stands behind what it had its contractor install.
- The customer can be disconnected for nonpayment of the PAYS obligation.
- Ideally the utility uses its own capital not ratepayer funds – which is a good deal for the utility’s shareholders because it’s essentially a risk free investment.
There could not be a more perfect time to recommit to such a sensible program.
It is beyond debate that energy efficiency is our most valuable energy resource, and the national and state electorate is screaming: leave no one behind. We must not become a state where some people have Nest thermostats and high efficiency furnaces while others live with ice dams and unaffordable energy bills. Energy efficiency must get inclusive — that idea needs a champion and I aim to be that champion as the guy whose job it is to stand up for residential customers. It is a nonpartisan effort (appealing to Republican and Democratic sensibilities alike) to build market-oriented, locally grown wealth. Please join me in waging the noble struggle to make inclusive financing through PAYS a reality.
D. Maurice (Don) Kreis heads New Hampshire’s Office of the Consumer Advocate, which represents the interests of residential utility customers. He can be reached at firstname.lastname@example.org.