CT Businesses Have a Message to Legislators: Restore the Energy Efficiency Fund
Connecticut’s high-quality energy efficiency programs help many businesses save money, improve their bottom line, create new jobs that pay well, and compete locally and nationally. Last year alone, over 6,000 in-state businesses benefited from these crucial programs.
Helping businesses cut costly energy waste also helps grow Connecticut’s economy, as each $1 spent by these energy efficiency programs produces $7 in economic growth. That’s an unparalleled return on investment for the Nutmeg State.
Unfortunately, Connecticut took a major step backwards on efficiency near the end of last year. Under extreme fiscal pressure, the General Assembly diverted $127 million in ratepayer funding for efficiency, possibly sacrificing a long-term economic boost of approximately $889 million.
Connecticut now risks falling behind nearly all other states in New England, as most states in the region have achieved more ambitious energy savings targets or are on track to do so by 2019. Connecticut also risks leaving its businesses without good efficiency solutions, making its economic recovery even harder.
The decision to raid energy efficiency funds leaves many businesses in Connecticut concerned.
One such business is Watson Inc, a food manufacturer based in West Haven that employs 300 Connecticut residents. Three years ago, a group of Watson employees volunteered to be on an energy efficiency and sustainability team. With help from the energy efficiency programs, the team developed and executed a plan that led to a 20% reduction in electricity and gas usage.
They also replaced all lighting with LEDs, installed a new properly-sized air compressor, removed many inefficient dust collection systems, and replaced 20 out of 30 air conditioning units with more efficient models. After completing a steam trap survey, they replaced or repaired many components in the high-pressure steam and boiler system. These improvements helped save the company money while reducing its demand on the energy grid.
Another business, Trifecta Ecosystems, Inc., a start-up aquaponic technology and indoor farming company based in Meriden, recently weighed in with the legislature as well. The company described how Connecticut’s efficiency programs helped it immediately capture significant energy savings in a new facility, gain a competitive edge in their new and growing industry, and even hire another full-time employee.
Examples of business support for efficiency abound. Last year, for instance, a number of Connecticut-based companies signed a letter asking the legislature not to divert funds from energy efficiency, as did a national coalition with numerous Connecticut members. More recently Unilever, which has a large facility in Trumbull, shared the following quote to weigh in on the value of investing fully in energy efficiency:
“Unilever believes that energy efficiency is key to keeping businesses like ours thriving. Connecticut will benefit from funding the state’s energy efficiency programs,” said Mark Bescher, Manager of Federal Government Relations and External Affairs at Unilever.
Ball in the legislative court
Legislators and policymakers should consider the repercussions of energy efficiency losses on Connecticut’s business community, as well as its consumers, economy, and environment. These self-inflicted harms include lost jobs, lower economic growth, higher utility bills for ratepayers of all kinds, increased local air pollution, and reduced access to energy efficiency for low-income households.
The good news is that this damage can still be averted if the efficiency fund raid is undone during the current legislative session, which ends on May 9th. Acadia Center will make every effort to restore these vital funds and give our state—and its business community—a chance to achieve a clean and prosperous future.
Energy Efficiency Is Working in New England
Over the past few years, electric consumption has been declining in New England even as the population and economy have grown. This is due in large part to energy efficiency (EE) gains, which have dramatically reduced the amount of electricity consumed in the region and are projected to do so even more in the future.
Declines in peak demand
The hour of highest electricity demand in New England determines the region’s infrastructure needs. The system is built to ensure it can reliably supply electricity during that hour, which usually occurs on a hot summer weekday.
For the first time ever, ISO New England (the region’s electric grid operator) is predicting a decline in peak demand over the next ten years, mostly due to projected gains in EE and on-site solar generation. Known as the 90/10 peak summer demand forecast, this projection models electric needs during a once-in-ten-years hot weather event and serves as the basis for regional system reliability planning.
The 2018 forecast also includes improvements that help it more accurately reflect recent history. Predicted winter peaks (the highest hour of use in the winter) have shifted downward, and projected needs in 2024 are nearly 700 megawatts lower than in last year’s forecast. This is equivalent to the power produced by the retiring Pilgrim Nuclear Power Station in Massachusetts.
Acadia Center looks forward to seeing these revised winter figures incorporated into the updated modeling of ISO’s fuel security study. The initial fuel security study asserted shortages could occur under severely stressed system conditions and sparked calls for new pipelines to carry additional natural gas into the region to fuel power plants. The new forecast should result in significant changes to those predictions.
Beneficial to ratepayers
Since the electric grid is designed and built to meet needs on the peak hour, increases in energy efficiency reduce the need for expensive new construction, which would be paid for by utility customers if built.
Crucial for the future
ISO projects that by 2020, energy efficiency will reduce demand on peak days by more than all of the region’s nuclear power plants combined can supply. By 2027, energy efficiency is projected to reduce the amount of electricity we need to generate by more than 22%.
These figures not only highlight the benefits of the region’s past and planned efficiency, but also give insight into what could be accomplished with more efficiency. Lagging states can continue to expand their efforts, and efficiency improvements could be better targeted at summer and winter peaks if avoided infrastructure costs are more accurately calculated.
Regulator cuts Eversource rate request by more than half to $124.7M
PURA approved a fixed customer charge of $9.50, down from $19.25, which adheres to a law passed by state lawmakers in 2015.
High fixed charges burden seniors and low-income customers and reduce customers’ incentives to conserve electricity, Acadia said.
“Consumers everywhere prefer choice and control, and this lower monthly fixed charge will give customers substantially more control over their electric bills,” Bill Dornbos, Acadia Center’s advocacy director, said in a statement. “The new rate design will also help promote energy efficiency and renewable energy, more closely aligning Connecticut’s electricity rates with its energy policy goals.”
Read the full article from Hartford Business here.
Eversource Customers To See Rates Rise Under PURA Decision
PURA’s decision also lowers the fixed fee Eversource customers are charged, regardless of how much electricity they use, from $19.25 to under $9.50 a month.
Katz said that reduction will primarily benefit lower-income Eversource customers and consumers that significantly reduce their electricity use. She said most residential consumers will see their overall Eversource bills rise by that $5.40 per month.
“By enacting this significant reduction, Connecticut brings the state’s residential customer charges down to levels that are comparable with national best practices and recognizes that high fixed charges run counter to consumer interests and a clean energy future,” said Mark LeBel, staff attorney for the activist group Acadia Center.
The 50 percent cut in fixed charges was mandated under legislation passed by the 2015 General Assembly to limit residential customer charges.
Read the full article from the Hartford Courant here.
Victory for Consumers and Clean Energy in Connecticut Electric Rate Case
Approved Settlement Significantly Reduces Eversource Residential Customer Charges
HARTFORD, CT – On April 18, 2018, the Connecticut Public Utility Regulatory Authority (PURA) announced its decision to lower the customer charge for Eversource residential customers from $19.25 to below $9.50. This 50% reduction follows the requirements of a 2015 law enacted by the Connecticut General Assembly to limit residential customer charges, the fixed fee that customers pay regardless of the amount of energy used. Acadia Center first raised this issue in Connecticut in Eversource’s previous 2014 rate case, and, since 2015, has participated in two rate cases and a generic proceeding to ensure the proper implementation of the law.
“Connecticut has taken an important step today towards a clean and consumer-friendly energy system,” said Daniel Sosland, President of Acadia Center. “The Office of Consumer Counsel, Attorney General’s Office, and the Connecticut General Assembly have made major progress in bringing relief to Connecticut’s electric customers, and Acadia Center looks forward to working with these partners as the state moves forward with further reforms to the energy system.”
Customer charges for residential electric customers typically range from $5 to $10 a month, but in some states are significantly higher. High customer charges disproportionately burden seniors and low-income customers, who typically use less electricity than average. They also reduce the incentive for customers to lower their electricity bills through conservation, investment in energy efficiency, or renewable energy technologies like solar power. Before the implementation of the new law, Connecticut’s residential customer charges for its two major utilities were $19 per month and $19.25 per month respectively.
Bill Dornbos, Acadia Center’s Advocacy Director, said, “Consumers everywhere prefer choice and control, and this lower monthly fixed charge will give customers substantially more control over their electric bills. The new rate design will also help promote energy efficiency and renewable energy, more closely aligning Connecticut’s electricity rates with its energy policy goals.”
“By enacting this significant reduction, Connecticut brings the state’s residential customer charges down to levels that are comparable with national best practices and recognizes that high fixed charges run counter to consumer interests and a clean energy future,” said Mark LeBel, staff attorney for Acadia Center. “This is a significant step at a time when states around the country, including neighboring New York, are debating how to move forward on this important issue.”
Mark LeBel, Staff Attorney
firstname.lastname@example.org, 617-742-0054 x104
Krysia Wazny, Communications Director
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Advocates seek more momentum for Massachusetts offshore wind
Boston-based attorney Mark LeBel says the clean energy non-profit Acadia Center where he works “strongly supports going big on offshore wind all across New England,” but recognizes that the appeal of hydropower is its low price.
“There are plenty of questions about hydropower. It’s not a perfect resource,” he says. “Hydro-Quebec has been building out new dams for roughly the last decade with the idea of selling to new customers.”
LeBel emphasizes that the more renewable sources Massachusetts can bring online, the less additional natural gas infrastructure it will need.
Read the full article from Energy New Network here.
Central Hudson Agrees to Reduce Its Residential Customer Charge, Benefiting Consumers and Clean Energy
NEW YORK — On April 18, Central Hudson Gas and Electric proposed a settlement in its ongoing rate proceeding, in which it agrees to reduce its current electric and gas residential customer charge from $24 to $19.50 over three years. Central Hudson’s customer charge reduction makes it the first New York utility to reduce its customer charge in more than a decade.
Jen Metzger, Director of Citizens for Local Power, said: “Central Hudson’s historically high fixed charges have been a burden on many seniors and low- and moderate-income households, which tend use less energy. We welcome this important step in the right direction to alleviate this burden and make rates fairer by tying them more closely to how much energy customers actually use.”
Cullen Howe, Acadia Center’s New York Director, said: “Central Hudson’s agreement to reduce these regressive fees will benefit the majority of its residential customers. As the state looks to ramp up its efforts on energy efficiency and clean energy, Acadia Center believes it is crucial that New York utilities and regulators provide the right incentives to invest in these resources. Though Central Hudson’s fixed charge is still high and must continue to be lowered, other utilities should follow its example and begin reducing their customer charges as well.”
Also referred to as basic service or fixed charges, customer charges are flat fees that every customer pays, regardless of the amount of electricity or gas used. Across the country, fixed charges for residential electric customers typically range from $5 to $10 a month, but in some states — notably New York — these charges are significantly higher. Central Hudson’s current customer charges are the highest in New York and among the highest in the nation.
High electric customer charges disproportionately burden low-income customers, who typically use less electricity than average and generally benefit from lower customer charges. They also conflict with New York’s goals for a clean, modern, consumer-friendly electric system by removing any incentive for customers to lower their electricity bills through conservation, investment in energy efficiency, or renewable energy technologies like solar power.
While these reductions are an important step, other New York utilities have continued to maintain, or seek increases to, these charges. On March 15, for example, the Public Service Commission approved a decision allowing National Grid to maintain its existing monthly customer charge at $17, and Orange & Rockland County Utilities recently filed a rate proceeding seeking to increase its current $20 customer charge to $22. The New York Customer Charge coalition has set up a web site at www.lowerfixedcharges.org to continue advocating for lowering these charges and providing rate relief to low-income and low-usage New York energy consumers.
Jessica Azulay, Program Director at Alliance for a Green Economy, said: “We hope the Central Hudson agreement is the first step in a process to reduce fixed charges for all utilities across New York State. New York has set ambitious energy affordability and climate goals. Reduction in fixed charges is a major tool that utility regulators can and should use to accomplish both of those goals. We urge the Public Service Commission to use this tool aggressively to ease energy burdens for residential customers and incentivize conservation, energy efficiency, and investments in distributed renewable energy.”
Richard Berkley, Executive Director of the Public Utility Law Project of New York, said: “We are grateful to Central Hudson for taking the lead in beginning what will hopefully be a statewide reduction of New York’s extremely high customer charges. In a state where approximately half of residential energy consumers have trouble paying their utility and other vital bills such as food, medicine, mortgages or rent, taking concrete steps toward greater affordability by reducing these regressive charges is something we can all support, and we are equally grateful to our coalition partners and to the Department of Public Service for its assistance in bringing about the first reductions of these charges.”
“Fixed customer charges in New York are too high and are bad policy. This settlement marks an important step toward reducing the harmful effects that these charges have on customers, and in aligning rates with the New York vision for electricity markets,” said Karl R. Rábago, executive director for the Pace Energy and Climate Center and a former utility regulatory commissioner. “We are pleased that our years of work in rate cases in New York against these unfair utility charges is bearing fruit.”
Jonathan Bix, Executive Director of Nobody Leaves Mid-Hudson, said, “This nearly 20% reduction in Central Hudson’s fixed charge will increase affordability and decrease shutoffs for low-income customers. Although this reduction is a critical victory, Central Hudson and other utilities must continue to lower their regressive fixed charges, including Orange & Rockland Utilities through their current rate proceeding.”
Cullen Howe, Senior Attorney & NY Director
firstname.lastname@example.org, 212-256-1535 x501
Krysia Wazny, Communications Director
email@example.com, 617-742-0054 x107
For Fairer Electric Bills, Lower Fixed Charges
Residential electricity rates are typically comprised of two basic parts — a volumetric charge based on energy used and a monthly fixed charge, which is typically referred to as a customer charge. Customer charges are flat fees that every customer pays, regardless of the amount of electricity or gas used. Because utilities have a fixed revenue requirement, higher customer charges lead to lower volumetric charges, and vice versa.
Over the past several years, utilities across the country have pushed for higher customer charges, in part because they provide a guaranteed revenue stream. Acadia Center has developed materials showing that fixed charges for residential electric customers in most states typically range from $5 to $10 a month, but are much higher in New York, averaging close to $18. Central Hudson Gas and Electric’s current customer charge of $24 is the highest in New York and among the highest in the nation.
Why lower customer charges?
- High customer charges disproportionately impact low-income customers, who typically use lower than average amounts of electricity and who are often forced to spend significant amounts of their income on utility bills. While high customer charges might represent only a small fraction of a bill for higher-income consumers, these charges can represent a large portion of a low-income consumer’s bill, making energy costs proportionately greater for those on whom the burden is already greatest.
- High customer charges conflict with New York’s goals for a clean, modern, consumer-friendly electric system by decreasing incentives for customers to lower their electricity bills by investing in energy efficiency or distributed energy resources like solar power.
High customer charges don’t align with state goals
Importantly, high customer charges reduce the incentive for investment in energy efficiency. This is problematic as New York seeks to ramp up its efforts to improve statewide energy efficiency by announcing a plan to set a 2025 energy efficiency target by Earth Day. As Acadia Center has pointed out in its recently released EnergyVision 2030 Progress Report for New York, New York’s electric energy efficiency annual savings level is only 0.5%, compared to savings levels of 3.24% in leading states such as Massachusetts. As New York seeks to establish ambitious energy efficiency targets, it needs to set the right incentives to invest in these resources by ensuring that utilities reduce these charges.
Working toward rate relief
Things may be starting to change. On April 18, thanks in part to Acadia Center’s advocacy, Central Hudson Gas and Electric agreed to reduce its current electric and gas residential customer charge to $19.50 over three years in its ongoing rate proceeding, becoming the first New York utility to reduce its customer charge in more than a decade.
Acadia Center has set up a website with several other organizations at www.lowerfixedcharges.org to continue advocating for lowering customer charges to levels that provide rate relief to New York energy consumers and set New York on a path to meet its clean energy and energy efficiency goals.
Our Turn: Erika Niedowski and Meg Kerr: Addressing rural concerns about clean energy development
Renewable energy siting challenges are not unique to Rhode Island, but they are particularly pronounced given the state’s small size and high population density. Rhode Island has made ambitious commitments to clean energy deployment and carbon emissions reductions, including 45 percent reductions by 2035 and 80 percent by 2050.
As the state progresses towards its renewable energy goals, pressures are increasing to develop land with solar or wind resources, causing concern in some communities, especially rural ones. With smart local siting policies, both “green” goals of clean energy and land conservation can be achieved: Rhode Island communities can enjoy both the benefits of renewables and be good stewards of our landscapes and habitats.
The Renewable Energy Siting Stakeholder Committee is discussing ways to prioritize the siting of renewable energy in places that minimize environmental impacts, including rooftops and previously altered environments like landfills. Unlike Massachusetts, Rhode Island does not have policies that specifically encourage siting in such places.
Read the full article from the Providence Journal here.
Debate over Millstone rages on
“Millstone Power Station may play a role in the state’s transition to the clean energy future, but Connecticut needs a realistic, long-term plan to replace the plant with clean energy,” Acadia Center said this week.
In the absence of such a plan, Acadia Center argued new fossil fuel power plants eventually would replace Millstone. Ratepayers would be on the hook for new gas pipeline infrastructure to support them, which “would be almost immediately incompatible with the state and region’s mandatory greenhouse gas targets,” the environmental advocacy group said.
Read the full article from The Day here (article may be behind paywall).