Eversource Granted High Profit Margins, Automatic Annual Rate Increases, and Detrimental Charges for New Solar Customers
57 Consumer, Clean Energy, and Community Organizations Call on State Leaders to Address Counterproductive Decisions
BOSTON — Today, Acadia Center, Health Care Without Harm, MASSPIRG, Vote Solar, and 53 other organizations released a joint statement pointing to serious concerns over decisions by the Massachusetts Department of Public Utilities (DPU) in Eversource’s recent electricity rate case. These decisions are inconsistent with the consumer-friendly clean energy future that Massachusetts is striving for. The 57 organizations bringing forward these concerns come from many different perspectives, including low-income and ratepayer advocates, environmental, health and clean energy public interest organizations, solar advocates, and clean energy businesses.
“Massachusetts is embracing many innovations on clean energy, including energy efficiency and offshore wind, that will boost the Commonwealth’s economy, benefit consumers, improve public health and reduce greenhouse gas emissions,” noted Daniel Sosland, President of Acadia Center. “Unfortunately, in four important ways, the DPU’s decisions in Eversource’s rate case represent a significant step away from embracing a clean energy future. Instead, these DPU decisions provide incentives for the company to invest in outdated and expensive energy infrastructure, reduce customer control, and impose significant unnecessary costs on consumers.”
Two of these decisions, unnecessarily high profit margins (known as the return on equity) and automatic annual revenue increases going forward, could collectively cost ratepayers an extra $460 million over five years. The other two decisions, unprecedented new demand charges on new residential solar customers and the elimination of optional residential on-peak/off-peak rates, would move away from electricity rates that are efficient and consumer-friendly.
“Hospitals typically have very small margins, so every unnecessary penny per kWh for Eversource means a lot less money for healing patients,” said Paul Lipke, Senior Advisor for Energy and Buildings at Health Care Without Harm. “Unless addressed, Eversource’s rate changes also increase pollution and shift costs from energy to health care. This conflicts directly with efforts to constrain the Commonwealth’s health costs, and at a time when households already spend six times on health care what they spend on energy. We can and must do better.”
“The Commission has decided to effectively raise costs, remove value and reduce customers’ understanding of and control over bills by approving Eversource’s new solar demand charge,” said Nathan Phelps, Regulatory Director for Vote Solar. “This decision is out of step with Massachusetts laws to encourage the state’s transition to a clean and reliable electricity system, and out of step with the DPU’s own prior leadership ensuring that solar customers are treated fairly for the local power they generate. We urge the Legislature and the Governor to reject this decision and reinstate Eversource customers’ right to lower their own utility bills with rooftop solar, protect the thousands of solar jobs serving our state, and deliver on the Commonwealth’s commitment to building a clean energy economy.”
“For many of us, our electricity bills are a significant monthly expense, and we rely on regulators to make sure utility companies like Eversource don’t overcharge ratepayers or adopt pricing practices that are deceptive or unfair,” said Deirdre Cummings, MASSPIRG’s Consumer Program Director. “In this case, the DPU has approved Eversource’s new pricing schemes that will result in hundreds of millions in excessive charges; while at the same time, Eversource has made it harder for consumers to monitor their electricity use and reduce their bills.”
“Residential on-peak/off-peak rates should be used as a key tool to manage peak demand. Historically, these have been underutilized because the utilities do not publicize them and make them difficult to sign up for,” said Mark LeBel, Staff Attorney for Acadia Center. “Instead of optimizing these rates and making them easier to access, the DPU let Eversource eliminate them.”
The decision on the return on equity is currently being appealed to the Massachusetts Supreme Judicial Court by Attorney General Maura Healey, and the decision on demand charges for new residential solar customers is being appealed by Vote Solar and other parties. The decision on demand charges is the subject of a bill recommended favorably by the Joint Committee on Telecommunications, Utilities, and Energy at the Massachusetts legislature, and a requirement for optional on-peak/off-peak rates is included in several different bills. The DPU recently denied the Attorney General’s motion for reconsideration on the automatic annual revenue increases.
Mark LeBel, Staff Attorney
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Janice Gan, Public Engagement and Communications Associate
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RGGI States Leading the Way Toward Economic and Environmental Success
BOSTON — A new report from Acadia Center shows that the Northeast and Mid-Atlantic states’ Regional Greenhouse Gas Initiative (RGGI) continues to deliver for the economy, for the environment, and for public health. The program is driving down CO2 emissions, which have declined in each of the last 6 years and are down 40% since the program launched. The RGGI states have outperformed the rest of the country in emissions reductions and economic growth over this period, and the region has seen average electricity prices fall while prices have increased in the rest of the country. On top of all this, the program has driven substantial reductions in harmful co-pollutants, making the region’s air cleaner and its people healthier.
The report, Outpacing the Nation: RGGI’s Environmental and Economic Success, describes key trends and drivers, including the following:
- Emissions of CO2 fell 8.4% below the RGGI cap in 2016, and emissions have declined 40% since RGGI launched.
- Average electricity prices across the region have decreased by 6.4% since RGGI took effect, while electricity prices in other states have increased by 6.2%.
- RGGI states have reduced emissions 15% faster than other states and have seen 4.3% more economic growth since RGGI launched.
- Proposed RGGI reforms will result in 130 million fewer tons of CO2 and $1.28 billion in avoided health impacts through 2031.
“States in RGGI are demonstrating the power of bipartisan climate leadership,” said Daniel L. Sosland, Acadia Center President. “RGGI is a powerful example of an effective policy that drives economic, consumer, health and climate benefits while tackling a major challenge. Responsible leaders know we need to address climate change, and RGGI provides a readily available blueprint for success.”
“Launching RGGI took bold action from the region’s Governors, and thanks to that leadership the participating states have been reaping the rewards ever since,” said Peter Shattuck, Director of Acadia Center’s Clean Energy Initiative. “The current RGGI Governors have built on that success by strengthening the program for the future, ensuring that RGGI will continue to deliver benefits for years to come.”
“The RGGI states have shown that we don’t have to choose between ambitious climate policy and economic prosperity. In fact, RGGI’s track record has proven that ambitious climate policy can drive economic prosperity,” said Jordan Stutt, Policy Analyst at Acadia Center. “Now that the program for the electric sector has been strengthened and extended, we hope this proven model will be expanded to cover more states and applied to the region’s largest source of climate pollution: transportation.”
For more information, see: acadiacenter.staging.wpengine.com/document/outpacing-the-nation-rggi
Jordan Stutt, Policy Analyst
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Peter Shattuck, Director, Clean Energy Initiative
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Krysia Wazny, Communications Director
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A Change for All
As of now, RGGI reduces the carbon cap by 2.5% each year. However, RGGI can be made stronger by reducing the annual carbon cap to 5%. A study by the Acadia Center calculated that shifting the cap to a 5% annual carbon reduction will provide more than $2 billion in health benefits through 2030, which is more than double the benefits that would be achieved by continuing the 2.5% annual reduction.
Read the full op-ed in the Manhattan Times here.
9 States Deciding Whether to Tighten Power Plant Emissions Rules in RGGI
Since creating the interstate compact to cut utility sector carbon emissions in 2009, the RGGI states have cut their carbon emissions from electric generation by 37 percent and reduced electricity prices by 3.4 percent, all while growing their economies 3.6 percent faster than states outside their club, according to a study by the clean energy nonprofit Acadia Center.
“All of the program’s history suggests we can continue to go after these emissions reductions aggressively without causing a burden to ratepayers,” said Jordan Stutt, a policy analyst at the Acadia Center.
Stutt pointed to modeling conducted for the RGGI states showing that the tighter cap would result in 99 million avoided tons of carbon dioxide through 2031—the equivalent of one year’s worth of emissions from 26 coal plants. The cost would be less than a tenth of a penny per kilowatt-hour for consumers. (For an average U.S. household consuming 900 kilowatt-hours per month, that would be equivalent to a 90 cent electric bill increase.)
The clean energy drive has provided benefits beyond fighting climate change—in significantly fewer premature deaths, heart attacks, asthma attacks, and respiratory illnesses, according to an Abt Associates study released earlier this year. It quantified the health savings at $5.7 billion.
“No matter how you slice it, this program has been a major success,” Stutt said.
Read the full article from InsideClimate News here.
Viewpoints: How clean energy can help save Connecticut’s budget
As the state’s budget battle continues, debate over cutting costs and raising revenue has not focused on a promising strategy – ramping up clean energy efforts to grow our way out of the budget problem. Deploying solar and increasing building energy efficiency cuts air pollution, reduces energy costs, creates jobs, and stimulates the state’s economy – all while putting more tax revenue in state coffers. We can help plug the budget gap by strengthening our clean energy economy. The two work together.
What we absolutely should not do is raid clean energy funds.
An essential part of Connecticut’s clean energy economy transition is the Regional Greenhouse Gas Initiative (RGGI), a multi-state cap-and-invest system to reduce carbon dioxide emissions from the electric power sector. Through RGGI auctions of carbon allowances, Connecticut has raised and reinvested $160 million in programs that help residents and businesses save money on electricity and heating bills—which means more disposable income to spend.
RGGI fund raids would cause consumers to lose out on significant savings on their energy bills, with every raided dollar costing consumers nearly three more. An Abt Associates analysis shows that by reducing air pollution, RGGI has decreased health impacts and saved lives, avoiding up to $300 million in healthcare costs in Connecticut.
Simply put: if RGGI funds are raided, Connecticut loses.
Similarly, Connecticut’s Energy Efficiency Fund (funded in part by RGGI proceeds) helps support nearly 34,000 jobs in technical fields like home performance and HVAC, and saved $3.5 billion for Connecticut households and businesses over the past decade.
Every dollar invested by Connecticut’s energy efficiency programs saves $3.89 on utility bills. Yet this fund – paid for by ratepayers for their benefit – is raided in the Senate Republican budget proposal still on the table. Sweeping money from these programs is shortsighted and would damage Connecticut’s economy, health, and quality of life for years to come.
Beyond protecting critical energy programs from budget raids, our state legislators and governor should be proactive. Here are four clean energy policies lawmakers and the administration can act on now to aid Connecticut’s fiscal health:
- Reduce state agencies’ energy expenditures. Expanding and extending Connecticut’s Lead by Example program, which lets agencies use future energy savings to finance efficient upgrades to aging facilities, could save about $45 to 60 million every year.
- Set up a full-scale shared solar program. According to Vote Solar, this proven approach can deliver more than 2,500 new jobs, $370 million in local economic benefits, and $80 million in property taxes. Similarly, expanding virtual net metering to help speed solar deployment will save municipalities hundreds of thousands of dollars a year in energy costs—badly-needed funds given the anticipated deep cuts to local aid.
- Allow electric vehicle manufacturers like Tesla to sell cars directly to in-state consumers. Tesla estimates it will generate $12 million in sales tax revenue if allowed to open six stores, and it is willing to pay any shortfall to the state after two years. Acadia Center analysis shows that this benefit would come at no cost to existing dealership jobs. Making electric vehicles easier to buy also helps the state tackle a major source of air pollution—cars and trucks—which causes respiratory ailments, imposing huge medical costs.
- Establish a regional policy to reduce transportation climate emissions while generating revenue for reinvestment. Acadia Center analysis shows that pricing CO2 emissions from the transportation sector could generate hundreds of millions of dollars annually. At a time when the state’s transportation funding is in crisis, these funds could put cleaner buses on the road and build a better-running rail system, improving community access to transportation.
The bottom line: a clean energy economy is one that is strong and growing. Both legislators and the governor have important roles to play in ensuring a forward-looking energy agenda, from robust funding for efficiency programs to an ambitious final Comprehensive Energy Strategy. With Connecticut’s frequent failing grades in both air quality and budget health, the state desperately needs to adopt a clean energy budget for the future.
Claire Coleman is Climate & Energy Attorney for Connecticut Fund for the Environment. Kerry Schlichting is Policy Advocate for Acadia Center.
This op-ed was published in the CT Mirror.
States Bring Economic Clout to Fighting Climate Change
Nine states, including New York, participate in the Regional Greenhouse Gas Initiative, a mandatory, market-based program to reduce carbon emissions. According to a new analysis by the Acadia Center, since 2005 the RGGI states have reduced carbon emissions by 40 percent while their economies have grown by 25 percent, outpacing the rest of the country.
Acadia analyst Jordan Stutt said these states bring real economic clout to the effort to combat climate change.
“Together, they represent the sixth-largest economy in the entire world,” he said. “This is no longer about symbolic statements; it’s about real action to reduce harmful emissions.”
Following the president’s announcement, the RGGI states reasserted their commitment to upholding the Paris agreement.
The report found that participation in RGGI has done more than reduce carbon emissions. Stutt said reductions of such other pollutants as sulfur dioxide and nitrogen oxides have led to fewer asthma and heart attacks, premature deaths, and missed school and work days – all of which saves money.
“When we quantify all of those avoided impacts,” he said, “we see that RGGI has delivered $5.7 billion in avoided health costs for the region.”
Stutt added that electricity prices have also declined in RGGI states while going up in other states.
Six of the RGGI states have joined with seven other states and territories to form the U.S. Climate Alliance. While the alliance doesn’t have a coordinated plan to reduce emissions, Stutt noted that some of the states already have policies in effect while others have legislation in progress.
“There are a number of different vehicles being discussed to address this issue,” he said, “and it’s encouraging to see that all these states are going to be working together to achieve that goal.”
Combined, the U.S. Climate Alliance states, which include California, represent the third-largest economy in the world, behind the United States and China.
The analysis is online at acadiacenter.staging.wpengine.com.
Read and listen to the full story from Public News Service here.
Here’s what some are saying about Trump’s decision to pull out of Paris Climate Agreement
Daniel Sosland, president of Acadia Center, a nonprofit: “The Northeast region has successfully proven the benefits of pursuing a clean energy, low polluting economy: states have reduced climate pollution while enjoying greater economic growth, job creation and public health benefits. This significant progress on clean energy under both Republican and Democratic leadership at the state and federal level serves as a prime example of what is possible across the nation.”
Read the full article from Mainebiz here.
RGGI States Can Save Billions on Healthcare with Stronger Program
BOSTON—New research from Acadia Center shows that a strengthened RGGI program would drive $2.1 billion in avoided health impacts. A stronger cap on carbon pollution would drive reductions in regional emissions of harmful pollutants like SO2, NOX, and particulate matter, which would lead to fewer emergency room visits, missed work and school days and premature deaths. The burdens of these co-pollutants fall disproportionately on low-income communities and communities of color, meaning that a stronger RGGI program will provide the greatest benefit to underserved populations.
“RGGI has created jobs, economic growth and climate benefits while improving the region’s air quality,” said Daniel Sosland, President of Acadia Center. “The RGGI states should build on that success by establishing ambitious cap levels through 2030 which would deliver substantial health benefits for the participating states.”
The new analysis shows that a 5 percent annual decline in the RGGI cap from 2020 to 2030—the most ambitious cap the RGGI states have modeled—would result in over $2 billion in avoided health savings, more than double the benefit of a continued annual cap decline of 2.5 percent.
“A stronger emissions cap over the next decade can help keep Springfield’s kids out of emergency rooms and in their classrooms,” said Sarita Hudson, Manager at Pioneer Valley Asthma Coalition. “Reducing pollution would make a huge difference in the everyday wellbeing and lives of this community.”
Environmental groups, health professionals and low-income advocates have called on the RGGI states to seize the opportunity provided by the program to look out for the communities burdened by pollution in a way that dramatically improves local air quality and generates revenue for the entire state. “The RGGI states can help low-income communities breathe easy, and strengthen them by re-investing RGGI proceeds into projects that spur local economic activity and create jobs,” said Jesse Lederman, Director of Public Health and Environmental Initiatives at Arise for Social Justice.
“Good state and regional policy needs to use this kind of smart thinking, to avoid inadvertent cost shifting from energy to health care. We support this forward-thinking effort” said Paul Lipke, Senior Advisor for Energy and Buildings, Health Care Without Harm.
Information on the 2016 RGGI Program Review, including meeting materials and stakeholder comments, can be found at: http://www.rggi.org/design/2016-program-review
Additional information on RGGI’s performance to date and needed reforms through the 2016 Program Review are described in Acadia Center’s 2016 RGGI Status Report:
The Regional Greenhouse Gas Initiative (RGGI) is the first mandatory, market-based effort in the United States to reduce greenhouse gas emissions. Nine northeastern and mid-Atlantic states reduce CO2 emissions by setting an overall limit on emissions “allowances,” which permit power plants to dispose of CO2 in the atmosphere. States sell allowances through auctions and invest proceeds in consumer benefit programs: energy efficiency, renewable energy, and other programs.
The official RGGI web site is: www.rggi.org
Jordan Stutt, Policy Analyst, Clean Energy Initiative
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