By Degrees: Energy Efficiency Efforts During the Pandemic | New Hampshire Public Radio

By Degrees: Energy Efficiency Efforts During the Pandemic

Dec 16, 2020

Energy efficiency upgrades can save money and cut back on carbon footprints. but how should much should we invest, especially during a pandemic? It’s been a big debate for N.H. utility regulators in recent weeks.  As part of  NHPR’s By Degrees climate reporting project, we unpack this issues and examine the pros and cons of greater efficiency. Should businesses and residents have to deal with up-front costs to create savings down the road? And what does this debate say about the state’s energy future?

Airdate: Thursday, Dec. 17, 2020


GUESTS:

  • David J. Creer - Director of Public Policy for the Business & Industry Association of NH.
  • D. Maurice Kreis - New Hampshire's Consumer Advocate in the Office of the Consumer Advocate. He represents the interests of the Granite State's residential utility customers at the New Hampshire Public Utilities Commission and elsewhere.
  • Annie Ropeik - NHPR energy & environment reporter.
  • Heather Tebbetts - Manager, Rates & Regulatory Affairs at Liberty Utilities.
  • Michael Vose - Republican state representative from Epping; chairman of the House Science, Technology, & Energy Committee.
 
Read Annie Ropeik's reporting on this issue.
 

 

inDepthNH: Rep. Vose Opinion: Consumer Advocate’s Column Missed the Point

NHSaves is a collaboration of New Hampshire’s electric and natural gas utilities working together to provide NH customers with information, incentives, and support designed to save energy, reduce costs, and protect our environment statewide.

How are you responding to climate change in your life? Take our quick, updated survey and help shape NHPR's reporting project, By Degrees.

Transcript

  This transcript was machine-generated and contains errors.

Laura Knoy:
From New Hampshire Public Radio, I'm Laura Knoy, and this is The Exchange. Energy efficiency upgrades can save us money and reduce our carbon footprints, but how much should we invest in it during a pandemic? That's been the debate before the New Hampshire Public Utilities Commission in recent weeks. And today in The Exchange as part of NPR's By Degrees Climate Reporting Project will break it all down. What are the pros and cons of these efficiency programs? Should businesses and residents have to deal with upfront costs to create savings down the road? And what does this debate say about New Hampshire's energy and climate future listeners?

Laura Knoy:
We're talking this hour with Don Kreis, New Hampshire's consumer advocate who represents residential utility customers at the Public Utilities Commission and elsewhere. Also, Michael Vose, Republican state representative from Epping, chair of the House Science, Technology and Energy Committee, and Annie Ropeik, NPR's energy and environment reporter who's leading the By Degrees Project. Well, a big welcome to everybody. And let's start with a couple basics. And Annie to you first. Energy efficiency means a lot of things. You know, insulation in your house, LED lights. What are we really talking about here? In terms of this debate before the Public Utilities Commission?

Annie Ropeik:
So this is the proposal that the state's big utilities that's Eversource, UNITIL, Liberty and the New Hampshire Electric Co-op, have to put forth every three years under state law for how much electric and gas sales they want to save through energy efficiency measures. So how much less energy they have to sell by increasing energy efficiency efforts? So for the next three years they are proposing something like four and a half percent less electricity and two point eight percent less gas. And might not sound like much, but it carries a cost of about three hundred and sixty seven million dollars, which would be passed on to ratepayers. So the utilities get to run the cost back of what they don't sell from ratepayers. But the idea is that it saves people a lot more money immediately and in the long run, by them just using less energy. And that's not just residents, but it's also businesses.

Annie Ropeik:
So this plan that the Public Utilities Commission is currently finishing up, deciding on before the end of the year is sort of a roadmap for how the utilities want to achieve those savings. All the programs and rebates and audits and retrofits of lighting and insulation and appliances for homes and businesses that they want to help people access to achieve these savings, how it's all going to be paid for, how it breaks down. And this is supposed to be decided on by the end of the year to take effect in January. But the PUC has sort of been extending its proceedings. So right now, we don't know exactly when this is going to be rolled out.

Laura Knoy:
So just to sort of lay out the philosophy of this, Annie, and correct me if I'm wrong, please. So the utilities are saying, OK, state of New Hampshire, if we want to reduce our broad energy output in the interest of climate change, for example, we will actually sell less of our product. But you got to make it work for us. You can't just put us out of business here. Is that what's going on?

Annie Ropeik:
That's right. I mean, the utilities always get to recoup their costs of providing this necessary public service. They're sort of like pseudo nonprofits in my mind, not literally, but they you know, they provide a necessary public service. So they are entitled under the law to be able to cover their costs. And so in this case, they are saying, yes, we agree to work actively, to sell less of our product or deliver less of our product. And the state has to agree on a sort of cost structure to have that covered. And if you look at your energy bill, this is in the fine print. It's called the system benefits charges. It's a very small charge in your bill, like my monthly utility bill currently from Eversource is one hundred and seventy eight dollars. This charge is two dollars of that. So that's for me as an average apartment renting residential ratepayer. And all of that adds up to help utilities cover the cost of these lost sales. And it brings everyone's demand and cost down in the long run and helps the utilities sort of save money to do things that they think matter more, which we'll talk about during this hour.

Laura Knoy:
Well, and listeners, if you want more information about some of these programs as they exist now, you can go to our Web post for today's show. It's an nhpr.org exchange. So Don Kreis turning to you again as the state's consumer advocate. Why is this so important to you?

Don Kreis:
That's really easy to answer. Let me first start by wishing everybody a happy Hanukkah. Hanukkah is the Jewish festival of energy efficiency. And so it's very auspicious that we happen to be discussing this subject today because of the oil lamp that burned for eight days in the temple, even though it was supposed to burn for one. That is energy efficiency and action. I'm passionate about this subject as the state's ratepayer advocate because negawatts are cheaper than megawatts. It's that simple. The most inexpensive way to meet the next unit of demand is by saving that next unit of demand. And that's what we should be doing. That's what we should be investing in before we go to any other option, whether it's a renewable option, whether it's nuclear power or whether it's fossil generation. That's the story.

Laura Knoy:
Negawatt, meaning obviously, no watts is always better than than more megawatts, no matter where they come from. That's what you're saying, Don.

Don Kreis:
That is exactly what I'm saying. So even though Annie referred to the utilities as pseudo nonprofits, they're not nonprofits. They're in business to sell energy. And I'm in business to help them sell less of it.

Laura Knoy:
Well, and we've got a call to Liberty Utilities a little bit later in the show. But Representative Rose, I want to bring you in again as chair of the House Science, Technology and Energy Committee. How are you viewing these energy efficiency programs right now?

Michael Vose:
Thank you, Laura. I really appreciate being on the program this morning and being part of this discussion. The legislature has mandated essentially that we do all cost effective energy efficiency and we've actually been doing that for quite some time, starting with the core energy programs and then recently expanding that with the energy efficiency resource standard. And the legislature, I think, believes that energy efficiency is extremely important to our long term energy future. But there are questions about whether the energy efficiency resource standard is the best way to accomplish energy efficiency. And those questions are legitimate. And so I think over this coming session and over the years ahead, we're going to take a good, strong, hard look at what is the best way to deliver energy efficiency, as I'm sure we'll talk about this at more length as the show goes on.

Michael Vose:
We have to ask the question about whether mandating something from government versus relying on people's personal responsibility is the more important way to get something done. And I'll look forward to talking about that with you in more detail as we go on.

Laura Knoy:
Well, you can give us a little more detail there, Representative Vose. That's interesting. So it's the idea that if saving money through energy efficiency is so important, consumers would buy that more efficient refrigerator themselves. Is that right?

Michael Vose:
Well, that's exactly right. I mean, if it's in your best interest to do something and you take personal responsibility for your life, then you would do it and would not require prompting from government or any other source to do it. And I worry that when government does impose mandates that we might be teaching our citizens the wrong lesson, we may be teaching them that, oh, you don't have to worry about energy efficiency. The government will take care of that. And that lets them abrogate their sense of personal responsibility for dealing with this issue.

Michael Vose:
So, if there was a way that we could appeal to people's sense of personal responsibility and combine that with programs that help them achieve the goals that we want them to achieve, maybe that would be the better solution. So we need to continue exploring this topic to figure out, well, what is the best way to get to the goal that we all seek, which is to have a more efficient energy economy.

Laura Knoy:
Well, I'd love to hear from listeners on that as well. This idea that we're talking about where energy efficiency should come from in terms of who is helping consumers do it, motivating consumers to do it. We're looking at energy efficiency broadly, but then specifically discussions before the Public Utilities Commission and asking how much more should businesses and individuals be willing to pay in electric bills now to invest in efficiency that pays off down the road? That's what the PUC is looking at. So, Don Kreis, picking up on what representative said, if, you know, energy efficiency does save so much money over the long run, why don't residents and businesses just do it on their own?

Don Kreis:
Well, let me start by saying that I respect that sort of free market philosophy and ideology, but we're not operating in a free market here. We are, all of us, involuntary customers of monopoly-providers of electricity and to some degree, natural gas. And so we're we're in a regulated environment. And the state, the best public policy is public policy that delivers energy services to people at the lowest possible cost while assuring its reliability. There are all sorts of market barriers to energy efficiency. And we've studied this and studied and studied this many times. And we know conclusively that people don't just naturally gravitate to energy efficiency for all kinds of reasons. And so our ratepayer-funded energy efficiency programs deliver market signals to consumers that give them the choice. Nobody's forced to accept energy efficiency measures in their homes or in their businesses. We just make it financially advantageous to them and cost-effective so that they can make the investments in energy efficiency and save money on their bills. If we don't provide these programs, then the payback becomes much too long term for them to find the proposition attractive. So we make the proposition attractive and people get to choose. It's that simple.

Laura Knoy:
How do you do that, Don? What are some of the market barriers to energy efficiency that you mentioned and how do you try to remove those barriers?

Don Kreis:
Well, essentially, we we subsidize them will say to you, if we...

Laura Knoy:
Don, I wonder if we lost you there again, Don, if you were go ahead.

Don Kreis:
...or help you lower your energy bill. If we don't give you the subsidy, then there won't be that immediate bill decrease et savings. But if we do give you the subsidy and there is a net savings and it's a financially viable proposition for you, it's true for businesses and it's true for residences.

Laura Knoy:
And we lost you there for a little bit, Don. So I wonder if you could just circle back for a second. And I apologize. It's you were starting to explain exactly how this is done. And we caught most of it. But if you could just begin again there, please. It's basically discounts on products and services that increase energy efficiency. Is that it?

Don Kreis:
It is discounts, it's also help. The first step toward becoming energy efficiency, or energy efficient in your home is having an energy audit. So the auditor comes to your house and takes a look at everything that's happening there and gives you advice about how best to make sure that your home is as energy efficient as possible. That's especially valuable and important for businesses. We all know that businesses are very stressed these days. The typical New Hampshire business is a very complicated organization. The managers don't have a lot of time to think about energy. And so the experts from the energy efficiency program come into your workplace and tell you exactly what you need to do to make your business as energy efficient as possible.

Laura Knoy:
Well, and maybe a little later we'll talk about those energy efficiency auditors and, you know, how much they've been able to go into homes and businesses given the pandemic. But, Annie, back to you, please. What's the role of this whole energy efficiency discussion that we're having in the overall fight against climate change?

Annie Ropeik:
It has a huge role. I mean, we waste a lot of energy just because we haven't sort of fine-tuned our our infrastructure, our home appliances or businesses to use as little as possible because they were designed in a world where we weren't worried about how much emissions are our energy system caused. We could sort of be a little bit freewheeling with that and we're no longer in that world. So there is a report from the from an international energy agency that is like a key sort of global authority on energy matters and climate change, that said that if we did as much energy efficiency as possible as sort of a global economy, we could achieve 40 percent of the targets of the Paris climate accords. 40 percent just through this one measure, which in theory just means using a little bit less or streamlining what we do currently use. It should save everyone money. It should be a win-win. It may carry some upfront costs to to create those savings. But I mean, I think it's important to understand that you only have a net increase to your cost from energy efficiency if you don't take advantage of any of the efficiency measures that those upfront costs are paying for. Right. So it's a complicated calculation. But, you know, a lot of climate advocates see this. And I know that Don is one of them as an evangelist for energy efficiency, is just the lowest hanging possible solution. The cheapest form of energy and the lowest carbon form of energy is what you don't use. So this could be a huge opportunity to take a big chunk out of our climate goals without too much strain.

Laura Knoy:
What do you think Representative Vose energy efficiency is low hanging fruit. Why not grab it?

Michael Vose:
Well, yes, it is low hanging fruit, and each of us as individuals should be grabbing as much of it as we can. The energy audits that Don Kreis referred to are a good example of information that individual consumers can use to help them figure out, well, how do I seize control of my situation, do the responsible thing and become as energy efficient as possible. More education of that type will probably be good for consumers in the long run and for the citizens of our state and for our energy picture. So I would be in favor of doing more of the information exchange that an energy audit can provide. So having the state pay for some energy audits or ratepayers paying for some energy audits is probably a decent way to go. I will say that we've been lucky to some degree in that a lot of other states around us have been doing this energy efficiency resource standard activity for quite some time. And so we have actually some evidence to show that in certain states like Connecticut and Massachusetts, they've spent a lot, a tremendous amount of money on energy efficiency. And yet they have higher energy rates than we do here in New Hampshire. We've been more prudent and our energy rates are lower. There is some question about whether all this expenditure on energy efficiency actually produces the results that it purports to attempt to accomplish. So we need to be very careful how we implement these programs and we need to pay attention to what's happening around us to see what other experiences people are having.

Michael Vose:
So Representative Vose, you're saying, hey, I'm all for energy efficiency, but I'm not so sure about doing it in this way, sort of making ratepayers pay a little bit more and turning that back into energy efficiency.

Michael Vose:
Well, as you well know, Laura, the devil's in the details for just about anything that we attempt to do as human beings. So, yeah, we need to achieve energy efficiency. But how we go about doing that, I think, is an area that's still ripe for lots of thinking and debate.

Laura Knoy:
Well, and that's why we're here today and our listeners are jumping in as well. Let's go to our listeners now. Alex is calling from Concord. Welcome, Alex. Thanks for calling The Exchange today.

Caller:
Yeah, thanks for having me. I wanted to say, me and my wife bought a farmhouse a few years ago. It was built in the nineteen hundreds and it was terrible as far as energy efficiency. We used the New Hampshire Saves program, which was great. They came out the insolated the whole house, and we went from using about 750 gallons of oil a year to less than 200. And so it really paid for itself in just one season. You know, we never could have afforded to insulate ourselves, but but because they helped us, we could do that. And it made a huge difference in our lives.

Laura Knoy:
That's amazing. 750 gallons, Alex, to two hundred gallons?

Caller:
It was it was amazing. When the the auditor came out he said that it was as insulated as a barn and there was nothing in there. So it made a big difference.

Laura Knoy:
Wow. Well, thanks for calling, Alex. I live in a very old drafty house myself. Annie, what is New Hampshire saves that Alex referenced you mentioned it before, but but give us a little more there, Annie, please.

Annie Ropeik:
Yeah. So that's the state brand, basically for all of the programs that we're talking about, it's kind of the marketing umbrella that all of the audit programs and the rebates fall under. You might see the New Hampshire Saves logo on price tag on an efficient appliance at a hardware store, and they're able to call, you know, if you if you want to get an audit, if you want to know what your options are, to carry out all of these programs that the utilities are proposing with these three year plans. And I mean, the heating oil example hits close to home for me. And we literally moved out of an apartment that just had completely untenably high heating oil costs. We were renting. There were no insulation upgrades coming. It was going to cost more than our landlords wanted to do. I don't know what kind of options they were exploring for subsidies for that, but we couldn't afford it. And so we moved to an apartment that has propane heat. And it shocks me how much money we're saving. I mean, I we're barely going to pay for heat this winter from what we paid last winter. I think we're probably saving about fifteen hundred dollars a year just in making that switch. And, you know, the upgrades to propane are the kind of things that the New Hampshire Saves program that the state and utilities want to do. They want to encourage you to replace your your heating oil with propane or heat pumps, especially electric heat is even better. They want to encourage you to insulate. We have some of the oldest housing in the country. And so there are plenty of drafty old, you know, barns turned homes in this state that have barely ever had any efficiency measures taken on them. And people, you know, pay literally thousands of dollars that they don't need to, to cover those costs. And these programs seek to find ways. And representative is right that it's a lot more complicated than just saying, oh, we'll just pay for that. And that's fine. But these programs seek to help people make some of those changes.

Laura Knoy:
Representative Vose, what are your thoughts on Alex's story? He loves this New Hampshire Saves program because it certainly saved him a lot.

Michael Vose:
Yeah, great for Alex, and I appreciate him calling in today to tell us about that, but a question immediately occurs. The primary source of revenue for the New Hampshire Save's program is the system benefits charged to electric ratepayers. Why should electricity ratepayers be paying for someone to insulate their home? Do they get any benefit back from that as electricity ratepayers? That's a question that we wrestle with a lot in the state legislature. How this program is implemented doesn't always seem fair to the people who are paying for it.Well, and this is a huge topic that we will tackle after a short break. The idea that when we talk about efficiency, should we just be focusing on electricity? As you said, Representative Vose, Alex saved money not by reducing his electricity use, but by insulating his home. So that's another fundamental question that is before regulators. We will pick up that thread after a short break and we will also hear the perspective from the utility companies. All that's coming up.

Laura Knoy:
This is The Exchange I'm Laura Knoy. Today, we're unpacking recent hearings at the Public Utilities Commission where lower targets for energy efficiency savings are being considered. And here are a couple of the questions being debated: is the pandemic a time to raise rates, especially for businesses in the name of long term benefits? What are the real costs if efficiency energy goals are postponed? And where is the best place to look for energy savings? Are we focusing too much just on the utilities and their role? With us now is Heather Tebbets. She's manager of rates and regulatory affairs at Liberty Utilities. Welcome, Heather. Good to have you.

Heather Tebbets:
Good morning. Thank you for having me this morning.

Laura Knoy:
Well, and make the case, Heather, please, that this rate increase to pay for energy efficiency is worth it for your customers.

Heather Tebbets:
Sure. So the way that Liberty looks at energy efficiency, it's part of a portfolio. OK, so we have system upgrades that are necessary. We're looking at all ways to provide the lowest cost delivery service to our customers. And one of the things that's really important to this company is sustainability and driving....really just hoping that climate change issues that we're having and we really firmly believe that energy efficiency plays a huge role in that. You mentioned that, you know, energy efficiency is part of the portfolio of things that we're looking to do. And the first thing that I would suggest is that we're looking to always reduce costs to our system upgrades. So a utility built its distribution system for that one hour peak. And if that one hour peak, for example, for Liberty, is two hundred megawatts - and I won't get too detailed here - but just call it two hundred megawatts, that's the base that we're going to call it, so that one hour a year we are serving our customers, call it July 28 because we've had a super heat wave.

Laura Knoy:
When everybody is cranking the air conditioning or fans. Yeah, right.

Heather Tebbets:
Exactly right. So we have this all out, everybody's using everything at the same moment. We have to serve those customers. If we can't serve our customers, we have rolling blackouts, brownouts, things like that. We don't want that, right? That's not the purpose because we want to be able to serve all of our customers. So how do we either how do we handle that? Well, next summer as customers get more electric vehicles, a lot of customers have, you know, everyone in their home now has a cell phone - that all has to be charged. How many televisions do they have? People are using more electronics, which means that the load is essentially going up. We need to halt that somehow. And the best way to halt that immediately is to now utilize energy efficiency. So that can be changing all the light bulbs in your home. We heard from Alex about dealing with his heat for winter customers who have really high heating bills. But the point is that we are building our system and there's a cost to that. We don't have to build to that higher peak if we're never meeting that higher peak.

Laura Knoy:
It's those negawatts that Don talks about.

Heather Tebbets:
And I will say Don is absolutely right, the cheapest kilowatt hour is the one that you don't use. And I would strongly suggest to anybody who has the opportunity to go to your local hardware store immediately to replace your LED bulbs and anything else you can do in the New Hampshire Saves. It's not just for electricity. It's for gas. We do even have water opportunities where you can have low flow showerheads and things like that, because, again, you're utilizing...I mean it's a perfect example, we just had this horrible drought for the past few months. Some people's wells were dry. Well, you know what? You need to use less water. How do you do that? Energy efficient products can help you do that. It's not just electricity.

Laura Knoy:
Well, and in a few minutes, we're going to hear from the Business and Industry Association about their concerns. But Representative Vose has already told us that large users of electricity could feel a big hit. Annie pointed out that the increases we're talking about for individual homeowners might not be that big, but large users are concerned. So what's your message to manufacturers and other large uses of electricity, Heather, that any rate is going to be exponentially large for them?

Heather Tebbets:
Take advantage of the program that's exactly what I would tell anybody. I think that the idea behind the increase is that we're spending more money because we're offering more savings. So the dollar savings to these customers who have you know, we talk about a home energy audit, Alex is great to talk about a home energy audit. And businesses can do the things, they can get an audit to take a look at, you know, what can be done for HVAC and lighting, all of these things. Those are opportunities for them. Are they using the most up to date lighting product? Maybe they aren't. You know, a lot of a lot of offices now have the automatic lighting systems where if no one is there, they turn off. When someone comes in, they turn on. So now you have an opportunity where oh, I forgot to turn the lights off last night and left them on all night. Well now you don't have that issue. Your employees don't have to worry about that. It's automatically going to turn them off. So I would suggest to them that they should absolutely look into the energy efficiency programs that we have and take as much advantage of the fact that we're offering more to reduce their bills.

Laura Knoy:
Well, last question for you, Heather. And again, it's good to hear from you. How has the pandemic changed the goals that you presented just a few minutes ago in terms of energy reduction, in terms of climate change? How has the pandemic changed how ambitious you can be around that?

Heather Tebbets:
Well, I think that there's a lot of concerns with the pandemic, of course, we know that there's been previously we have been shut down. There's a lot of people who are staying home, being safe. And that certainly is a concern because people aren't frequenting the restaurants in the hospitality areas and we understand that. But at the same time, we can't wait. I think when I look at climate change, I can't wait until the oceans have risen so much that our coastlines are gone, to make a change. I have to start now to make that change. And over time, we will combat that problem. It doesn't happen overnight. It takes many years. It takes a lot of work. And it also takes a lot of, you know, teamwork, I'll call it, for all of us to be doing this at the same time. It isn't just about the utilities doing it, or maybe it's the legislature or even Don. It is all of us together as a team to say this is important to New Hampshire, this is important to our economy and this is important to our climate that we're going to invest in our future and say that these items are number one for us and and it's good for New Hampshire and it's good for our country.

Laura Knoy:
Well, Heather, it's good to talk to you. I'm sure you've got a busy day with the snowstorm, so I'll let you get back to work.

Heather Tebbets:
Thank you for having me.

Laura Knoy:
That's Heather Tebbets, she's manager of rates and regulatory affairs at Liberty Utilities. And as I suspected, our listeners really like to talk about energy efficiency. And that's great. We've got Cindy in Dover on the line. Go ahead, Cindy. You're on the air. Welcome.

Caller:
Hello, yes, I'm concerned about what Republican Representative Vose is proposing, and that is that we delay these upgrade programs to increase energy efficiency availability to folks who are seriously responsible and working hard to get their homes better quality of efficiency. But they just can't get over that last little tiny step of, not tiny step of that important step of, you know, insulation and so on. For example, the person who's now burning one quarter of the oil that they were burning last year, that family is now producing a lot less air pollution. We have to reduce our air pollution now. We do have to reduce all those air polluters now because we've seen with Covid people in poor air quality have much greater mortality from Covid and they have much greater mortality from heart attacks and strokes as well. So the Republican representative wants us to wait and he thinks we should wait and debate this even more. We don't have time to wait.

Laura Knoy:
And Cindy, I think that's the fundamental question that the U.S. is wrestling with. So actually, Representative Vose, since she talked about your position, I want to go to you first. But, Don, I want to hear from you, too. But go ahead. Representative Vose, Cindy and others in our conversation today said, let's not wait. We need to act now.

Michael Vose:
Well, Laura, we, several members of the legislature, including the late speaker, Dick Kench, did send a letter to the Public Utilities Commission to request that they consider postponing action on the new three year plan temporarily because of the effects of the pandemic. The effects of the economic downturn of the pandemic are unknown to most of us right now. And we think it would be problematic to impose additional costs on utility rate payers at this point in time. Now, we recognize that the legislature doesn't usually try to interfere in regulatory affairs of this nature, which are conducted by the legislative branch. But these are not ordinary times. I've never lived through a pandemic before in my lifetime of such magnitude. And every single day I see the effects of this pandemic on the people who live in my district, people who are struggling with the fact that they've lost jobs and income and that the services that they've come to rely on around them are slowly drying up and disappearing. And so we're not asking the Public Utilities Commission to suspend the energy efficiency program altogether. We're just asking them to consider postponing increasing it during the pandemic.

Laura Knoy:
Given the economic struggles that we've heard about.

Michael Vose:
Exactly.

Laura Knoy:
Well, Annie, I want to bring you in and Don, you too. But, Annie, go ahead. Some of the comments that we're hearing reflected the comments that the Public Utilities took in on this issue. People saying kind of what Representative Vose is saying, not now, hold off, times are tough, but also what our caller Cindy, is saying, which is we have to do this right now. So go ahead, Annie.

Annie Ropeik:
Yeah, that's right. I mean, the PUC really did get a mixed bag of comments on this whole proceeding. They heard from people who were really worried about any kind of rate increase, people who were really worried about the cost of inaction, who really wanted to continue to have these efficiency options increasing. I want to play a little bit of tape from Phillip Rosenthal, who's an efficiency consultant that actually Don Kreis has had as his expert witness at these proceedings. He talked yesterday about why he thinks the efficiency programs are actually a solution to the pandemic and not sort of an obstacle.

audio clip:
If anything, the response to the pandemic should be to provide very aggressive efficiency programs. Lots of customers are struggling to pay their electric and gas bills right now, particularly low income customers. As you can see, the non-participant rate impacts or bill impacts for any sector are less than one percent increase. But it provides the opportunity to dramatically reduce your costs at a time when when they most need it. And in fact, I think a lot of utilities have seen an uptick in residential participation, especially with major measures since COVID began.

Laura Knoy:
Ok, so Don Kreis, I'll throw that to you then, go ahead.

Don Kreis:
I am really glad to hear my witness, Phil Rosenthal, on this program and to his views, I would add this. The thing about energy efficiency is that every penny we spend on energy efficiency is wealth that stays in the state. So the pandemic is a time for economic stimulus obviously. We need to put New Hampshire people back to work. We need to avoid exporting wealth to the extent that we can. Working on energy efficiency projects is a great source of employment for the state. And if we redouble our commitment to energy efficiency at this time, I think it could have a major and palpable effect on the rebuilding of the economy that we clearly are going to have to undertake over the next three years. So I guess I would have to respectfully disagree with my friend, Representative Vose, that the pandemic is a time to back away from our commitment to projects like this. And and I also want to say he mentioned Connecticut and he said that electric rates in Connecticut are higher than ours. People don't pay rates, they pay bills. And the reality, as I think everybody who's looked at this knows, is that when we redouble our commitment to energy efficiency bills, the amount of money you actually have to write on that check go down. And yes, we should be using our electric bills to pay for savings in nonregulated fuels because everybody is an electric customer. So if you as an electric customer, get to save money not just on electricity, but on your propane, that's a good thing, isn't it?

Laura Knoy:
Oh, I see what you're saying, so, you know, even though we're focusing on electric rates and rules around electric utilities and rebates and so forth, you're saying, Don, look at the bigger picture. If you save money on your heating bills, that is still a help on your overall bills as a resident New Hampshire.

Don Kreis:
The famous energy guru Amory Lovins calls energy efficiency the lunch you get paid to eat. That's probably a little bit of an overstatement, but not too much of one. This really is a win win win all around. And the pandemic is a time to do more of this, not less of it.

Laura Knoy:
Well, coming up, go ahead, Representative Vose.

Michael Vose:
Could I just interject? One comment here. I ask everyone to consider a large New Hampshire company that has already spent a great deal of money on energy efficiency, they've squeezed every last bit of efficiency out of their building, their plant, their lighting, et cetera, et cetera, et cetera. So this company is still potentially going to get hit with huge increases in its electricity costs as the result of this impending new plan. But it's not going to benefit any more because it's already spent huge amounts of money. That's something to seriously consider. Another thing to seriously consider is that our restaurant industry right now is taking a huge beating because of the pandemic. And the restaurant industry really can't afford increased electricity or gas costs on top of what they're already trying to absorb. So suspending this increase right now may be something that we really have to seriously consider, even though we want to get as much energy efficiency as we possibly can.

Laura Knoy:
Well, and talking about large users is the perfect segue way to who we're going to be talking about after a short break. The state's Business and Industry Association is going to weigh in on how they feel about some of the proposals being debated in the legislature and at the Public Utilities Commission. This is The Exchange on NHPR.

Laura Knoy:
This is The Exchange I'm Laura Knoy. Today, energy efficiency programs are being scrutinized by the legislature and the Public Utilities Commission. The issue is up front costs and concerns over the economic fallout from the pandemic. We've been finding out more this hour as we dig into this. With us now is David Creer, director of public policy for the Business and Industry Association of New Hampshire. Welcome, David. Good to have you.

David Creer:
Thank you for having me.

Laura Knoy:
Well, when the utilities new efficiency plan was in the works earlier this year and we heard from Heather earlier at Liberty Utilities about it, the Business and Industry Association signed on to it, said it looked OK. Now, I understand you guys have concerns. So what are those concerns?

David Creer:
Yeah, and I do want to clarify, we signed on to an initial proposal that outlined the goals of the program. But I believe at the time the rate impacts had not yet been finalized. So we weren't really aware of how large of an impact would be. So there were parts of the plan that we appreciate it. But, you know, it's kind of a small distinction there. And our concerns overall is that the rate increases are substantial. Right. And I think the settlement proposal is taken those down a very little bit. But there's still a pretty substantial increases to the systems benefits charge. You know, some of our large energy using members are going to see hundreds of thousands of dollars in actual electricity costs over the next few years. And we're not denying that energy efficiency is a good thing and that they would actually see these bill decreases in the long run. But right now, in a pandemic, when they're trying to help recover our economy, that's a lot of money, a lot of resources that could be spent trying to reinvest in the company, getting our economy back on track, keeping people employed, that kind of thing.

Laura Knoy:
Well, and you probably have extra costs because of the pandemic to safety measures and all that. It's interesting to hear you talk about the the dollar amounts there, David, because as Annie mentioned earlier, you know, for the individual homeowner, it's a couple bucks. Ok, but just who, what types of businesses are going to see these large costs, who are we talking about here?

David Creer:
So this would be very large energy users would see the most substantial cost. And, you know, it varies depending on territory. But, you know, large manufacturers that operate 24/7, which is quite a few of them, they'll see, you know, hundreds of thousands of dollars in extra costs. You have hospitals that are using lots of energy, universities. You know, really just any of those businesses or organizations you see that really have large electricity bills are going to see significant cost increases.

Laura Knoy:
So you need me to tell you this energy efficiency will, of course, save those institutions and those businesses money, especially those large users. So why not do it this way that the utilities are proposing that the P.U.C. is considering? Is there a better way to do it?

David Creer:
No, I mean, energy efficiency is great, I'm sure someone has mentioned already that the the cheapest, cheapest kilowatt hour is the one you haven't used. So but the thing is, you know, if you give me an offer and you said if you give me five thousand dollars today, I'll give you twenty thousand dollars in ten years. Well, hey, that sounds like a great deal, but I don't have five thousand dollars today. And the pandemic has forced our businesses into seeing huge revenue losses. You know, a majority of our businesses are seeing very significant losses. And this is at a time when we're trying to get people back employed, trying to recover our economy. They just don't have the funds to do it this year, maybe not even next year.

Laura Knoy:
What other ways are you folks at the BIA looking at to increase energy efficiency in the business sector, given the savings that, you know, everyone acknowledges, you'll realize. Are there other ways to do it that are better?

David Creer:
Well, you know, a lot of our members are doing everything they can already in energy efficiency, not only because, you know, in the end they realize it saves them money, but a lot of our members are also, you know, I would argue most, if not all, are also environmental stewards. You know, we all live on the same planet. So they are looking to reduce their energy usage all the time through energy efficiency programs. We have had several members install solar arrays in their facilities to help reduce their footprint and reduce their energy costs. So businesses want to do these things and they continue to do these things on their own if they have to.

Laura Knoy:
Well, and David, I know you have to go. One last question. If it weren't for the pandemic, would this proposal be as problematic?

David Creer:
You know, I think the proposal was problematic because it offers such a massive increase in a very short period of time, but again, it's really the pandemic that is exacerbating the situation, where it's just, you know, it's a big stone to carry, so to speak.

Laura Knoy:
Well, David, thank you for being with us. We appreciate it.

David Creer:
Thank you very much for having me.

Laura Knoy:
That's David Creer, director of public policy for the Business and Industry Association of New Hampshire. And Annie Ropeik, given what we just heard from the BIA, what is the different ratepayer world, so to speak, that manufacturers and large employers like hospitals live in versus, you know, me sitting in my house? Are you sitting in your apartment?

Annie Ropeik:
It's a world of difference. And these programs do sort of have different tiers. You know, they apply to different kinds of ratepayers in different ways. But I mean, it's true that your largest manufacturers in the state, your BAEs and your Sig Sauers, and even factories like Hypertherm, where I took a tour a couple of years ago to see their energy efficiency efforts. You know, they use just orders of magnitude more energy than I do sitting here in my house powering electronics that I could count on two hands. They are powering huge factories and massive output.

Annie Ropeik:
So their costs are way higher. They also earn a lot more money than me. They have a lot more capital. So but, you know, they do have the sort of timing of how they spend money can be different also. And that's, I think, important to think about here. But I've heard businesses say before that they can't think about a seven or 10 year return on investment or even a couple of years necessarily when they might be beholden to shareholders in the next quarter or they might be facing a hiring freeze if they don't save some money just in the next several months. And we could be seeing some of that now. I think that there is a concern that I'm hearing from members of the public that if we put these programs on hold because of the pandemic, when do they come back into play, knowing that people like Representative Vose have concerns about this sort of philosophy overall. And actually I"d love to hear Representative Vose talk about that - sort of the longer term picture of these programs as the economy starts to recover from the pandemic, regardless of what the P.U.C. does in the very short term. I'm wondering what the lessons are for how this affects businesses overall. Does this change the future of how the state deals with efficiency? If you don't mind if I just kind of put that to Representative Vose?

Laura Knoy:
Sure. Go ahead, Representative Vose.

Michael Vose:
Laura, I'd love to talk about that. I hope we have time to. Let me give you a quick example, though, of how this proposed change will affect a company. Let's say a company uses twenty five million kilowatt hours a year. Right now, it's electricity bill is about three point three million a year. By year three of the proposed plan, they'll be paying four hundred thousand dollars more for the system benefits charged than they pay today. That's a huge amount of money, and so we're not talking small amounts of money here. So to answer Annie's question about the long term future, I think we need to, number one, make the energy efficiency resource standard more transparent. How many people understand how it actually works? How many citizens of New Hampshire understand how this thing is is supposed to work? We need to make it more transparent. And I've got a couple of ideas about how we can do that with some legislation I'll be proposing later this year. We also need to ask questions about how can the plan map every dollar spent to a guaranteed outcome? We need to try to understand those reduced energy usage from energy efficiency measures come from only energy efficiency measures, or does technological advance and innovation contribute to these kinds of efficiencies? And we also need to talk about where is the proper place to raise money for these kinds of programs?

Laura Knoy:
I think that's the heart of it, yeah.

Michael Vose:
If the system benefits charge is an approved P.U.C. rate, should that rate more appropriately, be part of each utility's rate base? Should utilities find energy efficiency projects first and then raise the dollars needed to fund them through the rates that they charge customers? These are important questions that the legislature and policymakers and stakeholders, too, need to explore in the years ahead.

Laura Knoy:
We've got lots of emails in favor of this NH Saves program. Gary in Sugar Hill says most people are unable to meet their daily expenses and buy the lowest cost of everything. If you can't put food on the table, saving money in the future by spending more today is irrelevant. Gary says the program enables families that can't afford one extra dollar of expenses to participate in our conversion to a clean energy environment. We also have a lot of calls and we'll go to Tom in Bethlehem. Hi, Tom. You're on the air. Go ahead.

Caller:
Hi, I'm retired, I own my own home. It was built in the 70s. I've been doing everything I can to tighten it up and upgrade the insulation. It was built with electric heat. I have Eversource. And my bills are plenty high enough right now. Thank you.

Laura Knoy:
So don't do anything that would raise your rates any higher, and I appreciate the call, Tom. What do you think, Don Kreis, this is a concern that the PUC definitely heard.

Don Kreis:
Absolutely, but, you know, the ideological opponents of energy efficiency are offering you up hypothetical scenarios, and what you're not hearing from is, you're not hearing from Dartmouth Hitchcock Medical Center and we're not hearing from Hypertherm or Lindt chocolate or be a BAE or any of the major industrial users of electricity here or energy here in the state because they understand that they're saving money from these programs and that there is more energy efficiency potential to be had. And so they're not running around saying that we should back away from our commitment to energy efficiency. That is what the philosophical and ideological dissenters from ratepayer funded energy efficiency, like my friends at the BIA, like my friend Representative Vose are telling you. But they don't have they don't have evidence. They're not waving a real electric bill from a real industrial user in front of you and saying these companies are losing ground because of this commitment to energy efficiency. And so I'm not convinced by what I'm hearing from them.

Laura Knoy:
Well, Tom, it's good to hear from you. And let's try to get patent Renge in. Go ahead, Pat. You're on the air. We've got just about a minute left, but go ahead.

Caller:
Oh, thank you. I just wanted to say that the BIA argument and Representative Vose's arguments would be much more acceptable if they hadn't opposed energy efficiency in the past when there wasn't a pandemic. And Rep. Vose references that three million dollar bill going up by 400,000 because of SBC increases. But he's not saying how much would the overall bill be reduced if they did implement full energy efficiency measures?

Laura Knoy:
Well, I'm going to have to jump in on you there. And I do apologize in the interest of time and Representative Vose, I do want to give you just a quick chance to respond and then we have to close it out. But clearly, energy efficiency is something listeners care about. So go ahead, Representative Vose, quickly, please.

Michael Vose:
Thank you. I just close by asking everybody to ask themselves this question. Should my utility ratepayer, my utility bill, help a corporation that is a profit making entity increase its profits? If energy efficiency is good for a corporation, they should pay for it themselves and not ask me and other ratepayers to help them do that.

Laura Knoy:
Well, we had lots of emails, too, that we didn't get a chance to get to. But thanks for every email that you wrote in, Facebook comments that we didn't get to, and for the calls. And I think we're gonna have to look at this again, because there's a lot of interest. Representative Vose, it was good to talk to you today. Thank you for being with us.

Michael Vose:
Thank you, Laura.

Laura Knoy:
That was Republican State Representative Michael Vose from Epping. He's chair of the House Science, Technology and Energy Committee. Don Kreis, good to have you, too. We'll have you back. Thank you.

Don Kreis:
Thank you. This is my favorite subject,

Laura Knoy:
Don Kreis, New Hampshire's consumer advocate. And Annie Ropeik, you're always helping us out. Thank you very much.

Annie Ropeik:
Thanks so much, Laura. See you next time.

Laura Knoy:
That's NPR Energy and environment reporter Annie Ropeik. She's also leading our By Degrees project. Today's program was produced by exchange producer and news host Jessica Hunt. Also for the record, phone screener and producer Christina Phillips snowshoed in to work so she could answer your calls today. So thanks to Christina as well. This is The Exchange on NHPR.