In the midst of the COVID-19 recession, when the economic benefits of energy efficiency would be especially helpful, New Hampshire is on the brink of halting progress. The state’s noteworthy advancement in utility energy efficiency efforts in recent years is suddenly in jeopardy.
Since establishing its first Energy Efficiency Resource Standard (EERS) in 2017, New Hampshire has improved its standing to 18th in ACEEE’s annual State Scorecard rankings (and 13th in the “utilities” category). This has been welcome progress in catching up to its very successful New England neighbors and has resulted in hundreds of millions of dollars in savings for New Hampshire ratepayers.
However, in a rather concerning development late last month, the New Hampshire Public Utilities Commission (PUC) balked at approving a proposed new triennial 2021-2023 energy efficiency plan. The decision was surprising because it came after months of collaborative discussion produced a consensus settlement agreement proposal, signed by all the state’s utilities (Eversource, Liberty, Unitil, and the New Hampshire Electric Cooperative), the state residential ratepayer advocate, and a coalition of nonprofit organizations. Their proposed plan would have taken effect on January 1 and would have included utility commitments for saving 4.5 percent of electric sales and 2.8 percent of natural gas sales over the plan’s three years through their efficiency programs for customers. The economic benefits to ratepayers and the state economy would be enormous.
Instead of simply approving the multi-party settlement proposal, the PUC said it would take eight more weeks to consider the case and temporarily extended the existing utility plans, which deliver fewer benefits to customers. This was, disturbingly, the same result that a group of legislative opponents of energy efficiency programs had requested. They had not questioned the existence of such savings potential, but rather, claimed that their objection was to increasing energy efficiency charges in light of pandemic-related economic disruptions.
Testimony in this case on behalf of New Hampshire’s Office of the Consumer Advocate took on that economic argument directly. Witness Philip Mosenthal of the consulting firm Optimal Energy stated, “To the contrary, I believe that the economic harm from the Covid-19 pandemic makes it more important than ever to pursue robust energy efficiency.” Mosenthal projected that the proposed EERS plan would trigger 17,500 job-years, more than $1 billion in additional labor income, and almost $3.5 billion in increased economic output in New Hampshire. “While this type of economic benefit would be compelling at any time… it is particularly so during the Covid-19 pandemic, when many sources of local economic spending are either drying up (restaurants, tourism) or shifting to online and less local sources (retail).”
ACEEE has previously made very similar arguments, noting that energy efficiency programs can help states and localities with economic recovery from the COVID-19 crisis in three important ways: (1) reducing household and business energy bills, directly helping with affordability challenges; (2) serving as an economic stimulus by generating increased local employment (energy efficiency programs tend to be very labor intensive); and (3) reducing ”dollar drain” from the local economy by reducing the need for imported energy fuels (New Hampshire has to import from other states and countries essentially all of the energy fuels it consumes).
It is noteworthy that several other states (e.g., Missouri, Pennsylvania) faced challenges to their utility energy efficiency efforts in the past year and overcame them. Regulators in those states considered arguments to delay or weaken efficiency programs and ultimately rejected them. Similarly, Arizona recently emerged from a period of stalemate and uncertainty to recognize the continued importance of energy efficiency and set more ambitious goals into the future, serving as a good model for other states.
We hope New Hampshire will ultimately proceed with the strong energy efficiency progress foreseen in the filed consensus settlement for its 2021-2023 plan. The PUC can approve that plan in eight weeks, just in time to help revitalize the New Hampshire economy. The eyes of the nation, and New Hampshire’s neighbors in the region, are on the Granite State.