The state’s energy efficiency program is costing more than it saves, according to William Driscoll, vice president for Associated Industries of Vermont, a group representing manufacturers.
Testifying before the Senate Natural Resources and Energy Committee on Wednesday, Driscoll attacked a program that charges ratepayers a fee on their electricity bill to raise money for energy efficiency projects.
“There are serious cost issues associated with Efficiency Vermont, particularly the way it’s financed, that actually are a disadvantage for Vermont companies,” Driscoll told the committee.
Efficiency Vermont, the state’s efficiency utility, subsidizes projects that retrofit residential and commercial buildings to make them more energy efficient. The committee is drafting a bill, S.302, to allow industrial businesses to opt out of paying the energy efficiency charge if they have their own efficiency measures or plans.
In place of the current program, Driscoll said his group would prefer to see tax incentives or lending mechanisms.
Other businesses say the program should be left untouched.
Vermont Businesses for Social Responsibility, which represents more than 1,000 businesses, said in a statement that “further carving companies out of our energy efficiency system will shift costs to other ratepayers and make it more difficult for the state to achieve its long-term energy and efficiency goals.”
The program provides a good return on investment by avoiding statewide transmission costs, creating jobs and freeing up money through energy savings, according to VBSR.
George Twigg, director of public affairs for Efficiency Vermont, said on average, the state’s 100 largest energy users receive a 280 percent return on investment.
“And what that means is for every dollar in costs – both the efficiency charge and their own cost to do efficiency programs – they’re getting $2.80 in benefits from their energy savings,” Twigg said in an interview.
Efficiency Vermont is asking the Public Service Board to approve a $4 million carryover in unspent funds from last year. The board is soliciting comment on the issue.
At the end of each three-year period, the board reviews the utility’s performance and awards compensation based on how well it performed, according to Twigg. In 2012, the program’s budget was more than $40 million, according to a report.
The Senate Natural Resources Committee plans to audit the Efficiency Vermont to find out how much it spends on advertising, capital, personnel, salaries and benefits, for example.
“The whole thing, that’s the question people around here are starting to ask,” said Sen. Bob Hartwell, D-Bennington, chair of the committee.
The committee has another bill, S.202, designed to raise more money for thermal efficiency projects (as opposed to energy efficiency) by placing any amount raised by the fee exceeding $45 million into a separate thermal efficiency fund.
