Jim Merriam: Efficiency Vermont builds on record of success

Editor’s note: This commentary is by Jim Merriam, the director of Efficiency Vermont.

In the year 2000, Vermont embarked on a ground-breaking experiment. It created the nation’s first “energy efficiency utility” – Efficiency Vermont – in recognition of the fact that the cheapest and cleanest unit of energy is the one that you don’t use.

In the years that have followed, Efficiency Vermont and our customers have won national recognition for finding innovative and effective ways for Vermont families and businesses to save money, save energy, and reduce their carbon footprint through energy efficiency.

Fourteen years into our efforts, it is natural to ask, “What’s next?”, or even, “Is there anything still left for Efficiency Vermont to do?”

To answer those questions, let’s start with where we are today:

• In 2013, Efficiency Vermont bought energy efficiency for less than half the cost of comparable electric supply: 4.1 cents per kilowatt hour for efficiency versus 8.4 cents for supply.

• A recent report from VELCO, the state’s transmission company, found that Vermont’s energy efficiency investments have resulted in the avoidance or deferral of $279 million in regional transmission projects.

• In 2013, Vermont’s electricity usage was 13 percent lower than it otherwise would have been, thanks to the work of Efficiency Vermont and our customers.

• An independent study commissioned by the Public Service Department in 2011 found that every $1 invested in energy efficiency returns $5 in benefits to the Vermont economy.

• In the area of thermal efficiency, Efficiency Vermont’s Home Performance with ENERGY STAR service helped nearly 1,200 Vermonters tighten up their homes in 2013, significantly reducing their heating costs.

Efficiency Vermont’s energy-saving efforts in 2013 had the environmental impact of taking more than 135,000 gasoline-powered cars off the road for a year.

This technology will provide Vermonters with a vastly improved ability to understand how they use energy, and how they can reduce their energy costs and use through both energy efficiency and conservation.

 

The fundamental drivers of these results have remained the same throughout Efficiency Vermont’s existence: Focusing on customer solutions that are cost-effective and innovative, and that leverage the private-sector marketplace. That focus is complemented by rigorous third-party oversight that provides accountability to the public and policy makers.

So what about the future?

From a strictly economic point of view, there is a lot of untapped, cost-effective energy efficiency savings in Vermont’s homes and businesses. Currently, electric energy efficiency is less than half the cost of electric supply. As long as efficiency is less expensive than supply, every unit of energy we save through efficiency saves money for Vermonters.

In addition, the technology and policy landscapes for energy efficiency, and Efficiency Vermont specifically, are constantly changing and evolving. Ten years ago, LED lighting — which can be up to 80 percent more efficient than incandescent technology and more than 50 percent more efficient than compact fluorescent technology — was barely a gleam in the eye of the marketplace. Today, it is becoming the standard: Thanks to an incentive from Efficiency Vermont, you can go to your local hardware store and buy a high-quality LED bulb for $4.99.

One of the most striking technology changes in recent years is in the use of electricity for heating. In years past, electric resistance heating systems were inefficient, costly to use, and a logical target for replacement with fossil fuel systems. But today, electric-powered air source heat pumps are so efficient that they can provide heat at half the cost of oil or a third of the cost of propane. As a result, after years of focusing on reducing the use of electricity, Efficiency Vermont is now identifying technologies such as this where it might actually make sense to use electricity instead of other sources of more costly, more polluting energy.

At the same time, Efficiency Vermont is becoming increasingly focused on the need to reduce peak demand as a way to minimize Vermont’s share of steadily-growing regional transmission costs. As noted earlier, this focus is already paying off, with VELCO finding that Vermont’s energy efficiency investments have helped to avoid or defer $279 million in transmission projects across New England – savings that flow to all ratepayers by reducing or offsetting future rate increases.

More and more, individual consumers will be able to play a larger role in helping to reduce these costs (and their own bills). Vermont is a national leader in the deployment of advanced metering infrastructure (sometimes referred to as the “smart grid”). This technology will provide Vermonters with a vastly improved ability to understand how they use energy, and how they can reduce their energy costs and use through both energy efficiency and conservation. Efficiency Vermont will be there to help Vermonters take advantage of these opportunities in ways that are effective for consumers and easy to engage in.

Finally, it is important to emphasize that Efficiency Vermont doesn’t operate in a vacuum. We evolve and improve based on the changing needs of our customers and the changing policy priorities of the state. Case in point: Our original mandate to focus solely on electric efficiency was expanded in 2008 to encompass heating fuel efficiency, recognizing the substantial cost and saving opportunities that an “all fuels” efficiency approach represented. As the state continues to chart its energy future, Efficiency Vermont is actively working to ensure that we are well-positioned to continue to help Vermonters meet their energy needs.

As Efficiency Vermont’s director, I’m proud of the results that we have achieved to date, but I never want to see us rest on our past successes. There is still a lot of work to be done to help Vermonters reduce their energy costs, and to help the state as a whole meet its energy and economic development goals. We are committed, and I am personally committed, to making sure that Efficiency Vermont continues to meet public expectations of high performance, innovation, accountability, and transparency in the years to come.

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15 Comments on "Jim Merriam: Efficiency Vermont builds on record of success"

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Matt Fisken
2 years 7 months ago
It’s reassuring to read that Efficiency Vermont is not satisfied resting on its laurels. “Is there anything still left for Efficiency Vermont to do?” I don’t think anyone would claim EVT has done everything it can, even though many believe it’s time to scale back its operations and remove the 1¢/kWh tax for customers using less than an average amount of electricity (600 kWh/month). If EVT has, in fact, been so successful in getting this ball rolling, then surely there should be some momentum built up by now. If not, then it suggests there’s something missing from the program. I… Read more »
Don Peterson
2 years 7 months ago
Matt makes a good point. People who use the least electricity pay the most for it, due to the billing structure used by Vermont electric utilities. Its time to remove the monthy user fees, which punish efficiency, and replace them with a flat increase in kwh charges. The change would likely be a very small amount per kwhr. Efficiency Vermont could lead the charge here by persuading rate setters that high effective rates on small consumers is a drag on energy efficiency efforts. EVT might also consider outreach to management circle in the utility industry to remind them that their… Read more »
Matt Fisken
2 years 7 months ago
Thanks Don, Even though I didn’t make that specific point, I have previously and I wholeheartedly agree that power sippers should pay a lower customer charge than energy hogs. It would be wonderful if EVT advocated for this as well. The argument that “we all need to pay to keep the poles and lines up” went out the window when net metering customers figured out they could eliminate their customer charges by installing a large enough PV array. The question is, what is the actual value of simply being connected to the grid? For a customer who uses very little… Read more »
Avram Patt
2 years 7 months ago
Actually, Vermont’s co-op and municipal utilities have long had a two-tiered residential rate structure for most residential ratepayers. ( I believe all the municipals do but I haven’t checked each one.) Depending on the utility, the first 100-200 kWh are sold at a rate considerably lower than all usage after that. A very low user will have all usage billed at that lower rate. A customer that uses less than the average Vermont household will pay a blended rate, a significant portion of which will be based on the low cost block. A high user will pay a blended rate… Read more »
Don Peterson
2 years 7 months ago
This is disingenuous on your part, as you know perfectly well. My first 100 kwhr costs me a $16.00 monthly charge and 8 c kwhr — a total of 24.00 for 100 kwhrs. That is 24 cents per kwhr. My second 100 kwhrs costs me an additional 16.00, making my total bill for 200 kwhrs 40.00. That is 20 cents kwhr. This seems like less money than 24 cents a kwhr, although what do I know about long division? It ‘s tiring to walk people through this simple math when they ought to know better, and as a former utility… Read more »
Avram Patt
2 years 7 months ago
It’s not disingenuous at all. You can go away for a month, turn everything off and not use a single kWh. Whenever you happen to return, you flip the switch and the lights come on. The utility is serving you 24/7 that whole time and maintaining the systems, from poles and wires, billing, property taxes insurance and everything else, regardless of the amount you use, or don’t use. All those costs are the same per meter regardless of usage. If anything is disingenuous, it’s including the monthly charge in the kWh rate calculation. Regardless of your usage, it costs the… Read more »
Don Peterson
2 years 7 months ago
I have no quarrels with the need to maintain a useful, vital service. Roads are a useful vital service. I can sit at home for a month, and if I want to drive to dinner at Aunt Bess’s one sunday, there the road is, waiting to take me. And how is that road maintained? Taxes on the gasoline. How hard is that to understand? I use the road less, I pay less to maintain it. Your fixed monthly fee model is out of date, and not useful in the face of global climate change. Maybe in 1939 it made sense,… Read more »
Avram Patt
2 years 7 months ago
Actually your local roads are paid for by property taxes. So your roads are paid for by a mix of consumption tax and taxes that have less relation to benefit than a utility monthly charge does. You may see a similar issue come up with super efficient and/or electric vehicles as they become prevalent, which may travel the same number of miles as you drive today, put the same wear on the roads, but pay less for their maintenance. It is an issue some states are already beginning to grapple with. Consumption-based revenue needs to be complemented by at least… Read more »
Karl Riemer
2 years 7 months ago

Thanks, Avram, for explaining this clearly. Never having used >200 kWh/month I hadn’t realized a step existed. Of course, that means the “service charge” portion of my bill looks inordinately large, but that’s because the total isn’t.
My own uninformed opinion is that maintaining the infrastructure bringing power to my house for a measly 47¢/day is a bargain. If it were up to me, we’d be paying twice that to make it more robust rather than barely holding its own.

Matt Fisken
2 years 7 months ago
“If anything is disingenuous, it’s including the monthly charge in the kWh rate calculation.” You should tell that to the EIA. http://www.eia.gov/electricity/sales_revenue_price/pdf/table5_a.pdf “All those costs are the same per meter regardless of usage.” This is obviously not true. There are the total costs of building and maintaining a grid, which are simply divided up evenly among all ratepayers. The customer charges are all the same out of convenience, but the cost to the utility to provide a connection for each ratepayer varies widely. Because it would be impossible to fairly set this cost for each customer, the ideal option would… Read more »
Don Peterson
2 years 7 months ago
Avram: Maybe a lifetime of being safe within the confines of a regulated industry has made you fail to recognize change, but change is coming, and its not plug in cars that I’m referring to. Carbon intensive industries, like power generation, will have to help throttle back consumer consumption or the world comes to an end for the human race. (Hardly a disaster, when you think of it that way, actually) So when I proposing a minor cost shift from a billing model put in place in the last century, you resist the notion by supplying non sequiturs about the… Read more »
Avram Patt
2 years 7 months ago
Don, I guess I’ll finish by saying that if you knew a little more about me, you’d know that I did not spend a lifetime in the utility industry, that my work has involved energy efficiency in one way or another since the early 1980s in 3 previous non-utility jobs, and that the utility I did end up working for championed and achieved energy efficiency starting before I worked there, at a time when most utilities had to be forced to do that. It was in fact my realization that we needed to move away from damaging unsustainable energy sources… Read more »
Karl Riemer
2 years 7 months ago

Done you may be, but thanks you will get. In a hotbed of hyperbole and well-intended, well-said, ill-considered emotional arguments and pseudo-solutions, your dispassionate rationality is always the adult voice. You aren’t only better informed than the rest of us, you’re more thoughtful, reasonable and respectful. Thanks for taking the time to bring facts to the table.

Karl Riemer
2 years 7 months ago
“Ten years ago, LED lighting — which can be up to 80 percent more efficient than incandescent technology and more than 50 percent more efficient than compact fluorescent technology — was barely a gleam in the eye of the marketplace. Today, it is becoming the standard” Balderdash. 10 years ago LED lighting was expensive but far more than a gleam in the eye of anyone ostensibly conversant with efficiency trends. Today it is definitely the standard. Yet, 10 years ago right up to and including today, Efficiency Vermont promotes poisonous, obsolete CFLs. They’re less heavy, ugly and half-assed than they… Read more »
Matt Fisken
2 years 7 months ago
Karl’s shrewd critique of CFLs is appropriate, but only scratches the surface. Jim’s commentary and the opinion of many who have bought, sold or subsidized these curly cue catastrophes is that they have been a helpful bridge technology, allowing us to save energy until the price of LEDs comes down. One could make the same weak argument about nuclear power helping get us to a renewable energy economy. As Karl astutely points out, the promotion of and obsession with the former has delayed the latter. Like nuclear power, the focus now should be on transitioning away from CFLs in the… Read more »
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