Energy

Amendment to H.40 freezes energy efficiency charge

Adam Greshin
Rep. Adam Greshin, I-Warren, offered an amendment to the House Ways and Means Committee to freeze the state’s energy efficiency charge on Wednesday. Photo by John Herrick/VTDigger
Lawmakers approved a two-year freeze on the state’s energy efficiency charge, despite warnings from the Department of Public Service that it would cost ratepayers millions in lost savings.

The House Ways and Means Committee approved an amendment to H.40, a proposed renewable energy program, to cap the revenue source for a state’s program used to drive down electricity consumption. The energy efficiency charge is a percentage fee placed on electric bills.

In a compromise to gain political support for the RESET program, which is expected to reduce greenhouse gas emissions and avoid a looming rate hike as soon as next year, Tony Klein, chair of the Natural Resources and Energy Committee, supported the amendment.

“We did what was necessary to do,” said Klein, who expected a partisan vote on the bill otherwise. “We took one for the team.”

The committee voted 8-2-1 to approve the amendment and 8-2-1 to pass H.40 out of committee.

The purpose of the amendment would cap the energy efficiency charge at 2015 levels — which currently raises $52.2 million — for the next two years. The freeze would affect the energy efficiency programs offered by Efficiency Vermont and Burlington Electric Department, which are considered to perform better than average, a study found.

Since 2003, the charge on electric customers’ bill has increased 11.5 percent annually, according to Adam Greshin, I-Warren, who offered the amendment. He said lawmakers should take the next two years to review how that money has been spent.

“The amount we have invested in energy efficiency is unparalleled,” Greshin told other committee members. “Let’s just time out.”

Environmental groups oppose the measure because it creates the need to build more generation and poles and wire, among other reasons. But it was welcomed by commercial and industrial manufactures who view the temporary pause as a way to re-evaluate how the state pays for energy efficiency.

Manufacturers benefit from the current programs, but some might benefit more under a different financing structure, according to Bill Driscoll, vice president of Associated Industries of Vermont.

“Are they spending too much for what they get? That speaks to our concern about the funding mechanism,” Driscoll said. “They may be able to achieve the same sort of savings but have more money left over to do other things.”

But the so-called “time out” is expected to come at a cost to electric ratepayers totaling up to $24 million in lost net benefits over the next decade, according to Darren Springer, deputy secretary for the Department of Public Service.

Over the next two years, the state’s efficiency program will be level funded — a drop of 6.5 percent over expected budgets, equal to about $10 million. Ratepayers will no longer have to pay this amount, but it will come at a cost later on.

Springer said the state will have to purchase more electricity and will lose earnings it receives from the region’s grid operator for reducing consumption at times of peak demand. The total net benefits equal $20 million to  $24 million, he said.

In other words, according to George Twigg, director of public affairs for Efficiency Vermont, “What you would save from this amendment is going to come at a price that is twice as high. That does not seem like a good deal for Vermont ratepayers.”

Another amendment to the bill that is being considered would strip funding for Efficiency Vermont’s thermal program that could amount to $6 million in lost annual funding.

Patti Komline
Rep. Patti Komline, R-Dorset, supported an amendment in the House Ways and Means Committee to freeze the state’s energy efficiency charge on Wednesday. Photo by John Herrick/VTDigger

Rep. Patti Komline, R-Dorset, said she might introduce the amendment on the House floor. She would redirect the money into water quality restoration efforts. As for thermal efficiency, she said Vermont’s proposed renewable energy program would require utilities to make such investments under the so-called “tier three” obligation.

“Tier three is going to be doing what Efficiency Vermont does with their thermal efficiency program,” Komline said. “I’m just saying you don’t need two people doing the same thing.”

But opponents of the measure say the proposed renewable energy program is complementary to Efficiency Vermont’s existing program. They say some utilities would be allowed to partner with Efficiency Vermont and build on their existing infrastructure. Others say it would hurt the existing programs.

“If I’m looking to upgrade my boiler, if I’m looking to weatherize my home, if I’m looking to install clean heating technology, such as a biomass system, every program that’s out there that offers me a rebate is funded through these thermal efficiency funds,” Springer said. “You talking about taking all of that off the table.”

Proposals to change the state’s efficiency program have circulated for years. Now, lawmakers who support efficiency programs say at least there will be a conversation about the benefits of energy efficiency to the ratepayers — that is energy efficiency cost half the price as electricity, officials estimate.

“We welcome the conversation,” Twigg said. “I just think there is a way to do it that doesn’t cost $24 million.”


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John Herrick

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  • Unfortunately, it’s Tony’s team not the team of the citizens of Vermont.

  • Connie Willard Godin

    Good, never liked how EV was funded since the beginning.

    • David Schoales

      I hope they find an improved method so growth and savings can continue. No way energy rates will go down,despite this brief oil blip.

  • Other than fixing the REC problem, which is a self inflicted wound needing immediate care, what is the big rush with the rest of the bill?

    This legislation is meant to last decades, why isn’t something this big worthy of proper due diligence?

    As for the H.40 savings of $275 million projected by the Department of Public Service, will that money be deposited in the same account with the Hsiao $500 million health care savings promised by the Governor?

    • Willem Post

      Peter,

      Rep. Adam Greshin is finally calling an end to the EV gravy train boondoggle.

      I just cannot believe how long it took legislators to wise up to this expensive, inefficient scheme.

      Were legislators and the public bamboozled by glowing energy savings reports that have been known to make dubious energy savings claims, as proven by subsequent audits?

      Remember, I called EV a boodoggle from day one.

      I’ll say it again:

      – EV SHOULD BE ABOLISHED ASAP
      – LEFTOVER BUDGET MONEY SHOULD BE USED ELSEWHERE
      – THE CHARGE ON ELECTRIC BILLS SHOULD BE REMOVED

      The budget went from $14.0 million in 2003 to $52.2 million in 2015, about 3.729 times greater, for a growthrate of 11.6% per year over 12 years.

      No state agency has 11.6%/yr budget increases for each of 12 years!!!!

      The charge on the electric bill went from 0.00317 c/kWh in 2003 to 0.01179 c/kWh in 2015, about 3.72 times greater over 12 years.

      Were there 11.6 %/yr increases in the energy savings for that 12-year period due to EV activities?

      Not even close, based on EVs own, self-serving, glowing annual reports.

      That means EV is becoming LESS and LESS efficient over the years.

      It looks like an expensive boondoggle is finally meeting the wall of fiscal reality.

    • Willem Post

      Peter,

      To rely of DPS to come up with H-40 savings is beyond rational, like having the fox select the lock on the hen house.

      H-40 was written by DPS. Klein’s “team” passed it 10 to 1.

      The House Ways and Means Committee is making VERY MINOR amendments.

      Springer of DPS, is throwing out “savings lost” numbers, due to EVs budget freeze, WITHOUT ANY BACK-UP.

      Is this how energy policy is made in Vermont?

      Is this how the expensive, dysfunctional SPEED program/boondoggle came about?

      • Willem Post

        Peter,

        Rep. Adam Greshin is finally calling a freeze to the EV gravy train budget. It is about time. I just cannot believe how long it took legislators to wise up to this expensive, inefficient scheme. Finally, an expensive boondoggle is meeting the wall of fiscal reality.

        Legislators and the public likely were bamboozled by EVs glowing energy savings reports that have been known to make dubious energy savings claims, as proven by subsequent audits. For the good of Vermont’s economy:

        – EV SHOULD BE ABOLISHED ASAP
        – LEFTOVER BUDGET MONEY SHOULD BE USED ELSEWHERE
        – THE CHARGE ON ELECTRIC BILLS SHOULD BE REMOVED

        The budget went from $14.0 million in 2003 to $52.2 million in 2015, about 3.729 times greater, for a growth rate of 11.6% per year over 12 years. No state agency has 11.6%/yr. budget increases for each of 12 years!!!!

        The charge on the electric bill went from 0.00317 c/kWh in 2003 to 0.01179 c/kWh in 2015, about 3.72 times greater over 12 years.

        Were there 11.6 %/yr. increases in the energy savings for that 12-year period due to EV activities? Not even close, based on EVs own, self-serving, glowing annual reports. That means EV is becoming LESS and LESS efficient over the years.

  • Moshe Braner

    Now they need to abolish the fixed monthly “per meter” fee that they started a couple of years ago. Any fee that is not proportional to consumption is a disincentive to conservation.

    • Matt Fisken

      Moshe, do you mean the one that supports the low-income assistance program?

      • Moshe Braner

        That’s the one. Sock it to those with not-quite-low-enough income who are frugal in their usage: charge them the same each month as those who splurge. This makes no sense.

        Moreover, with this “per meter” fee in place, it is likely to rise beyond the current modest level. Even at the current level of 50 cents per month, that amounts to about a 2% fee on the frugal users. Imagine the hue and cry if they were to impose a 2% fee on all usage!

        Meanwhile, the fixed annual auto registration fee costs frugal drivers more than the state gasoline tax does. That’s another example where the legislature talks conservation but socks it to the real conservers. And they seem to raise that fee further every year.

  • Townsend Peters

    Big business doesn’t like the efficiency charge and that’s going to cost all of us in the long run. Save $10 million to lost $24 million later is cutting off your nose to spit your face.

  • Matt Fisken

    This seems like a pretty fair compromise.

    My hope is that efficiency efforts will eventually be more common sense, more self supporting and less bureaucratic.

    I think the failure of imagination is that that $24 million (over 10 years) couldn’t be saved in other ways that don’t require subsidizations. Vermonters could easily save $25,000/day by unplugging their vampire cable/satellite boxes when not in use. That’s $9 million a year!

    What we may need to look at is how our digital lifestyles, with modems, routers, computers, phone/tablets, smart meters, cell towers, etc. left on/charging all the time are the problem here and throwing some fancy lightbulbs and heat pumps at the problem is no solution at all.

    • Townsend Peters

      Wow, what a policy. Do nothing and hope people unplug. That’s worked so well in the past.

      • Matt Fisken

        Townsend, I didn’t say “do nothing” although that would be a way better idea than subsidizing toxic light bulbs and incorrectly claiming their savings by ignoring their pitiful power factors and pretending they don’t degrade power quality.

        If EVT has been so effective, why keep throwing more and more money at it?

        • Townsend Peters

          Because there’s more energy to save at a cost that’s cheaper than buying more.

          And, funding effective programs is usually the way to go. Funding ineffective programs is a bad idea.

  • Steve Comeau

    According the article “Springer said the state will have to purchase more electricity and will lose earnings it receives from the region’s grid operator for reducing consumption at times of peak demand. ”

    But isn’t part of the energy policy to now incentivise air sourced heat pumps and electric cars. If more people shift to electric for their heat and cars, it seems electricity usage will increase. This might not affect the peak demand but it will increase usage.

    As Moshe notes in a comment above, there are ways to incentivise conservation that aren’t even being considered. Also a simple graduated fee structure could be much more effective than continued increases in efficiency charges.

    • Townsend Peters

      Electricity usage will increase more, and cost more, if you don’t also incent efficient use of electric energy. Cutting the EVT budget while encouraging more electric use is exactly the wrong direction.

      If you have a policy to encourage more electric use, you should make sure it’s done efficiently. Otherwise the cost of power will go up.

      Have you asked the Public Service Board to require rates for GMP customers to increase as their use increases? It’s the only utility in the state that does _not_ have the graduated fee structure you seem to endorse.

      • Lance Hagen

        If cost of power will go up with more usage, it can only be because of limited capacity. So why on earth did the state fight so hard to close down Vermont Yankee? That effort seems counter-productive.

        • John Greenberg

          Lance,

          “”If cost of power will go up with more usage, it can only be because of limited capacity.”

          That’s simply not true. The reason power prices would go up is that it costs more to generate power than not to use it: megawatts cost more than negawatts.

          The figures I’m familiar with are those for the years 2007-2010. At that time, energy efficiency in Vermont cost roughly 2.5 cents; the contract price for VY power was 4 -4.3 cents (it rose sing .1 cents each year). The average wholesale market rate was approximately 6 cents.

          On some occasions, thanks to efficiency, CVPS was obligated to buy more power from VY under its contracts than it needed. So it purchased the efficiency at 2.5 cents, bought unneeded power from Entergy for 4.x cents (see above) and sold the power into the market for a profit. The profit was then returned to ratepayers.

          At the time, New England had roughly 8,000 MW of excess capacity: its auctions brought bids for 40,000 MW when its peak demand + reserves came to 32,000 MW, so ISO-NE actually ended up rejecting bids.

          • Lance Hagen

            John,

            Are you telling me the cost, in $/kWh, is higher in peak hours versus the cost, in $/kWh, in off peak hours? Your logic seems to imply that.

          • John Greenberg

            Lance Hagen:

            “Are you telling me the [wholesale market] cost, in $/kWh, is higher in peak hours versus the cost, in $/kWh, in off peak hours?”

            Yes, that’s precisely what I’m telling you.

            Go to http://www.iso-ne.com/isoexpress/web/reports/pricing/-/tree/zone-info and click on “Monthly Data by Load Zone.” Then go to the VT tab on the spreadsheet and compare column R (which is the overall average) or T (which is just off-peak) to column Q (on-peak).

            For last month, for example, the average price was 6.427 cents per kWh. Off peak was 5.813 cents; on peak was 7.174. Obviously, the figures change month to month and year to year, but the basic relationship is constant.

          • Lance Hagen

            John,

            You need to understand the difference between PRICE (which your reference shows) and COST (which I was referring to). PRICES for power may fluctuate not because COSTS to generate change, but demand for this power changes.

            Your entire premise is based on PRICE changes are totally driven by COST changes. I would argue that COST ($/kWh) are equal or lower at times on high demand because you are getting better utilization of your fixed assets (or fixed costs)

          • John Greenberg

            Lance,

            If you have any facts to substantiate your distinction between price and cost (as you are using the terms), particularly any facts that are relevant to the question at hand (namely whether efficiency costs less than generating power), feel free to present them.

            The wholesale cost of power, like any other market, is certainly influenced both by supply and by demand. That appears to be one of your points, and I see nothing wrong with it. But from there on, we’re in very murky waters.

            Market prices, as you’re now calling them, are set by the convergence of supply and demand in the market. Operators bid in the prices at which they’re willing to sell power and receive the market clearing price. Presumably, they’ve accounted for the kinds of efficiency considerations you appear to also be raising in their bids, but I would assume that their deliberations comprise far more issues than just efficiency.

            In any case, we’re definitely above my pay grade here, and I strongly suspect, above yours as well.

            Fortunately, none of this germane to this discussion anyway. The relevant two facts have already been presented. 1) It costs less to save electricity than to generate it. 2) It costs the utilities more to provide power during peak hours than during off-peak hours. Exactly WHY either of these statements is correct, and even more particularly, what precise mix of considerations enters into each generalization, I’m willing to leave to those who are more expert than I. From a policy perspective, the facts I just cited suffice.

          • Lance Hagen

            John,

            I didn’t use specific wholesale prices at all. I used the percent difference between peak and non-peak prices, which was only 20%. I then applied that 20% delta to the retail price ($0.15/kWh) to come up with $240/yr.

            The difference after applying the 20% delta in rates turn out to be only a 16% difference in the electric bill (hook-up charge is a fixed amount) for 700 kWh/mo

          • Lance Hagen

            John,

            Let me try one more time.

            Let’s assume I build a factory that has a capacity to deliver 1000 lbs. of widgets per month to meet my customer needs. My factory has 2 cost elements, fixed and variable costs.

            Now one of my customers implements efficiency items, which happens to be paid for by all my customers in a monthly efficiency charge. As a result, to meet all my customer needs, I only need to generate 800 lbs. of widgets per month. Now the unit cost to generate these widgets goes UP because I will need to spread the ‘fixed’ cost over fewer widgets (800 lbs. and not the 1000 lbs.). So the more I can operate at maximum capacity the lower my unit cost is.

            So the efficiency efforts where great for the one customer, but not for all the other guys, since they now need to pay a higher price for their widgets.

            So your statement 1) is only true for the person who saved (through efficiency) and not for the person who couldn’t save. He pays more in the end.
            You have shown nothing that supports COST in statement number 2). All you have shown is PRICES are higher in peak hours

          • John Greenberg

            Lance,

            The problem with creating analogies of this sort is that you don’t spell out precisely what it is that you’re trying to analogize and to whom the analogy is suppose to refer. You examine only one scenario while ignoring many others.

            To be honest, I’m not even sure to whom this analogy of the widget factory is supposed to refer. The only entities in the electric world which have customers paying both for efficiency and for their product are Vermont’s retail utilities, so I’m going to assume that it is they that the “widget factory” owners are supposed to represent.

            The problem is the utility business model is entirely different from a factory. These days, for the most part, utilities don’t MAKE electricity (widgets); they buy it under contracts signed with third parties. Moreover, they don’t have just one contract, or even just one TYPE of contract. They have a whole portfolio of contracts, of very different durations, differing types, with different financial implications. This gives them flexibility and diversification which allows them to meet all kinds of contingencies, including this one.

            If a widget factory owner’s operations were threatened as described in your example, then some of his equipment, for which he has already paid, would be threatened with going idle. But unlike a utility, a widget factory owner is not confined to selling his goods only to certain customers (e.g. those within his geographical area as defined by regulation) or, for that matter, at a regulated price.

            So there is nothing stopping the widget factory owner who sees that sales are going to drop, from trying to find new customers to buy the widgets that his existing customers used to buy, or from lowering prices in hopes that customers would buy more widgets. Neither of these options is available to utilities thanks to the tradeoff they make as regulated entities. If the market drop seems temporary, the factory might even stockpile widgets until the price is restored. Unlike widgets, electricity can’t be stored.

            If all these (and other) tactics failed, the owner might indeed be forced to take a loss on some of his sunk costs. Unless you’re “too big to fail,” failure is always an option.

            None of this applies to utilities. Most of the generating assets they did own were sold to third parties a long time ago (e.g. VY). Unless I’m mistaken, GMP gets a TINY portion of its power from generating assets that it owns, and that’s true for most of the other utilities I know about as well. (Municipal utilities may be an exception, and WEC may be as well.)

            When a utility sees its demand for power decreasing, especially if the drop is predictable, as is the case here, then it simply adjusts its power purchase portfolio accordingly. Nothing (owned by the utility) is “idled.” There is no excess fixed charge to be distributed among the other customers. Since the power purchased would have been more expensive than the “negawatts” created by efficiency, the utility saves money, and the savings are passed on to ratepayers.

            The fixed charges that the utilities DO have are mostly in the form of lines, poles, maintenance garages and equipment, offices, etc. and no one that I’m aware of is suggesting that efficiency is likely to be carried to a point where any of the existing assets of this kind would be idled. Conversely, efficiency DOES allow utilities to save money that would have gone into building NEW transmission and distribution lines, and EEV has targeted areas where new lines would otherwise have been required. The money to build these new lines would have ultimately have come from ratepayers. By not building them, existing rates do not go down, but rates which WOULD have gone up, now won’t have to.

            The fact is that unlike the widget factory owner, the utility doesn’t make its money on the revenues from sales. If there is a drop in power costs due to a drop in demand, which there will be efficiency efforts are successful, that decrease is passed on to ratepayers. The utility makes its profits by earning a “rate of return” on assets which have been allowed into its “rate base,” as determined through rate cases before the PSB.

            In sum, there are a lot of reasons why your analogy is a poor fit. Widgets are tangible and not limited by geography, customer base, etc. Widget owners function within a competitive market economy. Electricity is not tangible, is strictly limited (at the utility level) to a geographic region and to an existing set of customers, and functions under strict regulation.

            Instead of trying to model what you think the system ought to look like in some abstract model, please take the time to investigate how the system we have in place actually works.

            That’s precisely what I did to educate myself: I sat down with the friendly folks at CVPS, GMP, (they were separate at the time), and WEC (and other experts) and asked them everything I could think of. When questions arose subsequently that I couldn’t answer for myself, I emailed them or gave them a call. With CVPS in particular, I spent a LOT of time talking about how efficiency would impact them economically.

            Concerning efficiency in particular, there are multiple studies – at the state level and the national level – to confirm what I’ve been saying in the comments here. There’s nothing at all novel about any of it. (And by the way, most of the state stuff I’ve seen dates from the Douglas administration (or even earlier).

            In short, I’d ask you to stop trying to re-invent the wheel until you’ve familiarized yourself better with the wheel we have. I am far from suggesting that it can’t be improved; it can. But to improve it, you need to make the effort to understand it first.

      • Moshe Braner

        If I ask the PSB will they enact it?

        It may be the “only” utility that does not do it – it is also the dominant utility in the state.

        They should do that, and they should also require GMP to use the smart meters (that all of us ratepayers paid a goodly amount to purchase) as originally promised: enact variable-rate billing, charging more for power at high-demand times. As it is now, frugal users are subsidizing those who use a lot of power at the times when it is expensive.

        • Townsend Peters

          Mr. Braner, you can but try. I agree that the Board should require GMP to implement this kind of rate structure. I don’t agree, though, that it should be done as alternative to funding energy efficiency.

    • John Greenberg

      Steve:

      Your comment answers itself. “According the article “Springer said the state will have to purchase more electricity and will lose earnings it receives from the region’s grid operator for reducing consumption at times of PEAK demand.” [Emphasis added] In addition, peak power costs the utilities significantly more.

      “If more people shift to electric for their heat and cars, it seems electricity usage will increase.” It will, but the idea is that the increase will come during OFF-PEAK times.

      Currently, peak demand is approximately ½ again as high as base demand, so there’s a HUGE differential there. Filling it would mean greater efficiency for the system as a whole.

      In short, despite appearances, these two ideas are not at all incompatible with one another.

      • Lance Hagen

        John, your statement of:

        “It will, but the idea is that the increase will come during OFF-PEAK times.”

        I agree with your Off-Peak statement for cars, but not for heat. If heat is the larger portion of the additional load, then cost will go up.

        • John Greenberg

          Lance,

          “I agree with your Off-Peak statement for cars, but not for heat.” You don’t say why you disagree.

          I’m no expert in heat pumps or off-peak meters, but my understanding is that they work just fine for electric domestic water heaters. It seems entirely likely that a portion of the heating load will be on during the day, but the larger portion can occur at night for 3 reasons.

          First, many residences are empty for large portions of the day when people are at work, school, etc. Second, it’s generally colder at night. Third, in a well-insulated house, if it’s more efficient to heat at night, the house can hold a significant portion of the heat during the day. According to Wikipedia: “Thermal storage solutions incorporating resistance heating can be used in conjunction with ASHPs. Storage may be more cost-effective if time of use electricity rates are available. Heat is stored in high density ceramic bricks contained within a thermally-insulated enclosure.[8] ASHPs may also be paired with passive solar heating. Thermal mass (such as concrete or rocks) heated by passive solar heat can help stabilize indoor temperatures, absorbing heat during the day and releasing heat at night, when outdoor temperatures are colder and heat pump efficiency is lower.” http://en.wikipedia.org/wiki/Air_source_heat_pumps

          These are not all or nothing matters: some people will charge their cars during the day, and some will heat their houses. But, in both cases, the bulk of the load gets shifted.

          Someone more knowledgeable than I should really provide a more precise answer.

          • Lance Hagen

            John, all your arguments may have a ring of merit …. But for heating in off peak hours, one not only has to invest in a heat pump, one also needs to invest in a heat storage system (high density ceramic bricks contained within a thermally-insulated enclosure or such). And these heat storage structures are usually centralized and as such, one also needs a system to distribute this heat. To retrofit an existing structure with such a system is extremely costly and requires a significant amount of space. So the difference between peak and non-peak price rates most likely will not justify such an expensive investment.

            The system you describe is more suitable for a new build.

          • Lance Hagen

            Talk about being penny wise and pound foolish.

            Using the prices from J. Greenberg’s reference (iso-ne) and assuming usage of 700 kWh/mo, converting all your electric usage from high peak to off peak times will save you ~$20/mo or $240/yr.

            So a heating system that only heats with off peak electric, requiring a heat pump, heat storage system and heat distribution system, doesn’t look to attractive when you are only saving $240/yr. You would never each a ‘break even’ point

          • John Greenberg

            Lance,

            Consumers don’t pay the prices shown in the ISO-NE reference. Utilities do. I have repeatedly tried to make this clear by using the word “wholesale.” Retail rates in Vermont (and elsewhere) are more than double those shown on the ISO spreadsheet.

            Most utilities purchase a significant portion of their power under power purchase agreements (PPAs) rather than through the spot market.

            Some PPAs are dependent on or correlated with market prices. It is my understanding that the current HQ contract is based on market prices smoothed out over time. But the old HQ contracts were NOT related to the New England electricity market price, nor were the VY contracts in place prior to 2012.

            There are advantages and disadvantages to each of these options, and there are a good many more possibilities. Most utilities choose a MIX of options so as to diversify their risks to the extent possible.

          • Lance Hagen

            John,

            I didn’t use specific wholesale prices at all. I used the percent difference between peak and non-peak prices, which was only 20%. I then applied that 20% delta to the retail price ($0.15/kWh) to come up with $240/yr.

            The difference after applying the 20% delta in rates turn out to be only a 16% difference in the electric bill (hook-up charge is a fixed amount) for 700 kWh/mo

          • John Greenberg

            Lance,

            I don’t think I’m following your example or your math very well.

            Most of those who would be buying a heat pump system would be using it to replace another system: most likely, oil or propane. I see nothing in your calculations about the price of the fuel to run that alternative system. If you’re not REPLACING another system, then you’d be buying one AND paying for the fuel. I see nothing about the capital costs of the alternative system either.

            As far as I can make out, then, there are 2 other possibilities. One is that you’re calculating the cost of running a heat pump at peak power rates to the cost of running the same heat pump at off-peak rates, and then suggesting that the difference should pay for the heat pump installation itself. Why should that be the case?

            The other is that you’re comparing it no heat at all, which doesn’t sound very plausible in Vermont.

            Your 5:44 PM comment adds three further wrinkles which require more clarification. First, you say that the difference between peak and off-peak power is 20%, but you don’t say how you arrived at that figure. As I said above, the EXISTENCE of the difference is a constant, but the AMOUNT of the difference may very well vary – I’ve never seen or done any calculations. How did YOU calculate it?

            I just did a quick and dirty calculation for all the numbers shown in columns q and s and it does NOT jibe with your figure. It shows that from March of 2003 to January of 2015 off peak was 24% less than on peak.

            Without knowing all the determinants in the difference, it certainly seems possible that the period I chose, entirely because that’s what ISO provided (I suspect ISO began operations in March, 2003 or close to that point), may NOT represent the relationship going forward. Or perhaps it does. I don’t know. If you think you do, what’s your basis for that knowledge?

            Second, you mention that all of this is based on 700 kWh/mo. Given that the average Vermont household currently consumes 600 kWh per month WITHOUT a heat pump, your figure seems way too low. What’s it based on?

            Third, how did you choose a retail price of 15 cents? That’s more or less GMP’s current retail price, but VT retail prices vary. Moreover, there’s no reason to assume they will remain constant in the future. If you’re buying a heat pump, as in your reasoning here, presumably you expect it to last more than a year or two. So on what basis did you determine the retail price over the lifetime of the heat pump (whatever that is).

            I would add, finally, that I know nothing at all about heat pumps, beyond the most basic information available in the media. I gather they vary a good deal in terms of what temperatures they can deal with, and I would imagine they vary a good deal in cost, depending on the size of the space you’re trying to heat. It would be unsurprising to learn that they vary a good deal in terms of longevity as well, but I have no idea. None of this is discussed in your calculations.

  • Chet Greenwood

    Efficiency Vermont skims $52.2 million from rate payers each year. The amount we pay is based on usage so the more you use, the more you pay. According to Adam Greshin, the rate has increased 11.7% annually since 2003. A “time out” is definitely needed.

    Thank you Rep Greshin for bringing this up.

    What other state agency (?) (hard to tell the difference) gets an automatic 11.7% annual increase without going through hoops?

    For Mr Peters:
    I know of businesses that pay in excess of $100k annually to Efficiency Vermont and get very little in return. This amount could easily send businesses to other states.

    I do like Efficiency Vermont and it is a good organization, I would like them to succeed on their current revenue of only $52.2 million.

    • Townsend Peters

      Oh no, they do get a benefit. If the businesses did not pay this charge, they would see power costs go up by more than the amount of the charge.

      • Willem Post

        Townsend,

        Please provide your own PROOF, not the EV “proof”

    • Moshe Braner

      “I know of businesses that pay in excess of $100k annually to Efficiency Vermont and get very little in return.”

      – can you be more specific? Any business that pays that much (1) must be using a LOT of electricity and (2) likely has enough clout to demand some sort of benefit. E.g., recently EVT gave the ski resorts $millions to help them buy more efficient snowmaking equipment. EVT got a lot of flack for doing that, but, it may be justifiable if the snowmaking has been using enough electricity over the years to generate $millions in EVT fees. I havn’t seen actual numbers on this though!

      • Chet Greenwood

        Moshe, I cannot print the details but I can be very specific and willing to share.

        Several inspections/suggestions from field staff at EVT will show benefits and they will even share the cost but the net cost/benefit in most cases exceeds what most companies would consider a wise investment – unless a 5-10 years return is acceptable.

        I think the ski industry did some superb lobbying and I hope it works for them (and the environment).

        I believe IBM had some favorable legislation a few years ago that allowed them to avoid paying the EEC charge if they could document like expenditures with their own efficiency plan.
        ie, if we had a plan to invest $100,000 we could avoid paying the monthly EEC charge. My attempts to institute this were unsuccessful.

        As for clout- it took someone the size of IBM to initiate this plan- I/we do not have that clout.

        • John Greenberg

          Chet Greenwood:

          You say “unless a 5-10 years return is acceptable.” Why wouldn’t it be acceptable on an investment that lasts for decades? Please provide further explanation.

          • Chet Greenwood

            John,
            Individuals might plan to stay around for decades but some multi-national businesses will not commit capital expenditures that do not give them an equitable return.

            It is also questionable that the savings will be what is projected. See Springer’s comment…”total net benefits equal $20 million to $24 million. This is quite the range of estimated savings- from someone in the know.

            New technology is being developed that will replace today’s “state-of-the-art” equipment so a 10 year capital investment could be scrapped before fully depreciated.

          • Chet Greenwood

            John,

            Other than building materials, I haven’t seen any evidence that energy efficient products will last decades.

            It is also questionable that the savings will be what is projected. See Springer’s comment…”total net benefits equal $20 million to $24 million. This is quite the range of estimated savings- from someone in the know.

          • John Greenberg

            Chet Greenwood:

            First, there are far too few multi-national corporations using significant amounts of power in VT to make them the basis for ANY general policy.

            Second, the idea that these businesses don’t want to commit to remaining in the state for very long doesn’t suggest (to me at least) that the return isn’t “equitable.” At best, it MAY suggest that someone else (whoever buys the property) will get the return. That seems to me an entirely different issue.

            Additionally, your argument that “New technology is being developed that will replace today’s “state-of-the-art” equipment so a 10 year capital investment could be scrapped before fully depreciated” is far too broad. The operative word here is “COULD.” All you have to do is look around you (in Vermont anyway) to see that plenty of equipment older than 10 years old is still in operation. And the fact that the “state of the art” has moved on doesn’t necessarily imply that one needs to scrap what one already has if it’s still working fine.

            “Other than building materials, I haven’t seen any evidence that energy efficient products will last decades.” First, I’m not sure what you’re including in “building materials,” but my understanding is that EEV has MOSTLY been dealing with building materials: lighting in particular. Second, the fact that you haven’t seen the evidence doesn’t mean it isn’t out there.

            To find your comments at all convincing, I’d need to see a lot more specifics. What specifically has been proposed for your site? What is the proposed payback on each item and what is the (real) depreciable life of it? What is the actual rate of return, based on those figures? Etc.

            I spent roughly 10 years selling energy-efficiency equipment (mainly CFLs) along with many other green products. In the course of selling the bulbs, for example, I did numerous spreadsheets for customers to show them what they could expect to save. In all that time, I don’t recall ever doing a spreadsheet that showed an ANNUAL return of less than 100% tax-free. The numbers were simply staggering. (They’re considerably MORE rewarding now, because the RETAIL price of these bulbs has come down to less than 1/3 of what we used to charge WHOLESALE)

            In short, you’re making a whole lot of broad general statements here which directly contradict just about everything I know from direct experience and/or have read. I think it’s fair to ask you for far more concrete examples and far better evidence.

  • Annette Smith

    It’s a complicated conversation that the House committees have spent too little time on, as part of a complex piece of legislation that contains what is viewed as a must-pass component.

    The other must-pass piece of legislation that we have not seen is siting and process. We have a process now that serves developers and industries at the expense of communities and requires expensive lawyers and experts to participate. We have renewable energy projects harming people on a regular basis and no accountability. We have renewable energy projects breezing through the permitting process that are resulting in lawsuits by neighbors.

    What we do not have is a community-focused process for building renewable energy and decreasing consumption. The top-down approach that H.40 continues is disempowering to Vermonters, not empowering. The attitude seems to be that Vermonters are too stupid to understand what is possible, and instead all these gimmicks have to be used.

    It is time to RESET the entire renewable and conservation picture so that the customers and communities come first, not last, and they are a part of the development of the legislation instead of the victims of it.

    • H.100, a bill related to solar siting was read in the House Natural Resources & Energy Committee on 1/30/15. The bill had more than 20 co-sponsors from around the state.

      In looking at the House bill tracking system, it appears that H.100 has not received any attention since its initial reading.

      Ordinary Vermonters don’t have lobbyists working the corridors of the capital to protect their interests. They only have their elected representatives. It’s time for the peoples’ representatives to turn their attention to the folks who sent them to Montpelier.

      When it comes to decorating our roadways and neighborhoods with industrial solar projects, the people of Vermont have far more skin in the game than the solar developers and investors. At this time Vermonter’s home values are being jeopardized as near by industrial solar projects are being proposed/developed with essentially no standards. Vermont communities’ and families’ interests need to trump those of the solar developers.

      Its time for Chairman Klein to affirmatively act on H.100

    • Willem Post

      Annette,

      Siting is a big deal. Thank you for bringing it up.

      How big a deal is it? Here are some numbers:

      H-40 requires utilities to go from 40% RE sales (0.4 x 5,600 GWh = 2,240 GWh) at end 2014 to 55% RE sales (0.55 x 5600 = 3,080 GWh) at end 2017, 3 years, or an increase of 3,080 – 2,240 = 840 GWh, of which 1% is required to be distributed, mostly rooftop, solar.

      In 3 years, 831.6 GWh of ADDITIONAL RE would need to be generated by mostly solar systems in meadows and wind systems on ridgelines, or 277.2 GWh/yr.

      That means 1.2 Lowell systems on ridgelines and (240) 2.2 MW systems in meadows, all of it in 3 years!!!

      For more detail, see the articles I have sent you by email.

      Why is DPS not providing the people of Vermont with this simple calculation? We are not THAT stupid.

      • Willem Post

        Correction to above comment.

        H-40 requires 1 % of 3,080 GWh = 30.8 GWh = 30,800 MWh of RE from distributed sources.

        Total Vermont energy from solar from about 44 MW of panels, SPEED and non-SPEED, in 2013, was about 44* MW x 8,760 hr/yr x capacity factor 0.14 = 53,962 MWh. All but about 10,000 MWh was from distributed sources, such as on roof tops.

        H-40 requires distributed RE to go from 10,000 MWh at end 2014, to 30,800 MWh at end 2017, and increase of 20,800 MWh in 3 years.

        That is a major acceleration, as it took at least 6 – 7 years to get to 10,000 MWh!!

        That would require 20,800 MWh/(8760 x 0.14) = 17 MW = 17,000 kW of installations, or (3,390) 5 kW rooftop systems at a capital cost of 17,000 kW x 4,000/kW = $68,000,000, of which about 30% would be a federal CASH subsidy.

  • Don Peterson

    Cancelling EV wont reduce the ratepayers final bill; it will just redirect the difference into the utilities coffers. IMHO

  • John Greenberg

    I would hope that we could distinguish between two ideas about Vermont’s energy efficiency programs in this debate.

    The first is simply this: efficiency works. For everyone. It is, by far, the cheapest way to meet demand, costing, as various folks said here, roughly ½ of the currently low market price for power. In addition, it is, by far, the least damaging source environmentally. That even includes power generated renewably, which of course, is NOT the case of most of Vermont’s current electricity supply. Cutting back on efficiency efforts is, as someone put it, cutting off your nose to spite your face. There is a plethora of evidence to back up these statements, from a wide variety of sources. They are true of efficiency ANYWHERE, however it’s achieved. There is no debate among energy experts about any of this.

    Having said that, the second issue is HOW we should achieve more efficiency in Vermont. The answer to that question is far less obvious. Historically, Vermont has adopted a variety of strategies, and, from where I sit, few of them have been as effective as one would have hoped.

    In the early days, prior to the creation of EEV, Vermont’s utilities were charged with conducting efficiency programs. Once EEV came into existence, most of the utilities passed the baton to EEV. In my view, as someone who has had a close eye on these issues for decades now, including running a business which dealt in electricity efficiency products (among many other things) for 10 years, I have been unimpressed with the programs we’ve put in place. They’ve been scattershot, often provided incentives that should never have been needed, and failed to provide incentives that ARE necessary. To make a long story short, they have not, in my view, been anywhere near as effective as they could be. Still, they’ve been a good deal better than nothing.

    Consequently, I would hope that this “pause” – if it actually becomes law – also becomes an urgent signal to get us back on track. We should, without delay, consider whether or not EEV is the best vehicle for these efforts, how we pay for them, who should pay for them, how to integrate electric and thermal efficiency programs, and the other legitimate issues that have been raised here and elsewhere. All of these deserve careful scrutiny and debate.

    What we should NOT do, however, is throw the baby out with the bath water. Efficiency works. Let’s use this moment to make it work better in Vermont.

    • Steve Comeau

      John,

      Energy efficiency improvements are beneficial because they provide the ability to the same work with less energy. But, I think there is a small caveat to your statement that there is no debate about the effectiveness of energy efficiency. There has been many studies into energy efficiency and it turns out the effectiveness is not always so clear cut. This is particularly the case in the large scale, as it relates to overall energy use and climate change, and is worth noting.

      A good launching point to understand this debate is an article published in the New York Time Dot Earth blog back in October 2014 on energy efficiency “rebound”. http://dotearth.blogs.nytimes.com/2014/10/24/another-round-on-energy-rebound/?_r=0

      The general idea is that as equipment becomes more efficient there is a tendency to use it more, which cuts into some of the benefit of the efficiency. For example, if the new snow guns used at Vermont ski areas are so much more efficient, it might make sense to expand and increase snowmaking to increase business at the ski area. More subtle is the indirect effect, such as the reinvestment of the saving from the efficiency gains.

      I am not saying that energy efficiency rebound undermines the effectiveness of the EEV program. But it may have a negative influence on the overall results of the program over time, especially for some types of efficiency measures.

      • John Greenberg

        Steve,

        The article you cite has a significant disclaimer right in the middle, which you failed to note. The emphasis is provided by the author: “Recent estimates and case studies have suggested that in many energy-intensive sectors of developing economies, energy-saving technologies may backfire, meaning that increased energy consumption associated with lower energy costs because of higher efficiency may in fact result in higher energy consumption than there would have been without those technologies.”

        The key word here is “developing,” which (pace Willem Post) does not apply to Vermont. If you replace candles with LED light bulbs, you can pretty easily grasp the author’s intent here.

        Even in developed economies, there is SOME tendency in the direction described here. Some people will decide that since they’ve replaced their old, inefficient bulbs with new efficient ones, it’s ok to just leave them on all the time. If that’s the case, they can buy automated devices to turn lights off when not in use: they’re popping up far more frequently now in public places.

        The real question you’re raising pertains to economic growth. As things get cheaper (which they do when produced and used efficiently), there IS a tendency to use more of them: that’s generally considered improving the standard of living. And obviously, there are environmental consequences to that, especially given our planet’s vast population (pace George Plumb).

        The issue is an interesting one, but it doesn’t need to be – nor will it be – resolved here. In short, yes, it’s entirely possible that over time, improving efficiency will encourage growth. But even if that’s the case, the operative words are “over time.”

        We know right now that we are wasting very substantial amounts of energy. The obviously-too-conservative estimates that I’ve seen put the number at around 20%, and the reason I call them too conservative is that they explicitly leave out large portions of what is wasted. But even at 20%, that’s the rough equivalent of all the power Vermont consumers purchased from VY while it was operating (ca 180 MW per year). If, over the course of time, saving that much power causes folks to use more of what remains, then we can either find new ways to save power (which I strongly suspect we will anyway) or find some sustainable sources to produce it.

        Since the issue you’re raising is a big picture argument, here’s a very big picture factoid for you. In 1980, it took 13381.33 BTU per year to produce $1 of GDP in the US. By 2011, the equivalent figure was 7328.424. During the same period, real (inflation adjusted) GDP more than doubled from $6.50 trillion to $15.19 trillion. Draw your own conclusions.

        • John Greenberg
        • Steve Comeau

          John,

          To your first point on the Dot Earth blog article, the article goes about much more than “developing” countries. The section you quoted was on “backfire” which is the extreme case of energy efficiency resulting in an actual increase in energy use due to the efficiency measure. The article goes on to state something more relevant to Vermont and the US: “Over the last several decades, cars have become much more efficient. But 75% of the technical efficiency gains achieved in US automobiles went to produce more power, not save fuel. ” What this means is that cars got more efficient, but that most buyers took that increase in efficiency as a bigger or faster car or truck, not as more miles per gallon.

          To your last point on energy intensity, according to the US Department of Energy website “the simple E/GDP ratio measure of energy intensity overstates the extent to which energy efficiency improvements have occurred in the economy, because factors that affect intensity that are unrelated to the efficiency of energy use are included in the ratio”.

          To address this there is a new “New Economy-wide Energy Intensity Index” which compensates for other factors that cause energy intensity to improve. Using the simple Simple E/GDP Ratio shows a energy intensity change of -27% from 1985 to 2004. But using the Economy-wide Energy Intensity Index shows a energy intensity change of -10% for the same time period. For details see http://www1.eere.energy.gov/analysis/m/eii_total_energy.html

          My conclusion is that efficiency is good, but it is too easy to overstate the effect as it pertains to a decrease in overall energy use.

          • John Greenberg

            Steve,

            I think we’re losing track of what’s being discussed here, and more particularly, of what I’ve asserted.

            I did NOT say that every dollar invested in efficiency will produce equal effectiveness or that there is a one-to-one relationship between dollars invested and effect achieved. I did say that efficiency programs work, and nothing you’ve said subsequently suggests that I’m wrong. There are all kinds of technical issues which can be raised and debated.

            The nitty gritty of exactly which programs will achieve what impacts is interesting, but is above my pay grade, and I suspect, yours as well. We are not going to design an efficiency model for Vermont in the comments columns of Vermont Digger.

            But we CAN push the public debate on a basic, key point: namely, that Vermont should fund efforts to reduce energy demand. If legislators want to move away from EEV to a different model, I will wait to see what the model looks like. If we get to the point of discussing what the model SHOULD look like, I have ideas to contribute, but I’m not going to get mired in them here.

            With that said, I will respond to a few of the detailed points you raise.

            You note: “”Over the last several decades, cars have become much more efficient. But 75% of the technical efficiency gains achieved in US automobiles went to produce more power, not save fuel.” What this means is that cars got more efficient, but that most buyers took that increase in efficiency as a bigger or faster car or truck, not as more miles per gallon.” First, I strongly suspect that the term “technical efficiency” as used in this quote does not mean the same thing as “efficiency” as you and I have been using it here. Second, you fail to note that the OTHER 25% went to saving fuel and that fleet average miles per gallon are lower than they were as a result. In other words, efficiency DID work.

            I singled out developing countries because the author did so (and because he’s right): the problem he’s pointing to is much more intractable in areas of previous deprivation. But that’s NOT germane to Vermont. If you read my remarks to imply that’s ALL he said, then I apologize for the ambiguity.

            Similarly, the new EIA source you cite is interesting, but it doesn’t change the fact that the US is using less energy per unit of GDP than we used to.

            Let me put all this a different way, if I may.

            There is simply no question that we can and should be focusing on policies to reduce energy use in Vermont (and in the US). The sources you cite do NOT contradict that point.

            We can debate until the cows come home just HOW to do that and which initiatives will work the best. I care a good deal more about making sure that the debate moves forward than I do about any particular outcome, as long as we keep pursuing the goal.

    • Willem Post

      John,

      “The first is simply this: efficiency works. For everyone. It is, by far, the cheapest way to meet demand, costing, as various folks said here, roughly ½ of the currently low market price for power.”

      I agree, but for ACHIEVING energy efficiency, the EV boondoggle, with a 2015 budget of $52.2 million that has been increasing at 11.6%/yr for each of 12 years, is NOT required.

      A MAJOR increase in energy efficiency can be achieved by changing the statewide building code to require all NEW buildings to be net zero energy.

      That will set in motion a major upgrade in skill levels in the construction trade, as it has in other countries that have had strict building codes for decades.

      I am speaking from experience, as I “had a house built” in Norway (colder winters than Vermont). Almost all of it was done in the factory, with very little on the site, and almost nothing by me.

      This house was a 2,100 sq. ft. prefab, as most houses in Norway, and it was ready in ONE MONTH, and it was very energy efficient.

      Stick-built is hardly ever practiced, as it would be much more difficult, and expensive, to build an energy efficient house on the site.

      • John Greenberg

        Willem,

        Changing Vermont’s building codes would impact only a tiny fraction of Vermont’s housing stock, which is, in turn, only a fraction of Vermont’s energy use.

        Specifically, only 8% of all Vermont housing was built in the decade between 2000 and 2010 (http://www.vhfa.org/documents/hna2010/03-stock.pdf, p. 3 chart). Roughly 2/3 was built before 1969. I didn’t look for more recent figures, but I’m sure they haven’t changed significantly.

        Whatever its virtues or failings, EEV DOES address far more than just new construction, and part of the problem, in any case, is that it has no mandate to address thermal efficiency issues. As I said above, I am not here to defend EEV. But any replacement program should be MORE comprehensive, not less, and should certainly not be limited to new housing construction.

        There is VAST waste in existing housing, as well as in various other areas. Why not address it?

        • Willem Post

          John,

          “Changing Vermont’s building codes would impact only a tiny fraction of Vermont’s housing stock, which is, in turn, only a fraction of Vermont’s energy use.”

          That same argument was used DECADES ago in Europe, but that argument did not appear sufficiently rational, because the code stayed, and EVERY building during these decades was built to the stricter codes. Over the years that adds up to quite a few individual houses, apartment buildings and condos.

          With regard to upgrading existing, mostly wood, houses, in Norway, the siding is taken off, 6 mil PVC is applied, 4 inches of blueboard is added (R-20, taped and sealed, joints staggered), new siding, new high U-value windows, new high U-value doors, blower door test to determine leakage, etc.

          All this is performed by private contractors.

          Homeowners are told to upgrade or face fines.

          Houses are given an energy rating in most EU countries.

          Houses with low energy ratings have difficulty selling.

          Efficiency Vermont type outfits were not set up as they were not needed in the EU.

          The loan, if any, is very low intersest, about 1 or 2 percent, and is paid off with the energy cost savings, usually within about 10 years.

          • John Greenberg

            Willem:

            “That same argument was used DECADES ago in Europe, but that argument did not appear sufficiently rational, because the code stayed …”

            You miss my point entirely.

            I am not arguing against building codes, but they do not and cannot replace broad-based, comprehensive energy efficiency programs.

            My point above was NOT that building codes don’t work or shouldn’t be used, it was that they address only a tiny fragment of the energy waste that goes in all sectors of our society. And in a state where MOST of the building stock would not be subject to the codes you’re describing, they do not even address the bulk of the waste in housing and other buildings.

            As I noted before, for better or worse, EEV DOES address more than a few of these other issues, so replacing it solely with new building codes would leave enormous amounts of waste behind.

            From my point of view, the problem with EEV is not that it does too much, but that it does far too little. Relying solely on building codes would only make that much, much worse.

        • Willem Post

          John,

          “I am not arguing against building codes, but they do not and cannot replace broad-based, comprehensive energy efficiency programs.”

          They do and can in Europe WITHOUT inefficient, superfluous Efficiency Vermont type set-ups. I am speaking from living in Europe for a toal of 26 years.

          Because the EV route was chosen in Vermont that does not mean, by a long shot, it is the best way to have broad-based energy efficiency.

          When I first heard of quasi-government EV, my first impression was another boondoggle.

          What gives Vermont such special insight, that seems to have eluded/not be on the radar screens of EU energy specialists?

          Do you really think the EU, which does not have as much resources to waste as poor Vermont, would even think of having such a wasteful EV approach?

          Vermont has a lot to learn. It is very far from being a “leader”. Vermont uses Chinese PV panels, Japanese heat pumps, and Danish wind turbines, AND it has an UNENFORCED building code not worth the paper it is printed on!!!

          • John Greenberg

            Willem:

            You appear to attribute all of Europe’s energy savings to building codes, but in fact, European countries are far more widely active in the energy efficiency arena than you claim.

            The European Council for an Energy Efficiency Economy, for example highlights numerous programs and policies beyond building codes: http://www.eceee.org/policy-areas. I did not undertake to read up on each area to see what is BEING done or has been done, and what ECEEE is advocating. I note that this is not an official agency: it’s a non-profit organization.

            On the other hand, the European Commission IS and official agency and it also has specific directives in a variety of areas, again not limited to building codes: http://ec.europa.eu/energy/en/topics/energy-efficiency/energy-efficiency-directive and http://ec.europa.eu/energy/en/topics/energy-efficiency. Again, I did not take the time to read up on all the areas which the Commission is regulating or for which there are directives.

            For the purposes of THIS discussion, just the headlines on the linked pages are sufficient to show that your apparent claim is just wrong. It is simply not true that all of Europe’s energy efficiency improvements stem from its building codes or that Europe’s example somehow contradicts my statement that “building codes … do not and cannot replace broad-based, comprehensive energy efficiency programs.”

            I found these links as the result of a quick search on the internet: I’m certain there’s plenty more where they came from.

            In addition to all this, you’re ignoring the fact that Europe has also had very high taxes on energy for decades. That includes, but is not limited to the high taxes and fees on the residential use of electricity in Germany and Denmark that you regularly denounce in these comments columns. In fact, EVERY European country imposes widely varying levels of taxes and levies on the residential use of electricity (http://ec.europa.eu/eurostat/statistics-explained/index.php/Energy_price_statistics#Electricity_prices_for_household_consumers); Denmark’s and Germany’s are the highest. For detailed spreadsheet data and country by country comparisons, see http://ec.europa.eu/eurostat/statistics-explained/images/e/e2/Energy_prices_2014s1.xls. These taxes and levies been imposed for a reason, namely to reduce demand, and there is no evidence to show that they’ve failed to do so.

            Again, let’s not miss the ball here. I’m not arguing against building codes, nor am I a big booster of Energy Efficiency Vermont.

            Instead, I advocate a comprehensive approach, which assesses energy waste as a whole and then chooses one or more policies to address the problem. Failing such a review (for which I see little political support at the moment), I support EEV as a good deal better than nothing and also a good deal better than simply changing Vermont’s building codes for new construction and calling the job done.

            I would note too that there is no contradiction of any kind between maintaining EEV (or an equivalent program of some kind) AND improving VT’s new-building codes.

            I strongly believe that Vermont can do a good deal better than ANY of the aforementioned approaches.

            And I stand by my previous comments.

          • Willem Post

            John,

            “It is simply not true that all of Europe’s energy efficiency improvements stem from its building codes or that Europe’s example somehow contradicts my statement that “building codes … do not and cannot replace broad-based, comprehensive energy efficiency programs.”

            I never said ALL OF EUROPE’s………………, because that would not be true. The EU has many approaches, but not the wasteful EV approach.

            I said: “Do you really think the EU, which does not have as much resources to waste as poor Vermont, would even think of having such a wasteful EV approach?”

          • John Greenberg

            Willem:

            Let’s review.

            You suggested that Vermont should eliminate EEV and use building codes instead. I responded by saying that “Changing Vermont’s building codes would impact only a tiny fraction of Vermont’s housing stock [8% in 10 years], which is, in turn, only a fraction of Vermont’s energy use.”

            You answered as though I had made an argument against building codes, which I explicitly denied.

            I then added: “… but they [building codes] do not and cannot replace broad-based, comprehensive energy efficiency programs.” To which you replied: “They do and can in Europe …. “ But now that I’ve pointed out that they can’t and don’t in Europe, you argue: “I never said ALL OF EUROPE’s….”

            Fine. You win. I’m sure you’re right.

            Now that we’ve settled that, though, what exactly ARE you saying? More specifically, since you want to eliminate EEV, and since building codes address only a small part of the problem, what ELSE are you recommending? As you point out in your latest riposte, “The EU has many approaches.” Are there any you’re willing to endorse for Vermont?

            Elsewhere, you’ve rejected taxies and levies, which ARE used in Europe as I pointed out above, and you’ve rejected the carbon taxes proposed recently in Vermont, so I assume all of these are off the table as well.

            On the other hand, you’ve come to VT Digger many times telling us that you believe in energy efficiency and consider it the optimal solution. Indeed, you said so above. I wrote: “… efficiency works. For everyone. It is, by far, the cheapest way to meet demand, costing, as various folks said here, roughly ½ of the currently low market price for power.” And you responded: “I agree,” and launched into an attack on EEV.

            In fact, each time you’ve endorsed energy efficiency, your only specific solutions have been limited to eliminating EEV (which clearly won’t bring us MORE efficiency, though it MIGHT save us money) and adopting strict codes for new buildings.

            So what other initiatives do you think Vermont should adopt? If those are the only two you’re willing to endorse, please tell us why that’s so. In particular, if it IS so, since you’ve raised the example of Europe, please tell us why you reject all of Europe’s OTHER “many approaches.”

          • Willem Post

            John,

            “The EU has many approaches.” Are there any you’re willing to endorse for Vermont?”

            1) As buildings are a big contributor to CO2, strict, ENFORCED, statewide building codes are a necessity, as the EU has already proven for at least 3-4 decades. These codes finally should mandate near-zero-energy buildings Vermont could be a leader!!!

            With lots of insulation and good sealing, one can achieve energy reductions of 70% compared with standard buildings. Lighting, appliances, heat pumps, solar panels, etc., will do most of the rest to get to near-zero-energy.

            2) Light vehicles are another major CO2 source. Vermont should have a minimum mileage standard, say 28-30 mpg. Anything below that pays an annual fine at the time of registration; the more below, the bigger the fine.

            That mpg level should be increased each year. Folks will quickly drive Prius-type vehicles, as you already are doing.

            3) Electric rates should be pegged to consumption. Consume less the rate is lower, consume more the rate is higher.

            Electricity guzzling households, 1000 kWh/month and up, should be paying at least 30 c/kWh, etc. Electricity sipping households, 400 kWh or less, should be paying 10 c/kWh.

            These three items will reduce Vermont’s CO2 by significant amounts.

            NOTE: CO2 is only one factor affecting GW. Other manmade factors are deforestation, urbanization, industrial agriculture, industrial pollution.

            There is also NATURAL GW, so-called climate cycles, such as coming out of the Little Ice Age since about 1850. The low point of the LIA was in the late 1700s.

            The Roman Warm Priod and the Medieval Warm Period were warmer than the Present Warm Period, which started around 1850.

            The combined effect of manmade and natural creates GW.

          • John Greenberg

            Willem:

            Thank you for your additional suggestions. I’m not sure I agree with the details, but I do agree with the direction in both cases. I only wish I hadn’t had to pull teeth to get them.

            I would note, however, that all 3 of your suggestions combined are still a VERY long way away from a comprehensive approach, which I suspect, is what Europe and Japan have been taking, and what I strongly believe we need in Vermont.

  • Now, the legislators should take one more step…that is take away the responsibility from the PSB to set the tax(fee). For the budget of efficiency Vermont and give that responsibility back to the legislature where it ounce was.. The 180 members of the general assembly better represent the people of Vermont…rather than a 3 person board appointed by the Governor.

    • Townsend Peters

      Why stop there? Why not do that with all utility rates? The legislature used to do that too.

      • John Greenberg

        Yeah, let’s have 180 lay people with hundreds of other bills to consider during a 4-month session and no staff set the rates for Vermont’s utilities. What a perfect recipe for disaster!

  • Lance Hagen

    “Springer said the state will have to purchase more electricity and will lose earnings it receives from the region’s grid operator for reducing consumption at times of peak demand. The total net benefits equal $20 million to $24 million, he said.”

    I would sure like to see how Mr. Springer came up with these numbers and who actually benefits. For years ratepayers have been funding Efficiency Vermont and I have never seen my rates go down as a result of “earnings it receives from the region’s grid operator for reducing consumption at times of peak demand”

    • Willem Post

      Lance,

      Springer, et al., think they can throw out any numbers, WITHOUT BACKUP, anything to get H-40 passed.

      Springer is like the fox telling us the lock on the chicken coop is just fine.

      The same smoke and mirror shenanigans as went on with single-payer.

      I think the legislature, backed against a fiscal wall of its own making, is finally beginning to realize the game is up.

      Increasing taxes, fees and mandates is no longer an option.

      Already-struggling households and businesses are croaking.

  • David Dempsey

    Mr. Klein said “we took one for the team”. Since when has government been a team sport? What is the name of your team and who are the players? What team am I on and who else is on my team. This attitude is exactly what Vermonters hate and is counterproductive.
    I don’t know much about what the efficiency program does. But I do know that sending people a lightbulb and a few pamphlets is a complete wast of money. Then I get a report each month telling me how much more power I am using than my more efficent neighbors. That’s is another waste of money. I sent an email to them asking them who these neighbors are. I also asked how they can compare my electriciy usage with someone else without having any idea what each neighbor uses electricity for. I use gas for cooking, hot water, and the dryer. I use electricity for my other appliances. Comparisons are completely bogus. I opted out of having a smart meter, so they can’t get much information from the meter. The ratepayers pay for the efficiency program and we expect efficient use of our money. The response was typical rhetoric, with an admission that a lot of people have asked the same questions.

    • Matt Fisken

      I wonder if it is a coincidence that people often find their bills drop after opting out of having a so-called “smart” meter (returning to an electromechanical/analog meter) AND that the person who secured the $69 million ARRA grant to install the new digital, microwave-pusling meters thinks “we need to use more electricity.”

      I challenge anyone who has had a “smart” meter for the past 2-3 years to opt out and see what happens to your bill (and your health).

      • Richard Ratico

        Matt,

        Since bills didn’t go up after smart meters were installed, it’s unlikely they’ll go down after removing them. Likewise with health, no change.

        How do you feel about measles vaccination?

  • Mark Keefe

    Thank you Rep. Komline for slowing down increased spending in the name of “efficiency”. I appreciate your pragmatic, sensible, and reasoned approach to balancing “efficiency” efforts with broad based cost containment strategies that work for all Vermonters. I would have hoped Mr. Klein would have seen this as a respite for ratepayers…..

  • Irma Heeter

    It’s about time they put a cap back on this charge that has gone up every year since it’s inception. Back when it started there was supposed to be a 2% cap on the amount charged for each KWK you used. Energy Efficiently has been raising this percent
    every year with the legislation’s support with no end in sight.

    The more I conserve, the more I seem to pay for electricity and all these added fees just keep coming and going up and up each year.

    • Willem Post

      Irma,

      You have seen nothing yet. Here is a standard GERMAN household electric bill.

      German household electric rates increased in about a straight line from 13.94 in April 2000 (start of EEG law), to 21.65 in April 2008, to 28.73 eurocent/kWh in April 2013.

      German household electric rates, 29.65 eurocent/kWh in December 2013, were the 2nd highest in Europe, after Denmark’s 30.45 eurocent/kWh. France, 80% nuclear, was at 15.48 eurocent/kWh. See URL for breakdown of electric bill charges per kWh.

      Total household cost……………..29.650
      Less VAT………………………………..4.744….16% of Total
      Less EEG surcharge………………..5.227
      Less other taxes and levies………4.722*
      Utility energy………………………………….5.5
      Utility service, distribution……………….1.407
      Utility operations…………………………….8.0
      Utility Energy, Service, Operations….14.907….50.28% of Total

      * Includes: Energy tax; Offshore hafnungsumlage; Parapraph 19 umlage; KWK aufschlag; Konzessions ausgabe.

      • Jan van Eck

        I would remark that one reason the French have been so successful at producing low-priced power from nuclear plants is that all their plants are the same – they developed one format that worked and stuck with it. A bit like the 737; build a lot of them and your experience curve works for you. In the US the commercial industry built a big swath of “one-off” plants, each different in operating design. the lack of commonality removes the benefit of a common experience curve.

        The US does have one design of reactor that has lots and lots of clones and has worked flawlessly for decades. That it the military version. Ironically, it is an “old-design” version, without all the safeguards that the civilian reactors pay for. Interestingly, never a failure.

        • Willem Post

          Jan,

          The US has the highest NUCLEAR capacity factor in the world, about 0.90.

          Vermont Yankee’s CF was above 0.91, and operated on a 500-day refueling cycle.

          The CF is reduced because of the 30-day refueling shutdown.

          30/500 = 6%

          That means VY could, at the very most, have a CF = 0.94. It averaged about 0.91!!!

          Any plant has to be WELL RUN, HIGHLY RELIABLE, and have much REDUNDANCY to be able to do that.

  • Arthur Hendrickson

    The regressive nature of the energy charge on our power bills is taxation at its worse. Most people have already paid in more than they will ever benefit. I have told my legislators for years that the EV program is nothing other than “welfare for the rich”.

  • EV is a boondoggle. Perfect example. They would help me buy a reverse osmosis for my maple sugaring operation. Would it save energy? Yep. It would save firewood. It would also save me time and allow me to make a bunch more maple syrup. That means more money in my pocket thanks to all of you other rate payers. That’s not right. This is how EV works. They use other people’s money to pay for things I should be paying for myself.

    If Darren springer wants a new wood fired…whoops…I mean biomass……boiler, new windows for his home or better insulation…HE should pay for it. Not me.

    I don’t understand how we got into this mode of thinking. Where we are willing to spend a zillion dollars of other people’s money to get a supposed 24 million in savings. Keep spending more and more of my money on benefits for other people and you are going to crash my economy!

    Scrap EV. Vote no on RESET. And let me decide what to do with my finances.

    While you’re at it. Kill net metering. It’s the one thing that makes a tesla battery in my home completely unnecessary. Why would I need to put energy in the bank for later use if I can just draw it off the grid. That contributes to instability. And causes ISO NE to need more reserve capacity.

    These shams are over stressing the economies of families like mine and taking money away from sectors that would do far greater good for the majority of us who won’t take something that everybody else had to paid for.