Energy

Administration rebuffed on call to cut energy efficiency funds

An energy consultant at Efficiency Vermont provides a tour of an energy-efficient and weatherized home. File photo by John Herrick/VTDigger
The Public Utility Commission has rejected calls by Gov. Phil Scott’s administration to knock 8 percent off Efficiency Vermont’s budget.

The commission, formerly called the Public Service Board, issued an order last week that will leave efficiency funding undiminished for the next three years.

The order means Efficiency Vermont will see an annual budget of around $53 million for the next three years, while Burlington Electric Department’s efficiency program will have a budget of about $2.5 million annually. Vermont Gas Systems’ efficiency program will operate with about a $3 million annual budget.

According to the order, electric customers not served by Burlington Electric Department will see a notable decrease next year in the “efficiency charge” that partly funds Efficiency Vermont, followed by “modest increases” the following two years. The commission sets rates on a three-year basis.

The continued funding will save Vermonters money in the long run, the commission said.

“(C)ontinued investment in cost-effective energy efficiency will result in total electric and natural gas costs for Vermont ratepayers that are lower than they would otherwise be absent energy efficiency efforts,” the commission’s order states.

“These efforts not only yield savings for customers who install electric and natural gas efficiency measures, but also result in savings for all ratepayers through reduced need for power purchases by utilities and deferred need for system upgrades such as new transmission facilities,” the order states.

The order represents a good investment, even without the requested 8 percent decrease, said Riley Allen, deputy commissioner of the Department of Public Service.

“We think that, very broadly, these are sound investments in what’s generally the least-cost and most environmentally benign resource available,” Allen said. “But it’s a question of degree.”

Allen said conditions in the energy industry have changed enough since the last time efficiency charges were set that a funding cut made sense. Natural gas prices have lowered, as have oil prices.

Allen said members of the administration “would have preferred a different outcome, but we respect the board’s process.”

Environmental advocates hailed the PUC’s order as a good investment.

“The PUC decision clearly recognizes that energy efficiency provides long-term benefits for Vermonters,” said Sandra Levine, senior attorney at the Conservation Law Foundation.

Efficiency measures actually reduce Vermonters’ electric bills, Levine said, citing a 2016 study that found every $1 invested in Efficiency Vermont actually represents a $2 savings over the long term.

Efficiency will grow increasingly important as the state pursues greater electrification, Levine said.

State policies are currently meant to encourage a shift from oil, natural gas and gasoline to electricity for heating and transportation. The shift could require major upgrades to the state’s electrical transmission and delivery networks unless efficiency measures keep that growing demand in check.

Levine said this transition is anticipated, but said it was not included in the analysis that led Scott to recommend a decrease in efficiency funding. This was among the shortcomings in Scott’s analysis that led the commission to reject his administration’s recommended funding decrease, Levine said.

“It’s a clear rebuke of the Scott administration’s request to cut energy efficiency, and it’s encouraging that the PUC continues to stand by cleaner and lower-cost energy efficiency resources,” Levine said.

The administration’s own numbers showed that efficiency investments help Vermonters, said Vermont Public Interest Research Group clean energy advocate Sarah Wolfe.

“It was very hard to see the logic in their reasoning,” Wolfe said. “For them to say, ‘We’ve been doing so much efficiency we don’t need to do more’ doesn’t make sense. That was their argument.”

Wolfe said it’s unusual for the commission to depart so dramatically from the administration’s recommendations.

“It’s pretty rare for the commission not to go with the [Department of Public Service’s] recommendation,” Wolfe said. The disparity between the department’s recommendation and the commission’s order underlines the importance of efficiency for the state, she said.

The PUC must balance a range of objectives in setting out the efficiency budgets, according to state statute.

The efficiency charges should, according to statute, accomplish four outcomes in particular: reduce the amount of energy the state must purchase, reduce the volume of greenhouse gases the state generates, reduce the need for more costly infrastructure upgrades, and minimize the cost of electricity.

The commission budgets every three years for the state’s three efficiency utilities, and this year’s budgeting process has gone on since the fall.

The commission will calculate anticipated energy savings and other effects based on the funding in this order before issuing a final order this fall, but the budget numbers are final, said Abby White, marketing director at Vermont Energy Investment Corp., the entity that administers Efficiency Vermont.

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  • Jamie Carter

    EV needs a good audit… Paging Doug Hoffer.

    The idea behind EV isn’t a bad one, but from a practical standpoint it’s not a useful program.

    Your upgrades are limited by their policies.
    Often you need to pay upfront for an energy audit to qualify. So to save $100, you pay $500 to have someone tell you your windows are drafty.
    Than you have to use one of EV’s preferred contractors who are oftentimes much more expensive. In the case of a new furnace by nearly $2000… which exceeded any EV funds that would have been rebated back.
    Then there is paperwork, processing time, etc to get a rebate. Because it’s definitely the upfront cost that is preventative for most people…

    In the end to upgrade my boiler to a new more efficent model would have cost me $1000’s more to go through EV than to just do it on my own and there is no guarantee the rebate would ever be received.

    But heck, we’ve got loads of cheap LED light bulbs that will available for the next 3 years.

    • Paul Richards

      “Than you have to use one of EV’s preferred contractors who are oftentimes much more expensive.”
      In the case of electrical work, a licensed Master electrician who is certified and capable of many complex electrical designs and installations is not approved by EV to perform solar installations. The state of VT approves of licensed electricians doing solar work but not EV. An electrician has to join essentially a trade group called Renewable Energy VT (REV) . There are dues to pay, required education, peer reviews etc. This all takes at least a year to complete and you have to complete solar 3 systems that are not subject to a EV rebate (while not being approved) . So a Master Electrician can specify, design, install and repair complex control systems for things such as wastewater treatment plants but they are not approved by EV to install a simple residential solar system. It’s a racket…
      As far as the money goes, they killed the goose that laid the golden egg; VT Yankee with provided most of the funding for these programs.

  • Edward Letourneau

    They speak of savings over the “long term,” but never define what that term is. Meanwhile they are taking money from the poor and senior citizens on a fixed income, that they will never get a return on.

  • Mary Daly

    That is a lot of money and I congratulate our Governor for attempting to lower the cost to the tax payers. It is the Vermont Tax Payer that eventually gets the bill. As I have paid for upgrades to save energy in my own home, why is that others get the government to pay for energy efficient upgrades. I was the one who benefited the most from the work that was done, therefore, I paid for it. The idea that a wasteful bureaucracy makes the decisions and for who gets what, is repugnant to me.

    Other questions: Who pays for the installation of the Charging Stations and the power used at the Park and Rides? The electric car owners or John Q Public? How are we going dispose of all the solar panels and wind towers when they are no longer usable? I always think of the long term and wish others would too.

  • Lester French

    Efficiency Vermont should be cut back. They are set up at the rate payers expense to promote purchases of electrical products supporting electric utilities and their contractors and suppliers. The reports sent out monthly provide, as far as I am concerned, no useful information and just contribute to the waste stream. Consider also that you have to have significant disposable income to take advantage of any of their recommendations that have questionable long term paybacks.

    • Willem Post

      Lester,

      EV, which has a staff of about 200 employees, spends about 45% of its budget on expenses, which is an inefficient way to do energy efficiency. See the Andrew Rudin URL, which shows the Efficiency Vermont way of doing EE is not efficient at all, despite their self-serving reports.
      https://vtdigger.org/2015/01/27/andrew-rudin-efficiency-vermont-not-efficient/

      In 2014, EV budget $45.9 million, about $18.9 million was spent on various expenses, $22.9 million on subsidies for participants, and $4.1 million on other activities.
      https://www.efficiencyvermont.com/Media/Default/docs/plans-reports-highlights/2014/efficiency-vermont-annual-report-2014.pdf

      In 2015, EV budget $52.2 million, about $19.6 million was spent on various expenses, $23.6 million on subsidies for participants, and $9.0 million on other activities.
      https://www.efficiencyvermont.com/Media/Default/docs/plans-reports-highlights/2015/efficiency-vermont-savings-claim-summary-2015.pdf

      The EV cozy public-private partnership is just another liberal-Democrat-inspired boondoggle to curry favor with various constituencies. After 20 years, the EV surcharge on electric bills should be ended.

      EV should become a private consulting firm competing with other such firms, instead of unfairly taking away their business. No wonder Vermont has such a low business friendliness rating.

      Vermont is a relatively poor state with:
      – A stagnant population,
      – A growing population of elderly and dependent people,
      – State budget deficits year after year,
      – A near zero, real-growth economy, and
      – A very poor business climate.

      Making EV a private consulting firm would eliminate about $56.2 million of EV surcharges on 2016 electric bills of already-struggling households and businesses. EV budgets totaled about $643 million for the 1992 – 2017 period.
      http://psb.vermont.gov/utilityindustries/eeu/generalinfo/budgets
      http://www.windtaskforce.org/profiles/blogs/efficiency-vermont

    • Ali Bernard

      Absolutely! There frequent mailings have outdated information, and their programs mostly benefit very wealthy people and perhaps very unhealthy people. The entire program is toothless and irrelevant to most Vermonters. If I wanted to read issued, outdated drivel I could read my monthly AARP magazine. The fact that these guys get money and have full time high paid employees is another VT outrage.

  • Jon Lavallee

    i think Scott meant that EV needs to operate more efficiently. i think i read that 50% of what is put into the fund is spent on admin fees.

  • Steve Baker

    Who performs the “third-party study” and how do they benefit from this? We have politicians and auditors in our state that continuously tell us things are great!