For the Monitor
This week, the New Hampshire Senate has a crucial vote on House Bill 559, which would dedicate all RGGI funds to energy efficiency. This is the most cost-effective use of those funds not only for individuals and companies but also for every ratepayer in New Hampshire. Allow me to explain.
Over the past eight years the operator of New England’s regional electricity grid, ISO New England, has invested $8 billion in improving transmission. The cost of these transmission projects is divided among the states based on how much electricity each state uses. When this program began eight years ago, New Hampshire’s share of the $8 billion was approximately 8½ percent or roughly $680 million – about $85 million a year.
As RGGI funds became available, most New England states devoted most of those funds to energy efficiency and renewable energy. They did this because buying efficiency is less costly than the electricity it replaces and lowers participants’ electric bills, but it also lowers each state’s demand for electricity. This in turn lowers their payments to ISO New England for future transmission projects.
New Hampshire took the opposite approach and returned most of its RGGI funds to businesses and homeowners in the form of rebates.
But the unintended consequence was that New Hampshire’s overall proportion of current and future ISO New England transmission expenditures has risen from 8.5 percent to 9.7 percent and will soon reach 10 percent.
This is a problem because ISO-NE plans to spend at least another $4 billion over the next four years on needed additional transmission projects. New Hampshire’s share of these projects will soon reach 10 percent because we have done comparatively little to lower our state’s overall electric usage. As a result, New Hampshire ratepayers will pay an estimated $400 million over the next four years to ISO New England for transmission line expansion.
The only way we can lower New Hampshire’s percentage of that $4 billion charge is to reduce our use of electricity. We have two ways to do that: use less electricity by implementing more efficiency measures, or generate as much renewable electricity as possible and use that energy “behind” the meter.
For instance, if a school district implements extensive efficiency measures such as LED lights, new motors, new pumps, and insulates its buildings, it can reduce electric usage by 15 percent to 35 percent. If it also installs a solar photovoltaic array it can generate enough electricity to cover a large proportion, if not all, of its electric usage. As a result, the district lowers its bill, reduces the electricity it takes from the grid and helps lower New Hampshire’s percentage of the $4 billion it needs to be paid to ISO New England.
Massachusetts, Connecticut, Rhode Island, Vermont and Maine have extensive energy efficiency and renewable energy assistance packages. These programs will continue in the years ahead to lower their states’ usage and share of the transmission fee. If New Hampshire does nothing, our share of the $4 billion transmission charge will continue to go up.
HB 559 takes a large step toward solving this problem by taking the residential, commercial and industrial RGGI funds and placing them in existing energy efficiency programs administered by the PUC and each utility. All of these programs are oversubscribed and have waiting lists, so we know we can use that money effectively.
These funds are proportionally allocated by the PUC: the commercial and industrial RGGI contributions go to commercial and industrial projects and the residential contributions go to residential projects. The funds get returned in the form of incentives to each sector, which needs to match them. These match requirements can range from 3 to 1 up to 6 to 1, depending upon the type of project. This gives the state an excellent return on its investment, lowers electric bills for each participant and helps to lower the cost of electricity for every ratepayer in the state.
HB 559 is a great way out of New Hampshire’s ISO New England conundrum. If through efficiency we could reduce our projected 10 percent share to 8 percent of future transmission costs, we would save ratepayers $80 million over the next four years.
If we do nothing, our electric bills will go up. The House has already approved this bill. Please urge your senator to vote yes on HB 559, which will help lower electric bills for every ratepayer in New Hampshire.
(Dick Henry of Concord is an energy consultant for New Hampshire school districts.)