Christine Donovan – VEIC
A statewide energy efficiency policy study was recently performed by Vermont Energy Investment Corporation (VEIC).
In February, 2014, on New Hampshire Public Radio’s program, “The Exchange, ” Meredith Hatfield, Director of the New Hampshire Office of Energy and Planning and top energy advisor to Governor Maggie Hassan, explained the economic and employment benefits awaiting the state should the legislature enact a state policy supporting the procurement of all cost-effective energy efficiency by electric and gas utilities.
Presentations to the New Hampshire House Science, Technology and Energy Committee and the 25-person Energy Efficiency and Sustainable Energy Board administered by the New Hampshire Public Utilities Commission were made in November and December, 2013.
As a result, with funding from the U.S. Department of Energy, VEIC was hired by the State of New Hampshire through a competitive solicitation to assess the economic feasibility of increasing investment in energy efficiency through adoption of a new statewide “Energy Efficiency Resource Standard (EERS).” At least 25 states in the US have adopted such a policy as an important step towards achieving their energy goals. New Hampshire is the only state in the Northeast that does not yet have an EERS or its equivalent.
Working with a team that included GDS Associates and Jeffrey H. Taylor Associates, VEIC completed an energy efficiency savings and economic impacts analysis that found:
- The total amount of energy efficiency savings from electricity and heating fuel use that is cost-effective to achieve in New Hampshire is the equivalent of 6.6% of 2012 electric sales, or 715.4 million kWh.
- This is more than 10 times the amount of savings being realized through the energy efficiency programs currently in place, and could be achieved at an average lifetime cost of 3.1¢ per kWh, well below the cost of 8¢ (or more) to supply energy from new sources.
The economic benefits that this investment would deliver are substantial. Because expenditures on energy efficiency improvements create cost savings for consumers, they function as an investment in the future.
In addition, because energy efficiency improvements typically involve the purchase of local goods and services and often reduce the use of use of imported fossil fuels, energy efficiency is a local economic development opportunity. As such, the cost of achieving all cost-effective energy efficiency represents an unrealized investment opportunity in New Hampshire. Key economic findings from our report included:
- The cumulative investment to achieve all cost-effective energy efficiency in the state would be $941 million. That investment would save New Hampshire families and businesses $195 million per year, which represents a payback of less than five years.
- Over the 15-year lifetime of the investment, the cost savings would amount to $2.9 billion, a return on investment of 210%.
- In addition to the direct economic benefits from the energy savings, this investment would create 2,380 new jobs, the equivalent of 34% of all new jobs created in New Hampshire between 2010 and 2011. It would increase the state’s gross domestic product by $160 million per year, the equivalent of 7.3% of all new income in the state between 2010 and 2011.
Given these findings, not surprisingly the VEIC team recommended:
- Enacting legislation to establish an aggressive EERS policy in New Hampshire – requiring procurement of all cost-effective energy efficiency increasing to 6.6% of electric sales equivalent over a five-year period.
- Legislation directing the NH PUC to implement and oversee a collaborative process for the development of multi-year and annual goals, plans, and budgets for the regulated energy efficiency programs.
- Achieving 90% compliance of the IECC and equivalent commercial code and an extensive benchmarking initiative to implement this.
- Requiring state and local governments to “lead by example” through a coordinated and well publicized effort to improve energy efficiency in public buildings.
- Focusing efforts on true market transformation in order to accelerate and scale-up competitive private investment.
The key policy advisor for the New Hampshire Department of Environmental Services is now working with a team of EESE Board members, legislators, and utility stakeholders to consider our recommendations and offer potential legislative or regulatory steps for moving forward.
VEIC identified the substantial energy, environmental, and economic benefits awaiting New Hampshire from increased energy efficiency investments. It’s now up to the policy-makers and regulators to decide if they will seize the opportunity that this investment represents.