With Trump cuts, end of tax credits, why do this?
By Rob Smith / ecoRI News staff
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That’s the question state utility regulators are considering
as the year draws to a close. Rhode Island Energy, the main utility company and
sole administrator of the programs, says it’s time to cut the budget and
“right-size” the amount of money Rhode Islanders are charged.
Environmental groups and advocates, however, including the
state council on energy efficiency programs, say it’s not the time to downsize
key initiatives that let Rhode Islanders use less energy and save money.
Under Rhode Island Energy’s proposal, the budget for
electric energy efficiency programs would be cut from $82 million to $62.9
million for the next calendar year, a $19 million decrease year over year. For
gas, the utility company proposed trimming its budget by more than $2 million,
to $33 million.
Opposed to Rhode Island Energy’s proposed cuts is the
state’s Energy Efficiency Council, which declined to endorse the utility
company’s proposal earlier this year. The council is instead proposing its own
plan, which also contains cuts, although not as severe as Rhode Island
Energy’s.
Under the council’s plan, electric energy efficiency
programs would be cut to $67.7 million for next year, and on the gas side, the
council proposes the same budget as 2025 — $35 million.
The state Public Utilities Commission, which has final say
over the program’s budgets, has spent the past week having evidentiary hearings
for the budget proposals. It’ll be up to the PUC to decide what the final
budget will look like, and if it’s time to downsize the budgets.
“The way I see it, all parties are recognizing some degree of decrease on the electric side, there’s just a dispute how deep that should go,” PUC chair Ron Gerwatowski said.
The programs are funded by charges on each month’s utility
bill sent to ratepayers. Regulators last month approved around $11 million in
energy efficiency funds to go toward bill credits in an effort to reduce the
cost of electricity.
Cutting the programs has some backing. The Providence
Journal has reported that Gov. Dan McKee supports cutting the
energy efficiency charges on each ratepayer bill.
“What’s at issue here is not whether or not the company will
seek out cost-effective savings or whether it’s incentivized to do so,” said
Steve Boyajian, an attorney representing Rhode Island Energy. “The issue is
that the company is trying to forecast what it will actually achieve and make
sure that customers are not charged up front for any more than that, and that’s
what this budget represents.”
Electric prices, especially during the winter, continue to
remain high years after the pandemic subsided. In 2022, the PUC approved a
historic 47% rate hike, the equivalent of a costlier $50 a month higher utility
bill, in electricity prices, taking the cost of energy higher than it had been
in years.
Prices have yet to fall to where they were prior to the
pandemic, with only slight decreases seen compared to previous winters.
But energy efficiency programs have big benefits. The
cheapest energy available to Rhode Islanders is the energy they don’t use. The
state’s energy efficiency programs, which are administered by Rhode Island
Energy, help ratepayers weatherize their homes, install energy-efficient
windows, and upgrade to newer, more efficient boilers, water heaters, and other
appliances that reduce the amount of electricity and gas used.
Those benefits have a direct dollar amount, both in Rhode
Island and around the country. Collectively, state-level energy efficiency
programs in New England between 2012 and 2023 have delivered $55 billion in
benefits to families and businesses, with a return of $3.40 in benefits for
every dollar invested, according to a study completed earlier this year by the Acadia
Center.
The programs also support and sustain 160,000 jobs related
to energy efficiency, and reduce carbon emissions to levels equivalent to
removing 33 million gasoline-powered cars from the road for a year.
According to the study, Rhode Island received $5 billion in lifetime benefits,
and got $1.97 in benefits for every dollar invested in energy efficiency. The
programs supported 11,330 jobs, and had the cumulative impact of reducing
carbon emissions to the same levels as removing 1.65 million gas-powered cars
from the road for one year.
“How I describe the programs to ratepayers and customers, is
that while it shows up as a line item on their utility bills, efficiency helps
them reduce the other items on the bill,” said Emily Koo, Rhode Island program
director for the Acadia Center. “That includes supply, transmission, and
distribution charges.”
Rhode Island Energy’s proposed cuts have been opposed by
the Acadia Center, multiple elected officials in the General Assembly,
and Providence Mayor Brett Smiley.
In his letter to the PUC, Smiley wrote upgrades to HVAC
systems and lighting had resulted in real cost savings for the city over the
long term, savings the city can ultimately pass on to taxpayers. “As a
municipality we know that energy efficiency is simply a good investment, and
the most effective tool we have to sustain energy cost savings and deliver on
climate emissions reductions,” he wrote.
The PUC is expected to make a decision later this month.
