Lawmakers debate proposal to change funding for energy-efficiency programs

A proposal to change the funding mechanism for energy-efficiency programs was hotly contested in testimony before lawmakers on Monday.

Some who spoke before the Senate Energy and Natural Resources Committee blamed House Bill 351 for the ongoing delay of the 2021-2023 energy-efficiency plan. There has been no decision from the Public Utilities Commission on a plan that was supposed to go into effect at the start of the year, a delay that has already caused some popular weatherization programs to shut down.

HB 351 would make two main changes to the “system benefits charge” – a portion of ratepayers’ electric bills that funds energy-efficiency programs: It would restrict how the charge can be used and shift who has control over increasing it.

The bill gives control of increases to the Legislature instead of the Public Utilities Commission and also limits use of the system benefits charge to only measures that reduce the cost of electricity. Home insulation is one example of a program that would no longer be eligible if the proposal is approved, according to Rep. Michael Vose, an Epping Republican, who introduced the bill to the committee.

The bill’s sponsor, Rep. Michael Harrington, a Strafford Republican, didn’t attend the hearing because he was in the Caribbean, Vose said.

Both Vose and Harrington signed a letter to the Public Utilities Commission opposing the 2021-2023 plan to expand energy-efficiency programs. That plan would have been funded by an increase to the system benefits charge that did not require legislative approval.  

Sen. David Watters, a Dover Democrat, raised concerns that some language in the bill could be confusing, like the stipulation that only programs “whose main goal is to reduce the consumption of electricity and not some other form of energy” are eligible.

“Efforts to help folks shift to electric sources of heat, for example, might be a good idea,” said Watters, “but under this language, because you have the word ‘reduce’ exclusively that might not be possible.”

Vose said he didn’t think the language would create a conflict.

Watters also said that for low-income households, whether they saw their electricity or heating bill going down, “there was kind of a sense of interconnection there.”

Switching over to electric heat, such as heat pumps, is a strategy clean-energy advocates have pushed because it can reduce the reliance on fossil fuels, especially when electricity comes from comparatively clean sources.  

Beyond how the money can be spent, there’s disagreement about who gets to decide if the system benefits charge should increase. Increasing the charge means more funding is available for energy-efficiency measures – something advocates argue New Hampshire needs in order to catch up with neighbors in the region.

But the increase is one of the reasons Vose opposed the 2021-2023 energy-efficiency plan. The plan, which cost ratepayers $62 million in 2020, would increase to $280 million by 2023, Vose said.

Rep. Kat McGhee, a Hollis Democrat, said the plan was an investment that would bring a $1.3 billion stimulus to the state. 

She said Harrington’s bill “seeks to fix something that isn’t broken, and in some cases it goes beyond that to basically prevent something from working but is working.”

“Really what this does is put sand in the gears of an energy-efficiency program that’s working for the people of New Hampshire,” McGhee said. 

Huck Montgomery, director of government affairs for Liberty Utilities and an opponent of the bill, pointed to a rigorous cost-effectiveness test showing that each cent spent on energy efficiency will lead to a greater return.

“We really think it’s unfair to those customers, ultimately, who are expressing very high demand for the services today,” he said.

Those who support the bill argue that the Legislature should have control of approving this type of increase.

But Consumer Advocate Don Kreis, who opposes the bill, said part of the proposal may not be constitutional.

“I actually think requiring that kind of circling back to the Legislature raises constitutional issues that we will have to raise in appropriate forums, in the event that a bill like this becomes law,” Kreis said.

“That is not the way this is supposed to work,” he said.

He asked that the bill be re-referred to committee for additional discussion.

Greg Moore, the state director of Americans for Prosperity, testified in support of the bill. He said it would increase accountability and transparency.

“We think that the decisions should be made by people who are actually elected by the citizens,” he said.

Sen. Kevin Avard, a Nashua Republican and chair of the committee, asked Madeleine Mineau, the executive director of the nonprofit Clean Energy NH, whether there is accountability and transparency in the current process.

Mineau, who also serves as chair of the Energy Efficiency and Sustainable Energy Board, the entity that coordinates energy-efficiency programs in the state, explained the year-long process. 

“Every single meeting was open to the public,” she said. “Anyone would have been absolutely welcome to participate, to listen, to provide input.”

Mineau said the process involved 1,000 pages of information and 28 hours of hearings – a task she argued would be unrealistic for the Legislature to take on.

Others pointed out that low-income households stand to lose if the bill becomes law. 

Ray Burke, an attorney with New Hampshire Legal Assistance, is also against the proposal, which he said would increase uncertainty about energy-efficiency programs. He said the bill could be harmful for the low-income program, which has 8,000 households on the waiting list. 

“The concern is that this bill would cause uncertainty and delay, not only for implementing this current three-year plan, but also in the long term,” Burke said.

“We’ve already seen the effects of the current delay,” he said.

Contractors like Dan Ramage are among those who have felt the impact of that uncertainty. Ramage has been working on weatherization since 1992. 

“Even now I think it’s causing some unrest among the contractors who thought with the triennial plan, ‘I need to grow equipment and crews.’ But now we’re kind of at a standstill,” he said.