Dear Chairman Adams:
I am writing to provide general comments on two items before the Public Utilities Commission (PUC) Docket number 2006-446 and Docket number 2006-411.
The first, LD 1931, “An Act to Encourage Energy Independence for Maine” and NOI on Docket number 2006-446 asks the PUC “to consider programs that could reduce the price of electricity over time for all consumers by achieving reductions in demand for electricity during peak use periods.”
Reducing overall electricity demand through increased energy efficiency programs should be Maine’s top priority. Maine has the lowest system benefit charge (SBC) in New England and thus the lowest investment in energy efficiency, even though the return on investment is double the investment and could prove to be even higher. Maine has a tremendous opportunity to expand its energy efficiency programs while at the same time decreasing electrical costs for all consumers. This is possible by increasing the SBC consistent with the original proposal included in LD 1931: a doubling of the SBC rate over the next four years. Pending the implementation of the Regional Greenhouse Gas Initiative (RGGI), there might be an even greater amount of available energy efficiency investment with a full auction of all the carbon credits. With increased funding and expansion of the PUC’s existing, highly successful Efficiency Maine programs and other mechanisms, electricity demand would be reduced as well as electrical costs to consumers.
Boosting energy efficiency in Maine’s residential sector would be best served by expanding existing Efficiency Maine energy efficiency programs, on promoting energy efficiency requirements for new buildings with towns and inspectors, and expansion of the Whole House program currently run by the Office of Energy Independence and Security.
Other strategies such as load shifting, demand management and load interruption programs do not boost energy efficiency and should not be the focus of the PUC’s recommendations to the Legislature. Simply decreasing demand peaks does not cut overall demand for energy, and has a more limited impact on consumer savings than efficiency. In addition, we also encourage the PUC to increase the program funding cap for Efficiency Maine’s business program to at least $100,000, so that large businesses and facilities, such as the University of Southern Maine, may take on bigger energy efficiency projects.
The second, LD2041 “An Act to Enhance Maine’s Energy Independence and Security”, NOI on Docket #2006-411 asks the PUC “to incorporate demand side resources into the supply of standard offer service for residential and small commercial classes.” We fully support this strategy and concur with the comments of the Office of the Public Advocate on a number of points. We agree that Maine should pursue a strategy that considers the acquisition of all energy efficiency that costs less than supply. In addition, we believe that all bids that are cost effective should be accepted and not limited to a certain percentage which could discourage the number of bids. In addition, bid evaluation criteria should be comprehensive and not focused solely on least cost bids. Otherwise, more short-sighted and easy projects would be bid in, at the detriment of projects with a longer payback horizon or longer implementation period. A multi-pronged approach would be more effective in generating comprehensive energy efficiency bids.
Environment Maine Research & Policy Center is pleased to have the opportunity to comment on these potentially significant changes in the energy market that will realize dramatic decreases in electricity demand, energy conservation, cost savings for consumers and much needed reductions in air and global warming pollution. I have also included our recent report, Energy Efficiency: The Smart Way to Reduce Global Warming Pollution in the Northeast, which further enumerates energy efficiency projects Maine should pursue and that are being pursued in other Northeast states.
Sincerely,
Jennifer Andersen, Advocate
Environment Maine Research & Policy Center
