Vt. steps up energy efficiency _ gradually

By Dave Gram

Associated Press

Published: Friday, Aug. 5 2011 2:55 p.m. MDT

Fred Barnett, director of facilities at National Life Insurance Company, holds an LED light fixture which will replace older pole lights on Friday, Aug. 5, 2011 in Montpelier, Vt. Vermont utility regulators have approved a three-year budget for the statewide energy efficiency utility program that calls for gradual growth and increases electric rates in each of those years by less than 1 percent. Officials with the Vermont Energy Investment Corp., which administers the Efficiency Vermont program, say the state will invest about $128 million in efficiency investments in 2012 through 2013, but reap about $259 million in saved energy costs as a result, a better than two-to-one return on investment.

Toby Talbot, Associated Press

MONTPELIER, Vt. — Vermont utility regulators have approved a three-year budget for the statewide energy efficiency utility program that calls for gradual growth and increases electric rates in each of those years by less than 1 percent.

Officials with the Vermont Energy Investment Corp., which administers the Efficiency Vermont program, said that under a board order issued Monday, the state will invest about $128 million in efficiency in 2012 through 2014, but reap about $259 million in saved energy costs as a result — a better than two-to-one return on investment.

Efficiency Vermont promotes energy savings through rebates on low-wattage light bulbs and home appliances. It has specialists on staff devoted to energy savings on farms, in convenience stories and other venues. It recently announced a round of incentives to meet a goal of having Vermont's heaviest industrial energy users cut their electricity consumption 7.5 percent in the next two years.

Money for the efficiency programs is raised through surcharges on electric bills, which will remain less than a penny per kilowatt-hour. The Public Service Board said it might have ordered a bigger increase, but cited Vermont's fragile economy and complaints from businesses that raising their electric rates any more could hurt their competitiveness.

"This additional investment in cost-effective energy efficiency will result in total electric costs to Vermont that are lower than they would otherwise be by providing savings to consumers who install electric efficiency measures," the board said in its 84-page order. Even for those who don't take advantage of incentives to install more efficient lighting and other energy-saving devices, the efficiency programs will hold costs down by helping the state's utilities avoid buying expensive wholesale power during times of peak demand, it added.

This year's efficiency budgeting exercise got the same sorts of criticisms from both sides that it has received in past years, with the Conservation Law Foundation saying the state isn't being ambitious enough in its efforts to save energy and some business groups saying the efficiency program is too costly.

"Unfortunately, there are still too many savings left on the table," said Sandra Levine, senior attorney with CLF's Vermont office. "As a result, Vermonters will be paying too much and polluting too much for our power needs. Efficiency continues to cost far less — one-half to one-third the cost of other power sources. Money we spend now on efficiency provides local jobs and is savings in the bank for many years to come. We could easily make twice the investment we are making now, and that's what we should be doing."

Associated Industries of Vermont, which represents manufacturers, has complained for years about the efficiency surcharge hurting companies' bottom lines, and urged the board to move away from the efficiency charge as a main funding source and toward paying for individual projects through the energy savings those projects would generate.

"We're very disappointed in the board's order," said William Driscoll, vice president of AIV. "We don't think it sufficiently reflected an appreciation of the burdens being created by the existing budget levels," he added.

Vermont has won national recognition for creating what is billed as the nation's first statewide energy efficiency utility more than a decade ago — it has been emulated since then by some other states — though Efficiency Vermont isn't completely statewide. A fraction of the money the board budgeted for efficiency programs was set aside for separate programs administered not by Efficiency Vermont, but by the municipal electric department in Burlington.

The board order gave direction to three recent developments related to Efficiency Vermont:

— It noted that it had given VEIC a 12-year appointment to administer the program, rather than the three-year contracts the company had won successively for the previous 12 years. Efficiency Vermont Director Jim Merriam said that would mean greater continuity to efficiency programs.

— It projected a budget for efficiency efforts for the next 20 years, to be firmed up in three-year increments between now and 2031.

— And it noted at length that Vermont's efficiency efforts were being expanded beyond electricity, with Efficiency Vermont being allowed for the first time not just to promote electricity savings, but energy savings on heat and industrial processes as well. The board said it would develop a separate budget for those programs and pay for them with money flowing into Vermont under multistate utility agreements designed to reduce greenhouse gas emissions and promote planning for future energy needs.

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