Highlights Policy Newsletter

POLICY NEWS & VIEWS

Annual Efficiency Plans Demonstrate Ramp Up in Efficiency Investments
Annual utility filings for 2010 indicate that states are implementing measures NEEP has long supported: ramping up the budgets of their efficiency programs and integrating program delivery.

Massachusetts is leading the way under the Green Communities Act, which requires that utilities acquire all cost-effective energy efficiency. The joint plans, worked out through the Energy Efficiency Advisory Council (EEAC), would increase funding significantly to $1.6 billion for electric programs and to $480 million for natural gas programs and provide for common electric programs and natural gas programs statewide. Savings under the plan are expected to reduce electric use by 2.5 percent natural gas use by 1.15 percent by 2012.

New filings in Connecticut, New Hampshire, and Rhode Island also include increased funding and consolidated customer efficiency programs.

Massachusetts Puts in Place Decoupling Orders for Key Utilities
The Massachusetts Department of Public Utilities (DPU) approved the first revenue decoupling mechanism for its utilities this fall, first for Bay State Gas and then National Grid’s electric service. The orders mark an important step forward for energy efficiency programs in Massachusetts, as revenue decoupling removes financial disincentives for utilities to promote energy efficiency by severing the link between volumetric sales and revenue. Under decoupling, utility rates are adjusted on an annual or semi-annual basis to guarantee utility a certain level of profit based upon target levels of revenue.

DPU Order 9-30 raises Bay State’s gas rates by $19 million, 45 percent less than their requested level of $34 million, and puts in place a revenue-per-customer decoupling mechanism that will adjust rates semi-annually.

DPU Order 9-39 raises National Grid’s electric service rates by $44.3 million, 60 percent less than the requested level of $111.3 million, and creates a revenue decoupling mechanism that will adjust rates annually to reconcile target revenue levels for the year with actual distribution revenues.

For more background on revenue decoupling, visit our Rate Reform page.

California’s Approval of Television Standard Sparks Northeast States to Action
In a historic and unanimous vote taken on November 18, the California Energy Commission approved new energy efficiency standards for television sets. The standards require new TVs to consume 33 percent less energy by 2011 and 49 percent less by 2013. Residential energy use has climbed dramatically in recent years, largely due to energy intensive TVs and other home electronics.

California’s move builds momentum for coalitions in several Northeast states to potential include television standards in new legislative proposals.   Massachusetts legislators are currently considering H. 3124, a bill that includes standards for TVs and other appliances. NEEP supports these efforts and believes that enactment of these standards offers Northeast states a low cost strategy to affect dramatic energy savings while driving down energy bills.   Click here to read Appliance Standards Manager Dave Lis’s testimony to the Joint Committee on Telecommunications, Utilities and Energy on the Massachusetts standards bill.

New York Weighing Update to State Energy Code
The New York State Legislature is currently considering AB 7735, a bill to amend the New York State Statute in a way to allow the state to properly meet the requirements of the federal Recovery Act. The bill would accomplish several objectives including:

Require the adoption of the 2009 International Energy Conservation Code and ASHRAE 90.1-2007 or codes of equivalent or greater stringency by June 30, 2010. Requires the Department of State to administer the code so that the target of 90 percent compliance is met. Require the Code Council to show that any attempt to limit applicability of the code must be consistent with the requirements of the Recovery Act.

Require the Code Council to amend the code every time a new version of the IECC is published.

Remove the loophole that requires only “substantial” renovations or alterations (greater than 50 percent of a building subsystem) to meet code.

Removes the requirement that the code be “cost effective” defined as having a 10-year payback period.

NEEP Calls for Changes to Rhode Island Public Buildings Act
Rhode Island recently enacted SB 232, the Green Building Act of 2009, which ties new construction or major renovations in public facilities and public schools to the US Green Building Council’s (USGBC) Leadership in Energy and Environmental Design (LEED) standard. According to the law:

Building projects by public agencies must be “designed and constructed to at least the LEED certified or an equivalent high performance green building standard.”

Projects by public schools that receive state funding must be “designed, and constructed to at least the LEED certified standard, or the Northeast Collaborative for High-Performance Schools Protocol, Version 1.1 or above.”

The Department of Administration will determine if “lesser green building standards” are necessary for projects that cannot comply with LEED.

While praising the conceptual goals of the act, NEEP staff Carolyn Sarno and Isaac Elnecave proposed an alternative approach to the House Committee on Environment and Natural Resources. They reasoned that Rhode Island should continue to use NE-CHPS for high performance school construction, as has been the case for the last two-and-a-half years and extend its use to other public buildings. They also urged the state to enact a stretch energy code that is written and enforceable as code, rather than using a building rating system such as LEED, which can’t be enforced as code and would not synch up with National Grid’s new construction energy efficiency programs offered in the state.   “It ensures energy savings, provides more certainty that actual green measures will be incorporated in the buildings, and provides a vehicle with which Rhode Island building community has significant experience,” noted Elnecave of CHPS. “NEEP believes that specifying NE-CHPS for public buildings along with adding a stretch code is the best way to reach the goals of the legislation.”

NEEP looks forward to working with officials in Rhode Island to improve the Green Buildings Act of 2009. Click here for more on NEEP’s work on high-performance buildings.

NH Tax Credit Legislation Would Undermine the State Building Code
The New Hampshire House Committee on Local and Regulated Revenues weighed legislation that would allow for property tax credits for homes that meet green building standards created by National Home Builders Association (NAHB). H.B. 487 would permit municipalities to grant credit of up to $1,000 against local property tax bills to homeowners that build to NAHB’s National Green Building Standard ICC-700-2008.

NEEP opposes this legislation as currently written, because it would essentially provide tax incentives for merely meeting the state’s most recently-adopted building energy code.