Friday, November 25, 2011

Blog

Mass. following steady path to energy efficiency

By Natalie Hildt, Manager of Public Policy Outreach, Northeast Energy Efficiency Partnerships

If you could meet your energy needs at a third of the current cost of electricity, while at the same time creating local jobs, curbing harmful pollutants and reducing strain on the electric grid, would you do it? Massachusetts has.
 
By setting a course to meet as much customer demand as is cost-effective through energy efficiency, the Green Communities Act of 2008 has made the Commonwealth a national leader in energy policy, earning the coveted top spot in the American Council for an Energy-Efficient Economy’s State Energy Efficiency Scorecard.
 
While some of the benefits are immediate and visible — the homeowner who cuts heating bills by a third and increases comfort after weatherizing the house and replacing an old boiler, or the business that sees increased worker productivity and lower operating expenses after installing efficient lighting and manufacturing equipment — the broader impacts of wide-scale energy efficiency investments are becoming more clear and compelling.
 
Jobs: A recent report by the Massachusetts Clean Energy Center revealed that over 64,000 workers in the state are part of the clean energy economy, with energy efficiency making up the largest subsector. By putting energy dollars toward efficiency, more money is circulated in the local economy instead of going out of state to far-off fossil resources. An added benefit is that bigger products like HVAC equipment, insulation and windows are generally American-made.
 
Price Suppression: Investment in efficiency as a least-cost resource helps control costs for everyone. The broad price effects of driving down energy demand overall have been shown to reduce costs over time for even the ratepayers who don’t participate in the efficiency programs. These economic savings are in addition to the increasing number of the state’s residential and commercial customers being served as a result of the aggressive savings goals currently in place, which amount to a 2.4 percent reduction in electricity use by 2013.
 
The Role of RGGI: Proceeds from the Regional Greenhouse Gas Initiative (RGGI) have played a significant part in helping Massachusetts ramp up its investments in energy efficiency, with 94 percent of the state’s $142.5 million in revenue to date going to efficiency.
 
According to a landmark report by the Analysis Group released November 15, the economic benefits to the ten RGGI states include 16,000 jobs created and customer bill savings of more than $1.3 billion over the next decade, thanks to installed efficiency measures. Indeed, the report also shows that energy efficiency is the best use of RGGI auction proceeds, having an economic magnifier effect as well as contributing to wholesale price suppression.
 
Over the first three years of RGGI, this has meant an average savings of $25 for residential customers, $181 for commercial customers and $2,493 for industrial customers. The net economic impact for Massachusetts totals about $500 million. This should come as no surprise to us in Massachusetts. In fact, it was a study done under the Romney administration that determined investing RGGI auction proceeds in energy efficiency would be the most cost-effective way to implement the program.
 
Interestingly, the drop in revenue for power plant owners under RGGI equals the increase in economic benefits to the states by $1.6 billion region-wide. It is no surprise that groups like Americans for Prosperity, the Koch brothers’ front for big fossil fuel interests, is working so hard to tear down market-based carbon trading systems like RGGI.
 
There has been a lot of negative press lately about a handful of failed renewable energy companies, as if somehow these few exceptions show that policies to advance clean energy are failing. Much less has been said of the quiet and steady success of energy efficiency in delivering real and lasting benefits to consumers and businesses, while making progress on broader societal goals such as cutting carbon emissions and growing jobs in the green economy.

Natalie Hildt is manager of Public Policy Outreach at Northeast Energy Efficiency Partnerships in Lexington.