Aggressive Steps to Increase Efficiency Central to Massachusetts and Connecticut Energy Plans

MA EE Plan 2013-15The Northeast stands out for its aggressive pursuit of energy efficiency, as demonstrated by the presence of six of its states– Connecticut, Maryland, Massachusetts, New York, Rhode Island and Vermont – on the top-ten list in the most recent national scorecard published by the American Council for an Energy Efficient Economy (ACEEE). Massachusetts has occupied the scorecard’s first place since 2011, and its ambitious energy-efficiency plan for 2013-2015, along with new initiatives for building rating and commercial Property Assessed Clean Energy (PACE) loans, suggest it is not content to rest on its laurels. But Connecticut, ranked sixth by ACEEE in 2012, aims to challenge the frontrunner through its first Comprehensive Energy Plan, which calls for stronger efficiency programs and strengthens the bonding power of the state’s Clean Energy Finance and Investment Authority.

Officials from both states spoke about their newly minted plans at a Boston energy forum on February 15, noting the mix of collaboration and friendly rivalry that characterizes their ambitions to meet robust clean-energy targets.

Massachusetts’ New Three-Year Efficiency Plan

Building on its history of achievement, Massachusetts intends to devote considerable resources to the ongoing pursuit of all cost-effective energy efficiency in a plan that was formally approved by the Commonwealth’s Department of Public Utilities on January 31. Department of Energy Resources(DOER) Commissioner Mark Sylvia told the Boston audience that efforts for the years 2013-2015 will maintain the elements contributing to its prior successes – generous funding; integration of programs for electricity and gas efficiency; tailored approaches for different customer segments; statewide branding through the website; and robust evaluation, measurement and validation of outcomes — while working to enhance the scope of marketing and public education, the participation in economically challenged neighborhoods, and the availability of a comprehensive statewide database for the programs.

The new plan also is closely aligned with the goals of the Commonwealth’s Clean Energy and Climate Plan (CECP), which requires a 25 percent reduction in GHG emissions by 2020, relative to a 1990 baseline, Sylvia said. To support the CECP’s aims, energy-efficiency program administrators, in consultation with Massachusetts’ Energy Efficiency Advisory Council, set even more stringent goals: to increase electric energy efficiency from 2.11 percent of retail sales in 2012 to 2.60 percent by 2015 and gas energy efficiency from 1.02 percent to 1.19 percent over the same period, he said. The proposed three-year energy savings for the period 2013-2015 is about 1.19 million megawatt hours greater than savings from the combined 2010-2012 levels, or equivalent to the greenhouse-gas reductions that would be achieved by eliminating the energy use of approximately 100,000 homes.

To achieve these objectives, funding for the three years will be approximately $2.2 billion, 24 percent more than allocated for the 2010-2012 period. Benefits are expected to be about three times greater than costs, providing returns such as lower customer bills, avoided transmission construction, reduced pollution, and green job growth, said Sylvia. The plan will be funded through the same combination of revenues: 63 percent will come from a so-called energy-efficiency reconciliation factor added to utilities’ distribution rates; 22 percent from a system benefits charge on power usage; 6 percent from Regional Greenhouse-Gas Initiative (RGGI) proceeds; 6 percent from carry-over of previous years; and 3 percent from Forward Capacity Market proceeds.

Beyond the programs set out in the three-year plan, two new initiatives will be added, said Sylvia. Pilot programs, funded in part by the U.S. Department of Energy, are testing out building rating systems for both the commercial and residential sectors, and a new PACE program for commercial and industrial sectors is under construction through a partnership between DOER and MassDevelopment, the Commonwealth’s finance and development authority, said Sylvia.

The initial phase of the Building Asset Rating (BAR) pilot for the commercial sector identified a new, less-costly method for benchmarking energy consumption that can inform decisions about efficiency investments, Sylvia said. In the new phase of the pilot, this methodology will be applied to 40 more buildings in order to test its effectiveness in a range of structures, he said.

The pilot program for the residential sector, available in eight communities, aims to develop a simple and intuitive energy performance score that allows homeowners to compare their house’s grade on measures of efficiency and greenhouse-gas emissions against the average scores of similar properties in their area, Sylvia said. Called “Home Miles per Gallon,” the assessment also provides a thermal image of owners’ homes that shows how much air leaks and poor insulation affect efficiency, and a rundown of cost-savings associated with various energy-efficiency measures, he said.

The PACE initiative would establish a loan framework for commercial and industrial properties that should sidestep the chief obstacle that in July 2010 halted most residential PACE programs nationwide: federal regulators’ opposition to a provision in most programs that granted senior-lien status to PACE loans granted to homeowners. DOER and MassDevelopment would collaborate in bundling projects and acquiring revenue for PACE loans through bonding, placing a senior lien on properties with the lenders’ consent. As with earlier PACE programs, liens would attach to a property rather than its owners, and loans could be used for either energy-efficiency improvements or renewable-energy installations. The agency is working with Massachusetts State Senator Brian Joyce, chair of the Committee on Bonding, Capital Expenditures and State Assets, to create legislation that would authorize such a program.

Connecticut’s New Comprehensive Energy Plan

On February 19, just a few weeks after the Commonwealth’s three-year energy plan was approved, Connecticut Governor Dannel Malloy rolled out the final version of his state’s first Comprehensive Energy Plan (CEP). Jesse Stratton, the director of policy at the Department of Energy and Environmental Protection (DEEP), reviewed the major goals and initiatives contained in the plan for the Boston forum.
Stratton characterized the plan as one that provides a flexible approach for achieving a cheaper, cleaner and more reliable energy future. Reliability has particular resonance in a state that experienced extended power outages from multiple severe storms beginning in the late summer and early fall of 2011 and continuing on through October 2012 with superstorm Sandy, said Stratton.

Like Massachusetts, Connecticut aims to acquire all cost-effective energy efficiency by focusing on not just the lowest-hanging fruit – like replacing incandescent light bulbs with energy-efficient options — but on deeper efficiency packages that are economical overall, said Stratton. She said her agency has made use of MassSave’s® example of disseminating information to the public on energy-saving strategies by establishing its own integrated marketing label and Website, . Connecticut will also collaborate with Massachusetts on building labeling so as to avoid the confusion that can result from using disparate approaches for measurement, Stratton said.

But Connecticut’s plan has unique characteristics, said Stratton, beginning with an emphasis on leveraging private capital in order to transition from a “subsidy” approach to a “finance” model. As an example, she described the attention given to distributed generation “on a 24/7 basis, not just for back-up during power outages.” The plan includes a request for proposals for microgrid pilot projects, already in process, to test systems that might supply some power to police and fire departments or wastewater treatment plants on a continuous basis and also be able to keep critical services running during power outages. Microgrid projects in addition could be designed to incorporate fuel-cells, a technology manufactured by Connecticut companies, said Stratton. The plan would encourage addressing regulatory issues in such a way as to increase the deployment of district energy and promote the use of Energy Improvement Districts to attract capital, she said.

Another CEP initiative involves heating fuels. Connecticut, along with other New England states, has historically relied on oil to heat a large portion of its homes and businesses. The state lags in the area of conversions from oil to natural-gas relative to other states that already had an extensive natural-gas infrastructure in place, because a financial impetus was lacking before the era of shale gas, Stratton said. But now, with gas prices much lower than oil, the state will launch a “no regret” strategy — first, to bring in customers already on natural gas mains and then, to extend mains in areas where there are large anchor loads, she said. Such efforts would be connected to energy-efficiency improvements as well, she said.

Stratton concluded her discussion with a focus on transportation, another important area for Connecticut’s future, where the goal in addition to efficiency is increasing clean fuel options. State support is available for purchasing heavy-duty natural-gas vehicles, expanding EV charging infrastructure and encouraging fuel-cell technologies for vehicles, she said. Furthermore, as a small, densely populated state with only a few major transportation corridors, Connecticut hopes to be able to do more with mass transit, Stratton said.

As part of the Comprehensive Energy Plan, Stratton said officials are reviewing Connecticut’s Renewable Portfolio Standard, and that an update will be released for public comment in the near future.

By Eleanor Saunders

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