NH commission’s cuts to energy efficiency funding hamstring Upper Valley projects

Valley News Staff Writer
Published: 11/18/2021 9:56:28 PM
Modified: 11/18/2021 9:56:23 PM

LEBANON — Ethan Cole expanded into weatherizing homes in the Upper Valley six years ago. But after the New Hampshire Public Utilities Commission slashed funding for energy efficiency last Friday, Cole sees hard decisions on the horizon as he looks at the future of Earthshare, his Lebanon-based construction company.

“Certainly,” he said, when asked if some of his employees’ jobs may be at risk. “We have been left in an unpredictable business climate thanks to the work of the PUC.”

He had already delayed about seven weatherization projects for Upper Valley homeowners when funding ran out early in 2021. Now that funding may never be available.

The PUC’s decision last week to cut funding reverses recent decisions that ramped up the state’s investment in energy efficiency.

In 2016, the PUC approved the Energy Efficiency Resource Standard to set efficiency goals funded by ratepayers through a “system benefits charge.” The EERS proposed a second triennial plan that with $380 million in funding from ratepayers over three years to reduce energy use statewide by 4.5%. Supporters of the plan argued it would save the state well over $1 billion. A range of stakeholders, including the state’s utilities and the New Hampshire consumer advocate, endorsed the increased funding.

The PUC waited nearly a year to announce whether or not the plan had its approval. Then on Nov. 12, it not only rejected an increase, but announced that it would cut funding for energy efficiency by approximately 50% by 2023. The PUC pointed to concerns about short-term economic consequences of raising rates, citing a 1998 decision that it argued committed the state to “market based, not utility-sponsored and ratepayer-funded, energy efficiency programs.”

Don Kreis, the New Hampshire consumer advocate, called the decision “outrageously bad.” He criticized the PUC for breaking with more recent decisions.

“I fell right out of my chair and I climbed back into the chair and reread the order. And I was incredulous,” he said.

For him, energy efficiency is a question of balancing short-term costs and long-term savings.

His office will pursue a rehearing within 30 days of the Nov. 12 decision, he said. The decision goes into effect immediately, though its opponents may challenge it.

Earthshare is one of many businesses across New Hampshire that invested in staff and resources to help execute ratepayer-funded energy efficiency programs.

“If that funding goes away, it would probably cut 60% out of my business. I’d have to lay off 60% of my employees. I have 15,” said Dana Nute, who owns Resilient Buildings Group, a Concord-based construction company that serves the Northeast. Just last month, he had hired two new people “to keep up with the work.”

He has already put about eight projects on hold and will have to reassess several projects in the Upper Valley, he said. His company is working on an addition at Headrest, a nonprofit social services center in Lebanon. The project had some funding from NHSaves, and while that is secure for ongoing work in 2021, it may dry up in 2022, he said. Energy efficiency funding for affordable housing in Claremont is also at risk, he said.

“My head is spinning,” he added. “I’ve gotten probably 25 phone calls today just from contractors that I hire wanting to know what they’re supposed to do.”

NHSaves, a collaboration of the state’s utilities, manages the incentives that the PUC slashed. Its programs help New Hampshire residents weatherize, buy efficient appliances, and install LED lights. As of 2020, NHSaves completed projects for nearly 1.5 million residences, over 9,000 businesses and 500 municipalities. In Lebanon, for instance, both the city and the school district have taken advantage of NHSaves programs.

Jon Chaffee, a member of the city’s Energy Advisory Committee, said that about 80 Upper Valley nonprofits, municipalities and businesses, both large and small, worked with Liberty Utilities to reduce their energy consumption through the program. The energy savings from completed projects alone amount to almost 750,000 kilowatt-hours annually, according to reports he had from the utility. Because he had advocated with Liberty to provide additional staffing for these programs, he sought to follow their progress. The projects brought about $1 million in incentives into the Upper Valley.

“This figure will be significantly curtailed by the funding cut back,” Chaffee said.

He added that even before the cuts, there were not enough funds for all the residents interested in participating in weatherization programs offered by NHSaves when Sustainable Lebanon promoted the program a few years ago.

Members of Upper Valley energy committees saw the PUC’s decision as a roadblock to their local goals.

“Puzzlement and disappointment” was the first reaction of Jim Nourse, who chairs the Lyme Energy Committee.

“I’m not quite sure why there is pushback,” he said. “The PUC argues it will save ratepayers. For me, the cheapest energy we have is the energy we don’t use. If you don’t use it, it doesn’t cost you anything.”

He was especially concerned about the decision with high prices for heating fuels looming this winter.

“If that’s coming and we’re making it more costly for people to weatherize their homes — it doesn’t make sense to me,” he said.

In years past, Lyme worked with neighboring towns and Vital Communities to help residents take advantage of NHSaves rebates to weatherize their homes. So did Plainfield, where Evan Oxenham co-chairs the Energy Committee. Now, neither Nourse nor Oxenham are certain that they will be able to continue those programs.

When Plainfield and Cornish collaborated on a weatherization program in 2018, 24 homeowners went forward with NHSaves. Even more were interested, but only those with the “very leaky homes” moved forward, Oxenham said. And about half were elderly residents who especially needed the program.

“It has a huge impact on the poorest people in our state,” he said. “The action by the PUC is affecting the people who need it the most.”

Clifton Below, the chair of Lebanon’s Energy Advisory Committee, was also concerned about the cost of the PUC’s decision, especially for ratepayers: Energy efficiency helps the state avoid buying new increments of capacity that would push up costs for everyone, he argued.

“The cheapest kilowatt-hour is the one that is saved,” Below said. “This (decision) starts to take the utilities out of the business of considering that lower-cost option to meet demand. They make more money by selling more electricity.”

Claire Potter is a Report for America corps member. She can be reached at cpotter@vnews.com or 603-727- 3242

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