State’s energy strategy likely to increase fees

There was a nugget of news in the big energy speech Gov. Dannel P. Malloy gave at the Northeast Energy Efficiency Partnerships’ annual summit Thursday, which happened to be in his hometown of Stamford.

Turns out the Department of Energy and Environmental Protection also Thursday released its long-term energy strategy known as the Integrated Resource Plan. While a bit wonkish for the average person, it actually does affect the average person and there were a few things worth noting.

First of all, this is the first one done by DEEP. The previous three were formulated by the utilities themselves. Second, it strongly emphasizes energy efficiency not as not a key, but THE key to lowering energy bills.

As the governor said in his speech: “That’s because the best and cheapest kilowatt of power is the one you don’t use.”

To do that, the IRP requests a funding increase for energy efficiency from $105 million to $206 million annually. That would include the rest of this calendar year, effectively increasing that pot of money to $158 million for 2012.

The catch — that money would come from increases to ratepayer fees on electric bills that already go toward energy efficiency. For an average home that uses about 750 kilowatts of electricity a month, already paying a fee of about $2.25, it would add another $2.77. The increase would need to be approved by the Public Utilities Regulatory Authority.

The good news the governor and the IRP pointed out is that with generation service charges in decline, and at least a temporary freeze on most electric rates as part of the Northeast Utilities/NSTAR merger, electric bills even with an additional fee are likely to be lower.

The bad news the governor didn’t point out, but the IRP did, is that the generation service charge rate is expected to start heading back up around 2017. The point, the IRP states and Malloy said in his speech, is to get energy efficiency in place in time to offset other increases.

“The key is for homeowners and businesses to join us on the efficiency journey to pay less in actual dollars for the power you use,” the governor said. “Those who step up on efficiency will see significant drops in their electric bills and energy spending more generally.”

There were a few other hidden cautions in the IRP. One predicts that by 2018, the available renewable energy generation will be lower than the state’s target for it. The state has long had a target of 20 percent renewable power by 2020. That gap could result in annual penalty fees of more than $250 million.

The IRP calls for reassessment of the situation and implementation of new state and regional policies and strategies.