Will energy efficiency investment fall victim to Canadian hydropower?

Energy policymaking in Connecticut has lately been consumed by the struggle over large-scale hydropower, and that is unfortunate, because the energy policy we actually need in Connecticut has little to do with remote Canadian dams and a lot to do with a low-cost, consumer-friendly energy resource much closer to home – energy efficiency.

We waste energy in Connecticut in ways large and small. Most of our homes and office buildings leak heat in winter or cool air in summer. Many of our lights and appliances use far more electricity than needed to function well. Furnaces and boilers can be outdated energy hogs, burning too much dirty and expensive heating oil, for instance. And industrial processes may not be tailored precisely to optimize the amount of energy needed to manufacture a product.

All of this inefficiency adds up to an immense amount of energy waste. And that waste is expensive; for electricity alone, we purchase on average about $400 million in unnecessary power each year in Connecticut. Unnecessary natural gas and heating oil purchases caused by inefficiency also likely run in the many millions of dollars per year. This is an astounding amount of wasted money, and it acts as a real drag on household budgets and our state’s economy.

Yet nearly all of that waste is preventable. Fairly straightforward energy efficiency fixes – like duct sealing and high-efficiency insulation – exist and are well known in efficiency circles. The state’s award-winning energy efficiency programs, overseen by an effective, independent oversight board of committed citizens and knowledgeable experts, already knows how to offer such solutions to all electric and natural gas ratepayers.

But the problem is that current funding levels for those programs are severely inadequate and have been for years. The state’s electric efficiency programs, for example, receive less than half the annual funding they need. Even worse, oil heat customers have no efficiency program dedicated solely to their fuel, as do electric and natural gas customers.

This situation could easily be remedied. Miniscule increases in the rate charges that currently exist to support the state’s electric and natural gas efficiency programs, as well as a new and tiny charge on fuel oil sales, would allow for the full investments that need to be made in the efficiency programs. And those cost-effective investments would more than pay for themselves, with each $1 invested producing anywhere from $1.50 to $4 in benefits. These investments would also create new jobs here in Connecticut, grow our economy as more households spend their savings in-state, and reduce harmful air pollution – all without waiting years for expensive new transmission lines to maybe be built to import large-scale Canadian hydropower into our regional electric grid.

The good news is that the Malloy administration has repeatedly recognized in its energy plans that fully investing in all cost-effective energy efficiency should be its top strategic priority for reducing the state’s high energy costs. The bad news is that the Malloy administration has not yet managed over the last two years to implement the full level of energy efficiency that Connecticut needs.

The fault for this can arguably be spread over several state agencies involved in energy efficiency. But the main responsibility has to lie with the governor and the need for his active leadership on this important energy issue. If the significant amount of political capital curiously spent on large-scale hydropower over the last few months had instead been spent on ensuring full investment in cost-effective energy efficiency, there is no doubt that the present policy failure – the continuing toleration of costly energy waste in our state – would already be solved.

Now is the time for the governor to put his full weight behind his stated intentions on efficiency policy if there is to be real change.

An opportunity remains in the General Assembly. While the current legislative session ends in only a few days, a bill originally proposed by the Governor that seeks to increase investment in energy efficiency, House Bill 6360, is still pending. Although this bill does not go far enough in our opinion – for example, increasing electric efficiency funding but not to the full level needed – we nevertheless strongly support its passage, as it would constitute valuable progress on efficiency policy and greatly expand the reach of the state’s efficiency programs to the real benefit of many customers.

Connecticut’s residents and businesses deserve an improved and efficient energy system right now.

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