Now more than ever, Connecticut residents want to improve home efficiency but EnergizeCT, the state’s largest efficiency program, is running out of money to serve them.
Efficiency programs are at the core of energy demand and cost reductions for residents and businesses. These programs help utilities avoid energy, power plant, transmission, and distribution costs that would otherwise be passed onto customers. They are central to the state’s decarbonization work. And, when compared to fossil fuel resources such as natural gas power plants or renewable energy resources paired with storage, energy efficiency emerges as the lowest-cost energy resource.
It is often said that the least expensive energy is the energy that you don’t use.
Last year’s spike in energy prices, coupled with a rising recognition that we must reduce our fuel consumption, have made these programs quite popular. At the same time, COVID-driven inflation has increased the cost of providing the workforce and materials needed. It is not surprising then, that the budget for these programs is squeezed. The number of homes being served has risen and the costs for improving heating and ventilation systems has increased dramatically.
Funding for these programs comes from three sources: a charge on customer electric and gas bills, revenue from the state’s participation in the Regional Greenhouse Gas Initiative (RGGI), and selling energy efficiency credits to the New England Forward Capacity Market.
To get through the current year, the state Energy Efficiency Board (EEB) has authorized Eversource, one of the administrators of the EnergizeCT program, to “borrow” from next year’s budget and also to reduce certain benefits. The co-pays for the programs are expected to increase in 2024 and further cuts to incentives may be made to both the Eversource and United Illuminating-administered programs.
The purpose of the cuts is to have a “cooling effect” on the uptake of these programs. And according to one heat pump vendor, this is already happening. With the removal of the point-of-purchase rebate on October 1, several of his customers canceled their contracts. On the efficiency side, Home Energy Solutions (HES) vendors are having to lay off crews, a very undesirable outcome for HES technicians, many of whom come from underserved communities.
A cooling of home efficiency measures is exactly the opposite of what is desired and needed right now. The state should be finding as many ways as possible to weatherize every home and business in Connecticut and work towards electrification of HVAC systems. Energy efficiency is the single most effective tool we have to save money, save the environment, and secure our energy independence.
In 2017 when Connecticut was in the depths of a statewide budget crisis, it “swept” $175 million dollars from the ratepayer provided efficiency funds. While legal – it wasn’t right. The time is now for Connecticut to return those funds and keep these vital programs going.
The efficiency funds are paid in good faith by ratepayers who expect them to be there when it is their turn to take advantage of the program offerings. They were intended to be used for state efficiency gains and this is where they will do the most good for all of the residents of Connecticut.
Bernard Pelletier is Vice President of People’s Action for Clean Energy.