Energy Efficiency: Things Were Going So Well Until the Commissioners Got Involved

Perry Appointees Smitherman, Nelson, Anderson protect consumers from energy efficiency

There is a disturbing trend emerging in Texas. A once successful consumer-oriented program is floundering because of a deficit of perspective behind the dais at the PUC.

The Public Utility Commission of Texas proposed adopting an update to the state’s energy efficiency program that would cap the amount of money utilities could spend on programs that reduce the energy bills for homes and businesses.

Under the rule, utility expenditures on energy efficiency would be limited to one tenth of one cent per kilowatt-hour. That’s $0.001, which would amount to around a dollar a month for the average home. It’s worth pointing out that there are no cost caps for other energy resources, just the cheapest one.

This bears repeating: the PUC does not want utilities to spend more money to fund programs that make Texas homes more energy efficient and reduce their utility bills.

During today’s hearing, it was abundantly clear that Governor Perry’s appointees to the commission have folded to industry pressure and adopted the bizarre world view that energy efficiency costs consumers too much money. As evidence, in addition to only considering utility industry estimates on the cost of future efficiency resources, they frequently alluded to a report released this week by the conservative and industry-friendly Texas Public Policy Foundation which made unsubstantiated claims that the consumer benefits of energy efficiency programs could not only be less than currently estimated, but actually negative (page 3). (A more detailed critique of their report is coming).

At a workshop earlier this month, the commissioners only allowed industry representatives to present information. No consumer advocates, environmental groups, no academics were allowed to present and even the comments by ACEEE seem to have been ignored.

It’s now time for the Legislature to be the grownups in the room when they convene in January. The commissioners mentioned several times the need for direction from the Lege. Maybe that’s because legislators are in a better position to put energy efficiency costs and benefits into context-recognizing that the vast majority of energy costs and risks to consumers and businesses come from over-dependence on coal, natural gas, and nukes. After all, the slice of the utility bill pie that energy efficiency takes up is minuscule compared to the other components that make up a customer’s energy bill. If the Commissioners were truly concerned about consumer cost burden, shouldn’t they pay attention to the other 99% of the utility bill?

Commissioner Nelson’s comments were particularly disturbing. She said the proposed maximum cost caps were too high ($1.30/month). At one point she questioned the need for energy efficiency mandates at all. There was also an awkward exchange between commissioners where she implied that climate change does not exist (along the “we had a mild summer, therefore.” line of thinking).

A few more brief comments on the rationales used today:

Nelson sited low natural gas prices and the subsequent dip in utility bills as a reason why Texas could do without an energy efficiency goal, despite the fact that energy efficiency is still cheaper than gas AND the fact that efficiency inherently puts downward pressure on bills regardless of other energy prices.

The best time to increase energy efficiency goals is when energy prices are low as a way to ensure they stay low-not to wait until they skyrocket again.

Nelson also again framed the efforts of the 81st Legislature curiously. Despite the fact that both houses passed Senator Troy Fraser’s SB 546 which would have increased the state efficiency goal, she said the Lege “declined” the opportunity to pass updating the efficiency goal. Anyone who was following this bill last session should take issue with that. The Senate passed SB 546 30-0. The House passed it 97-45. Her choice of words implies that the Lege intentionally did not want to pass an increase in the energy efficiency goal. Evidence exists to the contrary. Perhaps she needs to have a discussion with the Senator on the meaning of legislative intent.

What the PUC will adopt is not what the Lege intended.

Even Arizona just passed a efficiency bill that makes this effort look unispiring to say the least. “The Arizona Energy Efficiency Standard established in the Rule will achieve 22 percent energy savings in 2020 as a percent of retail sales from energy efficiency, with a credit of up to 2 percent for demand response.  This will put in place one of the strongest energy efficiency standards in the country.”

Contact your Senator and Representative and ask them to pass a strong energy efficiency bill!

Wonky background:

When adopted (around December of this year), Texas will have the following efficiency goals:

2010: 20% of the growth in demand (no change from 2009, states are now setting up programs to reducing the total amount of energy used rather than new growth)

2011: 20%

2012: 25%

2013: 30%

Cost caps would be based on consumer rates:

  • Residential: $0.001/kWh, or $1.30 per month for years 2011-12; 2013 and beyond it would be increased to $0.0012/kwh or $1.60.
  • Commercial: $0.0005/kwh for 2011-12; 2013 and thereafter: $0.00075/kwh

If you want to completely wonk out on a Friday afternoon, you can find the proposal here.

The archived video of today’s meeting can be found here. Fast forward about 3 hours and 15 minutes to get to the energy efficiency discussion. (They took it up about 12:46pm).