LANSING – Organizations
that offer or oversee energy efficiency services insisted those programs would
at least be severely curtailed if there was not legislation requiring utilities
to offer them, while small utilities said not only would the programs continue,
but the current law inhibits what they can do as the Michigan House Energy
Policy Committee wrapped up its discussions Wednesday on that portion of
proposed changes to the state’s energy laws.
The
testimony appeared to leave at least a few questions unanswered, as Rep.
Aric Nesbitt (R-Lawton), chair of the committee, was still supporting his
plan to incorporate energy efficiency into an overall energy plan for each
utility rather than continuing the current requirement that each meet targets
for efficiency.
Kate White,
executive director of Michigan Community Action, which administers the energy
optimization program for the smaller utilities that chose not to operate their
own, said the program has exceeded its goals but is still only reaching a small
percentage of the households available.
“There’s
plenty of work to be done,” she said. “We have many homes that would participate
if there were resources to do that.”
There are
commercial customers yet to reach as well, she said.
White agreed
with Nesbitt that energy customers should find it in their own self-interest to
make changes that will reduce their use.
“That
natural incentive is not readily apparent,” she said. Both residential and
commercial customers, she said, often do not see the value of the investment
unless the payoff is relatively short.
“Utilities
will not go after robust energy efficiency measures on their own,” White said.
Brindley
Byrd, executive director of American Energy Efficiency Contractors, said
eliminating the current requirement for energy efficiency programs would mean
loss of at least 10 percent of the workforce in the industry.
“That just
essentially runs the energy efficiency industry into a brick wall without any
alternatives,” he said of the proposed legislation.
James Alt
with the Michigan Electric and Gas Association, which represents the state’s 10
smaller investor-owned utilities, said eight of his members are using the
program run by Michigan Community Action, and he expected that partnership or
some similar program would continue.
“We do
support cost effective energy optimization as well,” he said. “Energy
optimization-type programs are going to continue even absent the mandate.”
But he said
the bill as structured does not provide the flexibility that would allow more
to operate their own programs.
“We
want to see the ability of a gas company to file at the (Public Service Commission)
with a program tailored to their own need,” he said.
The current
caps on spending for the programs limit the smaller utilities, he said, noting
that a couple of his members have about 10,000 customers. “You can’t do a
whole lot with the revenue you’re going to get from that,” he said.
“On a
go forward basis, the state mandated goals and spending limits make little
sense,” Art Thayer, director of energy efficiency programs for the
Michigan Electric Cooperative Association, said.
If given the
opportunity, he said he expected some of his members would expand their
programs while others could cut them back without much effect on energy
efficiency efforts within their territories.
Thayer said
the state law also could end up in conflict with requirements or reporting for
coming U.S. Environmental Protection Agency rules on greenhouse gas emissions,
which allow energy efficiency programs as one of the ways to meet emissions
reductions.
Nesbitt said
one of his concerns is all customers are paying the surcharge for energy
efficiency programs but only a few participants are seeing the benefits.
“Not
every household has to participate to benefit,” Martin Kushler, senior
fellow at the American Council for an Energy Efficient Economy, said. The load
reductions from the programs mean the utilities do not have to build new plants
or replace some of the older plants, which will keep costs down for all
customers.
Kushler and
others also argued against proposals that would allow utilities to capture
certain of their fixed costs through a standard charge on each bill, with only
the actual power generation changing each month. They said that would further
make energy optimization less attractive by cutting into the savings customers
would see each month.
He also
pushed for the state to expand programs that allow customers to finance
upgrades through the savings on their utility bills as a way to encourage the
improvements.
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