The budget of Vermont's statewide energy efficiency program and the costs to ratepayers are going up.
Ratepayers currently pay less-than-a-penny tax per kilowatt-hour on their electric bills to support power-saving programs administered by Efficiency Vermont.
Under a Public Service Board order issued Wednesday, the tax on residential ratepayers will increase Feb. 1 from about from about seven-tenths of a cent to about nine-tenths of a cent. Put another way, for a homeowner using 600 kilowatt-hours a month, the efficiency charge will climb about 19 percent from $4.64 to about $5.51.
The money goes to support the $38.5 million that will be spent next year to encourage energy efficiency measures, with about two-thirds going to commercial and industrial applications, where the big potential energy savings are.
Blair Hamilton, policy director with the Burlington nonprofit Vermont Energy Investment Corp., which runs Efficiency Vermont under contract with the state, said ratepayers save in two ways: Families and companies using less power see smaller bills. Also, reducing the state's growth in demand for electricity causes Vermont power companies to reduce their purchase of expensive wholesale electricity for resale to their customers.
"If we weren't paying the energy efficiency charge and had not paid it for the past 10 years, rates would not be like what you're paying now, less the energy efficiency charge," Hamilton said. "We'd be paying a lot more."
Sandra Levine, a lawyer with the Conservation Law Foundation, said new power generation costs more than twice what conservation does.
"Energy efficiency continues to meet our power needs at far less than half the price of power supply, and that's particularly important with, for instance, the Hydro-Quebec deal at roughly 6 cents per kilowatt-hour," Levine said.
The state recently announced a long-term deal between Vermont power companies to buy power at a starting wholesale price of about 6 cents per kwh from the provincial utility, which has ample excess hydropower capacity.
William Driscoll, vice president of Associated Industries of Vermont, a manufacturers' group, said his group had argued that the Efficiency Vermont budget was growing too fast. The Public Service Board, which regulates utilities, said the budget would climb about 15 percent in 2011.
Businesses opting not to invest in new efficiency measures are paying to help others that make such investments, he said. Some of his group's member companies worry about "paying the efficiency charge, versus having that money for payroll investments or other business costs," he said.
Hamilton said Efficiency Vermont has begun to expand beyond conserving electricity and into helping Vermonters save on other energy sources used for heating. Other projects range from installing more efficient pumps for municipal water systems to helping grocery stores install more efficient refrigerators.
Last week, the American Council for an Energy Efficient Economy ranked Vermont No. 5 in the country for its energy efficiency programs. It gave the state high marks for conserving electricity, less so for heating efficiency and energy usage in transportation.
