Despite 2021 rate decreases, manufacturers criticize National Grid energy efficiency plan

NATIONAL GRID's approved 2021 Energy Efficiency plan expands the program budget while decreasing charges to customers, but some manufacturers remain critical of the program. / PBN FILE PHOTO/MARK S. MURPHY

PROVIDENCE – Thanks to unspent funds during the pandemic, National Grid Rhode Island customers will see the charges they pay to support energy efficiency programs decrease without compromising the program’s 2021 budget.

Yet some state manufacturers remain critical of the fund, questioning what benefits they derive for the amount they’re paying and calling for National Grid to suspend the program amid the still-surging COVID-19 pandemic.

The R.I. Public Utilities Commission in a series of meetings that ended on Dec. 30,  approved a combined $151.6 million budget for National Grid’s 2021 Annual Energy Efficiency Plan, which represents a $6.2 million, or 4.3%, bump over the 2020 budget. Despite increased funding, the plan also cuts the monthly energy efficiency charges billed to residential and commercial electric and gas users using the roughly $32.2 million in unspent money from 2020.

Commission Chairman Ron Gerwatowski in comments made during the two-part meeting lauded the plan as a “good news event,” that combines a “robust energy efficiency program and some rate relief.”

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Terry Sobolewski, president of National Grid Rhode Island, in an emailed statement also praised it as a “forward-thinking plan that will help more residents and businesses reap the benefits of energy efficiency…and help decrease their energy use and potential costs.”

But some in the state’s manufacturing community have questioned whether the program is achieving its intended goal and are calling for charges to be suspended.

The Energy Council of Rhode Island and the Rhode Island Manufacturing Association in June called on the state legislature to force National Grid to stop collecting the monthly fee, which helps fund a host of rebate, incentive and other energy efficiency programs. Their pleas fell on deaf ears – particularly frustrating because National Grid suspended shutoffs and bill collections for usage for most of the year, said Dave Chenevert, RIMA executive director.

And while the monthly energy efficiency program charge is fairly nominal for residential customers – roughly $7.60 a month for a customer who uses 500 kilowatt hours of electricity and 845 dekatherms of gas, based on 2020 rates – large manufacturers pay a lot more.

Craig Pickell, president and CEO of Bullard Abrasives, Inc., said his monthly energy efficiency program electric bill often hits $1,500 to $2,000. By that calculation, he’s poured in more than $250,000 in the 16 years of operations out of Lincoln.

But he said the benefits he has derived from the program the charges are intended to support seem minimal, at best.

“It seems like the only interest they have is lighting,” he said, naming replacement of standard bulbs with LED counterparts as the primary benefit the fund has offered him. 

“When you’re running a manufacturing facility, you’re constantly trying to improve energy costs,” he continued. “It would be nice if for all the money I’m putting in this thing, I could get some help.”

Pickell named as example installing an energy-efficient chilling system to maintain the constant low humidity level required for his industry. When he asked if any of National Grid’s energy efficiency programs could support or offset the $750,000 cost he was quoted on, he was told there was nothing available.

That the money collected through these charges was largely unspent – evidenced by the surplus reported in the 2020 budget, added insult to injury according to Pickell.

Asked for response to concerns voiced by Pickell and Chenevert, Ted Kresse, a spokesman for National Grid Rhode Island, reiterated the “hundreds of millions” in cost-savings the energy efficiency programs have generated for “thousands” of Rhode Island businesses.

National Grid estimates indicate commercial and industrial customers will save 4.44% to 9.02% on their long-term electric costs and 2.45% to 7.12% on their gas charges under the 2021 rates approved by the PUC, Kresse said. 

“In our view, that’s a significant win for our commercial customers,” Kresse said in an email.

But the short-term decrease does not account for what have been steadily rising rate hikes and distribution charges over time. Previous rate hikes by National Grid drew criticism from major manufacturers such as Toray Plastics (America) Inc., though the company declined to comment on the latest plan. 

The unpredictability and rising rates has led some businesses to buy their energy elsewhere, including Taylor Box Co. The Bristol-based manufacturer switched from National Grid to Constellation Energy seven years ago, President Daniel Shedd said in an email.

Bullard Abrasives has also opted to buy its energy elsewhere, but still has to pay National Grid the distribution charge for the equipment and operations to actually deliver power to its facility – a $9,000 cost for the month of December alone, said Pickell.

“In my world, we can’t raise our prices, so that comes out of our bottom line,” he said.

Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.

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