PROVIDENCE – Record demand for National Grid energy home weatherization services created budget overruns which may, in turn, drive up the fees customers pay to support the company’s energy efficiency programs.
State utility regulators are slated to vote Tuesday on National Grid’s 2022 Energy Efficiency Plan. If approved, the average residential customer would see their annual gas and electric bills increase by a combined $49.92 beginning Feb. 1, roughly 1.7% higher than what they paid for the same usage in 2021, according to filings with the R.I. Public Utilities Commission.
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The proposed fee hikes stem in part from the $4.5 million hole projected in the company’s 2021 natural gas budget amid “unprecedented demand” for weatherization services, according to the filings. Pent-up demand combined with workforce shortages pushed many of these projects originally scheduled for 2020 into 2021, creating a budget gap that the company hopes to fill with a higher “system benefit charge” this year.
Also contributing to the increases in both gas and electric surcharges compared with the previous year is that National Grid no longer has the benefit of unspent funds to help plug its budget holes. Last year, charges decreased because the company had unspent funds from 2020, when many services were temporarily suspended due to the pandemic.
Going into 2022, the company no longer has the cushion of a prior year’s surplus to help pay for its proposed $159.7 million combined gas and electric energy efficiency spending plan. Instead, revenue from the service fees charged to customers will fund the bulk of those expenses, along with $14.3 million from ISO New England’s wholesale electricity market sales.
In its filings, National Grid touted the program’s environmental and economic benefits, estimated at $358.7 million over the lifetime of the natural gas and electric energy efficiency improvements that its budget supports. The 608,736 tons of carbon avoided by these green investments removes the equivalent of 121,000 cars from the road for an entire year, while adding the equivalent of 3,231 job years to the state GSP, according to the filings.
But manufacturers who have railed against the program in years past remain unconvinced. Huge warehouses laden with equipment that runs around the clock means they pay big utility bills, particularly for electricity. Even a 1% or 2% increase in service charges is magnified on their bottom lines, said David Chenevert, executive director for the Rhode Island Manufacturers Association.
Meanwhile, many of the energy-efficient programs that the charges help pay for aren’t really applicable to manufacturers.
Peter Kaczmarek, president of Mearthane Products Corp., has had several energy-efficiency audits through National Grid, looking for ways to cut down on energy use at his Cranston facility. But the results have been limited.
“Once you get past the really obvious stuff like LED lightbulbs, the ways to save energy are a lot more complicated,” Kaczmarek said told PBN. “You can get into stuff like variable frequency motors, but that requires a much higher level of investment and expertise to figure out where it might be appropriate.”
Kaczmarek maintained that the Energy Efficiency Program was a good one, but he felt it was a bit unfair that Mearthane was being charged for something from which it couldn’t reap many benefits.
Thomas Lucchetti, president of Cumberland Foundry Co. Inc, put it more bluntly.
“It’s a scam,” he said. “You’re basically stealing from people who can’t take advantage of it and giving the money to the people who can.”
The state’s Energy Efficient and Resources Management Council voted not to endorse National Grid’s plan, citing a lack of information and that the utility had failed to prove it considered all other ways to cut costs without passing charges onto ratepayers, according to a filing with the PUC.
The R.I. Division of Public Utilities and Carriers in its submission also noted “concerns regarding the ever-growing energy-efficiency budgets and the upward cost trajectory of other electric and gas programs that collectively continue to increase the already high cost of energy for Rhode Islanders.” The division ultimately concluded that National Grid’s proposal met the least cost-procurement standards set by the state, however.
Ted Kresse, a spokesman for National Grid, in an email response pointed to the “millions” in savings that National Grid’s energy-efficiency programs have saved its customers while being honored as among the top in the country. Company estimates included in public filings project that customers who take advantage of energy improvements will see long-term decreases to their bills. This includes commercial and industrial customers that could save 2%-6% on their electric bills and up to 24% on natural gas costs by participating in energy upgrades, according to the filings.
Frustrated by the seeming lack of benefits from National Grid’s energy-efficiency programs, Lucchetti and Kaczmarek are both looking skyward for a different way to cut their energy costs.
Lucchetti said the pair of solar arrays added to his Cumberland metal casting site last year shaved about $1,000 from his $30,000 bill.
Meanwhile, three rooftop solar arrays slated to be erected on Mearthane Products Corp.’s buildings will provide enough power to cover 90% of the company’s electricity use, Kaczmarek said.
“We are always interested in paying less for the same service,” he said. “We wanted to balance against the rising level of electricity costs while trying to do something positive for our business and positive for the environment.”
The Public Utilities Commission will meet to discuss and vote on National Grid’s 2022 Energy Efficiency Plan at 10 a.m. Tuesday.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
