To:
Vermont Public Service Board
From: Sandra Levine, Conservation Law Foundation
James Moore, Vermont Public Interest Research Group
Date: April 18, 2008
Re:
Reply Comments on EEU 20-year budget projection, Budget Recommendation
for 2009-2011 and recommendation on disposition of Forward Capacity Market
Funds
Conservation Law Foundation (CLF) and Vermont Public Interest Research Group
(VPIRG) provide the following reply comments on the budget levels the EEU should use
for the 20-year energy efficiency forecast, budget recommendation for the 2009-2011
period and recommendation on disposition of Forward Capacity Market Funds as
requested in the Public Service Board’s memoranda of April 9 and 10, 2008.
Reply Comments on EEU 20-year budget projection
In light of the requirement that the EEU budget be set at a level that will acquire “all
reasonably available, cost-effective energy efficiency savings” as set forth in 30 V.S.A. §
209(d)(4), the Board should reject the recommendations that the current EEU budget
increased only for inflation be used for the 20-year budget projection. As recognized in
the Board’s Order of August 2, 2006 and as supported by the evidence presented at the
workshops to establish the existing budget, higher funding levels would be appropriate.
Failure to account for this in the EEU 20-year budget projection would be contrary to the
legal requirements set forth in Title 30. The EEU 20-year budget projections must be
based on a budget levels that will acquire “all reasonably available, cost-effective energy
efficiency savings.” There is simply no support or claim that maintaining the existing
budget adjusted only for inflation is appropriate or would satisfy the legal requirements
of Vermont law.
Budget Recommendation for 2009-2011
CLF and VPIRG recommend that the EEU’s budget be increased annually to a level that
results in acquiring “all reasonably available, cost-effective energy efficiency savings” as
required by Vermont law. 30 V.S.A. § 209(d)(4). Analysis from the previous budget
proceeding showed that a $52.5 million budget in 2008 would have been an appropriate
level to meet the statutory requirements. The Board’s August 2, 2006 order regarding the
EEU budget recognized that higher funding levels would be needed to acquire all
reasonably available cost effective energy efficiency savings. Since nearly eighteen
months has passed since that budget was put in place, the Board should significantly
increase the budget going forward. Recent avoided cost estimates from the Department
of Public Service demonstrate that electricity costs have increased. All other things being
equal, this alone demonstrates that more energy efficiency resources are now cost
effective.
To meet Vermont’s climate change goals and its obligation to provide least cost energy
services to its residents, the efficiency budget should be significantly increased over the
next few years. Beginning in 2009 the budget should be increased to $52.5 million and
over the next three year period the budget should increase to approximately $85 million –
a level that will continue to acquire reasonably available cost effective energy efficiency
savings, especially in light of the increased avoided costs.
Forward Capacity Market Funds
The FCM funds should be utilized either to provide home heating energy efficiency
services as was contemplated during the 2008 Legislative session, or to acquire additional
electric energy efficiency resources. Regarding the first alternative, it may be helpful to
have input from Legislators on the use of these funds as this was addressed in recent
legislation. Regarding the second alternative, please see comments previously provided
by CLF and VPIRG on 3/27/07 and 10/24/06 (attached) where we recommended that
these funds be used to acquire additional energy efficiency resources. As noted in the
earlier comments, the FCM payments should benefit ratepayers but should not be
refunded since there are additional reasonably available cost effective energy efficiency
savings that can be acquired.
Thank you for providing us with this opportunity to comment.
Attachments:
CLF & VPIRG Comments on FCM Disposition dated 3/27/07
CLF & VPIRG Comments on EEU Participation in FCM dated 10/24/06