Energy efficiency programs are a win for all when the rates that fund them are reasonable. New Hampshire businesses need every tool in the toolbox to adjust to the current conditions to remain afloat — including energy efficiency programs at an equitable rate.
The past year has posed a series of unique challenges for Granite State businesses. New Hampshire is facing what will be a third year of the COVID-19 pandemic. And as if that were not enough, businesses are doing their best to operate under economic inflation and staffing shortages, too. You can add rising energy costs, perhaps worsened by the now uncertain status of New Hampshire’s energy efficiency program.
So, how did we get here? The 2021-2023 Triennial Energy Efficiency Plan, as proposed in 2020, requested system benefits charge (SBC) rate increases up to 168% from the 2020 SBC rate for commercial and industrial ratepayers as early as 2023. Such a steep increase would be detrimental to New Hampshire’s business climate. A sudden and dramatic hike of SBC rates would no doubt slash the budgets of small businesses when they truly need to a catch a break with expenses. For years, New Hampshire has consistently ranked in the top 10 states for the highest electricity costs in the nation. This is no badge of honor for Granite Staters.
For its part, the Business & Industry Association objected to the increase due to the significant hike in energy costs that would have resulted. The state Public Utilities Commission, which is charged with establishing rates, rejected the increase, but in doing so, put the entire energy efficiency program in limbo, a result nobody in New Hampshire wanted.
Conserving energy in an ever-demanding market is a significant goal the BIA, New Hampshire's statewide chamber of commerce and leading business advocate, shares with many advocates in the state. However, it would be tone-deaf to continue pushing for dramatic increases in the SBC rates at the sacrifice of New Hampshire’s business climate, especially during a pandemic that continues to pose economic challenges for businesses. Steep increases for energy efficiency charges, whether within system benefits charges or separate, will come at a detriment to the state’s economy. Passage of sharp increases could prove to be so fatal that manufacturers consider leaving the state and small businesses may not be able to grow in ways they planned because they must cover their newly raised operating and energy costs. These effects would be damaging to so many New Hampshire businesses that employ tens of thousands of Granite Staters. An unreasonable increase in SBC rates would be hurtful to New Hampshire businesses of all sizes and industries.
BIA strongly supports energy efficiency funding and programs. Businesses utilize energy efficiency programs to help offset upfront costs of undertaking measures and projects that help reduce operating costs. Energy efficiency programs provide rebates that allow businesses to reasonably rely on the available program offerings to plan for larger, more complex projects that typically result in significant energy use reduction and savings. Without these programs, businesses will lose money in the long run and energy will needlessly go to waste.
BIA supports maintaining the status quo set at the 2020 SBC rates and would support a modest increase from the 2020 SBC rates for the purposes of continuation and certainty for the funding and programs for energy efficiency.
The bottom line is New Hampshire needs energy efficiency funding and programs to remain in place with certainty, but energy efficiency must come with an affordable price tag for consumer and industrial ratepayers in order to protect New Hampshire’s business climate. BIA continues to advocate for energy efficiency at a reasonable cost to commercial and industrial ratepayers. A proper balance ensures long-term success.
Kirsten Koch is director of public policy for the Business & Industry Association.
Current Issue - April 2024