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More ambitious targets and other reforms spurred higher auction prices and more money for efficiency programs.
A rebound in prices for carbon allowances in regional cap-and-trade auctions helped restore funding last year to Maine energy efficiency programs.
Efficiency Maine said in its latest annual report that funding for the fiscal year ending in June 2018 topped $49.2 million, up from $44.8 million in the prior year. The money is spent on initiatives including weatherization, low-income assistance, and retrofits in the commercial and industrial sectors.
A major component of its funding is the Regional Greenhouse Gas Initiative (RGGI), an 11-year-old program of nine Northeastern states to incentivize lower emissions from the power sector. Member states’ electric utilities must bid for a limited number of carbon allowances to match power plant emissions. Its quarterly auctions have raised more than $3 billion that has been returned to New England and Mid-Atlantic member states. The vast majority of that money has been used to fund statewide energy efficiency programs. Maine’s share has totaled nearly $101 million.
The regional initiative’s success, however, caused an oversupply of emission credits and prices to drop in 2016. Maine’s RGGI funding fell from $14.7 million in fiscal year 2016 to $6.9 million in fiscal year 2017. After member states enacted more ambitious targets and other reforms, prices climbed again and Maine’s RGGI funds were nearly $9.5 million for the last fiscal year.
“It’s performing at a level forecasted previously. It provides more stability to programs we can offer,” said Michael Stoddard, executive director of Efficiency Maine Trust, which administers the state’s efficiency programs.
Those restored funds allowed Efficiency Maine to revive programs that were deprived support. Weatherization through the Home Energy Savings Program was one of the important programs that was cut and then restored during the year when more funds became available.
Other efficiency funds come from utility ratepayers, and various funds, settlements and contracts with distribution utilities, the federal government and the regional power grid operator.
Aside from the funding issues, Stoddard said fundamental changes in the marketplace have institutionalized the efficiency ethic, which allows for a reallocation of resources.
An example is that LED lighting is now part of the original design of commercial and industrial buildings and no longer is a feature that has to be incentivized. This allows the organization to focus exclusively on building retrofits.
“We are assuming when a commercial building is newly constructed, LED lighting is something that would’ve been selected regardless of any efficiency program, so we concluded they no longer need a financial boost from our program. So that ends up conserving our funds,” Stoddard said. “That’s pretty wonky, but that represents a significant shift.”
Another shift is that contractors and appliance suppliers are recommending more efficient units, like water heaters. “That’s a much larger price point [than for a light bulb], so we’re seeing significantly better results by shifting the point of intervention upstream to the contractor,” he said.
Another change unrelated to program funding is the amount of activity in finding savings for residential natural gas customers. With lower natural gas prices and more efficient heating and boilers, the amount of savings has diminished and payback times for customer investment have gotten longer, making those programs less popular.
Looking ahead, Stoddard has high hopes for a program to help Mainers who have fallen behind on their electric utility payments. The Arrearage Management Program would identify customers who have fallen behind who can then volunteer for assistance.
The pilot program that began at the tail end of fiscal year 2018 would provide energy efficiency assistance, include providing LED lighting, and more importantly, replacement of expensive-to-run electric resistance water heaters with heat pumps for hot water.
“There’s a disproportionately high number of low-income customers with electric resistance water heaters, so using heat pumps could prevent them from going into arrears,” Stoddard said.
Other highlights from the annual report include:
- Avoiding more than $189 million in unnecessary lifetime energy costs.
- Matching more than $47.3 million of incremental private investment with $47.1 million of program investment.
- Supporting 7,780 projects to install air sealing, insulation, ductless heat pumps, or heating systems through the Home Energy Savings Program.
- Reaching a milestone of promoting more than 33,900 ductless heat pumps installed over the past six years.
- Adding more than 33.8 megawatts of new peak summer demand reductions to the grid.
- Avoiding an estimated 89,847 tons of annual greenhouse gas emissions.
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