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Baltimore – Mismanagement of energy efficiency programs by the Maryland Public Service Commission could cost Maryland electricity consumers an average of $288 million annually versus if the agency had ensured utility companies were meeting their energy savings goals. The finding comes from a new report tracking Maryland’s progress towards statewide energy efficiency goals released today by Maryland PIRG Foundation, the statewide consumer group.
According to the report, Falling Behind on Energy Efficiency: Maryland Risks Missing Its Energy Savings Goals, the absence of a strong regulatory watchdog means that total energy savings are on a trajectory to fall 52 percent of the state’s 2015 goal energy efficiency goal. BGE is on track to reaching 48% of its savings goal.
“The good news is that energy efficiency programs in Maryland has have already delivered tremendous energy savings,” said Maryland PIRG Foundation State Director Johanna Neumann. “The bad news is that the Public Service Commission’s mismanagement has set customers back from reaping even greater benefits.”
The General Assembly passed the EmPOWER Maryland Energy Efficiency Act in 2008, which set a statewide goal of reducing per capita electricity consumption 15% by 2015. Two thirds of those savings must come from utility companies, which are regulated by the Public Service Commission.
The Public Service Commission delayed implementation of EmPOWER Maryland, preventing meaningful savings to consumers early on. Unclear program guidelines and drawn-out approval processes delayed program launch for most utility programs for almost a year after EmPOWER was enacted. Additionally, the agency failed to ensure that utilities launched efficiency programs in a timely manner after receiving PSC approval. Even now, the PSC has not created a system for timely evaluation of utility programs, resulting in planning problems.
The PSC has failed to hold utilities accountable for their electricity savings shortfalls. The PSC has approved utility plans that will not meet EmPOWER targets and has failed to impose consequences on utilities when they do not hit interim goals. The Commission is also restrictive in the types of programs it allows utilities to pursue, leaving many efficiency opportunities untapped.
Ensuring the success of these programs is critical. Energy efficiency can help lower electricity bills and address many problems Maryland faces from high electricity use including pollution and reliability problems. The average Maryland’s household electricity bill increased $400 between 1999 and 2009 because of high energy prices.
Investing in energy efficiency can also boost the economy by putting people to work and keeping money in the local marketplace. Every dollar invested in energy efficiency can yield up to $4 in savings for individual consumers.
"We have proven that cost-effective investments in energy efficiency save Maryland property owners money," said Rebecca Rundle, Vice President of Smart Home Services, LLC. ."Homeowners that have followed our suggestions have saved 20-40 % or more on their energy bills. These programs are helping to grow the green construction sector, which keeps our money here in Baltimore and employs people with well-paying local jobs."
Energy efficiency programs implemented in Maryland in the past two years under the EmPOWER Act have already delivered significant benefits for the state.
- Because of efficiency measures adopted in the past two years by more than 150,000 Marylanders through utility and state-run energy efficiency, consumers will spend $60 million less on electricity every year and as much $900 million over the life of the investments.
- More than 1,000 workers have been through energy efficiency job training, and many local energy efficiency companies are expanding.
Yet, if utility programs achieve the same quarterly savings from 2011 to 2015 as they did in the final quarter of 2010 (the best quarter to date), utilities will achieve only 46 percent of the EmPOWER electricity savings targets in 2015.
Meanwhile, non-utility efforts to meet EmPOWER targets have accomplished relatively little, partly because the General Assembly diverted funds that had been designated for energy efficiency.
In order to maximize the positive effects energy efficiency can have on our economy, the PSC and the state must improve EmPOWER Maryland implementation and support additional efficiency programs.
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