Advanced Energy Perspectives

STATE: Delaware Passes SB 150, Paving the Way for More Energy Efficiency

Posted by Tom Plant

Jul 24, 2014 12:25:00 PM

    

In 2007, Delaware established a Sustainable Energy Utility (SEU). The idea was to create an entity that would emulate the great success of Vermont’s efficiency utility, vaulting Delaware into a leading position in energy efficiency. Unfortunately, Delaware has continued to lag behind its neighbors – it was rated 22nd in the country in ACEEE’s most recent scorecard.

delaware-ee-spending

Per capita investments in energy efficiency in the Northeast: gas and electric programs across sectors [1]

 

SB 150, which recently passed the Delaware legislature, promises to change that by addressing the shortcomings of the SEU and allowing more people to initiate efficiency programs.  

 

Delaware’s SEU failed to meet expectations for two reasons. First it was funded through a combination of Recovery Act funding, which has expired, and RGGI funds, which are in decline.

 

Second, the SEU was saddled with a very restrictive management structure that impeded the opportunity to partner with the state’s utilities and state programs.

 

SB 150, as amended, addresses these issues. The legislation opens an avenue for the state’s utility commission to establish ratepayer-funded investments in energy efficiency that will enable all cost-effective efficiency measures to be implemented.

 

Experience has shown that ratepayer financed investments not only can deliver sufficient funding, but are also more directly relevant to the investment being made. An investment in energy efficiency lowers the overall ratepayer commitment and reduces the necessary ratepayer obligation to increasing generation over time – so the investments are offset by the benefits.

 

Moreover, the legislation includes the recommendations of the state’s oversight board for the SEU and eliminated the roadblocks to effective implementation of energy efficiency programs and collaboration with the states utilities.

 

However, this legislation may not have come to fruition without the engagement of AEE member companies. With only one week to go in Delaware’s legislative session, a bill to fix the state’s energy efficiency standard was still stuck in committee. Six AEE member companies – EnerNOC, Johnson Controls, Next Step Living, Opower, Philips North America, and Veolia North America – joined 11 other businesses and organizations, such as Northeast Energy Efficiency Partnerships, in signing a letter to legislative leaders urging action. They emphasized the economic benefits of such legislation, noting that with a robust efficiency program, Delaware could achieve a 26% reduction in energy consumption by 2025.

 

As Harry Godfrey, Manager of National Policy and Partnerships at OPower noted, “This legislation should unleash substantial investments in efficiency throughout the First State, creating jobs and savings ratepayers money. Utility leaders have expressed an interest in running behavioral efficiency programs, akin to those run by their neighbors in Maryland and Pennsylvania. However, to date, the policy environment has proven to be more of a hindrance than a help to implementation of these cost-effective programs.”

 

This coordinated business pressure, coupled with the leadership of Governor Markell, members of his Administration and state legislators, dislodged this legislation during the final hours of Delaware’s legislative session. In the coming weeks, the Governor is expected to sign SB 150 legislation, marking a new chapter for energy efficiency in Delaware.

 

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[1] Data collected by Northeast Energy Efficiency Partnerships. More resources here.

Topics: State Policy Update

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