Position: FAVORABLE
Maryland PIRG and AARP
respectfully request a favorable report of SB 268, the Maryland Strategic
Energy Investment Fund.
We also encourage the committee to
consider amendments to add cost-effectiveness language to the criteria the
Maryland Energy Administration (MEA) will use to decide which technology to
prioritize. (9-20B—5(F)(1)(i). By prioritizing the most cost-effective
methods, MEA will be able to maximize energy savings for consumers.
SB 268 is intricately connected to
SB 205. If both bills are passed and the goals achieved, Maryland consumers will save an estimated
$1.9 billion by 2015 and $4.1 billion by 2020 in avoided electricity costs. An
additional $346 to $725 million in savings will be realized by reduced demand
which avoids the most expensive peak demand costs.
SB 268 uses money from the auction
of carbon allowances under the Regional Greenhouse Gas Initiative, which Maryland joined as part
of the 2006 Healthy Air Act, to finance MEA’s involvement in clean energy
programs. Under the bill MEA would be authorized to use RGGI funds to invest in
energy efficiency and conservation measures and programs, renewable and clean
energy resources, climate change research, targeted programs to reduce
electricity consumption by customers in the low-moderate income residential
sector, and to provide grants, loans and other assistance and investments in
accordance with the act.
While we support all of the above
activities, with limited resources the priority funding should go to the most
cost-effective programs first with consideration for opportunities that are
best captured now, such as green building design of new construction. Of the
above technologies, energy efficiency promises to be the most cost-effective
option.
Why Should MEA assume the role
of administering these programs and measures?
State agencies effectively administer a set of energy
efficiency and clean energy programs in other states. Because it is our belief
that energy efficiency is the most cost-effective of the areas that MEA could
pursue and we hope that the bulk of their funding goes towards energy
efficiency, we will limit our written testimony to why it makes sense for a
state agency to be in the energy-efficiency business in addition to the utility
companies.
Utilities can run effective energy efficiency programs, but
programs with longer pay-back times may not make the short-list for utilities
to administer. With strong accountability and built-in measurement and
verification programs, state agencies can operate these programs very effectively.
The programs administered by MEA should work in tandem with
utility-administered programs and offer programs state-wide.
MEA should work with the utilities to offer a single portal
or program contact to access a full range of applicable program
services. Across the country, there is an increasing emphasis on statewide
approaches and programs, even if not delivered by the same entity to all
customers. For example, the utilities in the states of California,
Connecticut, Iowa,
and Massachusetts
offer many programs based on a common platform of services.
For example, through public education and targeted rebates,
New York
encourages homeowners to replace outdated and inefficient appliances with
energy-saving models. Participating families save an average of $600 per year
in energy costs.
Pennsylvania helps low-income customers reduce their energy bills
through free home energy audits and weatherization. In 2004, the program saved
the average low-income family about $300 per year, or 2 percent of their annual
income.
New Jersey offers rebates to homeowners who purchase efficient
furnaces or air conditioners. Tens of thousands of New Jersey households have participated and
now save an average of $63 per year on heating and cooling.
Vermont educates home-builders about energy-efficient design and
building techniques, increasing the quality of home construction. In 2006, 22
percent of all new homes in the state met Energy Star performance standards,
with energy bills at least 30 percent lower than a typical home.
On the commercial side, Connecticut offers a program that helps
businesses to replace outdated equipment with energy-efficient models—covering
the entire additional cost of efficient equipment over standard versions.
Maryland can and should establish similar programs to lower gas and
electric bills for residential and small commercial customers. SB 268 gives MEA
the resources to do that and more to help more Maryland towards a more efficient and
cleaner energy future.
We respectfully request a
favorable report, with consideration that MEA should implement the most
cost-effective programs first.
