Cutting clean energy won't lower New England utility bills, advocates say

Yahoo

21-03-2025

A growing chorus of New England state officials — and not just Republicans — is calling for cuts to clean energy programs in an attempt to rein in high electric bills.
These efforts are underway everywhere from Maine, where legislators are trying to repeal incentives for rooftop and community solar, to deep-blue Massachusetts, where regulators recently slashed $500 million from a proposed energy-efficiency plan.
The irony, clean energy advocates say, is that many of the investments under threat contribute relatively little to customers' monthly bills and save everyone money in the long run.
'They see these programs as some sort of addition that's being put on their bill that they don't see the effects of,' said Kyle Murray, director of state program implementation for climate nonprofit Acadia Center. 'Cutting these programs will not really save us money, and it will actually end up costing us more money in the long term.'
Concerns about the cost of energy are not unique to New England, but the region does have the nation's highest electricity prices outside of California and Hawaii. Compounding the problem, this year's cold winter increased gas and electric use, driving recent bills to levels many ratepayers and policymakers say are unsustainable.
Politicians have responded by pointing a finger at renewable energy and energy efficiency efforts. In Connecticut, Republicans are going after the state's public benefits charge, a utility bill fee that funds energy efficiency programs and a state clean energy fund. Vermont's Republican governor, who has supported climate action in the past, is pushing to weaken the state's Global Warming Solutions Act, saying the move is necessary to lower prices for residents. In Rhode Island, a Democratic lawmaker has proposed delaying the state's 100% renewable target by 10 years.
Though each state's circumstances are different, advocates argue that it is almost universally true that these intended quick fixes would cost consumers and the environment in the long-run. Solutions exist, they say, that would preserve the long-term benefits clean energy and energy efficiency offer, while also making power less expensive.
'The work is difficult, but there is not an inherent conflict between clean energy and affordability,' said Larry Chretien, executive director of the Green Energy Consumers Alliance.
Electricity bills are made up of several components. The supply charge pays for the actual power delivered to a customer. Distribution and transmission charges cover the cost of the wires, poles, and other infrastructure needed to deliver that power. Utilities often collect additional fees to fund energy efficiency programs, renewable energy initiatives, assistance for low-income customers, and other work.
While this last segment of the bill has gotten the most attention lately, the other two make up the majority of the monthly cost. In Maine, for example, electricity supply currently accounts for 39% of the average residential energy bill and transmission and distribution for 51%.
Lowering — or even stabilizing — supply and delivery costs can be tricky. But it is precisely the renewable energy and energy efficiency programs being targeted for cuts that can help control those costs, because they lessen the need for expensive grid upgrades and shelter ratepayers from volatile natural gas prices, advocates say.
Utility infrastructure is built to handle far more power than is needed on most days; the systems are scaled to be able to meet the demand of millions of air conditioners running on the hottest days of the year. So lowering the power needed at those peak moments — through energy-efficient heat pumps or rooftop solar panels that generate power right where it's needed — can reduce the cost of keeping the infrastructure up to the challenge.
'Everything is built out to serve a couple days of peak energy each year,' said Vickash Mohanka, director of the Massachusetts chapter of the Sierra Club. 'Everybody's bills are paying for those peaks, and I think we need to see a lot more progress in flattening that consumption.'
Energy efficiency and renewable energy progress can also mean cheaper power supply. Electricity supply in New England is so expensive in large part because of the region's dependence on power plants that run on natural gas, a fuel that is prone to price volatility and which is forecast to get more expensive in coming years. Energy efficiency improvements lower electricity demand, reducing the impact these price fluctuations have on consumers. And replacing this power with renewable energy that gets free fuel from the sun and wind can also reduce and stabilize electric bills.
Cutting support for renewables and efficiency may seem to save money, but the costs just crop up again elsewhere, said Greg Cunningham, vice president of clean energy and climate change for the Conservation Law Foundation.
'It feels like and it looks like we're eliminating a cost or reducing it, but it's like Whac-A-Mole,' he said.
Containing costs for supply, distribution, and transmission is challenging but doable and necessary, advocates say.
Though Massachusetts' cuts to energy efficiency programming disappointed consumer and environmental groups, many praised a plan Gov. Maura Healey announced this month to save residents $5.8 billion in energy costs in coming years. Her proposal includes new discount rates, tighter regulations on competitive electric suppliers, and reviews of every additional fee on utility bills to root out those that are no longer needed.
Boston Mayor Michelle Wu this week announced plans to tackle the city's high energy costs by installing 5,000 heat pumps and weatherizing 10,000 buildings over the next three years in partnership with Mass Save, the state's energy efficiency administrator. The initiative is expected to use $150 million in incentives and create $300 million in savings for Boston residents.
Connecticut legislators are considering proposals to make appliance energy standards more stringent and to allow cities and towns to aggregate their energy demand, negotiate for lower supply prices, and potentially use the savings to develop their own renewable power projects.
Advocates have also suggested that states adopt a performance-based ratemaking structure, in which utilities make money not just for building and repairing infrastructure but for reaching specific goals, such as equity, emissions reductions, or cost control. Several noted that states could also lower the rate of return utilities are allowed to earn on their infrastructure investments.
Clean energy advocates accept that some programs might need to change. Massachusetts, for example, could reconsider the value of some years-old initiatives paid for by ratepayers, Chretien said. In Maine, it makes more sense to review the solar-incentive program known as net energy billing for possible cost-saving tweaks than to completely repeal it, Cunningham said.
What's important, advocates say, is that policymakers avoid scapegoating energy efficiency and renewable energy, and start the hard work of solving the real problems.
'It feels to me like every year there is a public outcry, there's a media outcry, and there's a reaction,' Cunningham said. 'What there is much less of is longer-term planning. We need to do something about this.'