The PUC’s Consumer Advocate and the non-profit Energy Coordinating Agency both told the House Environmental Resources and Energy Committee this week that energy conservation is a cost-effective way to help solve the state’s energy problems, but less than 11 percent of the state’s spending supports such programs.

Sonny Popowsky, the Consumer Advocate at the Public Utility Commission, said “the cheapest kilowatt hour or cubic foot of natural gas is always the one that is not used.”

Popowsky said Pennsylvania electricity users face significant price increases between now and 2010 when electric rate caps imposed as part of deregulation come off.

If the PUC does not take steps now to mitigate that impact by adopting rules that stagger bringing electric generation to the market and not relying on the spot market to set prices, electricity rates could increase by over 50 percent.

He pointed to a recent experience with the Pike County Light and Power Company where electricity rates increased 129 percent and electric companies in Delaware and New Jersey saw rates go up 59 percent and 55 percent respectively.

Popowsky said the price of natural gas is driving the cost of electricity because the clean burning fuel has been used to power more and more electric generation capacity.

He said more needed to be done to reduce the demand for electricity, like setting energy efficiency standards for appliances, charging different rates for electricity at different times of the day or week when generation costs are less using advanced metering systems and under the Alternative Portfolio Standards Program using energy efficiency and demand side management as a direct alternative to electric generation.

Liz Robinson, Executive Director of the Energy Coordinating Agency in Philadelphia, told the Committee, “Pennsylvania is allocating almost 90 percent of all current funding to treat the symptoms of this problem: high bills, and only 11 percent in ways that can actually reduce the size of the problem.”

“There simply is not enough money to span the affordability gap (in energy costs) with cash,” said Robinson. “In fact, the longer we try to do so, the more time and money we will waste.”

Energy costs are expected to go up by at least 6 percent a year, which Robinson said means over the next 20 years heating costs for low income families will increase to $8,000 a year if demand is not reduced.

Robinson said conservation is the cheapest and cleanest form of energy that achieves four important goals—

1. Conservation immediately and permanently reduces the amount of money required to meet energy needs;
2. Conservation reduces upward pressure on prices – the American Council for an Energy Efficient Economy estimates if energy consumption is reduced by 5 percent, prices can be lowered by 20 percent;
3. Conservation contributes to the local economy roughly eight times the equivalent investment in the purchase of natural gas or fuel oil- if households statewide reduce home energy consumption by 10 percent, it would produce an investment of over $572 million in Pennsylvania’s economy; and
4. Conservation cleans our air by reducing emissions of pollutants and gases that contribute to global warming.

Robinson recommended the state develop a Plan for a Sustainable Energy Future for Pennsylvania that would lay out a detailed roadmap for increasing the energy efficiency of all sectors – residential, commercial and industrial.

She also recommended that all new affordable housing and publicly funded buildings meet or exceed the EPA Energy Star building standards and increase funding for weatherization and energy conservation programs, including a state Energy Bond Program to fund energy conservation improvements for small businesses and nonprofit organizations statewide.

Michael Love, President of the Energy Association of Pennsylvania, said there is much work to do to improve the aging energy distribution infrastructure in the state and the need to improve the recovery of costs associated with infrastructure improvements.

Love also supported increased funding for the Low Income Energy Assistance Programs and pointed to the growing problem of theft of energy services as a result of unpaid bills or illegal hookups.

Committee chairman Rep. Bill Adolph (R-Delaware) said his Committee will now be going through the testimony provided at this and the five previous hearings on energy policy to develop legislative proposals for consideration by the House.

NewsClip: Volunteer Project Focuses on Energy Efficiency

2/17/2006