The data don’t lie. In line with the trends we’ve been warning about for years, PSNH’s coal-fired business model is in free fall:

Residential and small business customers continue to flee PSNH’s dirty, increasingly expensive energy service.

Source: NHPUC data

• Over the past year the number of residential energy customers in New Hampshire who purchased energy service from a supplier that is not PSNH jumped to around 30,000 households in December of 2012 (compared to around 2,000 households in December of 2011).
• That figure doesn’t include the veritable flood of customers who abandoned PSNH’s energy service at the end of 2012 when word got out about PSNH’s 34% rate increase (ENH reported signing up 1,700 customers on December 31 alone for service starting January 1). The stampede of residential and small business customers away from PSNH’s energy service shows no signs of slowing down.

PSNH’s coal plants are becoming even less competitive and will operate even less in 2013 than in 2012.

Source: ISO-NE, EPA, and PSNH data

• We noted before that PSNH’s coal unit capacity factors have taken a nosedive over the past five years, and they are projected to keep falling on an annual basis in 2013 (see chart below).
• A power plant’s capacity factor reflects the amount of power the plant generated compared to the amount of power it could have generated if used to its full potential; when that number is low, it means it was a better economic choice for the plant’s owner to keep the plant idle most of the time. While other coal plants throughout New England are also running at low capacity, PSNH is the only utility in the region that can force ratepayers to bear its fixed costs plus a hefty guaranteed profit, even when its plants don’t generate power.

The Bottom Line:

Even as many customers are taking advantage of cleaner, cheaper alternatives, PSNH’s dirty and costly power plants are a heavy – and growing – burden for the majority of New Hampshire ratepayers and for New Hampshire’s economy. In a future post, I’ll discuss how the state agency tasked with protecting ratepayers from unreasonable rates is handling PSNH’s implosion (spoiler: not well) and what CLF is doing about it (another spoiler: fighting to protect New Hampshire ratepayers and the environment).

The front page of the Boston Globe last week presented a powerful, timely and cautionary tale about  two liquefied natural gas terminals  that sit off the coast of Gloucester and Salem. Those terminals are the tangible reminder of a massive push undertaken by energy industry insiders to build such terminals.  The intensity of that push, which began to build around 2002, becoming most intense during the 2004  to 2007 period and then petering out in the years since, contrasts sharply with the reality described in the Globe article: that those two offshore terminals have sat idle for the last two years.

That push to build LNG import facilities, which was such a mania in energy industry circles circa 2005, yielded some crazy ideas, like the proposal to hollow out a Boston Harbor Island and the infamous Weavers Cove project in Fall River. The offshore terminals, while the least bad of those proposals, reflected short sighted thinking detached from careful regional planning.  Both in terms of the need for these facilities and design decisions like regulators not forcing the projects to share one pipeline to shore instead of (as they did) twice disturbing the marine environment to build two duplicative pieces of infrastructure.

Today, the hue and cry is no longer about LNG, instead we are bombarded with impassioned demands for more natural gas pipelines as well as more measured discussions of the need for “smart expansions”. Will we have the collective intelligence to be smarter and more careful this time? Will the permitting process force consideration, as the law requires, of alternatives that make better use of existing infrastructure and pose less risk to the environment and the wallets of customers? Fixing natural gas leaks and becoming much more efficient in our use of gas is a key “supply strategy” that needs to be on the table and fully examined before committing to new pipelines.

And as it so often is, the overarching issue here is protecting future generations by addressing the climate issue. Science and prudent energy analysis, makes it clear that we need to put ourselves on a trajectory to end the burning of fossil fuels, including natural gas by the middle of this century. Given this reality every proposal to build massive and long-lived facilities to import more of those fuels must be viewed with great skepticism.

Vermont is poised to take a big bite out of the high cost and pollution of heating our homes and businesses. Slashing a full one-quarter of both lies within our reach.

Over the past decade, the cost Vermonters pay for staying warm has more than doubled. This strains our pocketbooks, our environment, our health and our security. Watching our dollars go up in smoke drains our economy.

What can we do? Building on the enormous success of our electric efficiency efforts, we can improve the heating efficiency of our homes and businesses in a similar manner. While some efforts have begun, most of the savings opportunity remains on the table. Throughout Vermont, heating efficiency has saved the average homeowner about $1,000 a year.  (See a recent editorial here).

A new report of Vermont’s Thermal Efficiency Task Force provides a strong roadmap for jumpstarting heating efficiency and renewable heat for our homes and businesses. The Task Force recommendations show how Vermont can stretch its heating dollars farther and provide over $1.4 billion in direct savings. That’s $1.4 billion that is not going up in smoke, literally leaking out of our homes and businesses.

Affordable heat means lowering bills. Every year Vermont struggles to fund low income heating assistance (LIHEAP). With affordable heat, Vermont can reduce the funds needed and can use LIHEAP dollars to help more Vermonters. Cutting fuel use by one-quarter means that for every four homes that are weatherized, help is available for one additional family.

Affordable heat reduces pollution. Every gallon of fossil fuel we don’t burn means less pollution. Whether we are adding solar to our roofs or insulating/weatherizing our homes we leave a lasting positive legacy for our children by taking seriously our responsibility to tackle climate change and reduce pollution.

The long and short of it is that Vermont — and Vermonters — can’t afford to keep wasting energy, wasting money and wasting clean air. Vermont’s commitment to affordable heat is our ticket to more comfortable homes and businesses, and a thriving and affordable clean energy economy.

photo credit: TimothyJ/flickr

Today, the New Hampshire Public Utilities Commission takes up PSNH’s request to charge its customers 9.54 cents per kilowatt hour for electric energy service in 2013. In a op-ed published this week, long-time CLF friends Ken Colburn and Rick Russman explain why New Hampshire’s crisis of escalating PSNH rates – and how New Hampshire policymakers resolve it – may be the defining economic issue for New Hampshire’s new class of leaders next year.

With PSNH’s rates to be by far the highest in the state and almost three cents higher than those of its sister utility NSTAR in Massachusetts, New Hampshire is dealing with an untenable situation: small businesses and residents are subsidizing PSNH’s above-market costs to operate and maintain dirty, inefficient, and uneconomic coal plants, to the tune of $128 million.* The average residential customer will pay $212 extra in 2013 for the dirtiest energy in the region.

To put $128 million in perspective, in 2011 New Hampshire invested less than a seventh of that amount, a mere $17.6 million, in electric energy efficiency programs – an energy solution that is lowering rates, reducing pollution, avoiding expensive new transmission projects, and creating jobs.

New Hampshire energy users are in effect giving this money away to keep alive New Hampshire’s biggest sources of toxic and greenhouse gas pollution (even though PSNH projects they will only operate at around 25% of their capacity in 2013) and to pay dividends to PSNH’s owner, New England mega-utility Northeast Utilities. And the situation will only get worse with time as PSNH customers join the thousands who have already picked an alternative energy supplier, leaving a shrinking base of customers to bear the heavy costs of PSNH’s coal fleet. (If you’re still a PSNH customer, you should definitely make the switch before the new year begins and PSNH’s new rates kick in.)

The blame for this economic and environmental travesty lies squarely with PSNH’s self-serving failure to plan for the future.

Yet PSNH is already trying to make the case that it needs a “fix” from the New Hampshire legislature to protect its coal plants, its 10% profit margin guarantee, and its protection from cleaner, cheaper competition. What’s even more bizarre – and indicative of its refusal to approach these issues honestly – is that PSNH is pinning its skyrocketing rates on the very factors that have reduced electric rates for everyone else in New England – namely, investments in energy efficiency and environmental protection and the increasing use of natural gas and competitive renewable energy sources. PSNH’s foolhardy but lucrative investments in its outdated power plants – for which it fought tooth and nail over the last decade – are the culprit, not environmental requirements that apply to all power plants in New Hampshire and across the region.

Please take a moment to read the op-ed and share widely with friends, neighbors, and especially your new representatives in Concord. For the good of the state’s economic and environmental health, they need to hear from you!

*  The math: PSNH customers will pay a 2.85 cent “premium” for every kilowatt hour over and above PSNH affiliate NSTAR’s market-based rates, and PSNH is projecting that it will sell more than 4 billion kilowatt hours of power to its remaining customers in 2013. The average household in New Hampshire uses 7,428 kilowatt hours per year.

PSNH's Merrimack Station

There comes a time when you just have to say that enough is enough.

That is where we are in the world of climate advocacy.

As Bill McKibben laid out in his essay on Global Warming’s Terrifying New Math we can no longer ignore the deep and fundamental need for action to save our climate, our families, our communities and our environment from catastrophe – and that there are powerful, entrenched and well-financed forces who will do just about anything to thwart our efforts.

The primary tools that CLF employs in the fight for climate protection are law, science and economics.  We fight for a thriving New England in court and work with smart business people to build markets for renewable energy like wind farms and to foster energy efficiency, the clean resource all around us.  And we are fighting to ensure that the governments of the region live up to their pledges to create great places where there is more walking and less driving and more of the remaining cars pollute less. We know that this work is essential if we are going to win the war to save our climate.

Courtesy 350.org

But sometimes we need to do more. One thing we need to do, in addition to our calm and civil lawyerly work, is to get angry and push back in the right ways at the right times and in the right places.  This is the spirit behind the Cape Wind Now! campaign that CLF and its partners have launched to call out the fossil fuel powered interests fighting against renewable energy. It is also the driving force behind the Do The Math tour and campaign led by 350.0rg.

And now it is coming to a concert hall near you. This event is a unique blend of “multimedia lecture . . . organizing rally [and] live musical performance” that is not to be missed. CLF has helped to arrange for this important effort to land at the historic Orpheum Theater in Boston on November 15 – tickets are still available!

Before coming the Boston the tour stops in Portland Maine on November 13 and then off on a cross-country odyssey from New York to Los Angeles, to Seattle and then Colorado and many stops in between and on the way.

Back in the 1970′s the satirical and surreal Firesign Theater proclaimed that “Everything You Know is Wrong.” At the intersection of energy and economics, that absurdist assertion is a increasingly obvious reality that advocates, policy makers and industry must embrace.

Throughout history, there are moments when prior assumptions and core beliefs have simply stopped being accurate. Great examples include people discovering that the Earth is round, microscopic organisms cause disease, and that various substances (tobacco, asbestos, particles produced by diesel engines) are harmful. To paraphrase what John Maynard Keynes may or may not have said, when confronted with changed facts the intelligent person changes their perspective, assumptions and opinions accordingly.

In the wonky, but critically important, world of energy systems no assumption has been more ingrained than this: “over the long term, energy demand grows over time — and that the only time it stays steady or declines is when the economy is in crisis and not growing.” But this “truth” that “everyone knows” is increasingly obviously wrong: we can grow while using less. Indeed, sometimes we can do better and grow because we’re using less energy.

The good folks at the Andersen window factory in Minnesota agree with this realization that the old conventional wisdom is wrong: a recent newspaper column documenting the experience of Andersen Windows described how even though “Andersen is making and selling more of its products . . . it’s using less energy. They’ve done it by changing light bulbs, upgrading equipment, and educating employees about energy conservation.”

Here in New England we have a strong record of planning and implementing energy efficiency and it is paying off in the same way. That is the clear assessment of the sharp-penciled engineers at ISO New England (the folks who operate and plan our regional electricity system), as presented in the graph below from the final report of a working group that CLF participated in. It may seem like heiroglyphs, but let me explain.

In the graph below, ISO-NE (as it is know) presents three energy futures: the blue line is the traditional forecast of expected growth in energy demand tracking expected economic expansion, the “load growth” that traditional models expect when the economic grows. This is then adjusted in the red line to reflect energy efficiency and other demand resources that have been recognized (and purchased) in the regional  electricity markets, reflecting the past wise decision to allow such resources to participate in those markets. Finally, the forecast is then further adjusted in the black line to reflect the plans and programs for efficiency and alternative energy being undertaken by the New England states.

Credit: ISO-NE

What you see in the flat, black line is economic growth without growing energy demand. You see the kind of growth being undertaken at Andersen scaled to an entire region.

In a quiet way this is a revolution — a clear recognition that new wind turbines, solar panels, or gas fired power plants will replace existing old and dirty oil and coal fired power plants as they retire, not to meet rising demand.  This is a stunning reality and success: the increasingly successful efforts to foster efficiency have ended the upward march of energy demand, allowing our economy to grow without increasing electricity demand.

Let us now hope that, as the facts change, people and organizations change their beliefs, perspectives and plans accordingly.  Building and buying energy infrastructure must continue – but it can no longer assume rising demand. Our investments must be smart, targeted and build towards a cleaner, and thriving, future where we have squarely and honestly addressed our climate crisis and the challenges of economic growth. Getting this right is one of the most positive aspects of what Bill McKibben has described as the “terrifying new math” that global warming mandates – this is a real life example of where we are headed in the right direction, cutting the link between increased prosperity and increased energy use and emissions.

My wife and I just moved into a new (to us) apartment in Cambridge and, as is often the case, were faced with a hodge-podge of leftover light bulbs in the fixtures – some too dim, some too bright and glaring, some dead. All were incandescents. New bulbs went on my shopping list.

Much to my surprise, the nearby specialty food store (a high-priced place, frankly) was selling an entire pallet of compact fluorescents (CFLs), for $.99 each! All brightness levels, floods and regular, soft light and cool tones, etc. No rebates, no special incentives, no mail-in coupons, nothing. Just a rock-bottom price. How could this be?

I bought a few and found they work just fine. However, they are the kind that have to “warm up” for 10-15 seconds before reaching full brightness. Remember those?  Almost a thing of the past. Hence the low price.

This is a significant moment. We’ve been doing electric efficiency in a serious way in New England for 25 years – since CLF and others published “Power to Spare” in 1987, which predicted that we could cancel out all increases in electric demand from then until 2005 if we made basic investments in electric efficiency. Like better light bulbs. We are now many generations of light bulbs down the road (with LEDs making their presence, not to mention all sorts of CFLs). And ISO-NE is actually predicting flat growth in demand until 2021, due in part to our collective investments in electric efficiency.

But when it comes to using natural gas more efficiently, we’re still in the dark ages, and we’re faced with potentially huge growth in the use of natural gas and the pipeline infrastructure to transport it around. It’s time to apply the lessons we’ve learned in electricity to the natural gas side of the energy equation. This will save us all money and keep the environmental impacts of expanding natural gas use to the minimum reasonably necessary.

The money-saving is obvious. Just as electricity-sipping appliances may cost more in the short run but you save money in the long run, investing in more efficient gas hot water heaters and ranges, HVAC systems, and even swimming pool heating systems will save several times the money invested, over time, by using less gas.

And using less gas is obviously better than using more – reducing fracking/extraction impacts, lowering impacts from new pipeline capacity, and of course reducing GHG emissions.  A recent CLF analysis, relying on a 2009 report on the potential for natural gas efficiency commissioned by the Massachusetts state government, determined that an aggressive but reasonable level investment in cost-effective residential natural gas efficiency measures could reduce residential gas use by 30%, thereby freeing up pipeline capacity.  This also helps ensure gas will be available to heat homes in New England’s (still) cold winter, especially low-income homes, and avert the prospect of conflict between the use of gas to make electricity and using gas to keep our homes and families warm.

So, more gas? Only if all cost-effective efficiencies are achieved. And we have a long way to go get there.

And then is it OK to use more gas? Only if we use natural gas as a means to make a true transition to an electric system based much more heavily on renewables. Starting now. Natural gas should not be viewed as a “bridge fuel,” it’s a “niche fuel.” In 20 or 30 years, its niche has to be to backstop and firm up renewables, which will then be the base and majority of our electricity supply. Its niche now, to be sure, is much larger than that, as it supplies the bulk of New England’s electricity generation.

It’s cleaner than coal and oil, but it is a fossil fuel. Burning it emits carbon and that cooks the planet (and extracting it has other serious impacts). We cannot build our long-term future on a plan to extract and burn more natural gas. And if we fail to achieve efficiencies now, and build big pipeline capacity instead, we’ll be locking ourselves into that sort of future, or at least making it very, very likely.

That would be wrong-headed, and a waste. We need to get into the efficiency habit with gas as deeply as we have with electricity – so that we’ll use less of it going forward, for generations to come.

How does a community balance the potential costs of siting clean energy projects with the economic benefits they provide? What are the local economic realities of hosting distributed clean energy generation facilities and energy efficiency projects in a community? CLF Ventures explored these questions and others in a recent webinar we co-sponsored with the Massachusetts Clean Energy Center (MassCEC) and the Massachusetts Municipal Association’s (MMA) Massachusetts Municipal Energy Group.

The first in a three-part series CLF Ventures is co-hosting this summer and fall, the August 15 webinar featured a presentation by James McGrath, Park and Open Space Program Manager for Pittsfield, a Massachusetts Green Community that has hosted several large-scale solar projects and implemented robust, community-wide energy efficiency programs. He spoke about how to initiate clean energy projects, the advantages of clean energy at the local level, and strategies to manage the most common roadblocks in implementation.

The webinar series is targeted to municipal officials and volunteers who are already engaged in clean energy and energy efficiency issues or interested in learning more about how to site and finance clean energy facilities and programs in their communities. Building on themes explored in CLF Ventures’ earlier work with MassCEC on siting land-based wind energy projects, the webinar series gives participants an opportunity to learn first-hand from municipal leaders and technical experts as they share their experiences implementing clean energy and energy efficiency projects across Massachusetts.

Upcoming webinars on September 12 and October 24 will explore how to engage the public when siting solar and wind energy projects and the ins and outs of financing clean energy through power purchase agreements. For more information or to register for upcoming webinars, email liz.carver@clf.org.

photo courtesy of Department of Energy @ flickr.com

In the past 25 years, our lives have become increasingly “plugged in.” We have an ever-increasing number of devices in our lives, our homes, and our offices that use electricity. What is amazing is that with our foresight and work during this same time period, our region now uses energy efficiently more than ever – reducing pollution, saving money, growing jobs, and cutting through partisan politics to succeed.

That’s a regional legacy to be proud of and one highlighted in the recent op-ed co-authored by former CLF President Douglas Foy. 

With the publication of “Power to Spare”  in 1987, CLF and others set forth the effective “out of the box” thinking that allows for reduced energy consumption while increasing economic growth. As the op-ed recounts:

“Our proposition was unique: To shift incentives that encouraged utilities to sell more power, to a new model that would reward them for promoting conservation. By putting efficiency on a level playing field with coal, gas, oil and nuclear, we would be able to lower demand, cut consumption, decrease total use and reduce pollution. We promised to boost the local economy at the same time through the job intensive investments in efficiency and by reaping the economic benefits of lower energy costs.”

And it’s been a success that continues.

Massachusetts passed the “Green Communities Act” and has grown energy efficiency jobs and lowered electric costs, with average rates for residential consumers dropping from the 4^th highest to 11^th highest place.

Rhode Island recently approved an aggressive efficiency budget and is expected to meet more than 100% of its anticipated load growth with energy efficiency, not through additional polluting electricity generation.

In New Hampshire, CLF Ventures recently managed a statewide project helping communities throughout the state identify ways to reduce energy consumption and costs through greater efficiency.

Vermont has its own efficiency utility that works statewide providing one-stop-shopping for businesses and residents to reduce costs and energy use with a budget designed to achieve over 2% annual savings.

Maine now has an independent energy efficiency authority which, in 2011, obtained state-wide energy savings equivalent to the output of a 110MW power plant by obtaining $3 of savings for every $1 invested by the program.

The transformation begun 25 years ago – that we are all a part of – continues. It provides a model for the country, and a model for further action to tackle climate change.