Few ideas in this world are without controversy. Energy, in particular, is prone to disagreement, whether it’s extending a pipeline, fracking for natural gas or developing a wind farm. These issues get all the attention, but it is energy efficiency that stirs the least dissension on both sides of the aisle and should get more glory. It is still the quickest, least expensive and easiest way to keep our air cleaner, our citizens healthier and put more money in our pockets. In good times and in bad times, in a Democratic or Republican administration, saving energy is the one solution we can all agree on.
Polices promoting efficiency have been working in Massachusetts, but success did not happen overnight. Groundbreaking ideas that germinated more than two decades ago have blossomed. The Bay State is now ranked number one in the country for energy efficiency. If we keep on this path, we will reap even more rewards in the future.
Twenty-five years ago this July, a trail blazing and provocative report was issued by the New England Energy Policy Council that paved the way for energy efficiency and predicted its enormous potential. “Power to Spare” analyzed how the use of “negawatts” (a phrase Scientist Amory Lovins had recently coined), could significantly reduce energy costs and environmental damage without hurting economic growth.
The Conservation Law Foundation led a team that included Conservation Services Group, MASSPIRG, the Mass Audubon Society and a host of other groups and included Jon Wellinghoff as a critical consultant in laying out a long term plan for the region. (Wellinghoff is now the chairman of the Federal Energy Regulatory Commission.) We secured support from key utility company allies, such as John Rowe (then with New England Electric System and most recently, CEO of Exelon) and Tom May from Boston Edison (NSTAR).
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.
Our “out of the box” thinking went a step further: We suggested that our plan could actually “bend the curve” by reducing consumption while economic growth went up. It was a dramatic and optimistic proposal to present to a group of business executives. After all, what company wants to sell less of its product? But thanks to their foresight, our unconventional ideas were taken seriously. After months of negotiations and regulatory hearings, this proposal was adopted throughout the region, most aggressively in Massachusetts.
The plan has progressed over the past 25 years through Republican and Democratic administrations and has reduced consumption by one third from projections. In 2008, the most notable expansion of the plan was signed into law by Governor Patrick as the “Green Communities Act,” which is using both energy efficiency and renewable energy strategies. Since then, Massachusetts has pulled out of recession faster than almost every other state in the country. Last year, energy efficiency jobs grew nine percent. Our unemployment rate dropped to six percent in May. Electric costs have gone down. Average rates, for residential consumers, have dropped from fourth highest in the nation to eleventh place. Overall costs for electricity among the state’s residential consumers dropped from 17th highest to 27th highest, putting Massachusetts below the national average in electricity costs.
Using “Power to Spare” as our guide, we delivered what we promised — to lower electricity rates and promote economic growth. For the first time, we “bent the curve.” Electric use is going down, while economic growth is going up. A recent report, published by the Independent System Operator, projects that all the power needs of the region, both capacity and energy, will be met through energy efficiency over the next 15 years, if proposed energy efficiency plans are carried to completion.
Today, the region is no longer hostage to high energy prices. Instead, we are masters of our own future, providing we stay the course that was laid out in 1987. The result will be lower costs for transmission, distribution, energy and capacity charges, as well as a stronger economy and a healthier environment. As Chairman Wellinghoff recently observed, “Using demand resources as the basis for our energy economy is the foundation of a cleaner and more reliable energy future. The plan we laid out should continue to be a model for the country. It was well worth the 25 years in gestation.”
So let’s celebrate this “Silver Anniversary” of energy efficiency — a bipartisan solution for a partisan world, for years to come.
Stephen L. Cowell is chairman and CEO of Conservation Services Group. Douglas I. Foy, president and CEO of Serrafix Corporation, headed the Conservation Law Foundation for 25 years and served as Secretary of Commonwealth Development during the Romney administration.