Senator John Kerry's state, Massachusetts, has just enacted a plan to spend more than twice as much per capita as famously energy-conservationist California on energy-saving initiatives. California will still spend a lot more, because it's so much bigger, but Massachusetts will outspend it per person, the state Office of Energy and Environmental Affairs said.
Energy and Environmental Affairs Secretary Ian Bowles called it "making the leap from the rotary phone to the cell phone -- and fundamentally changing how energy is delivered to consumers in the commonwealth," our correspondent Lisa Wood reports.
Both California and Massachusetts offer utilities full decoupling of profits from sales, so the utilities don't resist too much. Many states resist that, in part because industrial consumers really don't like it and many consumer advocates don't either. It does go against the basic capitalist grain (sell-more, make-more.)
Where some utility executives have called efficiency the "fifth fuel," Massachusetts is identifying it as the "first fuel." The first-fuel strategy has also been adopted in Connecticut and Rhode Island.
The money for the efficiency programs is to come from existing utility "system benefit charges," Regional Greenhouse Gas Initiative revenue, forward capacity market revenue and private sector spending. And state utility regulators will consider increasing utility distribution charges. If RGGI is replaced by a federal carbon cap-and-trade program, presumably some revenue could come from that.
At the same time, as the Senate wrestles a cap-and-trade program to the ground, efficiency proponents are trying to get Senator Barbara Boxer's Environment and Public Works Committee to include in it some much more ambitious efficiency measures than the House-passed bill has. One provision that the American Council for an Energy-Efficient Economy has recommended is awarding of one-third of the utility sector's carbon allowances to energy efficiency purposes.
There are no signals from Capitol Hill yet on this one, but it could be very tough to get it past state regulators and utilities in many states. Then again ... Kerry is from Massachusetts and Boxer is from California.
Then there's Commerce Secretary Gary Locke's remarks at the White House the other day, where he made an unsolicited pitch for decoupling. "Time-of-use meters and decoupling," Locke told the 100 "clean-energy" executives gathered in support of the climate bill. "This is going to require action by the states and each of the public utility commissions. Very, very controversial. But it is a necessary ingredient in terms of our national strategy to reduce the use of electricity and become more energy efficient and reduce our carbon footprint."
Talk about stirring up a hornet's nest of state regulators. Locke's remarks may not signal another run at mandating decoupling nationally; maybe he was simply using his bully pulpit. But the coincidences put one on the qui vive.
