Several years ago, my electric utility did a total energy audit on our duplex.
They recommended we convert our electric water heaters to gas heaters and reinsulate the entire building. They gave me a pre-approved list of contractors, materials and equipment to do the work, and a pre-approved 5-year loan to pay for it.
I signed up.
As a result of the improvements, I saved money on my electric bill and on my gas bill -- more than enough to pay off the loan for the investments, with money to spare.
The electric company saved because they did not have to build more generation. My contractors were happy to get the work.
Everyone won; no one lost. This is essentially how Governor Jim Douglas’ proposed Energy Efficiency Investment Program could work.
An energy bill recently passed by the Vermont Legislature was vetoed by Governor Douglas. The bill has aroused considerable political controversy because it would single out one taxpayer, Vermont Yankee, to pay the state $25 million to create a new, state-run energy efficiency utility. While the Governor said he will move to implement most of the bill’s other provisions -- for efficiency, conservation and alternative energy -- it was the tax, and the ill-defined new government bureaucracy it would spawn, that prompted his veto.
He proposed the Energy Efficiency Investment Program to accomplish the same goals, without the controversial tax or new state bureaucracy. The program would create a pool of private capital to provide $20 million in income-based grants and no-interest or low-interest loans allowing homeowners and small businesses to make their buildings more fuel efficient at no net cost, and save them more money over time.
“This proposal has all of the advantages of the Legislature’s proposal”, he said, “— lower home heating and cooling costs, more jobs, greenhouse gas reductions and leadership by example—but five additional advantages that their proposal cannot claim. It doesn’t require a tax; it would not increase electric rates; it expands the private environmental products and services market in a way that has additional economic multiplier effects; it doesn’t create a big new government bureaucracy, allowing a greater investment in energy efficiency itself; and perhaps most importantly this proposal progressively targets Vermonters who can least afford efficiency measures in their home.”

The idea of paying for efficiency and conservation programs with private-sector dollars is not new.

The International Performance and Verification Protocol (IPMVP) was created by the U.S. Department of Energy in mid-90s to develop standard methodologies to accurately predict and measure the savings produced by specific efficiency measures. It has since evolved into a non-profit organization. The purpose was, for the first time, to give financial institutions and investors the reliable value data they need, expressed in standardized ways, to evaluate efficiency and conservation projects for low-cost loans. When you can predict energy savings for a given efficiency project in a given home or business, the resulting cost savings can go to paying back the loan and finance charges. The protocol has been translated in 10 languages and is used worldwide. IPMVP standards and methodologies should be working for Vermont.

The Legislature is scheduled to return to Montpelier on July 11 to either sustain or override the Governor’s veto.

Meanwhile, the Governor’s action plan to get his new Energy Efficiency Investment program up and running is already underway.

It’s what I call a “value-driven, opportunity-based model” to save energy and make wise energy choices, as opposed to a tax-driven, regulatory model.
It recognizes that you and I are eager to find ways to save energy and reduce our dependence on fossil fuels, but it also offers us options to pay for improvements that are good for us, good for lenders, and good for our planet.

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