Utilities’ energy-efficiency program proposals lacking, OPC tells State regulators
BALTIMORE – The Maryland utilities’ three-year energy-efficiency program plans overall lack innovation and contain serious deficiencies, the Office of People’s Counsel told the Public Service Commission in a report filed this week. The utilities filed the plans to comply with a Commission order directing them to “develop and present ambitious, creative, and forward-thinking plans.” OPC’s report concludes that the plans fall far short of the Commission’s order.
“We are at a critical juncture for the future of energy-efficiency programs in Maryland,” People’s Counsel David S. Lapp said. “Customers are seeing their energy bills rise at the same time the State is implementing new climate goals. We need to get the most value from every dollar customers spend on energy efficiency, but we are mostly seeing status quo programs the utilities have been running for years.”
Among other problems, OPC cites the utilities’ failure to correct longtime deficiencies in HVAC programs and their failure to propose new programs to better manage peak electric demand—which prevent the need for costly system upgrades.
The utilities’ HVAC and heat pump water heater programs are not even reaching one percent of sales of space and water heating equipment in Maryland. Top-performing states have programs that result in 60 percent of water heaters being heat pump water heaters, analysis shows. Recommendations in the State’s building energy transition plan call for 50 percent of equipment sales to be heat pumps by 2025. To remedy the deficiencies, OPC recommends that the Commission shift program responsibility from the utilities to a single statewide implementer. OPC also said that third-party statewide administration would be appropriate for electrification programs.
OPC also criticized gas utility plans for continuing with programs to incentivize customers to install new gas appliances even though Maryland must move away from fossil fuels to mitigate climate challenges and gas delivery rates continue to increase.
“Providing incentives for gas appliances that will be used for 15 or more years tells customers that those purchases benefit both them and the State of Maryland,” Lapp said. “But they do not. Customers can save in the short- and long-term by not buying gas appliances—avoiding the fast-rising costs of the gas distribution system. Maryland cannot meet its climate goals by encouraging customers to continue using gas.”
The ratepayer-funded energy-efficiency programs are carried out under the rubric of EmPOWER—a statewide program overseen by the Commission. Ratepayers paid about $325 million in 2022 for EmPOWER programs. EmPOWER includes programs such as home energy audits, appliance rebates and recycling, behavioral programs, home retrofits, HVAC installation and upgrades, new residential construction, demand response, and limited income programs. These programs provide a variety of services and discounts to customers of participating utilities and lead to energy bill savings for Maryland utility customers. The programs are administered by six utilities and the Department of Housing and Community Development (“DHCD”). Beyond what customers pay in rates, eligible residential customers incur no additional charges when they participate in EmPOWER programs.
OPC’s 89-page report comprehensively evaluates utility proposals across all EmPOWER program areas and offers numerous recommendations for the Commission’s consideration.
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers of electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies and the courts.
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