Taking Big Steps Towards Energy Efficiency for All in Maryland

This weekend, my Memorial Day observance will include toasting a historic two weeks of regulatory activity in favor of low-income utility customers in Maryland, particularly those most underserved of the bunch: Renters.

On May 15th, in a 191-page order (pdf here), the Maryland Public Service Commission (PSC) ruled 3-2 in favor of a merger of Exelon and Pepco, a move that will put Pepco under the same corporate roof as BGE. This is a big deal, a multibillion-dollar deal with two million of us in Pepco’s service area a step closer to being Exelon customers.

Regardless of how you feel about the merger, there’s cause for celebration in the wake of this step by the PSC. Thanks in part to spirited intervention of several NRDC allies (including the National Housing Trust or NHT and the National Consumer Law Center or NCLC), the PSC’s order includes a number of conditions aimed at boosting energy efficiency and clean energy, with specific investments in Maryland’s affordable multifamily housing stock.

Specifically, as enumerated in this handy fact sheet, laudable conditions include:

• $57 million overall in energy efficiency and clean energy;
• a minimum $4.2 million for affordable multifamily housing;
• a $14.4 million Green Sustainability fund which can invest in improvements to multifamily housing in Montgomery and Prince George’s Counties (where I’m typing this) via a variety of financial instruments including low-interest loans and partial loan guarantees; and
• Enhanced energy-efficiency plans from the three utilities that Exelon would manage if the merger goes through (Pepco, BGE and Delmarva), to be filed by next March.

Just a few days before the merger order, the PSC heard two days of testimony from utilities and state agencies about the most recent data on EmPOWER’s previous three year cycle (covering 2014). First, on May 11th, regulators heard the Maryland Energy Administration’s (MEA)’s Lauren Urbanek paint the big picture, and it’s pretty. Thanks to utility and state programs, and to mild weather, in 2014 Maryland had the lowest per capita electricity consumption since 1990. In absolute terms, our consumption was down to the same level as 2001. She summed up that “cumulatively, utilities are 80 percent of the way to the 2015 goal” set at the beginning of EmPOWER 7 years ago - 15% reduction in energy use by 2015. I remember that MEA and several others were bearish on this just last year.

David Hill of the Vermont Energy Investment Corporation (VEIC), retained by the Office of People’s Counsel, echoed MEA by calling 2014 the best year yet for the program and noting that the state is approaching a two-percent-per-year rate of progress in energy efficiency, a steady clip that would put Maryland in the top tier of state energy efficiency leaders.

Mr. Hill added some sobering notes to his tune, however. Maryland is achieving this in spite of lower investment levels than most other states, and the utility plans for 2015-2017 aren’t continuous ramps upward but plateaus at best. We can do better, and that’s why the last bullet from the merger conditions above is on point - most utilities would have to enhance their plans for this cycle of EmPOWER. Well done.

On the second day, regulators heard from NRDC ally the Green and Healthy Homes Initiative (GHHI), whose CEO Ruth Ann Norton emphasized the importance of investments in low-income housing upgrades. She also urged regulators to recommit to its past support of the state’s Department of Housing and Community Development (DHCD) as the implementer of low-income energy efficiency programs such as the Maryland Energy Efficiency and Housing Affordability (MEEHA) program, which focusses on multifamily housing improvements.

Speaking of which, the big hitter on Ms. Norton’s panel was none other than Kenneth Holt, the newly minted Secretary of DHCD. He mentioned multifamily housing repeatedly as suffering from underinvestment. As he and his staff reported, MEEHA was allocated $12.5 million in total for the 2012-2014 EmPOWER cycle, and Secretary Holt reported that so far 3,704 households had benefited from upgrades with another 1,709 under construction, saving 7,000 kilowatt-hours of energy.

While this is progress, it pales in comparison to the need. Our new potential study shows that 16 percent of Maryland’s housing stock is affordably multifamily, sheltering 370,000 households. Over the next 20 years we could slash electricity use by 25 percent, gas use by 21 percent, and have return of $3.30 for every dollars investment. What a boon to our state, especially for those saddled most with high electricity and gas bills. For the full scoop on the potential, and best-practice solutions, check out this handy Energy Efficiency for All fact sheet.

Given this potential, I am exceedingly grateful that when Commissioner Hoskins questioned Secretary Holt about the “sufficiency of funding for low- and moderate-income housing in EmPOWER” he pointed specifically to the chasm between the potential and the investment in multifamily, saying “it’s insufficient, significantly” and reiterated that as the “area of need.”

So I’m really happy to report the last event of note in a remarkable two weeks in Maryland - a brief EmPOWER order issued yesterday. In it, the PSC reaffirms its commitment to DHCD, and approves the proposed MEEHA budget. That increases the investment by $10 million in this cycle of EmPOWER.

So while our potential study shows there’s a lot more low-hanging fruit, just in the past two weeks Maryland state officials have pushed the floor for investment in affordable multifamily housing energy efficiency up by about $14 million.

That’s very good news for my home state, and something to celebrate around the barbecue this Memorial Day.