Kenneth Costello (“There’s no free lunch with energy efficiency,” My View, April 20) argues that utilities such as Public Service Company of New Mexico should not spend money to help their customers implement energy-efficiency measures and save energy. But real-world experience demonstrates that although improving energy efficiency isn’t free, it provides benefits that far outweigh the costs.
Here are some numbers. PNM and other electric utilities in New Mexico spent about $285 million from 2008-17 on programs to help their customers save energy and reduce peak demand. As a result, households and businesses cut their electricity use by more than 1 billion kilowatt-hours in 2017, savings that are equivalent to the electricity use of 130,000 typical households in the state. Lower electricity use means utility bills are more affordable for hundreds of thousands of New Mexico’s families.
Furthermore, energy efficiency programs implemented over the past decade are providing over $400 million in net economic benefits due mainly to utilities avoiding costly capital investments and fuel purchases. In addition, reducing wasteful electricity use means less operation of coal and natural gas-fired power plants. This in turn cuts pollutant emissions, thereby improving public health and reducing the state’s contribution to global warming.
Contrary to what Costello claims, the energy savings resulting from utility energy-efficiency programs are not “engineering estimates” subject to large uncertainty. The programs are carefully evaluated by an independent consultant with oversight from the state’s Public Regulation Commission. In its detailed reports, the independent evaluator excludes energy savings by so-called “free riders” — those households and businesses that would adopt energy-efficiency measures in the absence of utility incentive programs.
Costello also wrongly claims that utility energy-efficiency programs benefit relatively few customers. When considered over a number of years, the majority of customers participate in one or more utility incentive programs, thereby realizing direct energy savings and reduced utility bills. And all customers benefit when the programs enable utilities to avoid costly investments in new power plants and transmission lines, or reduce air pollutant emissions.
Low-income households in particular benefit from utility energy-efficiency programs, as these families cannot afford to make energy-efficiency improvements on their own. Consequently, utilities often pay the full cost for energy-efficiency upgrades in low-income housing.
Put simply, it costs less to save energy from energy-efficiency programs that it does to supply energy from any type of new power source — whether wind power, solar power or gas-fired power plants. The environmental benefits are “icing on the cake.” This is why policymakers in New Mexico and elsewhere direct utilities to implement energy-efficiency programs for their customers, and why utility regulators approve them.
House Bill 291, approved by the state Legislature and signed into law by Gov. Michelle Lujan Grisham, provides the foundation for comprehensive utility energy-efficiency programs for the next decade. Based on past experience, including rigorous program evaluation, consumers and the environment will come out ahead. The Legislature and governor deserve praise for their foresight.
Howard Geller is the executive director of the Southwest Energy Efficiency Project. Tammy Fiebelkorn is the New Mexico representative of the Southwest Energy Efficiency Project. SWEEP is a nonprofit, public interest organization.