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National Grid to offer gas users energy-efficiency rebate

12:24 PM EST on Friday, December 8, 2006

By Timothy C. Barmann
Journal Staff Writer

National Grid has filed a plan with state regulators that will create a program to encourage customers to use natural gas more efficiently by providing rebates for energy-saving appliances and other incentives.

The utility company was directed to develop the energy-efficiency plan for its natural gas customers by a new law passed this summer.

The program will be similar to one already in place for electricity customers and will provide rebates, ranging from $10 to $800, on the purchase of furnaces, water-heating systems, thermostats and windows, according to the filing submitted to the Public Utilities Commission. The program will also offer free home energy audits.

Under the proposal, the program’s budget would be $2.8 million in 2007 and be financed by a new surcharge on the bills of natural gas customers. The surcharge would be 6.3 cents per decatherm, and would cost a typical gas heating customer about 54 cents a month, according to National Grid. That amounts to an increase of about 0.4 percent on a typical customer’s bill.

If approved by the PUC, the surcharge would go into effect Jan. 1.

An energy law passed this summer required natural gas utility companies to design an energy-efficiency program, similar to one that has been in place on the electricity side for several years. National Grid is the only provider of natural gas in the state, following its acquisition of the Rhode Island operations of New England Gas in August.

The law, known as the Comprehensive Energy Conservation, Efficiency and Affordability Act of 2006, allowed for a surcharge of up to 15 cents per decatherm to pay for the program.

But National Grid suggested that the program begin with a surcharge of less than half that amount.

“National Grid expects it will take time to effectively roll out the proposed programs and to create demand for program services that can be served effectively,” the company said in the 133-page filing. “In addition to educating customers about energy-efficiency opportunities, the company will need to train contractors in order to develop quality programs for customers.”

National Grid said that as demand for the program grows, the company expects to seek a higher surcharge. The maximum allowed by the law would increase a typical customer’s bill by about $15.53 a year, or $1.29 a month.

The utility company said it proposed first-year financing at $2.8 million, based on the costs associated with running similar programs in other states. National Grid said it had hired an executive from KeySpan Corp. as a consultant to provide guidance on developing the Rhode Island program. (National Grid has announced plans to acquire KeySpan.)

National Grid said that if the PUC approves the proposal, the company will then submit another filing to regulators by Feb. 1 that will contain more details about how the program will work

The rationale behind energy-efficiency programs is that they provide benefits to the customers who participate, as well as to all ratepayers, said Matt Auten, an advocate for Environment Rhode Island. That nonprofit organization, which was split off from the Rhode Island Public Interest Research Group, lobbied for creation of the natural gas efficiency program.

For participants, the rebates lower the initial cost of buying an energy-efficient appliance and reduce that customer’s energy bills going forward, Auten said.

For everyone else, the overall reduction of energy usage means that fewer power plants have to be built, less money needs to be spent on infrastructure and less pollution gets emitted into the air, he said.

For every dollar invested in energy-efficiency programs, there is a return of between $3 and $4, Auten said. Most of that return goes to the customers who participate in the programs.

National Grid said that its energy-efficiency program for its customers has curbed consumption a total of 425,000 megawatts since 1997. That’s enough electricity to power the city of Pawtucket for one year, said Laura McNaughton, manager of residential energy-efficiency services for National Grid.

The annual budget for the electricity program is about $22.4 million, and costs a typical customer about $1 per month.

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