Testimony of the National Consumer Law Center in Support of SB 105: An Act to Establish State Appliance and Equipment Energy Efficiency Standards

Before the Energy and Economic Development Committee
March 4, 2003

Charles Harak, Esq., Senior Attorney, NCLC Energy Project

The National Consumer Law Center (“NCLC”) welcomes the opportunity to testify in support of SB 105, a bill to increase energy efficiency standards. The Northeast Energy Efficiency Project and other energy efficiency experts project that passage of this bill will save New Hampshire consumers $47 million by the year 2010 and more than $300 million by the year 2020 through lower expenditures on energy. Lower energy consumption will also allow the state to avoid the need to build approximately 70 MW of generating capacity through the year 2020. This means reduced air emissions, improved health for the state’s citizens, and less damage to the state’s fauna and flora.
But NCLC’s real interest in this bill is that it will help low-income people who struggle to pay their energy bills. NCLC was founded in 1969 for the purpose of promoting the interests of low-income people as consumers in our society. For over three decades, NCLC has focused, among other issues, on the household energy needs of poor people. This winter well demonstrates the difficulty low-income households face in obtaining minimum amounts of home heating oil, natural gas, electricity and other energy supplies. Heating degree days are up 30% over last year and 10% above the twenty-year average. Home heating oil prices reached $1.70 and higher recently, more than 40% above last year’s level. Natural gas prices will average one-third or more above last winter’s levels, according to the federal Energy Information Administration. While electricity prices are more stable, household budgets are strained by the sharp increases in other energy prices and the record cold.

SB 105 will have an important moderating effect on electricity prices over the long term. By reducing the consumption of and demand for electricity, fewer new power plants will need to be constructed and existing plants that are more costly to operate will be run less. All of this translates into lower prices for consumers. But the consumers who experience the most benefit are those low-income households who struggle the hardest to keep up with their bills. The typical household energy burden of low-income families in the northeast averages between 15% to 20%, depending on the actual prices and temperatures in any given year. This is an extraordinary burden and explains why so many households are terminated for non-payment. SB 105, while no panacea, will help ameliorate the energy burden of low-income households.

Finally, SB 105 will not burden low-income households. Most of the covered products are for commercial use, purchased by businesses that will reap direct savings over the entire useful life of the products. Almost all of the covered products yield energy savings that pay back any increased initial purchase price in one to two years. But low-income households, like all households in New Hampshire, will benefit from lower energy consumption and lower peak demands. In a state and region with above-average energy costs, installation of more energy efficient appliances is a win-win situation for all. It is worth noting that in a recent appliance efficiency standards proceeding before the federal Department of Energy, the Environmental Protection Agency supported higher energy efficiency standards not only because of the reduced air pollution, but also for the reasons just noted: that low-income people stand to benefit the most from lower demands on our electrical generating system.

This is why NCLC so strongly supports the bill. We hope this committee will favorably report the bill soon.