Puerto Rico poised to benefit from energy efficiency, but opponents get the facts wrong.

November 01, 2019 – 12:34 pm
Maggie Molina, Senior Director for Policy

The people of Puerto Rico will soon benefit significantly from an untapped and least-cost energy resource. That’s energy efficiency folks. Because customer efficiency programs lower overall energy bills for residents and businesses. This as a result promotes local economic development, reduces emissions, and improves electric system reliability. As well as and more noteworthy: resilience.

In coming months, Puerto Rico is scheduled to begin such programs. This is a result of legislation enacted in April that sets a goal of saving 30% of electricity use by 2040.

Unfortunately, opponents of energy efficiency in Puerto Rico have recently gotten the facts wrong. Because they are emphasizing the costs while missing the benefits. This is for all customers. Most interestingly, mischaracterizing the programs through conservation ads. Versus and rather than efficiency programs.

Also the increasing uses of energy are causing a huge environmental threat. Worst part is energy and water are becoming equally important.

Consequently it’s also posing a high risk of damage and pollution. Because of this, it is vital that we find alternatives. Especially to where we get our daily amounts of energy from. Finally and how we can decrease the amount we use.

With the introduction of newer advanced technology, it is be possible to adjust our electricity sources. Energy efficiency for example and also the amount of energy these inventions consume.

Benefits outweigh the costs

The Puerto Rico Energy Bureau (PREB), the island’s energy regulator, has developed a $13 million budget for initial programs, to be collected on customer bills beginning this month.  But press coverage on the new charge is dominated by skeptics. Ones who focus only on the effort’s costs and not its benefits.

Efficiency is consequently the least-cost resource compared to more costly electricity generation.  That’s on average about 3 cents per kilowatt-hour (kWh).  By investing in more efficient equipment and appliances in homes and buildings, Puerto Rico will reduce customer energy bills. All because of lower energy use and the reduced need to build more expensive generating plants.

Efficiency also reduces emissions and boosts local economic development. Its programs are not free but small increases in consumer rates return a much higher share of benefits to all customers.

Hawaii Energy, for example, has operated such programs for a decade. According to its most recent annual report, efficiency programs deliver 1.8 billion kWh in lifetime energy savings. So at a cost of only 2.1 cents per kWh (program levelized cost of saved energy).

Therefore these programs drive customer bill savings.  Consequently of $37 million annually. That’s more than $488 million over the life of the measures installed. Furthermore it saves an estimated equivalent of three million barrels of oil and 1.8 million tons of greenhouse gas emissions.

Efficiency not conservation

Puerto Rico’s legislation envisions substantial reductions in both energy use and peak energy loads. All through a comprehensive set of efficiency programs that cover a wide range of customers.  For example, Hawaii Energy’s programs provide customer incentives. That’s for more efficient water heating and air conditioning. Even lighting, appliances, and pumps and motors. They cover diverse markets, including single-family homes. As well as multifamily buildings and low-income customers. Finally communities and businesses are getting into gear too.

Unfortunately, press coverage in Puerto Rico has claimed that the charge will be used “to pay for an advertising campaign on energy efficiency” (see here; in Spanish). Also it has not mentioned the more substantial set of programs. One that even consequently the legislation envisions.

Next steps

Puerto Rico’s governor is seeking other sources of income such as “collaborative agreements” or federal funds. (see here; in Spanish)

So while these funds are available for a “small program”; that’s not enough. Because a comprehensive program delivers large benefits to customers. That requires most noteworthy a comprehensive set of funding sources.

And as states around the United States show, customer-funded efficiency programs work. They also successfully leverage other sources of funding. That’s private businesses providing their own capital and other financing.

The details of the efficiency programs aren’t yet determined. All because PREB still is choosing a third-party program administrator for them. The next step then is regulators to work with PREB stakeholders. Thereby to developing a path toward implementation.

Proposals focus on funding sources other than customer rates makes this impossible. Thereby we can’t inhibit the ability of a new third-party administrator delivering energy efficiency.  In fact, such a move would be a major setback.  It would lead to higher energy costs. That’s because it would encourage the local electric utility – PREPA – to meet customer’s needs. That’s consequently with more expensive resources instead.

Efficiency can play a key role in Puerto Rico’s clean energy future

Puerto Rico is scaling up its time plans to modernize its grid. Including investments in solar and storage.  Because it should ensure energy efficiency plays a central role. That’s because it’s the least-cost solution. One that directly benefits customers and makes it easier and cheaper to invest in other sources of clean energy.