Megawatt v. Negawatt

RGGI and the Battle for Maine’s Energy Future

 

There’s nothing wrong with using electricity -- as long as it’s efficient and necessary.  Electricity runs mills, powers computers, and makes our lives more comfortable.  Used well, it makes us competitive.  Used poorly, it makes us all pay more and get less.

 

Japan is an economic powerhouse, in part because the Japanese use half as much energy per capita as the U.S.  When energy costs climb, Japans wins.  The U.S. loses.

 

The good news is that we can easily do better.  Today, simple installations such as compact fluorescent lightbulbs (CFLs), better building insulation, and variable speed drives can help us regain a competitive edge.  Few investments yield returns – both public and private -- like energy efficiency.

 

With current technology, it is far cheaper to conserve energy than to make it. Not using energy can be both painless and cheap.  By screwing in a CFL or replacing an old freezer, I create “negawatts” (avoided energy use) instead of using megawatts.  I save money for myself.  By decreasing demand while supply remains static, I cut prices for others as well.

 

The graph at above right compares recent, typical costs of wholesale energy with recent, typical costs of efficiency.  Per kilowatt hour, the prices compare at 8 cents and 2.9 cents.  In other words, a negawatt costs less than 40% the price of a megawatt.  This is why there are now companies that derive profit from helping businesses save energy. 

 

It is also why efficiency is an even better “clean energy” investment than new, renewable generation such as wind farms.

 

On April 26^th, following extensive discussion and public hearings, my legislative committee delivered a unanimous and bipartisan vote in support of Maine’s Regional Greenhouse Gas Initiative (RGGI, or “Reggie” for short).  RGGI originated in an agreement between governors of ten northeastern states, and would implement a cap-and-trade policy, or “polluter pays” approach, for carbon emissions from large power plants in ten states, from Maine to Maryland.

 

RGGI will move us forward on the road to energy security and independence and a more competitive economy.

 

The genius of RGGI is that by limiting and auctioning off the rights to produce pollution, Maine will generate funds that can then be plowed into energy efficiency investments.  Increasing efficiency will drive down demand, save money, and help prevent blackouts.  In short, RGGI is a win-win for both consumers and the environment. 

 

Cap-and-trade systems similar to RGGI have been implemented in other parts of the world.  Meeting with members of the British parliament to hear their experiences with this system a few weeks ago, I heard clear and unanimous agreement from all three political parties that the system is working.  Their version of RGGI is a market-based, common-sense system that has been good for their environment, and for their economy.

 

There are those who dislike RGGI.  At present, Maine's two large electricity carriers, Central Maine Power and Bangor Hydro, can only increase profits for shareholders through increased energy use.  They oppose RGGI because by eliminating waste, it will impact their profits.  While this is understandable, there are other ways to address this concern.

 

Due to disagreement about implementation issues, a more recent vote by two committees split down party lines.  I am hopeful that this week, we might see a return to the common sense bipartisanship of the April 26 vote.

 

Today, energy efficiency is patriotism.  With the global marketplace expanding and the days of peak oil arriving, neither Maine nor the U.S. can afford to wait.  Our economy must move forward to remain competitive, and RGGI is a strong step in this direction.

 

Rep. Seth Berry (D-Bowdoinham) is in his first term representing House District 67.  He presently serves on the Joint Standing Committee on Utilities and Energy, where he is focused on searching for solutions to Maine’s energy and connectivity needs.  Rep. Berry claims to get 40+ mpg from his ’95 Civic, and may be reached from his web site, www.sethberry.org.