State energy officials and utilities caution against using electric efficiency charge to fund thermal and transport electrification under S.65

Ed McNamara, who introduced testimony at the Feb. 19 Senate Natural Resources & Energy meeting, said S.65 would reassign electric efficiency funds to thermal and transportation programs and warned that approach could send the wrong price signals.

"You're increasing the cost of electricity while trying to get people to switch to using more electricity," McNamara said, adding that the usual economic rule is to "tax the bad and incentivize the good." McNamara told the committee he and his organization support energy-efficiency charges when they are used to lower electric rates, but that using that same charge to subsidize thermal and transport programs is "bad economic policy."

Why it matters: The electric efficiency charge is collected from ratepayers and has historically been used to finance efficiency measures that reduce overall system costs and downward pressure on rates. Witnesses warned that moving those resources to programs that reduce greenhouse gases (GHGs) in heating and transportation could both raise near-term rates and weaken price incentives for customers to adopt electric technologies.

Key points from testimony

- Budget mechanics and timing: McNamara summarized language in S.65 saying budgets for energy efficiency utilities (EEUs) would be fixed at existing levels plus inflation from 2027–2030 and that,…