Much discussion has recently taken place about the costs and benefits of energy efficiency; and whether or not businesses can afford this type of investment when the economy is fragile. While the first cost of any investment in business is important, other factors need consideration as well. Having managed the Burlington Electric Department's energy efficiency programs for a decade or so, I would like to explain why we think these programs are good for business.

BED believes that as a community we can't afford not to invest in energy efficiency. It's simple math. A delivered kilowatt-hour costs a Vermont utility more than 7 cents on average, according to the Vermont Public Service Board. A kilowatt-hour avoided through energy efficiency costs about 2.6 cents. Energy efficiency is one of the best economic development tools we have, along with providing many environmental benefits.

Existing Burlington businesses have responded to our programs with enthusiasm. Once an energy efficiency project is completed, they see bottom-line gains immediately. Our programs are designed so that the electric bill savings will more than offset the monthly cost of project financing that may be required. Loans for these projects tend to be short-term, and once paid off, savings continue year after year. This "positive cash flow" result helps to make these projects more economically attractive than many competing investments.

During this debate, we have heard that if this is a good deal for businesses they will do it on their own, eliminating the need for an efficiency program. Our experience and our customers tell us the opposite. Few businesses have the time, expertise or resources on hand to design and implement a plan of customized energy efficiency measures, given the crush of priorities that businesses face every day. Over and over again we hear from our business customers that without our gentle nudge, technical resources, and comprehensive package tailored to their specific circumstances, they would not likely have taken the time from their very busy day to pursue this opportunity.

Participants in BED's programs save more than $5 million each year which otherwise would have paid for electricity purchases, and this number grows each year as more efficiency projects are completed. Along with other factors, the success of these programs has helped BED avoid requesting a rate increase since 1995. In 1997, rates actually dropped by 5 percent, where they have remained.

Energy savings are dollars that can be reinvested in other purchases, providing economic stimulus to the community. Also, dollars spent on energy efficiency upgrades are mostly dollars that stay within the community rather than going out of state or even out of the country to pay for generation fuel. Local contractors install energy efficient equipment, and local businesses sell efficient light bulbs and appliances, fixtures, etc. Various studies have shown that these dollars recirculate through the economy in the form of goods and services to enhance their original value to the community.

We expect the next 10 years will hold at least as much potential for energy efficiency projects as the past 10. Thanks to new technologies and our ever-aging building and equipment stock, even those business customers who have already made efficiency investments will discover that new cost-effective opportunities await them in the future.

Taking a longer view on energy efficiency investment can help soften future bumps in the road, can better insulate our state from the swing of outside forces beyond our control, and can help Vermont continue to be a great place to do business.

Tom Buckley is manager of customer and energy services at the Burlington Electric Department.