Across the U.S., State Energy Efficiency Policies Deliver, Save Consumers Billions

14 June 2011

Utilities Expand Programs and Plan for Even More

States across the U.S. have been reaching or exceeding their energy savings goals established through Energy Efficiency Resource Standards (EERS), thereby lowering utility bills for consumers and reducing the need to build costly new power plants. The forecast is also bright for the future as states expect to achieve even higher energy savings for utility customers in years to come. These are the findings of two reports released today by the American Council for an Energy-Efficient Economy (ACEEE).

From 2004 to 2010, 24 states followed the lead set by Texas and Vermont by establishing an EERS, a policy that sets long-term energy savings goals for electric and natural gas utilities. Since then, utilities, regulators, and consumers in all corners of the country have embraced this approach to deliver energy efficiency programs that save energy and money in homes and businesses.

The first report, Energy Efficiency Resource Standards: A Progress Report on State Energy Savings Targets, documents the performance of every state with an EERS in place for more than two years. Comparing actual performance with the EERS targets, 13 of the 19 states with EERS policies in place for over two years are achieving 100% or more of their goals, three states are reaching over 90% of their goals, and the three states falling below 80% of their goals are working hard to catch up.  In each case, state EERS policies are driving energy efficiency investments and energy cost savings to unprecedented levels.

"These states are demonstrating that energy efficiency programs deliver real savings for utilities and ratepayers, and it is more affordable than any supply-side energy source," said Michael Sciortino, Policy Analyst and the report's lead author. By law and rule, the energy efficiency programs implemented in a state with an EERS must cost less than the electricity that would have been produced if not for the programs. Accordingly, utility efficiency programs are saving customers significantly more than they cost.

For example, in 2009 and 2010, Ohio utility customers saved $56 million in energy costs over and above the costs to deliver the programs. Over the lifetime of these programs, they are likely to save customers in excess of three-quarters of a billion dollars—and this is just the beginning. Program goals increase over time.

"As a comprehensive national energy policy remains beyond the reach of Congress, states are taking action to show how bold energy efficiency policies can benefit residential, commercial, and industrial consumers," said Steven Nadel, ACEEE Executive Director.

The future promises still more savings from state EERS, since most EERS targets increase over the next decade. The second report, Energy Efficiency Resource Standards: State Strategies to Reach Higher Energy Savings, documents how utilities are planning to ramp up their efforts to hit these higher energy savings levels.

The second report includes an analysis of six states with some of the largest and most successful energy efficiency programs in the United States—California, Connecticut, Massachusetts, Minnesota, New York, and Vermont. In these leading states, utilities are employing new strategies to expand existing programs and add new ones, enhance advertising and promotions, and conduct innovative pilot projects.

Six more states—Arizona, Colorado, Illinois, Michigan, Ohio, and Pennsylvania—are also examined in detail as they rapidly ramp up to develop the state-of-the-art energy efficiency programs required to meet the increasingly higher targets. Utilities in these states are running fewer, simpler programs that can get the most energy savings as quickly and cost-effectively as possible.

"Experts who specialize in these states say the potential for cost-effective energy efficiency is more than sufficient to meet the goals that have been established, and they put the likelihood of states continuing to meet their goals in the 90% range," summarized Martin Kushler, ACEEE Senior Research Fellow. "The greatest challenge for the future isn't technical—it's inspiring the political will necessary to pass these energy- and money-saving standards in every state."

To read the first report, Energy Efficiency Resource Standards: A Progress Report on State Energy Savings Targets, click here.

To read the second report, Energy Efficiency Resource Standards: State Strategies to Reach Higher Energy Savings, click here.

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This article is taken from the American Council for an Energy Efficient Economy (ACEEE).

URL: http://www.aceee.org/press/2011/06/across-nation-state-energy-efficiency-policies-deliver-s