Combined natural gas and electric utility energy efficiency programs score expanded savings

Blog Post | August 06, 2014 - 10:00 am
By Seth Nowak, Senior Analyst

Baseball’s All-Star Game assembles teams of the best athletes to face off against each other and play at an extraordinary level, beyond what is possible during the regular season. Natural gas and electric utilities design and build dual-fuel energy efficiency programs that score added energy savings and cut costs beyond what they could have achieved on their own. While the All-Star Game happens just once each year, combined gas and electric energy efficiency programs are performing at levels beyond the ordinary on an ongoing basis.

A new ACEEE report, Successful Practices in Combined Gas and Electric Utility Energy Efficiency Programs, examines the challenges utilities face and presents descriptive profiles of leading combined programs and their performance results. We found exemplary combined programs—residential, commercial, and industrial—in  states in every region of the country in which there are both gas and electric efficiency programs.

As a regular reader of this blog, you are probably aware that utility sector energy efficiency programs have been growing rapidly for the last decade. Gas and electric budgets have more than tripled since 2006.

Yet this impressive growth has occurred in a context where the most common pattern has been for electric utilities and natural gas utilities to operate their programs independently. That impedes customers who want to undertake projects that save both electricity and gas. Measures that could save energy and money may never get implemented, resulting in lost opportunities. Under separate programs, measures that save both electricity and natural gas may fail cost-effectiveness screening when considered individually, but could pass if considered together.

It’s no accident that single-fuel programs have been the norm. There are a host of issues to address when creating a successful integrated program, from a utility’s concern about cross-fuel competition, to the administrative effort, to regulators who view each utility program administrator as an independent entity. There are questions of program design and implementation. How will the program serve gas customers who don’t have electric service from the partner utility? What about customers who don’t have natural gas service at all? How will the program be funded, the savings be accounted for, and the costs be allocated?

The report finds that, while there is no single winning game plan for combined programs, there are many models to learn from, representing a variety of organizational structures. Keys to success include strong state policies that enable combined programs, effective institutional relationships, and supportive regulators. The report details specific state policies and distills lessons learned from leading combined programs, and it includes an extensive appendix of 16 in-depth program profiles. Each profile provides a description of the combined program structure, reports on performance, addresses the motivations for collaboration, and shares lessons learned. Download the report and find out how to make your combined program into a big league all-star!