ACEEE Blog

Leaders of the Pack: Utility Energy Efficiency Programs Innovate, Evolve, and Expand
June 20, 2013 - 6:37 pm

By Seth Nowak, Senior Analyst


In the last few years, customer-funded energy efficiency programs administered by utilities and statewide public benefits organizations have been developing innovative program designs, services, and delivery methods and expanding into new markets across the country. To recognize and profile the best program practices, and share what works for outstanding electric and natural gas programs, ACEEE has conducted its third national review of leading programs and is now releasing Leaders of the Pack: ACEEE’s Third National Review of Exemplary Energy Efficiency Programs.

ACEEE solicited nominations of exemplary programs from across the country and convened a panel of experts on utility energy efficiency programs to review and select exemplars in each of a diverse set of categories. We sought programs with demonstrated ability to deliver direct energy savings cost-effectively through energy efficiency with high levels of customer service and satisfaction. Other characteristics we looked for were innovative features that hold the promise of significant future impacts, and how transferable we expected the program’s success to be.

Overall investment in utility energy efficiency programs has approximately tripled since ACEEE’s last review in 2008, when program budgets were just over $2 billion per year, to almost $6 billion in 2012. With the increasing role of energy efficiency within energy resource portfolios, it is especially critical for program planners, administrators, and implementers to have access to up-to-date, quality data and information about leading program designs and what gets results. The report provides descriptive profiles of all the exemplary programs, with their background, structure, performance results, and contact information for program representatives. Common trends among the leading programs include:

  • Targeting market niches and sub-segments.
  • Finding ways to reach previously underserved customers with new programs and approaches.
  • Continuing many “tried and true” approaches to save energy cost-effectively year after year.
  • Adapting and tuning offerings to maintain and grow cost-effective energy savings.
  • Simplifying processes for customers to help to increase the number of program participants.
  • Making financing more widespread.
  • Incorporating the latest energy-efficient technologies, such as LEDs and other emerging technologies.

Award certificates were presented to some of the selected programs at the National Symposium on Market Transformation in March, and all will be recognized at the National Conference on Energy Efficiency as a Resource in Nashville, Tennessee, September 22-24, 2013. Registration is now open.

Today’s exemplary programs embody a long, rich history of innovation, hard work, and proven results. The programs that ACEEE selected in our third national review are a strong testament to the role that well-designed energy efficiency programs can play as a utility resource.


Getting the Most from Plug-In Electric Vehicles
June 13, 2013 - 7:42 am

By Siddiq Khan, Senior Researcher


Plug-in electric vehicles (PEVs) have experienced significant growth recently, with sales in the first five months of this year surpassing the total sales in 2012. Recognizing the importance of this technology to the U.S. light-duty vehicle fleet, ACEEE is releasing a new report, Plug-in Electric Vehicles: Challenges and Opportunities, which presents a broad overview of the PEV landscape, including issues from both the transportation and utility system perspectives. It explores the energy and environmental implications of PEV adoption in the United States, and whether and how their use should be promoted.

PEVs present an important alternative technology in a market long dominated by petroleum-powered vehicles. Large-scale adoption of these vehicles into the light-duty fleet would substantially reduce U.S. oil consumption. But the environmental impacts of PEVs are more complex, varying widely with the fuel used to generate the electricity on which the vehicle is charged. On the average grid mix and on a full-fuel-cycle basis, PEVs today offer major reductions in greenhouse gas (GHG) emissions relative to conventional gasoline-powered vehicles (see Table 1). Driving an all-electric vehicle in the northeastern U.S., which uses predominantly hydropower and nuclear power, will result in far lowerGHG emissions than driving even a hybrid-electric vehicle. The reverse is true, however, in the Midwest, which relies more on coal power plants.

Table 1: Annual Full-Fuel-Cycle GHG Emissions of Five Model Year 2013 Vehicles (based on GreenerCars.org calculations)

 

In-Use GHG (metric tons CO2 equivalent)

Upstream GHG (metric tons CO2 equivalent)*

Total GHG (metric tons CO2 equivalent)

Ford Focus conventional

3.6

0.8

4.5

Toyota Prius C hybrid

2.4

0.5

3.0

Chevrolet Volt plug-in hybrid

1.2

2.0

3.2

Ford Focus Electric

0.0

2.5

2.5

Honda Civic Natural Gas

2.8

1.1

3.9

* Electricity-related emissions based on average U.S. power generation mix.

Significant challenges stand in the way of widespread PEV adoption. PEV purchase prices are high, although owners will benefit from low fueling costs, as well as a federal tax credit (see Table 2). Insufficient energy density of batteries contributing to limited vehicle driving range in a single charge, limited availability and convenience of vehicle charging, and insufficient PEV models to cover the vehicle market are other major drawbacks for this technology. On the utility side, localized power disruptions could occur in neighborhoods with high PEV adoption due to overloading of distribution transformers. But overall, PEV charging will not represent a major draw on electricity supplies and will tend to improve utility load factor in off-peak periods.

Table 2: Purchase and Fueling Costs of Six Model Year 2013 Vehicles

 

MSRP ($)

Fuel Consumption

5-Year Fuel Costs ($)

MSRP + 5-Year Fuel Costs ($)

With Federal Tax Credit ($)

Gasoline (gal/mi)

Electricity (kWh/mi)

Ford Focus FWD

16,200

0.03

N/A

7,180

23,380

23,380

Toyota Prius C

19,080

0.02

N/A

4,308

23,388

23,388

Chevrolet Volt

39,145

0.03

0.35

3,803

42,948

35,448

Ford Focus Electric

39,200

N/A

0.32

2,246

41,446

33,946

Nissan LEAF

28,800

N/A

0.29

2,036

30,836

23,336

Honda Civic Natural Gas

26,305

0.03

N/A

4,065

30,370

30,370

 

A wealth of federal, state, and local government policies and programs are in place to support PEV adoption, along with private sector initiatives. At the federal level, policies include the $7,500 consumer tax credit for PEV purchase, grants and loans to automobile manufacturers and suppliers for development of advanced vehicles and batteries, and funding for consumer education and pilot projects for community PEV deployment. Recently adopted federal greenhouse gas and fuel economy rules also strongly incentivize production of PEVs by virtue of these vehicles’ value in helping manufacturers comply with the new standards.

These policies and programs will help reduce PEV purchase prices, by both reducing battery costs (see Figure 1) and increasing PEV sales volumes, further reducing PEV prices.

Figure 1: Progress in Battery Cost Reduction and Cost Projections to 2025

As policymakers continue their efforts to bring PEVs into the U.S. vehicle fleet, they should design policies that maximize these vehicles’ benefits and mitigate any adverse impacts. Our new report recommends in particular that they ensure that greenhouse gas standards for vehicles reflect full-fuel-cycle emissions, so as to promote advances in both PEV efficiency and clean electricity generation. The report also recommends policymakers develop utility policies that anticipate and address any stresses PEVs may put on electricity distribution equipment and electricity ratepayers, and adopt taxation policies that ensure PEVs pay their fair share (which will be modest) to maintain highway infrastructure.

Whether PEVs become the predominant light-duty vehicle technology or fill only certain market niches will depend upon factors such as future oil and natural gas prices, advances in conventional vehicle and fuel cell technologies, and possible breakthroughs in battery technology. Their role will also be shaped by future energy and climate policies. With proper attention to policy design, the United States can and should position itself to take full advantage of what PEVs have to offer.


Mainstreaming Energy Efficiency Finance: Takeaways from this Year’s Energy Efficiency Finance Forum
June 06, 2013 - 1:42 am

By Casey Bell, Senior Economist and Manager, Finance Policy


On May 13–15, ACEEE hosted the 7th Annual Energy Efficiency Finance Forum in Chicago, Illinois. Once again, we had record-breaking attendance—nearly 300 participants—and representation from a wide array of industries, including financial services; utilities; and federal, state, and local government.

During the Wednesday plenary session, Bruce Schlein from Citi once again shared their matrix portraying the various potential markets and mechanisms for energy efficiency finance. We can see by referencing last year’s that there has been growth in the types of products that are capable of serving various markets. However, even though we have several creative existing and potential tools in the toolkit, Ted Hesser, Jeff Pitkin, Keith Welks, Steve Vierengel, and others highlighted many of the still vexing informational barriers to mainstreaming energy efficiency finance.

We are still struggling to aggregate and securitize energy efficiency loan products, but there are new informational tools emerging to bridge the so-called “data divide.” These include the Department of Energy’s Buildings Performance Database, the Environmental Defense Fund’s Investor Confidence ProjectWegoWise, andBright Power. In addition, the Warehouse for Energy Efficiency Loans (WHEEL), program is being set up to create a secondary market for unsecured residential energy efficiency loans.

Yet the informational barriers are not confined to the conversation between energy efficiency program administrators and bankers. While the table is being set to bundle and sell energy efficiency loan products, there is a question on demand for these types of products. Many presenters and attendees participated in a dialogue regarding low loan volume. Some observed that many commercial entities finance energy efficiency with operating cash or through a standard capitalization process once convinced of its value, rather than seek an energy efficiency-specific loan product.

For example, Susan Leeds from the New York City Energy Efficiency Corporation elaborated on NYCEEC’s efforts to incorporate energy efficiency into existing financial products and solutions, and to fill gaps with turnkey solutions to combat specific market barriers (for example, ESAs coupled with a NYCEEC credit enhancement for a credit-constrained Class B building). Scott Johnstone from the Vermont Energy Investment Corporation highlighted undervaluation of energy efficiency (in addition to competing existing products such as HELOCs) in the residential market as a barrier to demand and subsequently the bankability of energy efficiency loan products.

So, how do we get bankable projects in the pipeline at a scale that will entice investors to engage and catalyze deal flow? Bruce Schlein suggested that understanding and socializing additional benefits of these types of investments such as health attributes may be a part of the solution. It is also important to recognize that while financing is certainly not the key to driving investment in energy efficiency, finding the right tools for the right projects in the right markets AND delivering them through effective marketing channels could catalyze some volume.

Going forward, it will be useful to determine where gaps in conventional finance present specific hurdles for efficiency, such as in small commercial, Class B and Class C properties, and multifamily—particularly affordable multifamily housing. For these sub-markets, developing boutique lending products or specific financing solutions may be of particular importance.

On-bill repayment has applicability for certain residential and commercial markets, particularly for small businesses. The debate continues as to whether it acts as a credit enhancement for investors. Commercial PACE has started to be applied to some larger projects in the commercial market, and its potential off-balance sheet characterization may make it an attractive alternative to internal financing. Energy Services Agreements continue to see increased deal flow in larger commercial and industrial projects. Master Limited Partnerships (MLPs), if opened to projects that generate energy savings, could be used to finance CHP and district energy projects.

Our perspectives on energy efficiency finance are maturing and it seems as though many in the field are buying into the idea of pursuing silver buckshot over silver bullets. While progress is being made to reach the inflection point that cracks this $279 billion market, there is still a lot of work to be done to spur customer adoption of energy efficiency investments.

Presentations from the event are available on ACEEE’s website. Many thanks to our co-chairs, sponsors, and speakers for making this year’s event a great success!


New Standards Cut “Vampire” Energy Waste and Offer Hope that the White House and DOE Are Addressing Delays to Energy Efficiency
June 04, 2013 - 1:56 am

By Andrew deLaski, Executive Director, Appliance Standards Awareness Project (ASAP)


U.S. Energy Secretary Ernest Moniz announced new national energy efficiency standards for microwave ovens on Friday that will take a bite out of standby (or “ vampire”) power. Just as important, completion of this long-delayed rule offers hope that the White House and the Department of Energy (DOE) are ready to put an end to the delays that have been plaguing new efficiency standards over the past couple of years.

First, let’s talk about microwaves. With a few simple changes, energy wasted by microwaves can be reduced to almost zero. A typical microwave spends only about 70 hours heating up food over the course of a year. For the remaining 8,690 hours (99% of the time), the microwave consumes energy continuously to power the clock display and the electronic controls. But some microwaves waste more energy than others. The microwaves that waste the most energy in standby mode consume about 4 watts of standby power, which adds up to about 35 kilowatt-hours (kWh) over the course of a year. The new efficiency standards, which will take effect in 2016, will limit standby power consumption to just 1 watt for most microwaves.

Given that 95% of households have a microwave, the small savings from each microwave add up. On a national level, DOE estimates that the new standards for microwaves sold over 30 years will save consumers $3.4 billion and will reduce electricity consumption by about 69 billion kWh, or an amount equal to the annual electricity use of about 6 million U.S. homes.

One simple step to reduce microwave vampire power involves changing the cooking sensors that are found in some microwaves, and which tell the microwave when to shut off during a cooking cycle. Traditional cooking sensors consume about 1-2 watts of power continuously because they need to be kept warm. A newer type of steam sensor provides the same functionality as traditional cooking sensors, but consumes zero standby power. Other simple changes to reduce standby power include improving power supply and control board efficiency.

The microwave oven is just one of the products for which efficiency standards have reined in vampire energy waste. Since a 2007 energy law required DOE to include standby energy use in new efficiency standards, the department has addressed vampire energy use in six products including clothes washers, clothes dryers, dishwashers, room air conditioners, central air conditioners, and furnaces.

The same 2007 energy law established the first-ever national standard for external power supplies. Since then, you may have noticed that the power supplies that have come with your latest cell phone and other gadgets are less bulky and lighter. They also do not get as warm to the touch as older power supplies, which means they are wasting less energy.

Later this year, DOE should complete updated power supply standards that will save even more. DOE is also working on new standards for battery chargers---the devices that power everything from portable power tools to cordless phones to electric toothbrushes. Existing California state standards for battery chargers are already affecting the national market and we expect the national standards to be equal to or stronger than the California energy waste limits. Since battery chargers consume power even when the device is not charging a battery, these new standards will take another important step towards reducing vampire energy waste.

Which brings us to the other good news in this announcement: The White House and DOE recognize how important improving efficiency is for meeting the president’s energy goals. Deputy Assistant to the President for Energy and Climate Change Heather Zichal blogged from the White House on Friday about how making appliances more efficient will “help Americans keep more money in their pockets …curb pollution and spark innovation …” In announcing the microwave standards, Secretary Moniz declared, “Appliance efficiency standards represent a huge opportunity to help families save money by saving energy, while still delivering high quality appliances for consumers.”

Zichal and Moniz have much more to do. As we described in January, the new microwave standard is one of eight for which DOE missed completion deadlines over the past two years. Before DOE set the microwave standard, the agency finished new transformer standards in April. Another four covering commercial refrigeration and lighting products still await approval from the Office of Management and Budget. The new standards for external power supplies and battery chargers remain under development at DOE along with new industrial motor standards. However, with a strong new microwave oven standard now complete, it looks like this administration is starting to get back on top of its game for improving energy efficiency.

Joanna Mauer contributed to this post.


Creating Value through Energy Management
May 16, 2013 - 8:27 pm

By Christopher H. Russell, Visiting Fellow, Industry


Champions within industrial facilities may be the largest piece missing from the energy policy and program landscape. Some energy program administrators are sponsoring the placement of dedicated energy managers at industrial facilities to overcome the obstacles to energy optimization. These pilot efforts seek to accelerate the pace and volume of industrial energy efficiency projects.

The placement of empowered, professional energy managers is an important contributor to the implementation of industrial energy management standards, policies, and programs. Today, ACEEE released a report that profiles some of the recent programs and identifies the elements that lead to successful models.

To date, energy issues have been largely delegated to technical staffs, which focus on equipment selection and engineering projects. While the technical focus is no doubt crucial, it does nothing to address the organizational barriers that may arise in response to the changes proposed by an energy manager.

The viability of any policy is highly dependent on a visible and motivated constituency. Energy managers can play pivotal roles not just by creating value within their companies, but also by enabling the pursuit of industrial energy efficiency policies of public utility commissions and the goals they set for resource acquisition programs.

Industrial culture provides the durable truism: “you can’t manage what you don’t measure.” This applies especially to all the energy-consuming mechanical systems that populate industrial facilities. Implicit in this truism, then, is the assumption that industry is willing to delegate time and resources to the management of energy and related assets. However, many North American manufacturing organizations are not accustomed to managing energy consumption, and in today’s competitive economic environment, companies are wary of adding to their human resource head count. Combine that with the fact that energy is just one of many initiatives competing for management attention and resources, and you can easily end up with energy management not being a priority.

Put another way, managing energy requires change. With change comes the perception of risk. Program sponsorship dispels the perceived risk of wasted time and resources that would result from the unprecedented expense of energy management. In effect, program sponsorship accelerates the learning curve experienced by progressive organizations that secure strategic energy management competencies.

Thanks to companies’ experience with pilot programs, some facilities are now hiring and even expanding their cadre of energy managers. By facilitating the creation of energy manager positions, these energy programs are also building the professional population that can become visible advocates for emerging energy policies and provide an important foundation for implementing industry energy management protocols such as the ISO 50001 standard.

Programs that promote industrial energy managers offer the potential to be an important complement to other industrial program elements that enhance project implementation and energy savings. Experience has shown that these managers can more than pay for their salary with identified energy cost savings, so these programs represent a low risk element to supercharge energy savings in the industrial sector.


A Look Back at Secretary Chu’s Enormous Impact on Energy Savings
May 15, 2013 - 8:07 pm

By Andrew deLaski, Executive Director, Appliance Standards Awareness Project (ASAP)


With Congress about to confirm Ernie Moniz as the nation’s new energy secretary, it’s a good time to take a look back on what his predecessor, Steven Chu, accomplished with new appliance, equipment and lighting efficiency standards. In brief, he accomplished a lot. But not as much as he might have if he’d had better backing from the White House. Let’s start with the hard numbers. Taking into account products sold between now and 2035, new efficiency standards adopted during Chu’s four-year stint will net U.S. consumers and businesses more than $100 billion in savings. The energy saved by these new standards will be about enough to power the entire U.S. economy—all of our buildings, industries, homes, cars, and trucks—for about four months.

Chu had a fertile field with which to work. Congress, recognizing the enormous energy-saving benefits from existing efficiency standards, charged DOE with developing many new standards as part of energy laws enacted in 2005 and 2007. In addition, Secretary Chu’s immediate predecessor at the Department of Energy (DOE), Sam Bodman, prompted by litigation and Congressional oversight, committed the agency to catch up on 22 missed deadlines for updates to existing standards, some stretching back to the mid-1990s.

Empowered by President Obama, who issued an executive order just days after taking office directing DOE to meet and beat all its legal deadlines for new standards, Chu seized the opportunity. Here are some of the highlights:

  • Standards completed in 2009 for the tube-shape fluorescent lamps used mostly in offices will save more energy than any other standard ever issued by DOE.
  • New water heater standards will help heat pump technology and gas condensing technology gain a market foothold by focusing on large water heaters where these new technologies are most cost-effective.
  • New residential refrigerator and clothes washer standards will reduce the average energy use of these products by about 25% and 40%, respectively. These standards show that continued technological gains can deliver cost-effective energy savings, even for products that have already achieved dramatic improvements.

Chu succeeded in part by changing the culture at DOE: he made saving energy exciting and he extolled the power of standards to drive the biggest results. Just months into office, he told National Geographic that “Appliance standards, ka-BOOM, can be had right away.” Chu backed up his words with new staff and resources.

By 2012, DOE had caught up on all of the overdue standards accumulated under prior administrations. Just as importantly, Chu had launched new work to consider whether standards could help drive cost-effective efficiency improvements for additional product categories such as industrial products (e.g., pumps, fans, and compressors) and consumer electronics like set-top boxes. A committed academic (Nobel laureate in physics, to be precise), the Secretary even pitched in as an analyst, helping the agency improve how it estimates the impact of appliance standards on product prices. Under Steven Chu, the DOE’s appliance standards office became a place to make energy savings happen.

Unfortunately, Chu’s momentum was slowed and, eventually, all-but-halted by the White House’s regulatory apparatus. Every major new rule must be reviewed by the White House’s Office of Information and Regulatory Affairs (OIRA) prior to agency publication. OIRA at first completed its’ reviews expeditiously. But, starting in 2010, the review process, which is supposed to take 60 to 90 days at most, started to stretch out. No rules were immune—even the new home appliance standards backed by manufacturers, consumer groups, and efficiency advocates together were stalled for months. Eventually, those standards were completed, but some effective dates were delayed, which means millions of needlessly inefficient appliances will be sold and remain in use, wasting energy for years.

As of this writing, seven new standards covering a range of products from microwave ovens to industrial motors are overdue. (DOE published new standards for distribution transformers last month, the first new standard in nearly a year.) The overdue standards are not especially controversial—for example, manufacturers and efficiency advocates have submitted a consensus proposal for new motor standards and the microwave oven standard would simply cut down on standby mode electricity waste. But, as I described in a blog post in January, these delays are costing U.S. consumers. We are keeping a counter on the ASAP website to track the cost of the delays— the new backlog already has cost U.S. consumers and businesses $4.2 billion in lost savings and the costs are mounting.

As Georgetown Law Professor Lisa Heinzerling pointed out in a recent blog article, the reasons for the delays are puzzling, but what’s clear is that OIRA serves as “a portal into the political machinery of the larger White House.”

In sum, Secretary Chu saved more energy with new appliance standards than any of his predecessors, by a lot. But, with a little more backing from the White House, he could have done even more. If Chu can be faulted at all, perhaps he could have been more effective at shepherding rules through political channels of the White House. Regardless, because of his actions consumers and business will be saving billions of dollars in the years ahead.

Chu’s successor, Moniz, is also a physicist, but he comes with another credential: service in the Clinton Administration both in the White House and as the Under Secretary at DOE. This experience may serve him well as he navigates new standards to their completion. If Moniz achieves as much as Steven Chu, President Obama will rank as the president who did more than any other to cut the energy wasted in our homes, businesses, and industries. Let’s hope Moniz gets the White House backing he needs.


Can Freight System Efficiency Improvements Deliver Major Energy Savings?
May 10, 2013 - 7:07 pm

By Therese Langer, Transportation Program Director


With heavy truck fuel efficiency standards in place and federal agencies gearing up for the next phase of the program, it’s time to consider energy savings opportunities in the freight system more broadly. Our new report Energy Efficiency Potential of the U.S. Freight System: A Scoping Exercise compares the findings of five recent studies to find out what energy savings estimates have been offered. Three were studies of the greenhouse gas reduction potential in the U.S. transportation sector, from which we extracted the findings on reductions in the freight sector through energy efficiency strategies. The studies generally found more savings potential from vehicle technology improvements (10 to 23 percent) than from combinations of system efficiency approaches (0 to 18 percent), such as shifting to less energy-intensive freight modes, improving logistics, and optimizing routing.

The other two were global supply chain studies, which we consulted in hopes of expanding the scope of efficiency strategies. The supply chain studies did indeed find considerably greater potential for savings from freight system efficiency improvements (12 to 37 percent, or 0.5 to 1.7 million barrels per day of oil in the United States) than the transportation studies found. In particular, the savings they attributed to approaches such as expanding home delivery, optimizing speed, and increasing load factor were quite high. The supply chain studies also considered prospects for moving the production of goods closer to markets, though they differed on whether that would lead to a net reduction in energy use.

While the supply chain studies offered new places to look for freight system energy savings, they were not as well documented as the transportation studies, nor were they U.S.-specific. Hence an integrated, comprehensive assessment of freight system efficiency opportunities, informed by a supply chain perspective, is warranted. 

The multi-year reauthorization for federal transportation funding is once again looming, so it’s a good time for such an assessment. Federal freight policy got some much needed attention in the run-up to the passage of the last reauthorization, MAP-21, in 2012. MAP-21 proclaimed a new National Freight Strategy and set in motion the development of freight plans at the state and national levels. Yet the provisions are focused almost exclusively on highways, defining the National Freight Network as a subset of our roadway system and mentioning intermodal facilities only in passing. A more expansive view of our freight system, and a clearer picture of the efficiency opportunities it presents, will come in handy when the next transportation bill takes shape in 2014.


ACEEE in Four Places at Once
April 24, 2013 - 7:29 pm

By Steven Nadel , Executive Director


As many regular readers of our reports and blog posts know, for the past decade ACEEE has increasingly been working on energy efficiency policy at the state level, working with local allies to encourage the development and implementation of best-practice energy efficiency policies.  Our focus on states was brought home to us when we realized that our nation-trotting staff were testifying or conducting field work in four different states early this week.

Yesterday, Associate Director Neal Elliott was in Columbus, Ohio testifying before the Ohio Senate Public Utilities Committee, presenting the results of a new analysis of the impacts of the state’s EERS over the past five years and the huge benefits to both participants and non-participants of continuing the state’s commitments to energy efficiency. We hope that this new analysis commissioned by the Ohio Manufacturers’ Association will help solidify the legislature’s commitment to energy efficiency policies that have received the support of the current (and the previous) governor and many of the state’s utilities.

Also yesterday, I was in Trenton, New Jersey testifying at a New Jersey Board of Public Utility (BPU) hearing on future energy efficiency savings targets and budgets.  I testified that while New Jersey used to be a leader in energy efficiency (ranked #8 in the 2007 ACEEE State Energy Efficiency Scorecard), it has been steadily slipping to the middle of the pack (#16 in the 2012 Scorecard).  I recommended that the BPU ramp up its energy savings goals and spending over the next several years in order to again join the leaders in reducing energy costs for New Jersey consumers and businesses and creating energy efficiency jobs in the state.

Meanwhile, on Monday, ACEEE Senior Fellow Marty Kushler was speaking at a forum in Traverse City, Michigan as part of Governor Snyder's 'Michigan Energy Policy Review' process.  Governor Snyder plans to make comprehensive recommendations regarding Michigan's energy future in December, 2013. Marty talked about natural gas energy efficiency, complementing an earlier forum talk  he gave on electric efficiency.

Finally, staff members Max Neubauer and Maggie Molina traveled to Jackson, Mississippi this week for a second round of stakeholder meetings as part of an ongoing ACEEE energy efficiency program analysis for Mississippi, in partnership with the Southeast Energy Efficiency Alliance (SEEA) and the Mississippi Development Authority (MDA). The primary goals of this stakeholder process are to build new relationships, understand the roles that the various stakeholders can play in developing energy efficiency in Mississippi, and identify opportunities to build effective, actionable steps toward greater efficiency through programs and policies.  The stakeholder meetings will help inform the scope of the energy efficiency program analysis, which will be completed this summer.

While this was a big week for ACEEE state activity, we are also doing substantial work on national and local policy.  For example, at the national level this week we are working with one coalition to develop an amendment to the Shaheen-Portman energy efficiency bill to promote benchmarking of commercial buildings and disclosure of energy use consumption information. We are also working with a Senate office and businesses to develop legislation to reform equipment depreciation schedules in the tax code so these schedules no longer discourage replacement of inefficient equipment.  And at the local level last week we finished the draft of a study on the City of New Orleans and we are continuing work on our first City Energy Efficiency Scorecard.


Manufacturers Association Releases ACEEE Report on Impacts of Ohio EERS
April 24, 2013 - 12:25 am

By R. Neal Elliott, Associate Director for Research


The Ohio Manufacturers’ Association (OMA) today released Ohio’s Energy Efficiency Resource Standard: Impacts on the Ohio Wholesale Electricity Market and Benefits to the State, a report that the OMA commissioned ACEEE to prepare. This report is the product of almost 6 months of research by ACEEE staff, supported by analysts at Synapse Energy Economics, Inc.

I will be presenting our findings to the Ohio Senate Public Utilities Committee, chaired by state Senator Bill Seitz. Chairman Seitz has initiated hearings on his legislation, Ohio Senate Bill 58, which is intended to review, and possibly modify, Ohio's energy efficiency resource standard (EERS).

Our report finds that the Ohio EERS enacted in 2008 by SB221 has now delivered over 3,200 gigawatt-hours of savings to Ohio electricity consumers over the past 3 years, equivalent to 2.1% of statewide electricity sales in 2011. These utility energy efficiency programs are cost-effectively saving customers electricity beyond the targets set by the legislation, as shown below.

As Ohio transitions to competitive wholesale electric markets going forward, the study finds continuing utility commitments to meeting the EERS targets in coming years could save customers a total of almost $5.6 billion in avoided energy expenditures. We estimate utility energy efficiency program administration costs to be $2.7 billion.

Of the savings, $2.2 billion results from price mitigation impacts that reduce wholesale prices, which in turn reduces bills for both participants and non-participants of utility-sponsored energy efficiency programs throughout the entire energy system.

The value proposition to businesses and manufacturers, participants and non-participants alike, is unequivocal: energy efficiency reduces customer energy costs, both directly through facility efficiency improvements and through downward pressure on market energy prices. Energy efficiency also reduces risks associated with volatile energy markets and, ultimately, enhances the competitiveness of Ohio’s businesses.


Why Increasing Information on a Home’s Energy Use Will Help Homebuyers Make Smarter Decisions
April 23, 2013 - 2:34 am

By Rachel Cluett, Senior Research Analyst


What if people could have access to a piece of valuable information that they don’t currently receive about the house they are considering for purchase?  What if this could happen with very little bureaucracy and limited program implementation costs? Sound appealing? While home inspections to ensure safety and structural soundness have long been part of the home buying process, and while real estate taxes and home insurance costs have been regularly accounted for in mortgage underwriting calculations, one major cost to homeowners has been left in the dark at the time of sale---the cost of the energy needed to “run” your new home.  

In a new report by ACEEE, Residential Energy Use Disclosure: A Review of Existing Policies, fourteen U.S. residential energy use disclosure laws were examined in order to shed light on how residential energy disclosure policies can most effectively reach homebuyers and renters in single-family homes and multifamily buildings. While commercial benchmarking is quickly becoming a hot policy in many major U.S. cities, residential policies have popped up in a remarkably diverse spread of jurisdictions---some of which have few, if any, other energy efficiency policies on the books.  

Increasing the transparency of information around the home buying process and increasing consumer awareness of the real costs of home ownership is crucial in a post-mortgage crisis environment. The average homeowner spends approximately $2,000 every year on energy used in their home, a considerable sum that is greater than the cost of the average home insurance policy and property tax combined. Yet this cost is not often realized—conventional mortgage underwriting ignores the amount of money a homeowner will spend on energy every year. For someone carefully determining manageable monthly mortgage payments, an unexpected extra $100-200 a month in energy costs can be a significant burden. A recent study by the Institute for Market Transformation found that the less energy a home consumes, the lower the chance of defaulting on a mortgage. A sample of 71,000 ENERGY STAR and non-ENERGY STAR single-family home mortgages revealed that default risks are 32 percent lower on average in energy-efficient homes. Residential energy use disclosure serves to provide that valuable cost information when a home is placed on the market.       

Initial experimentation with residential energy disclosure policies around the country highlights potential challenges, but also helps to provide examples of how to work past these barriers.  While much of the pushback against disclosure policies has come from realtors in the past, examples of smart collaboration efforts in Austin, Texas and Chicago Illinois, suggest how mutual design and implementation of policies can lead to more robust and useful energy disclosure. In Santa Fe, New Mexico, a residential disclosure ordinance requiring all new homes to post Home Energy Rating System (HERS) index ratings (a measure of a home’s energy performance based on an onsite inspection of the home’s features) took effect in 2008. After substantial discussions with interested stakeholders, the City Council adopted a more stringent policy, requiring homes to meet a specific HERS index score. Our review of the ordinance’s implementation indicates that because enforcement is tied to the existing building code, all new homes in the first 1.5 years the policy was in place had a HERS rating performed. 

To support these initial efforts, further evaluation is needed to reveal the most effective ways to design and implement policies that disclose home energy use to renters and buyers. As legislators across the country continue to pursue this promising policy option, partnerships with local stakeholders combined with well-designed policies will be crucial to the success of residential energy disclosure laws.