The State Current

The State Current offers succinct analysis of energy efficiency policy and program developments affecting the prospects for energy efficiency at the state level.

ACEEE values regular feedback from states on current policy and program developments. In order to stay abreast of policy and program developments for its state policy work, ACEEE has established a network of state-level contacts. Throughout the year, members of the Network and readers of the State Current are strongly encouraged to review the State Energy Efficiency Policy Database and ensure the information is accurate and up-to-date. The policies listed in the database are used to rank the states for the State Energy Efficiency Scorecard.

To get involved in the state network, or to receive this newsletter via e-mail, please contact Michael Sciortino: 202-507-4028.

Breaking Down the 2009 State Energy Efficiency Scorecard

California Passes $3.1 Billion Energy Efficiency Plan

New York Green Jobs Program Invests RGGI Proceeds into Efficiency

Also in ACEEE State Policy News:

State-by-State Analysis of Federal Climate Legislation and Possible Energy Efficiency Enhancements

ACEEE analysis of the American Clean Energy and Security Act of 2009 (ACES) demonstrates that improving the energy efficiency provisions in ACES would provide significant additional consumer savings and carbon reductions and create more jobs than the original bill. Improvements recommended by the study include a stand-alone energy efficiency resource standard (EERS) requiring 10% cumulative savings by 2020 (instead of the ACES Combined Efficiency and Renewable Electricity Standard, or CERES), allocation of one-third of electric local distribution company allowances to energy efficiency (the same allocation as is now in ACES for gas utilities), and sustained State Energy and Environmental Development funding at 9.5% of allowance revenue through 2030 and beyond. 

This report, Energy Efficiency in the American Clean Energy and Security Act of 2009: Impacts of Current Provisions and Opportunities to Enhance the Legislation, discusses these national-level impacts and breaks them down on a state-by-state basis. This study uses electric and gas program cost values from a new ACEEE survey, which shows energy efficiency costs holding steady at 2.5 Cents per kilowatt-hour, even as costs of new power generation rise.

South Carolina State Clean Energy Resource Project: ACEEE is currently performing one of its State Clean Energy Resource Projects (SCERP) for the state of South Carolina. ACEEE is undertaking an analysis of the state’s potential for greater energy efficiency with the plan to roll out a final report on November 11th in Charleston and on November 12th in Columbia, the state capitol. The report will analyze various state-specific policies and programs that can save consumers dollars on their energy bills while also producing jobs in one of the states most economically impacted by the current recession. For the first time in a SCERP report, ACEEE will examine the potential for energy savings related to water use. The full report will be available online immediately after its roll out on the 11th and will include specific jobs and consumer-related dollar savings.

Model EERS Language: ACEEE plans to release model legislative language for an Energy Efficiency Resource Standard, which may be used by states aspiring to achieve meaningful reductions in statewide electricity and gas usage.

With the third State Energy Efficiency Scorecard, ACEEE has provided a comprehensive approach to score and rank states on the adoption and implementation of energy efficiency policies and programs. The scorecard examines six state energy efficiency policy areas: (1) utility-sector and public benefits programs and policies; (2) transportation polices; (3) building energy codes; (4) combined heat and power; (5) state government initiatives; and (6) appliance efficiency standards.  States can earn up to 50 possible points in these six policy areas combined, with the maximum possible points in each area weighted by the magnitude of its potential impact on energy savings.

Overall, states have shown improvement in scores since last year’s scorecard.  This year’s average score, for example, is 17 points compared to 15 points last year. Although we provide individual state scores and rankings, we note that the difference between rankings is most significant in “bins” of ten or so, rather than differences between individual rankings.  The tiers of ten are therefore the best way to interpret the results of the scorecard. Below is a brief description of each “bin” and some of the major trends and developments affecting the scores.

↑ denotes most improved states. Maximum score = 50 pts.

The Usual Suspects:

The top eight states retained their position, albeit in a slightly different order, atop this year’s Scorecard. California continues to make unprecedented strides towards energy efficiency in all categories. along with other states in this bin. Moving into the second position, Massachusetts enacted new comprehensive energy legislation and is on a clear path towards establishing an aggressive Energy Efficiency Resource Standard, which will require annual electricity savings of 2.4% by 2012. In 2007, the Connecticut legislature further increased efficiency efforts in the state, requiring the state’s utilities to procure all cost-effective energy efficiency as their first priority resource. Similar loading orders are in place in California, Massachusetts, Rhode Island, and Maine. Vermont received a perfect score for its utility programs and policies thanks to its aggressive energy efficiency resource standard and Efficiency Vermont’s impressive achievements. Washington received a perfect score in transportation. One of the first states to implement a specific vehicle miles traveled (VMT) reduction target, Washington mandates an 18% decline in annual VMT per capita by 2020, a 30% reduction by 2035, and a 50% reduction by 2050. Maine, one of this year’s most improved states, jumps into the top ten thanks to improved building energy codes and combined heat and power policies, and the efforts of Efficiency Maine, the agency which delivers energy efficiency programs.

Waiting in the Wings:

States in the second tier are quickly becoming models for success in energy efficiency. In some categories, these states feature some of the country’s most promising programs and policies. Delaware passed one of the country’s most aggressive Energy Efficiency Resource Standards, requiring the state to reduce electricity consumption 15% by 2015. Colorado also continued to refine its energy efficiency resource standard by adopting natural gas savings goals for its utilities. Wisconsin and Iowa’s utilities (and Wisconsin’s Public Benefits Fund, Focus on Energy) have offered energy efficiency programs for decades, maintaining levels of funding rivaling top tier states. New Hampshire’s utilities collaborate to offer joint, statewide programs in order to gain the benefits from uniform planning, delivery, and evaluation. Utilities can earn performance incentives for 8–12% of total program budgets for meeting established cost-effectiveness and energy savings goals. 

Hawaii’s utilities placed third in electricity savings as a percentage of sales and New Jersey’s Clean Energy Program offers an alternative model for energy efficiency program administration. Pennsylvania offers some of the most robust financial incentives in the country including six grant programs, three loan programs, and a revolving loan program funded by the new Alternative Energy Fund. Maryland and New Jersey tie for third in scoring for transportation policies. Many of these states, however, show gaps in their overall approach. Energy-efficient transportation policies are absent in New Hampshire, Iowa, Idaho, and Nevada. Utility spending and savings lags in Maryland and Pennsylvania. In fairness, most of these states are just beginning robust efficiency programs and the actual savings and spending numbers should climb over the next few years.

Ready for Launch:

The third tier includes some of the most populous states in the country, representing an enormous opportunity for overall energy savings. Many of these states are in the midst of major shifts in their approaches to energy efficiency. Ohio and Illinois are now in the implementation phase of the major energy efficiency programs spurred on by Energy Efficiency Resource Standards passed in 2008 and 2007, respectively. Florida adopted the California Clean Car Standard in January 2009. While the program was passed by the state’s Environmental Commission, it is still awaiting ratification by the legislature. North Carolina recently began to implement a combined Renewable Energy and Energy Efficiency Portfolio Standard (REEPS). The energy efficiency portion of the REEPS energy savings targets will increase to 0.75% of prior-year sales in 2012, rising to 5% of prior year sales in 2021. Utah, New Mexico, and Arizona made major strides in utility-sector energy efficiency in 2009, continuing to utilize the integrated resource process and demand-side management (DSM) plans to push for aggressive energy efficiency spending and savings goals. As the first state to pass an EERS, Texas has concentrated on energy efficiency for years, but continues to face persistent barriers to achieving its full potential. Its EERS only targets 20% of load growth in 2009, and recent bills attempting to raise the standard were dropped in the hectic closing hours of the last legislative session.

In the Mix:

States residing in the fourth tier have made some laudable efforts, but the potential for energy efficiency remains largely untapped. Some of these states recognize this and have taken promising steps towards realizing an energy-efficient economy. Michigan passed an energy efficiency resource standard that requires utilities to achieve 0.3% savings in 2009, ramping up to 1% in 2012. Tennessee, which very recently developed and implemented a smart growth management policy, improved its score in almost every category. South Dakota made major strides in combined heat and power by approving statewide interconnection standards. All of these states have also adopted lead by example policies requiring energy efficiency in state facilities. Many of them have also authorized or implemented performance incentives for utility energy efficiency programs, employing an important tool to drive utility action. Significant barriers in the utility and transportation sectors continue to obstruct these states from achieving cost-effective energy efficiency on the scale that is possible. In Virginia, for example, implementation of a modest EERS has stalled since its passing in 2007. None of the states in this bin fund state transit in a meaningful way; however, Oklahoma and South Carolina stand out with new tax incentives for high-efficiency vehicles. 

In the Basement, with Some Bright Spots:

The outlook for the bottom tier is not as bleak as it may seem. Alabama has one of the country’s strongest efficient state fleet policies; West Virginia is a national leader in research, development, and deployment in clean energy; and Nebraska’s Dollar and Energy Savings Loan program has successfully operated for years. Alaska spends more than $50 per capita on public transit, Georgia has a policy to reduce vehicle miles traveled, and Louisiana offers a tax incentive for high-efficiency vehicles. Each state here has its bright spots but currently lacks the vision and political will from its leaders to make meaningful gains in energy efficiency. Stakeholders in states like Missouri and Arkansas are beginning to show sincere interest in energy efficiency, and this commitment must be sustained through a challenging ramp-up process. Surely, small victories are better than none, but these energy-intensive states could reap enormous energy cost savings from the implementation of statewide programs run through utilities, the state government, and third-party administrators. It is imperative for these states to maintain momentum from their successes, build on them, learn from states around them, and move forward with comprehensive strategies to reduce energy consumption. 

California has taken another large step towards improving energy efficiency. On September 24, the California Public Utilities Commission (CPUC) approved the 2010–2012 energy efficiency program plan and budget requests for four major investor-owned utilities: Southern California Edison Company (SCE), Southern California Gas (SCG), Pacific Gas and Electric Company (PG&E), and San Diego Gas and Electric Company (SDG&E).The decision authorizes savings goals for each utility; a total budget of $3.1 billion of ratepayer funding; the programs it will fund; and the evaluation, measurement, and verification (EM&V) procedures that will be used.

The decision follows a previous CPUC decision that established a policy to procure all cost-effective energy efficiency and conservation resources before adding generation resources. The 2010–2012 plan also follows the roadmap set in place by the California Long-Term Energy Efficiency Strategic Plan, which articulates a long-term vision and goals for each economic sector and identifies strategies to achieve these goals.

The 2010–2012 plan updates savings goals established in a previous decision to reflect an updated assessment of energy savings potential available to the utilities. The plan calls for nearly 1,500 MW of peak savings and 7,000 GWh of electricity savings over the three-year period, which would avert 3 million tons of greenhouse gas emissions and the construction of three power plants. The electricity savings target is equivalent to almost 4% of the combined 2007 electricity sales for the three IOU’s and 2.6% of the state’s 2007 sales.

The three-year budgets of $3.1 billion for the four utilities represent a 42% increase from the previous three-year cycle, but are 20% less than requested by the utilities. In accordance with the law requiring all utility program portfolios to be cost-effective, the CPUC reduced costs related to administration, marketing, education, and outreach (ME&O), and EM&V.

The plan sets out a portfolio of twelve statewide programs that will be offered throughout the utilities’ service areas. The “statewide approach” aims to simplify program offerings for consumers and improve communication between utilities and the CPUC. Twelve program leads will be assigned by the IOU’s to oversee the implementation of each statewide program and help the CPUC coordinate with the IOU’s. Each IOU will contract with an implementer to offer programs in the following categories: Residential, Lighting, Commercial, New Construction, Industrial, Agricultural, HVAC, Codes and Standards, Integrated Demand-Side Management, Workforce Education and Training, ME&O, and Emerging Technologies. Each program will have similar incentive levels, program delivery strategies, and marketing approaches.

Most of the statewide programs offer 1 to 6 "sub-programs" that are also coordinated with the same names, incentive levels, and basic approaches for the most part. Many of these subprograms are continuing programs that have not changed much from the previous program cycle. Overall the portfolio features a mix of new and innovative programs and continuing programs as well.

Among the innovative new programs will be the Statewide Program for Energy Efficiency (CalSPREE), targeting 20 percent savings for up to 130,000 homes over 2010–2012. The utilities will offer a tiered suite of residential “whole house” saving options that will be designed to leverage municipal funding programs, federal stimulus dollars, and related programs of the California Energy Commission. As for existing programs, the plan increases the budget utilities’ proposal for a promising industrial program called Continuous Energy Improvement, which will broaden the scope of programs available to the industrial sector. 

Aside from the twelve statewide programs, the plan also includes a coordinated statewide financing program, local and state government programs, third-party programs, unique "local" programs (i.e., done by only one or two of the IOUs), and unique pilot projects. The local government and state programs are coordinated by the IOUs and CPUC.

Finally, the plan also requires the development of performance metrics to measure the progress of each program towards market transformation and achievement of short, medium, and long-term goals and strategies as set forth in the Long-Term Plan.

Read the draft decision here: http://docs.cpuc.ca.gov/PUBLISHED/AGENDA_DECISION/107378.htm
Visit the CPUC website: http://www.cpuc.ca.gov/puc/

In September, the New York State Senate passed landmark legislation creating the “Green Jobs/Green New York” program, which aims to make 1,000,000 homes, businesses, and not-for-profits in New York more energy efficient. Workforce development and job training constitutes the second pillar of the program, which aims to create 14,000 jobs.

The program will be administered by the New York State Energy Research and Development Authority (NYSERDA), which will establish a revolving loan program to provide the upfront cost of up to $13,000 per residential customer to retrofit a home, and up to $26,000 to retrofit each qualifying business. NYSERDA will also conduct energy audits, administer the program, and provide a credit enhancement for critical private sector capital investments. The program is estimated to reduce energy usage of its participants by 30–40%. Property owners will repay the full cost of the investment over time with portions of their energy savings, yielding net savings for the program participants. The new law requires NYSERDA to establish innovative financing mechanisms such as on-bill financing, which allows utility customers to pay a monthly average bill and pay down the loan with any money paid in excess of actual costs.

NYSERDA will target small geographic areas for the initial retrofits through a competitive process that requires applicants to include local community groups and collaborate with contractors, local utilities, labor, and training organizations.  NYSERDA must give preference to areas with high energy costs and coalitions that include women- and minority-based businesses, and groups based in economically distressed communities.

The program will also receive $2–4 million of Regional Greenhouse Gas Initiative (RGGI) funds, which the state gathers through the sale of carbon allowances to major emitters in RGGI-participating states, to establish green job training throughout the state. In partnership with the Department of Labor, NYSERDA will create workforce training programs throughout the state to ensure that the state’s workforce is highly trained and in place to handle mass-scale retrofitting. NYSERDA will also partner with providers of workforce training such as community colleges, community-based organizations, trade associations, and labor unions to create successful and sustainable strategies. Key challenges to address will include building sufficient capacity, such as hiring enough qualified trainers or securing proper facilities for hands-on work for training programs. The program will also attempt to overcome inconsistencies in curricula and market acceptance of certifications throughout the state.

The program will be funded with revenue raised by the auction of carbon emission credits through the RGGI. The bill allocates $112 million from the auction proceeds to NYSERDA and this funding will be used to leverage private and federal investments. Auctions of carbon emission credits over the last two years have raised almost $150 million for the state, which expects to take in an additional $70 million through 2010. On October 15th, Governor David Patterson proposed a plan to take $90 million in RGGI proceeds to close New York’s budget deficit only days after signing the bill, which will be considered by the State Legislature currently in recess. The announcement was roundly criticized by environmental groups, which fear the move sets a precedent for using the money as a reserve for other programs in New York and other participating states. The Governor’s office maintains that the $112 million for NYSERDA would be preserved.

The criticism is rooted partly in the fact that under the memorandum of understanding signed by the 10 RGGI states, the states agreed to use proceeds from RGGI auctions for energy conservation and clean energy programs. Most states have delivered on this commitment. In Maine, all proceeds are used for electric and fuel efficiency. New Hampshire dedicates 90% of its proceeds to energy efficiency and at least 10 percent to low-income energy assistance. The state established the Greenhouse Gas Emissions Reduction Fund (GHGERF) with RGGI proceeds, which will support energy efficiency and renewable energy projects and initiatives in New Hampshire. The fund has already implemented a new revolving loan fund offered to businesses and administered by the NH Business Finance Authority.

Top of Page