The Efficiency Gap: Some States Lead, Others Lag in Energy Efficiency Funding - ACEEE Study Ranks the States

October 7, 2005

Washington, D.C. — While nationwide spending on ratepayer-funded electric energy efficiency programs showed modest growth from 2000 to 2003, spending levels continue to vary widely among the states, according to a new study by the American Council for an Energy-Efficient Economy (ACEEE). Total spending on these programs was about $1.35 billion in 2003, up from about $1.1 billion in 2000 and about $900 million in 1998.

"A relatively small number of states continue to account for most of the investment in energy efficiency through utility and related programs," according to Dr. Marty Kushler, co-author of the study and Utilities Program Director at ACEEE. "These leading states rightly recognize that energy efficiency can save energy at half the cost of new energy supply. As a result, they are increasing their commitment to energy efficiency and are saving their citizens and businesses a lot of money on their energy bills."

The top ten states in spending as a percentage of utility revenues are:

  1. Vermont
  2. Massachusetts
  3. Washington
  4. Rhode Island
  5. New Hampshire
  6. Oregon
  7. Wisconsin
  8. New Jersey
  9. Montana
  10. California

The ten lowest ranked states-with little or no program spending on energy efficiency programs-are: Alabama, Oklahoma, Missouri, Maryland, Nebraska, North Carolina, Kansas, Delaware, Virginia, and Wyoming.

Total spending on programs nationwide represents about 0.5% of utility revenues. The leading states spend from 1 % to 3% of utility revenues on efficiency.

Another indicator reported in the study is energy efficiency spending per capita. The nationwide average for electric energy efficiency program spending is $4.65 per capita. Eighteen states are above this national average; the highest (Vermont) is $28.26 per capita. However, twenty-four states spend less than $1 per capita. The top twenty states account for 90% of nationwide spending.

A downloadable copy is available at, or a hard copy can be purchased for $18 plus $5 postage and handling from ACEEE Publications, 529 14th Street, N.W., Suite 600, Washington, D.C. 20045, phone: 202-507-4000, fax: 202-429-2248, e-mail: