ABSTRACT

ACEEE’s updated study of an accelerated energy efficiency and renewable energy investment scenario in the Pacific West states shows that these resources could bring down Pacific West wholesale natural gas prices by up to 38% and retail prices by 20%, saving about $100 billion in gas costs for energy users in the region through 2020, and over $300 billion nationwide. Because new natural gas supply options for the region are limited and will take many years to bring on line, efficiency and renewables are the only resource option available to policy-makers in the near term.

ACEEE used the North American Gas Markets Model developed by Energy and Environmental Analysis, Inc. (EEA), the same model used by the National Petroleum Council in its major 2003 study of the nation’s natural gas policy future. We developed detailed projections for additional energy efficiency and renewable energy resource acquisitions in the three-state region, which were then used in the EEA model to estimate effects on whole prices, consumption, and other effects.

Realizing the benefits of increased efficiency and renewable investment will require both private and public investment. In the first five years, about $19 billion of direct resource investment will be needed, supported by about $5 billion in public policy and program activity. While ongoing investments beyond year five will be needed to sustain savings at the levels projected in this analysis, we expect that benefits would substantially exceed costs in these out-years. This efficiency and renewables investment scenario would thus be very cost-effective.

The principal policy recommendations are to:

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20 pp., January 2006, $16.00, E062