The vast majority of U.S. utility program energy savings come from states with energy efficiency resource standards. Many of these states have incorporated next generation features into their standards or adopted complementary policies to accomplish additional clean energy goals.
Twenty-six states and the District of Columbia contribute 82% of total utility energy savings in the country. These states all have one thing in common: an energy efficiency resource standard (EERS). An EERS is a binding, multiyear target that commits a state to achieving a certain amount of electricity or gas savings through energy efficiency programs administered by utilities or others.
New research from ACEEE assesses states’ incorporation of four next generation features in EERS or complementary policies that encourage energy affordability, investing efficiency dollars in low-income households, decarbonization, and electrification. ACEEE’s new report finds that although most of the EERS states have at least one next generation feature, only nine states have all four, and only 11 other states have more than one.
Dedicating a portion of energy efficiency spending to low-income households is the most common next generation feature that EERS states have prioritized, with 21 states having low-income targets. Six states require at least 25% of program investments to go to low-income households. EERS states dedicate more funding to low-income energy efficiency programs: an average of $26 per income-eligible customer compared to $14 in non-EERS states.
Seventeen EERS states have established mandatory emissions targets or decarbonization goals. Sixteen have used their EERS or complementary policies to advance building or transportation electrification, and 13 have created policies or programs to reduce household energy burdens.
These have been notable developments since 2019, when a previous ACEEE report mentioned electrification as an “emerging” priority and only a few states had passed policies to reduce energy burdens. Most state legislatures and utility commissions still need to adopt such policies to deliver deeper energy savings, advance climate goals, and reduce energy bills, especially for the most disadvantaged households.
Leading states are using their EERS policies to accomplish multiple goals
Among the EERS states with next generation features, we identified states that provide models for other states to follow, as they have successfully incorporated all four next generation goals. Of the states described in case studies in the report, we highlight New York, Massachusetts, and Illinois here.
New York continues to advance decarbonization, energy equity, and energy affordability through its EERS. Although the state's EERS was established through a 2007 Public Service Commission order, the 2019 Climate Leadership and Community Protection Act (CLPA) is a notable complementary policy that incorporates multiple next generation elements. The law set fuel-neutral energy savings goals for 2025. New York adopted these goals in the context of a broader goal of decarbonizing its power sector by 2040.
CLPA directed state agencies and associated stakeholders to ensure at least 35% of benefits from clean energy investments go toward disadvantaged communities. Outside of CLPA, New York runs an energy assistance program with low-income discounts, aiming to cap energy burdens at 6%. The state has also made significant progress in deploying heat pumps, with 26,500 installed in 2023 alone.
Massachusetts passed its EERS in 2008 and has supplemented the statewide energy savings goal with other legislation, including a climate law enacted in late 2024. The energy savings goal supports Massachusetts’ broader goals of reducing greenhouse gas emissions by 50% by 2030 and 85% by 2050 (relative to 1990 levels).
To ensure progress toward energy savings goals, the state regularly publishes three-year energy efficiency plans to help utilities achieve broader savings goals. The most recent plan covers 2025 through 2027 and allocates 35% of its budget for equity-focused programs, including goals to weatherize over 66,100 low- and moderate-income households. The Mass Save Income Eligible Coordinated Delivery program has successfully provided no-cost weatherization for income-eligible customers; it has already weatherized 23% of all eligible 1- to 4-unit homes as of 2022.
Illinois enacted ambitious clean energy legislation in 2017 (Future Energy Jobs Act) and 2021 (Climate and Equitable Jobs Act). The 2021 law—which committed Illinois to achieve 100% clean electricity by 2050—updated the state’s EERS, including by setting building and transportation electrification targets.
For electric utilities with transportation electrification plans, 40% of EV charging infrastructure investments must serve low-income or disadvantaged communities. Illinois also runs a percentage of income payment plan that limits utility bills to 6% of income for eligible households. Although this program is separate from the state’s EERS, it complements the state’s broader energy savings goal by lowering energy burdens for the households that can benefit most.
Where should next generation EERS policies go next?
Next generation EERS policies provide states with exciting opportunities to achieve deep energy savings, meet their climate goals, advance electrification, benefit low-income households, and improve energy affordability. For the 24 states that lack an EERS, we recommend enacting such a policy. An EERS provides a framework for holding utilities or efficiency program administrators accountable for meeting their energy savings targets, especially compared to general policies that lack savings targets.
For states with an EERS, we recommend greater incorporation of next generation elements to advance equity and climate goals. Setting low-income targets and energy affordability provisions helps more low-income households benefit from energy efficiency improvements. State legislatures can also direct utility regulators to set lower electricity rates for low-income households, further lowering energy burdens.
Strengthening decarbonization targets and advancing electrification could help more states reach their climate goals. Energy efficiency has the potential to cut nationwide emissions and energy usage in half by 2050, and electrification is crucial for eliminating emissions from fossil fuels. States should strategically tailor their EERS policies to achieve these goals while prioritizing the needs of financially vulnerable utility customers.
