State Current: Nation Approaches 25-State EERS Milestone

The country is rapidly approaching a milestone in energy policy. As of today, twenty-three states have an Energy Efficiency Resource Standard (EERS). Since 2007 fifteen states adopted an EERS, a policy that requires utilities to save a specific percentage of electricity and natural gas sales over an extended period of time through energy efficiency. The country will likely soon see over half of the states since an EERS is pending in three states (Utah, Wisconsin, and Rhode Island).

The EERS is a foundational policy that establishes a long-term market signal for utilities, which must utilize this cost-effective resource. The EERS, like a Renewable Energy Standard, diminishes risk and improves investment opportunities in energy efficiency. For the states, the EERS has proven to be an important policy tool to foster job growth in recession-battered industries like construction and manufacturing, all while reducing electricity demand and utility bills for consumers and businesses.

The twenty-three states with an EERS actually deliver over half of the retail electricity produced in the United States. Federal policymakers should take note of the success at the state level. With the EERS policies on the books now, the country will save 5–6% of our total retail electric sales by 2020. A federal EERS will draw the entire country to the level of savings currently being achieved by states with an EERS in place.  The proposed EERS in the Waxman-Markey bill will achieve 5­–8% savings by 2020, which will barely improve upon the business-as-usual scenario. Of the states with an EERS, 19 have standards aiming to achieve 10% or more by 2020 (cumulative savings compared to 2007 retail sales). In order to achieve these targets, states are forging ahead with ambitious programs to retrofit homes and buildings, foster competitive businesses, and begin transferring to a low-carbon economy through cost-effective energy efficiency investments.

In most states, it is too early to tell whether utilities are on track to meet goals since most have been implemented over the past year or two and energy savings data lags a year. Of the states with an EERS in place in 2006 with requirements for 2007 savings, most met or exceeded their goals.

State

2007 Savings as Percent of Electricity Sales

Approximate Annual Savings Target in 2007

Vermont

1.8%

1.8%

California

1.3%

1%

Hawaii

1.2%

No specified target

Connecticut

1.1%

1%

Nevada

0.65%

Up to 0.6%

Texas

0.13%

0.3%

Vermont stands out as the most visible success story, reaching 2.5% annual savings in 2008 and 9% cumulative savings from 2000 to 2008. The state achieved enough savings to “bend the curve,” meaning in 2008 the state reduced its energy consumption relative to the previous year because of its energy efficiency efforts. For a full list of state EERS policies and accompanying legislation or docket numbers, please see the ACEEE EERS Fact Sheet or visit the ACEEE State Policy Database.