Energy Efficiency Resource Standards Chart a Steady Course

Blog Post | July 11, 2013 - 12:44 pm
By Annie Gilleo, Senior Manager, State Policy

Utilities and policymakers are increasingly turning to energy efficiency as a low-cost way to meet or curtail rising energy demand. One policy tool in particular—an energy efficiency resource standard (EERS)—has been instrumental in providing a framework for energy efficiency across the nation. ACEEE’s updated state EERS policy brief outlines the 25 states that have enacted these long-term, binding energy savings targets. These states make up 61% of electricity sales in the United States. If each of these states maintains its current EERS target out to 2020, the overall savings would be approximately 236,000 GWh by 2020, equivalent to over 6.3% of sales nationwide, or the combined electricity consumption of Maryland, Washington, Minnesota, Vermont, and Rhode Island.

Recently, EERS policies in several states have survived significant pushback. In Ohio, where an EERS has been in place since 2008, FirstEnergy Corp. charged that a stagnating economy made the cost of program implementation too high. The proposal to halt further energy efficiency requirements lost momentum, however, as consumers and businesses alike came out in support of the policy. In April, ACEEE worked with the Ohio Manufacturers Association to release Ohio’s Energy Efficiency Resource Standard: Impacts on the Ohio Wholesale Electricity Market and Benefits to the State , a report outlining the economic benefits of Ohio’s EERS to all consumers. The push for a rollback faced strong opposition. Collectively, Ohio utilities have exceeded annual savings goals each year since 2008, generating more than 3.2 billion kWh in savings through cost-effective measures. Energy efficiency has been credited with driving down capacity prices over the past year, resulting in significant savings for all residents, even those that do not participate in the program.

Rollback attempts in North Carolina seem similarly unlikely to succeed. Legislation that would have rolled back the state’s 2007 Renewable Energy Portfolio Standard (REPS), toward which energy efficiency can count, failed to pass out of either the House or Senate in May. Though several North Carolina lawmakers have pledged to continue working to repeal the REPS, they face significant resistance from a broad group of stakeholders.

In Michigan, where legislation was proposed in 2012 to repeal renewables and efficiency standards, opposition by businesses and organizations supporting the energy efficiency and renewable programs succeeded in averting any action. Governor Rick Snyder then asked the legislature to hold the bill while he launched a comprehensive state energy policy review during 2013. In a major energy policy address, Governor Snyder indicated ambivalence about some portions of the state’s current energy strategy, but strong support for energy efficiency.

In New Mexico, conflict over efficiency standards led to a long-term victory in the form of compromise legislation. After a legislative proposal sought to limit efficiency spending to 1% of revenue, stakeholders worked with lawmakers and utility commission staff to revise the proposal. The version of HB 267 that ultimately passed slightly lowered New Mexico’s 2020 targets, but set spending levels at 3%, high enough that it is likely original savings targets will still be met. Furthermore, the fixed funding level streamlines the utility planning process, allowing utilities to look at their efficiency program portfolios in a more holistic manner.

In Maine, legislators sent a strong message by voting to override the governor’s veto of a sweeping energy bill. The bill restores full funding to Efficiency Maine, allowing the third-party administrator to pursue its mandate to invest in all cost-effective efficiency measures. The new law also expands natural gas efficiency programs to all natural gas utilities in the state.

In virtually all of the other 20 states, EERS policies continue to earn strong support. If the resistance to efforts to roll back EERSs in these five states is any indication, backing for EERS policies is quite resilient