States Are Picking Up Efficiency Funding Slack; Federal Government Fails to Match Effort

February 5, 2003

Media Contact(s):

Wendy Koch, 202-507-4753, Senior Director, Marketing & Communications

Washington, D.C. — Halting a dramatic decline, spending on utility and related state energy efficiency programs has rebounded modestly from the late 1990s, according to the American Council for an Energy-Efficient Economy's (ACEEE) new report, State Scorecard on Utility and Public Benefits Energy Efficiency Programs: An Update. Total annual spending on energy efficiency programs reached a high point of about $1.6 billion in 1993 and dropped dramatically to about $900 million in 1997. That steep decline was largely attributed to the rapid spread of utility deregulation initiatives across the United States in the mid-1990s. Now it appears that revived interest in energy efficiency by the states has begun to reverse that trend. ACEEE's research shows that total spending by states and utilities on energy efficiency programs had climbed back to about $1.1 billion in 2000.

ACEEE researchers cite this modest trend as evidence that states are reaffirming their commitments to energy efficiency as a means of responsibly managing their resource portfolios, while also providing significant economic and environmental benefits. The states most actively supporting energy efficiency programs continue to be primarily in the Northeast, the Pacific Northwest, and certain parts of the Midwest, along with a handful of other states, including California, Florida, and Texas. The average annual spending across all 50 states is $3.88 per capita. Connecticut ranks first in per capita program spending at $19.48.

While this overall national trend is encouraging, the research demonstrates that only about one-third of the states account for nearly all (86%) of the spending by utilities and states on energy efficiency programs. "Our analysis clearly illustrates that there remains a vast resource of energy efficiency opportunities in the United States that is being largely ignored and untapped," stated Dan York, ACEEE's Utilities Research Associate and co-author of this report.

Most states still offer no significant support for efficiency programs, and federal energy legislation has so far ignored the need for a national matching funding mechanism for state efficiency programs. This leaves the main burden of support for efficiency programs to a few states. Elaborating on the implications of the study, Martin Kushler, ACEEE's Utilities Program Director and co-author, stated, "The good news is that this research shows that a significant number of states remain committed to supporting energy efficiency programs and services. However, while the economic, environmental, and national security reasons for funding energy efficiency are stronger than ever, utility-related spending on energy efficiency is still one-third below where it was in the mid-1990s. The question is: will the inactive states, along with the federal government, step up to address this challenge?"

State Scorecard on Utility and Public Benefits Energy Efficiency Programs: An Update contains complete rankings for all fifty states and is available for free at http://www.aceee.org/research-report/u023. To purchase a hard copy of this report, click here.

For further information, contact ACEEE Publications, 529 14th Street, N.W., Suite 600, Washington, D.C. 20045, phone: 202-507-4000, fax: 202-429-2248, e-mail: aceee_publications@aceee.org.