Energy Efficiency and Renewable Energy Can Cut Natural Gas Prices Quickly and Cost-Effectively: Consumers Would Save $103 Billion From a $7 Billion Public Investment

December 3, 2003

Media Contact(s):

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

WASHINGTON, D.C. — Policies designed to spur new investments in energy efficiency and renewable energy generation could begin lowering natural gas prices immediately and help consumers save money, according to Natural Gas Price Effects of Energy Efficiency and Renewable Energy Practices and Policies, a study prepared by the American Council for an Energy-Efficient Economy (ACEEE) and released today.

ACEEE found that lower consumption and natural gas prices would save consumers $103 billion over the 2004-2008 period. Natural gas bills would fall by $75 billion, which translates into $96 per year for the average home's gas bill. Additional savings of $28 billion would occur from lower electricity bills.

"The study quantifies the benefits that energy efficiency and renewables would provide to our economy by reducing high energy bills borne by consumers and industry," stated Dr. Neal Elliott, Industry Program Director at ACEEE and co-author of the study. "Contrary to what many are saying, there is something we can do about natural gas prices right now. Efficiency and renewable energy can reduce natural gas prices quickly and affordably."

The study found that reducing natural gas prices through energy efficiency and renewable energy is not only fast, but also relatively inexpensive. "For every dollar of consumer investment in this area, $4.50 is saved through lower natural gas prices and reduced consumption," said Dr. Elliott. "This is the fastest and cheapest method of delivering relief from high natural gas prices."

These investments are unlikely to occur without policy changes, because of market barriers such as lack of information, splits between energy bill payers and buying decision-makers, and panic purchase situations. In order for consumers to achieve these savings, public policy investments are needed to overcome these barriers. Saving consumers the approximate $103 billion stated in the study would require public investment of $7 billion and private investment of $23 billion. This translates to a net societal benefit to cost ratio of more than three to one.

Natural Gas Price Effects of Energy Efficiency and Renewable Energy Practices and Policies outlines specific policy solutions needed to achieve these savings. They include:

  • Updating state and federal appliance efficiency standards;
  • Requiring electric utilities to use more renewable power generation;
  • Expanding rebates and grants to consumers to improve equipment efficiency;
  • Installing clean on-site power generation;
  • Expanding federal research and development support for emerging efficiency and renewable generation technologies; and
  • Establishing tax incentives for efficiency and renewable energy investments.

Fortunately, implementing energy efficiency programs is a practical and well-proven policy action. For those policymakers and regulators interested in pursuing such a response, ACEEE has just completed a national review and has identified 29 exemplary natural gas energy efficiency programs that other states and utilities could replicate. Profiles of those programs will be posted on the ACEEE Web site for free access by mid-December (

Natural Gas Price Effects of Energy Efficiency and Renewable Energy Practices and Policies can be downloaded for free at The ACEEE Web site also includes supplementary material: a summary of the study's results; a fact sheet; data results; a resource contact list; and a technical white paper on the methodology.

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