Everyone Benefits: Practices and Recommendations for Utility System Benefits of Energy Efficiency

Research Report U1505


Brendon Baatz


This report details the wide range of benefits of energy efficiency to the electric utility system, including traditional avoided cost of energy as well as many other economic benefits. These benefits accrue to all utility customers, including those who have not participated in programs. The report also discusses the ways in which efficiency program administrators currently quantify these benefits. Many states lack coherent policy regarding which utility system benefits should be included in cost-effectiveness testing. As a result, utilities and jurisdictions omit relevant benefits, leaving cost-effective energy efficiency and significant cost savings on the table. Finally, the report reviews quantitative benefits of energy efficiency in integrated resource plans and makes recommendations for improving the analysis of utility system benefits in cost-effectiveness screening.