I am pleased to report that all the “market fundamentals” continue to look strong for utility-sector energy efficiency. While the recession has eased electric demand a bit, long-term concerns about system reliability and adequacy of supply remain. Construction costs for new generating facilities have soared, concerns about CO₂ emissions are ever-increasing, and energy efficiency continues to prove itself as by far the cheapest available resource option.  (Indeed, an ACEEE review last fall found 14 states with major energy efficiency programs reported results yielding an average utility cost of conserved energy of 2.5 cents per kWh—see Saving Energy Cost-Effectively: A National Review of the Cost of Energy Saved Through Utility-Sector Energy Efficiency Programs.)

So why do I have this lingering feeling of worry? Perhaps it’s because we’ve been on this mountaintop before. Back in 1992 I was lead author (along with Ken Keating, Jeff Schlegel, and Ed Vine) of an invited paper here at Summer Study entitled: The Purpose, Practice and Profession of DSM Evaluation: Current Trends, Future Challenges. In that paper, we waxed eloquently about the strong position of utility-sector energy efficiency and the rosy future we foresaw for continued robust growth. Two years later, California launched the movement toward utility deregulation (“restructuring”) that spread across the nation, and utility energy efficiency spending plunged by 50% over the following three years.

For those relatively new to the energy efficiency field, I say: take nothing for granted. We’re already seeing some of the dreaded “raids” on energy efficiency funds in the Northeast, as cash-strapped states look for any possible sources of revenues. And the inevitable backlash against the recent advancement of strong progressive energy efficiency policies in many states—by special interests philosophically and/or economically opposed to funding energy efficiency programs—is already beginning to sprout (for example, the recent “hit piece” on energy efficiency by the conservative “Texas Public Policy Foundation”).

So my key message here is: enjoy the good times, but stay on guard and don’t let up on the vigorous advocacy for the cheapest, fastest, and cleanest energy resource: energy efficiency.