Massachusetts is a leading state with a long, successful record of implementing energy efficiency programs for all customer sectors.
The state created an aggressive funding mechanism and required electric utilities to provide energy efficiency programs during its restructuring of the industry in 1997. The natural gas utilities in the state have offered energy efficiency programs to customers since the late 1980s. Reported budgets for energy efficiency programs for 2011, and electricity savings for 2010, are in the State Spending and Savings Tables.
On July 2, 2008, the governor signed Chapter 169 of the Acts of 2008, An Act Relative to Green Communities. The new law altered the approval process and timeline for electric and natural gas utility energy efficiency plans and required the utilities to file the plans every three years. The law required the state’s regulatory authority, the Department of Public Utilities, to ensure that energy efficiency programs “are delivered in a cost-effective manner capturing all available efficiency opportunities, minimizing administrative costs to the fullest extent practicable, and utilizing competitive procurement processes to the fullest extent practicable.” In addition, the law directed the DPU to appoint and convene an Energy Efficiency Advisory Council (EEAC), whose members play a key role in designing, approving, and monitoring the energy efficiency programs of Massachusetts' investor-owned utilities. The EEAC’s primary mandate is achieving the goals outlined in the Green Communities Act and developing long-term vision, including recommendations concerning studies and research to achieve the goals of acquiring all cost-effective efficiency that is less than the cost of generation, and maximizing economic and environmental benefits that can be realized through increased energy efficiency.
According to a July 2012 draft of the second Three-Year Energy Efficiency Plan, required by the Green Communities Act, Massachusetts utilities expect to invest $2.2 billion in energy efficiency resources between 2013 and 2015. Massachusetts' approach has resulted in one of the most ambitious fully-funded state savings targets, with a 2012 goal of 2.4% annual electric savings, increasing to 2.5% per year from 2013-2015. The draft plan also proposes natural gas savings of 1.1% of retail sales starting in 2013 and increasing in subsequent years.
Utility companies in the state manage and implement the programs. The low-income residential demand-side management and education programs are implemented through the state’s low-income weatherization and fuel assistance program.
Massachusetts has decoupling in place for all of its gas and electric utilities. Utility companies can earn a shareholder incentive of approximately 5% of energy efficiency program costs for meeting energy saving, benefit-cost, and market transformation goals.
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