ACEEE NEWS RELEASE
STATES
HIT THE ACCELERATOR ON UTILITY EFFICIENCY TARGETS
FOR
IMMEDIATE RELEASE
September
18 , 2007
Washington,
D.C.—States have accelerated their efforts to reduce energy
use by setting mandatory energy savings targets for electric and
gas utilities. A review released today by the American Council for
an Energy-Efficient Economy (ACEEE) found 15 states with such policies
in place, up from five states two years ago. These targets, dubbed
"Energy Efficiency Resource Standards" (EERS), set long-term
targets that ramp up to major savings. Utilities can meet the targets
by offering programs to help their customers conserve energy, and
some states credit savings from combined heat and power plants,
transmission and distribution system upgrades, and other measures
toward the targets. According to ACEEE, targets are generally set
based on studies of cost-effective efficiency potential, as well
as program experience and stakeholder concerns. Penalties often
apply if targets are not met, with particulars varying from state
to state.
"Energy
efficiency is a top priority for many governors, legislators, and
utility commissioners in order to reduce customer energy bills,
dampen electricity and natural gas prices, help prevent blackouts,
and start to address global warming. EERS are especially popular
because they guarantee specific results and encourage utilities
to minimize costs," noted ACEEE Executive Director Steven Nadel.
ACEEE analysis
estimates that EERS requirements now in place could reduce national
electricity demand by more than 1% per year by 2013. This would
be a significant impact, given that the Annual Energy Outlook of
the Energy Information Administration forecasts that national electricity
consumption growth will average only 1.5% per year from now through
2025. EERS could thus significantly reduce electricity demand growth,
reducing customer bills, softening wholesale power prices, relieving
predicted generation capacity shortages, and slowing carbon emissions.
The most aggressive
targets in place are Vermont's, which reduced electricity use by
more than 5% from 2000-2006. The 2007-2008 target calls for an additional
reduction of 3.5% of electricity use. An even more aggressive target
is being developed in New York State where Governor Spitzer has
announced a target of 15% savings by 2015. The state Public Service
Commission is now working out the specifics.
At the other
end of the spectrum, some states have set modest targets and then
gradually increased them. For example, Texas established a target
in 1999 of reducing load growth by 10% annually. The target has
been exceeded each year and in 2007 the Texas legislature increased
the target to 20% of load growth. They also commissioned a study
to determine if 30% and 50% of load growth targets can be met in
future years.
Other recent
actions have taken place in Minnesota, Illinois, North Carolina,
New Jersey, and Colorado. For example, in Minnesota, Governor Pawlenty
proposed the New Generation Energy Act that, among other provisions,
requires the state's utilities to reduce energy use by 1.5% per
year. Illinois and North Carolina passed their laws this past summer.
Both set targets but also set cost caps on efforts to meet the targets.
Recent legislation in New Jersey, Colorado, and Virginia directs
their state regulatory commission to work out details. The New Jersey
legislation authorizes a target of 20% savings by 2020.
Other states
with energy savings targets are California, Connecticut, Hawaii,
Nevada, Pennsylvania, and Washington.
The ACEEE summary
is available at http://aceee.org/energy/state/utpolicy.htm.
The same Web site also includes a 2-page summary with a map of affected
states.
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The
American Council for an Energy-Efficient Economy (ACEEE) is an independent,
nonprofit organization dedicated to advancing energy efficiency
as a means of promoting both economic prosperity and environmental
protection. For information about ACEEE and its programs, publications,
and conferences, contact ACEEE, 1001 Connecticut Avenue, N.W., Suite
801, Washington, D.C. 20036-5525 or visit http://aceee.org/.
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