ENERGY EFFICIENCY INVESTMENTS CAN HELP PREVENT CALIFORNIA-STYLE ELECTRIC SYSTEM MELTDOWN BY REDUCING PEAK LOADS AND INCREASING RELIABILITY: CONSUMERS AND ENVIRONMENT ARE WINNERS

February 2, 2001

WASHINGTON, D.C. -- Consumers could benefit from reliable electric power delivery, savings on their electricity costs, and reduced pollutants emitted from power plants if utility companies and regulators adopt energy efficiency programs recommended in a new report issued by the American Council for an Energy-Efficient Economy, Using Targeted Energy Efficiency Programs to Reduce Peak Electrical Demand and Address Electric System Reliability Problems. The report's recommendations include six programs to improve air conditioning and lighting systems in homes and businesses. If these programs were deployed nationwide, savings would total more than 60,000 megawatts by 2010. That's about 40% of the overall increase in demand projected by the North American Electric Reliability Council.

Steve Nadel, Executive Director of ACEEE and primary report author, stated, "The proposed efficiency programs could reduce electric peak demand for participating customers by 5-15% without reducing comfort or service. If the programs engage enough customers, they could be a significant part of the solution to regional and local power shortages. Such programs are among the most proven and cost-effective solutions to the electric energy crises facing states across the nation." He added, "Most of what we're seeing right now in reaction to the California power crisis is emergency use reductions, many of which hurt the economy or cause people discomfort. We're proposing approaches that are true efficiency in that they help customers fully meet their needs while using less energy. Unfortunately, with electric utility restructuring, funding for such programs has decreased nationally by 24% since the mid-1990s. During that same time, growth in electric demand has overwhelmed supplies in several areas of the country."

Chris Neme, Director of Consulting Services, Vermont Energy Investment Corp. and co-author, stated, "Air conditioning and lighting systems spike the need for power on hot summer days in most areas of the country. Our report recommends increasing energy efficiency in the air conditioning systems and commercial lighting systems. The report also provides detailed plans to ease program adoption by utilities and state governments. If adopted quickly, savings could be realized shortly thereafter."

Susan Coakley, Executive Director of Northeast Energy Efficiency Partnerships, Inc. (a report sponsor), asserted, "Over the last ten years, electric energy efficiency programs in New England saved enough power to match the output of the Seabrook Nuclear Power Plant, a 1,100 megawatts plant on the New Hampshire seacoast. It's time to use that efficiency program capability to rein in growing summer peak demand." She also noted that policymakers in several Northeast states must make decisions this year regarding whether to maintain ratepayer funding for these efficiency programs or let energy demand grow unrestrained, forcing the need for even more new power plants.

The six programs are:

1. Replacing and updating residential cooling systems. Efficient air conditioning systems could cut peak energy use by 20-30% over standard systems. Correctly installing these systems could provide substantial additional savings. Last year, New Jersey's air conditioning program reached 14% of all replacement systems purchased.
   
   
2. Residential cooling system tune-up and repair. Correcting installation and maintenance problems that occur in half to three-quarters of all residential air conditioning systems could reduce warm-weather peak demand by an average of 14% in existing homes and 25% in new ones. Electric utilities in California have already tuned up air conditioning systems in thousands of homes.
   
   
3. High-efficiency commercial HVAC systems. High-efficiency "rooftop" air conditioners and chillers (larger cooling systems) could reduce peak demand by 20% or more relative to standard equipment. Utilities in the Northeast and California now offer programs to promote such high-efficiency equipment.
   
   
4. Commercial building tune-up and maintenance. A recent pilot tune-up project in eleven Chicago area buildings saved 6 million kilowatt-hours and more than 6 million dollars. The results from other studies suggest that improvements made to electrical and cooling systems could reduce energy consumption by 5-20%.
   
   
5. Commercial lighting retrofits. Lighting makes up a quarter of peak summer demand in the commercial sector. Lighting energy use could be cut 30% or more in most buildings by using improved lamps, ballasts, and other advanced lighting equipment.
   
   
6. Commercial lighting design. Improved fixtures, automatic controls, and better design could reduce lighting energy use in new buildings by 25% or more.
   

Fred Gordon, President of Pacific Energy Associates and report co-author, urged state utility commissions "To encourage, or even require, electric companies to fund or carry out these efforts." He added, "The U.S. Department of Energy should provide technical assistance to state efforts, and Congress should enact tax credits for efficient cooling equipment as proposed in several bipartisan legislative proposals."

Nadel concluded, "California, New England, and New York are already moving in some of the directions we propose. We urge these states to take additional steps, and encourage other states with power supply problems to begin programs along these lines."

Using Targeted Energy Efficiency Programs to Reduce Peak Electrical Demand and Address Electric System Reliability Problems is available for $25 plus $5 shipping and handling. Contact ACEEE Publications, 529 14th Street, N.W., Suite 600, Washington, D.C. 20045, phone: 202-507-4000, fax: 202-429-2248, e-mail: aceee_publications@aceee.org.

About ACEEE: The American Council for an Energy-Efficient Economy is an independent, nonprofit organization dedicated to advancing energy efficiency as a means of promoting economic prosperity, energy security,  and environmental protection. For information about ACEEE and its programs, publications, and conferences, contact ACEEE, 529 14th Street N.W., Suite 600, Washington, D.C. 20045 or visit www.aceee.org.