A Follow-Up of the Status of Reliability-Focused Energy Efficiency Programs Launched During the Electricity Crisis of 2001: Implications for Policy

This report presents as its primary focus the results of a follow-up survey of the 22 reliability-focused energy efficiency programs that ACEEE profiled as case studies in its April 2002 report Energy Efficiency and Electric System Reliability: A Look at Reliability-Focused Energy Efficiency Programs Used to Help Address the Electricity Crisis of 2001. The results of this follow-up are encouraging in terms of the viability of the concept of using energy efficiency programs to help address electric system reliability concerns. Most (17 out of 22) of the programs were given additional funding and operated through 2002, and are projected to be continued in 2003. A handful of programs were allowed to expire because their initial funding ran out and/or the crisis conditions had abated, but none of the programs were halted due to poor performance. Moreover, administrators for nearly all (20 out of 22) of the programs unequivocally responded that the programs would be used again if electric system reliability concerns re-occured.

A second focus of this report was to examine the findings of a recent ten-year national electric reliability assessment, Summary of Reliability Assessment 2002-2011, The Reliability of Bulk Electric Systems in North America, by North American Electric Reliability Council (NERC 2002). This report concluded that the NERC assessment found no cause for alarm at the national level, but clearly outlined a number of factors (e.g., financial distress in the generation industry, continuiing transmission needs, possible natural gas cost and/or delivery problems, etc.) that could lead to reliability difficulties, and also indentified a number of states and regions still facing current reliability challenges.

Taken in combination, the results of the case study follow-up and the near-term electric reliability assessment present positive implications for energy efficiency. The track record of actual experience by the case study programs demonstrates that reliability-focused energy efficiency programs can be a practical and viable tool for helping to address electric reliability concerns, and current projections indicate that significant challenges to electric system reliability remain in many regions of the country. Together, the results of this study suggest that policymakers and regulators should regard the incorporation of reliability-focused energy efficiency programs as a highly desirable policy strategy.

20 pp., 2003, $20.00, U031