Blog Post

New studies are showing what we already know: energy efficiency keeps electricity affordable and reduces environmental compliances costs

March 18, 2016

Multiple studies looking at spending and savings across programs, over time and in multiple states, all show the same thing: energy efficiency is highly cost effective. Put another way, it keeps electricity affordable by meeting demand and environmental regulations at a lower cost than if we generated new power, including from clean energy resources. To help break down this discussion to key points, we released two new fact sheets today, one showing that energy efficiency is consistently the lowest-cost option for meeting electric demand and the other showing that including energy efficiency can lower the cost of Clean Power Plan compliance.

How Much Does Energy Efficiency Cost?” includes results from studies by Lawrence Berkeley National LaboratoryACEEE, and the US Environmental Protection Agency (EPA). The fact sheet shows how these studies provide further evidence that energy efficiency costs less than other sources of energy, and also that the costs of energy efficiency have been level in recent years. “Energy Efficiency Lowers the Cost of Clean Power Plan Compliance” looks at the results of three studies, all finding that including energy efficiency as part of state compliance plans will lower costs to utility customers.  For example, a study by Synapse Resource Economics provides state-by-state information on most of the states.

This is great news for the people tasked with maintaining affordable electricity. So why isn’t it the go-to plan in more states? There are existing market barriers, such as the fact that utilities generally make more money by selling more power. Also, there aren’t a lot of deep pockets advocating for large-scale efficiency. And, the potential and cost of tapping into large-scale energy efficiency savings seems to be poorly understood by some. The state planning process around the Clean Power Plan (CPP) is a perfect example of this. Energy efficiency can help states achieve most of their 2030 CPP emissions targets while reducing electricity bills. This image from one of the fact sheets released today shows how adoption of a few common energy efficiency policies can help states achieve CPP compliance while reducing the costs of meeting electric demand.

Impact of using energy efficiency for Clean Power Plan compliance in select states

Source: analysis using ACEEE SUPR2 model.

The fact sheet goes on to explain that multiple analyses have found that using energy efficiency for CPP compliance will reduce electricity bills for everyone. One study finds that an energy efficiency scenario reduced electric bills by 17%. Another study shows that in most states using energy efficiency for compliance with the CPP will reduce bills by more than $10 per month.

A long time ago, we developed a regulatory system for electricity. But times have changed. Technological advances and decades of experience have unveiled a new path forward. By using energy efficiency, we can ensure that electricity is affordable and reliable while protecting public health and preserving our natural resources for future generations. Hopefully more states will recognize how energy efficiency can lower costs and embrace policies to spur electric energy savings. But some state regulators may continue playing by the old rules, and their citizens will have higher bills as a result.

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Climate Change Policy, Air Emissions Regulation, and CPP Utility Business Models
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