States’ energy efficiency plans evolve

Published on August 01, 2019 by Ed Roberts

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States adopting energy efficiency resource standards are leading the way in producing consumer electricity savings and also are expanding to incorporate new technologies to reduce carbon emissions, according to a report issued Thursday by the American Council for an Energy Efficient Economy.

The report concluded that energy savings targets – adopted by 27 states over the past two decades – are the most effective utility-sector energy efficiency policy.

The report, Next-Generation Energy Efficiency Resource Standards (EERS), found that EERS are a critical tool for lowering energy costs, helping to drive more than 80 percent of utility sector savings in 2017. In that year, states with an EERS in effect achieved incremental electricity savings of 1.2 percent of retail sales, on average, compared with average savings of 0.3 percent in states without an EERS.

Increased focus on emissions reductions, lower-cost resource planning, and equity for low- and moderate-income households have caused states to look for new frameworks for setting energy savings goals. Of the states reviewed in the report, most cited decarbonization as the most pressing policy goal and are using EERS policies to help reduce emissions and meet aggressive climate goals.

The report, released Thursday during a webinar, discusses five states that have adopted EERS (California, Hawaii, Minnesota, New York and Massachusetts) and explores the driving changes in each states’ policy, emerging models and what can be learned from each state’s experience, according to Rachel Gold, senior manager of ACEEE and coauthor of the paper. “This is a good news study,” said Gold, touting the advances in energy efficiency accomplished in those states.

“Some states,” according to Gold, “are finding that their EERS policy needs to change. For many years, these energy savings targets have looked quite similar, calling for specific amounts of electricity (and sometimes natural gas) savings.”

The next generation of EERS policies are broader, encouraging utilities and other program administrators to achieve multiple goals, like emissions reductions, electricity savings, and peak reductions, all while maximizing benefits to customers, she explained. In studying the five states, ACEEE found that new designs vary greatly. For example, while Massachusetts and New York have both adopted fuel-neutral savings goals, their overall frameworks look quite different.

Janet Joseph, senior vice president for Strategy and Market Development at New York State Energy Research and Development Authority, discussed some of the aspects of the state’s newly passed Climate Leadership Community Protection Act, under which the state pledges net greenhouse gas emissions by 2050, with all its electricity coming from carbon-free sources. Among others things, the plan envisions net-zero carbon buildings by mid-century.

“We are in the midst of an unprecedented energy transformation in New York and many regions of the country and the world,” said Joseph. “Most of our transformation is not in evidence yet.”

The ground-breaking New York plan consists of many facets including cataloguing sustainable market scale; reducing costs; valuing and rewarding the carbon and grid benefits of energy efficiency; decarbonizing heating and cooling and increasing affordability and access for low- and moderate-income households. New York state government plans to invest up to $200 million a year in technology, energy retrofits and financing under the plan.

The New York State Department of Public Service is expected to set out new guidelines for the program in the next two months, according to Joseph.

“This is very much a comprehensive portfolio of actions,” she said.

Jennifer Potter, a commissioner with the Hawaii Public Utilities Commission, discussed how her state’s EERS have evolved since 2012 when the main focus was on cutting down on Hawaii’s oil imports, which accounted for 68 percent of the state’s electric power needs, and the nation’s highest electric rates. New goals switched the focus towards carbon neutral emissions, evolving technologies (like grid edge and smart devices) and adding new generation sources to the grid.

Hawaii’s plan also brings increasing focus on helping low- and moderate-income residents to adapt to the new marketplace, said Potter. For example, she cited a proliferation of customer-sited energy resources. State energy officials are continually reaching out to stakeholders to evaluate what is important to them and “where we need to go in the next 10 years,” Potter explained.