What’s New in State Energy Efficiency Policy Management?

States use Energy Efficiency Resource Standards policies for targeting cost-effective efficiency.

During 2015 – 2016, state officials are planning and examining new data regarding their state policy designs in relevance to projects to encourage cost effective and more efficient energy usage. Many state policies that outline energy efficient standards using innovative energy saving solutions are anticipating reductions in customer’s energy bills. Recent data also demonstrates confidence in higher reliability, measurable results in reduced emissions, and an increased interest in local economic investments. Leading the way to major changes in statewide utility energy efficient policies, Indiana, Ohio, Arizona, and Florida are among the pro-active states seeking efficiency cost benefits.

Taking into consideration that every state has a defined character with a long-standing tradition, varied economic circumstances, not to mention the quirky differences within leadership groups positioned at state energy utility companies, and concerns in the hierarchy of governmental offices. Because each state has it’s own initiatives with regard to energy concerns, it is hard to imagine a homogenous solution to progressive performance within the two most widely used state reporting resource standards, the Integrated Resource Planning, (IRP) requirements, and the Energy Efficiency Resource Standards, (EERS). In a preview of the detailed report planned for release in 2016, let’s examine the various patterns of performance of energy efficiency policies across the US with regard to different policy conditions of IRP versus EERS.

How Effective are Current Requirements for IRP’s?

Across the U.S., because energy efficiency is a key resource benefiting the environment while also facilitating economic growth; state and private utilities budget upwards of $7.7 billion dollars, (USD), annually for programs that support efficiency standards. As of this date, twelve states have not voluntarily complied with an IRP or any type of energy planning requirement. Twenty-eight states have a form of requirement that utilities must prepare annual IRP’s, and 10 states are using another version for reporting long-term utility energy efficiency planning. When observing operational results according to program spending and savings for energy efficiency standards, with complaint states or non-compliant states, differences are a bit higher in compliant states. Revenues increased from 1.50 percent to 1.64 percent, state spending increased from 1.50 percent to 1.81 percent, and utility sales went up from 0.48 percent to 0.80 percent last year.

The Effect of Adding EERS to states with IRPs:

When states include both IRP standards or other long-term energy efficiency planning requirement reporting to Energy Efficiency Resource Standards policies, data shows these states have spent, as well as saved over three times compared to states with an IRP alone. Interestingly, states that have EERS policies bit no IRPs also spent three times as much on energy efficiency programming, and saved nearly five times the amount as other states that have no compliance standards for either IRPs or EERS policies. Twenty-six states showed striking differences in performance, where 24 states showed non-significant results in energy efficiency compliance programming. By 2020 this effort, at the current rates will save 240,000 GWh.

From this available state-wide data, it is possible to conclude that whether or not a state is compliant to having their utilities prepare Integrated Resource Planning objectives if they are using the Energy Efficiency Resource Standards policies, they are taking advantage of the most effective state policy that is driving program spending for energy efficiency programs, as well as savings, in the U.S. utility industry. States are continuously motivated to establish fair business models and work for achievements in their state’s EERS goals. Using their EERS for targeting cost-effective efficiency is also the best available model for reaching customer energy efficiency savings as well.