Blog

Energy Efficiency in States and Beyond

Newton's cradle, except with light bulbs; the background is various shades of blue.

The first Wednes­day in Octo­ber, we cel­e­brate Ener­gy Effi­cien­cy Day to lift up a time-hon­ored, though some­times over­looked, ener­gy resource. In all of its shapes and sizes, ener­gy effi­cien­cy is a depend­able and cost-effec­tive way to reduce elec­tric­i­ty and gas demand, pro­vide inno­v­a­tive new solu­tions to con­sumers, and clean up the ener­gy supply.

While it isn’t always obvi­ous how ener­gy effi­cien­cy improves our dai­ly lives, our fed­er­al and state leg­is­la­tures, pub­lic util­i­ty com­mis­sions, and inde­pen­dent grid oper­a­tors are always work­ing hard to strength­en and expand efforts to save ener­gy. Here’s a quick run­down of some of the ener­gy effi­cien­cy high­lights from 2021 so far.

State leg­is­la­tures across the coun­try have been craft­ing new laws to increase ener­gy effi­cien­cy efforts, though the approach­es are as var­ied as the states them­selves. Here, we name just a few 2021 bills that have already received a guber­na­to­r­i­al sig­na­ture. New Jer­sey S3995 and Maine LD815 pro­vide tech­ni­cal and finan­cial sup­port to upgrade the effi­cien­cy of grade school build­ings, while Ore­gon HB2842 and Con­necti­cut SB356 tar­get efforts towards res­i­dences, with a focus on pro­vid­ing sup­port to low-income own­ers and renters. Rhode Island S339, Maine LD940 and Neva­da AB383 upgrade state appli­ance effi­cien­cy stan­dards, while Col­orado SB231 allo­cates pub­lic funds to weath­er­iza­tion efforts. Min­neso­ta HF164 increas­es the state’s annu­al ener­gy sav­ings goals and calls for util­i­ty ener­gy con­ser­va­tion plans, and Illi­nois SB2408 pro­vides for new ener­gy effi­cien­cy pro­grams, espe­cial­ly for low-income res­i­dents, and stretch ener­gy build­ing codes. Neva­da SB448 dou­bles the per­cent­age of ener­gy effi­cien­cy pro­gram dol­lars that must be invest­ed in low-income and his­tor­i­cal­ly under­served communities.

The infra­struc­ture leg­is­la­tion cur­rent­ly being debat­ed by Con­gress also con­tains a range of invest­ments in ener­gy effi­cien­cy. The bipar­ti­san bill passed by the Sen­ate, the Infra­struc­ture Invest­ment and Jobs Act, pro­vides ener­gy effi­cien­cy fund­ing for states and local gov­ern­ments through the State Ener­gy Pro­gram, the Ener­gy Effi­cien­cy and Con­ser­va­tion Block Grant Pro­gram, fund­ing to imple­ment updat­ed build­ing ener­gy codes, and a new revolv­ing loan fund for ener­gy audits. It also pro­vides fund­ing for effi­cien­cy upgrades in pub­lic schools and non­prof­its and for weath­er­iza­tion for low-income home­own­ers. And it pro­vides funds to improve effi­cien­cy in the indus­tri­al sec­tor and train the ener­gy effi­cien­cy work­force. In addi­tion, although the final text of the Build Back Bet­ter Act is still uncer­tain, it would also like­ly pro­vide sig­nif­i­cant fund­ing for ener­gy effi­cien­cy pro­grams. Tak­en togeth­er, the pro­grams pro­posed in these bills rep­re­sent a poten­tial multi­bil­lion dol­lar fed­er­al invest­ment in ener­gy efficiency.

Many state pub­lic util­i­ty com­mis­sions over­see a fair­ly con­stant stream of util­i­ty pro­pos­als to invest in ener­gy effi­cien­cy pro­grams. While there has been no short­age of this work in 2021, at least three states have already made, or are in the process of mak­ing, fair­ly sub­stan­tial pol­i­cy changes relat­ed to ener­gy effi­cien­cy. In Cal­i­for­nia, reg­u­la­tors have just set new ener­gy sav­ings goals for elec­tric and gas util­i­ties (Dock­et No. R.13 – 11-005). In Michi­gan, the MI Pow­er Grid Ener­gy Waste Reduc­tion Low Income Work­group has been col­lab­o­rat­ing through­out the year to design pro­gram­ming that bet­ter address­es the health, com­fort, safe­ty, and ener­gy bur­den of low-income res­i­dences. And final­ly, a new rule­mak­ing in Col­orado responds to recent­ly passed leg­is­la­tion call­ing for strate­gic build­ing elec­tri­fi­ca­tion and nat­ur­al gas util­i­ty plans that reduce the usage of the fuel and its car­bon inten­si­ty through a myr­i­ad of strate­gies that include elec­tri­fi­ca­tion and ener­gy effi­cien­cy. (Dock­et No. 21M-0395G). In the dock­et, the Com­mis­sion will explore how ener­gy sav­ings tar­gets, weath­er­iza­tion, insu­la­tion, and fuel-switch­ing to high-effi­cien­cy elec­tric appli­ances can reduce cli­mate-warm­ing emis­sions and min­i­mize ener­gy tran­si­tion costs.

Final­ly, ener­gy effi­cien­cy remains an impor­tant (if some­times over­looked) fac­tor in whole­sale elec­tric­i­ty mar­kets. In PJM, recent improve­ments in load fore­cast­ing (includ­ing assump­tions that rely on increas­es in ener­gy effi­cien­cy) meant that cus­tomers had to buy less gen­er­at­ing capac­i­ty to meet reli­a­bil­i­ty needs, sav­ing bil­lions. In addi­tion, in ISO New Eng­land, Mid­con­ti­nent ISO, and PJM, ener­gy effi­cien­cy resources (bun­dled ener­gy effi­cien­cy projects that pro­duce ver­i­fi­able ener­gy sav­ings and reduce the need for gen­er­at­ing capac­i­ty) can com­pete to meet reli­a­bil­i­ty needs along­side tra­di­tion­al resources like pow­er plants. Allow­ing ener­gy effi­cien­cy to par­tic­i­pate on the sup­ply side of the elec­tric­i­ty mar­ket has a num­ber of ben­e­fits, includ­ing spurring inno­v­a­tive new projects that go beyond exist­ing ener­gy effi­cien­cy pro­grams, such as con­sumer incen­tives to buy prod­ucts that exceed effi­cien­cy stan­dards or com­mer­cial and indus­tri­al process improve­ments that reduce elec­tric­i­ty usage. PJM’s recent capac­i­ty auc­tion to pro­cure resources to meet reli­a­bil­i­ty needs result­ed in the pur­chase of over 4800 megawatts of ener­gy effi­cien­cy resources, a sharp increase from pre­vi­ous auctions.

Whether it’s through leg­is­la­tion, a reg­u­la­to­ry pro­ceed­ing, or in com­pet­i­tive whole­sale elec­tric­i­ty mar­kets, ener­gy effi­cien­cy con­tin­ues to be an impor­tant top­ic worth cel­e­brat­ing all across the country.