EFFICIENCY IS EVEN MORE EFFICIENT THAN THEY THOUGHT

Study Finds National Standard for Energy Efficiency Can Save U.S. Consumers and Businesses Nearly $170 Billion; Business and Environmental Groups Launch Campaign for Federal Policy to Spur Greater Energy Efficiency Investment
Melissa Smith, March 18, 2009 (American Council for an Energy Efficient Economy)

SUMMARY
The American Council for an Energy-Efficient Economy (ACEEE)’s Laying The Foundation For Implementing A Federal Energy Efficiency Resource Standard (authors: Laura A. Furrey, Steven Nadel, John A. “Skip” Laitner), draws from the most recent 2008 energy use data further verification of the enormous benefits to be gained by adopting widespread efficiency practices and habits.

Rewarding energy users for efficient practices could cut U.S. utility bills by $168.6 billion, 16% more savings than estimated in an earlier ACEEE report.

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The ACEEE report was released in conjunction with the launching of Campaign for an Energy-Efficient America, a coalition of business and interest groups formed to push Congress for a national Energy Efficiency Resource Standard (EERS).

The movement wants a national EERS requiring utilities to cut electricity use 15% and natural gas use 10% by 2020.

The report found that, among other things, a national EERS would: (1) generate 222,000 total permanent, high quality jobs; (2) save 262 million metric tons of greenhouse gas emissions; and (3) avoid the need for 390 new power plants.

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COMMENTARY
- The basic idea can be described in 1 word: Decoupling. The cuts in energy use come from rewarding utilities for reductions in energy consumption by their ratepayers instead of for selling more and more electricity.
- This "decouples" - or takes apart - utilities' profits and increaded energy consumption. It gives utilities more reward for creating efficiencies than they get from selling electricity.
- Programs would include home energy audits, rebates for installing efficient appliances and incentives for doing efficiency retrofits.
- A really exciting idea is to add an insignificant surcharge to ratepayer bills to create a pool of money and reward the utilities out of that pool for cuts in their customers’ consumption.
- With decoupling, utilities would have an incentive to perform audits, install smart equipment and new appliances and do retrofits at their expense. The utilities would recover the costs of improvements from increases to ratepayer bills equal to the total savings from the new structure, appliances, equipment and practices. In effect, the ratepayer pays no more but gets an efficiency makeover while the utility earns the money back for the improvements over time and is rewarded in the short run for reducing its customers’ consumption.

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- Administration of the national EERS would be at the state level where there is a pre-existing relationship between regulators and utilities.
- 19 states have EERSs. The policy’s fullest effect cannot come without national implementation but the report noted at the state level (1) Florida’s EERS will create 19,500+ new jobs and save $14 billion in energy costs; (2) The Illinois EERS will create 6,500+ new jobs and save $3.6 billion in energy costs; (3) Indiana’s EERS will create 5,000+ new jobs and save $3.6 billion in energy costs; (4) North Carolina’s will create ~6,500 new jobs and save $3 billion in energy costs; and (5) Tennessee’s will create 5,000+ new jobs and save $3.5 billion on energy costs.

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- The Save American Energy Act (H.R. 889 in the House, sponsored by Representative Edward Markey, D-Mass, and S. 548 in the Senate, sponsored by Senator Charles Schumer, D-NY) creates a national EERS to cut electricity use 15% and natural gas use 10% by 2020.
- The widely acclaimed energy authority Amory Lovins, Cofounder, Chairman and Chief Scientist of the Rocky Mountain Institute and known at NewEnergyNews as “His Excellency of Efficiency,” frequently cites ACEEE as the best reference for consumers.

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QUOTES
- Reid Detchon, Executive Director of the Energy Future Coalition: “As this coalition shows, the idea of a national energy efficiency standard draws support from a wide range of business and environmental groups in order to save money for consumers, create long-term jobs that cannot be outsourced, and reduce greenhouse gas emissions…”

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- Steven Nadel, Executive Director, ACEEE: “Energy efficiency is one of the most effective ways to address our nation’s energy and climate challenges while creating jobs and saving Americans money…In these difficult economic times, investment in energy efficiency makes more sense than ever...”
- Mindy S. Lubber, president, Ceres (which founded Business for Innovative Climate and Energy Policy, BICEP): “Energy efficiency is the veritable low hanging fruit for businesses who want to fight climate change and reduce their monthly energy bills…Leading businesses are calling on Congress to pass strong energy-saving policies that will spur innovation, improve company bottom lines, and put Americans back to work building a clean energy economy.”

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- Dave Douglas, V.P, Cloud Computing/Chief Sustainability Officer, BICEP member Sun Microsystems: "We appreciate the leadership demonstrated by Rep. Markey and Sen. Schumer...on policies that will encourage energy efficiency - the fastest, cheapest, and cleanest way to start addressing our nation's energy and climate challenges…”
- Brenna Walraven, Managing Director, USAA Real Estate Company: “Implementing a strong energy efficiency standard for utilities will lead to much needed additional investments in our built environment, increasing the asset value of commercial and residential buildings alike across the country…”