TODAY’S STUDY: ABOUT THE TAXPAYERS’ INVESTMENT IN ENERGY EFFICIENCY

Summary of Ratepayer-Funded Electric Efficiency Impacts, Budgets and Expenditures(2010-2011)
Adam Cooper and Lisa Wood, January 2012 (Edison Foundation/Institute for Energy Efficiency)

INTRODUCTION

In mid-2011 the Consortium for Energy Efficiency (CEE), in coordination with the Institute for Electric Efficiency (IEE) and the American Gas Association (AGA), collected industry-wide data on ratepayer-funded energy impacts, expenditures, and budgets for energy efficiency programs from utility and non-utility administrators in the U.S. and Canada.

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This IEE report is focused on U.S. electric efficiency results based on information from 195 organizations – 172 electric and combined utilities, 10 non-utility energy efficiency (EE) administrators, and 13 organizations that declined to release their data at the organizational level. For information on Canadian electric efficiency results and/or gas utility efficiency information please reference the most recent CEE report at www.cee1.org.

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MAJOR HIGHLIGHTS INCLUDE:

 U.S. ratepayer-funded electric efficiency budgets totaled over $6.8 billion in 2011, a 25 percent increase from 2010 levels.

 Electric utilities are by far the largest providers of EE in the U.S., with utility budgets comprising 84 percent of the total ratepayer-funded electric efficiency budget nationwide.

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 Given that state energy efficiency resource standards are established in half of all U.S. states, covering two-thirds of the nation’s population, and that several of these standards have scheduled increases, IEE believes that ratepayer funded electric efficiency budgets are highly likely to exceed the Lawrence Berkeley National Laboratory’s (LBNL) ―high case‖ scenario projection of $12 billion by 2020.

 The 2011 budgets for six states are more than double their 2010 budgets – Indiana, North Dakota, South Dakota, Virginia, Washington D.C., and West Virginia. Over the next 10 years, as different states develop new and, in some cases, first time programs, we can expect many new states to become leaders in energy efficiency.

 U.S. ratepayer-funded electric efficiency expenditures totaled over $4.8 billion in 2010, a 28 percent increase from 2009 levels. In 10 states, 2010 electric efficiency expenditures more than doubled from their 2009 levels.

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 Overall, electric efficiency programs saved over 112 TWh in 2010, enough to power over 9.7 million U.S. homes for one year, and avoided the generation of 78 million metric tons of carbon dioxide.2 Electric efficiency savings (including both traditional energy efficiency as well as load control programs) were achieved at an average cost of 4.3 cents per kWh saved in 2010. Focusing on energy efficiency only (excluding and assuming no savings from load control programs), savings were achieved at an average cost of 3.5 cents per kWh saved in 2010. The actual cost is likely between 3.5 and 4.3 cents per kWh saved.

 IEE projects total electric savings from ratepayer-funded electric efficiency programs to meet or exceed 125 TWh in 2011.

 States with regulatory frameworks that support utilities in their efforts to pursue electric efficiency as a sustainable business tend to be leaders in annual electric efficiency expenditures and budgets.

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SUMMARY OF IMPACTS

Based on the CEE/IEE database, Table 6 provides aggregate data for 2010 ratepayer-funded electric efficiency savings by NERC region and sector.

 Overall, EE programs saved over 112 TWh in 2010, enough to power 9.7 million homes for one year, and avoided the generation of 78 million metric tons of carbon dioxide… Electric efficiency savings were achieved at an average cost of 4.3 cents per kWh saved in 2010. Excluding demand response programs, which are aimed at shifting peak demand, EE savings were achieved at an average cost of 3.5 cents per kWh saved.

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In 2010, U.S. aggregate electric efficiency impacts increased by nearly 20 TWh, a 21 percent increase in savings from 2009 levels. All U.S. Census regions experienced an increase in electric efficiency savings with the largest percent increases in the Midwest (38.9 percent) and the Northeast (38.5 percent), followed by the South (19.8 percent) and West (5.3 percent). A few reasons for the increased savings include the growth in energy efficiency program spending between 2009 and 2010 along with technological improvements in the products and technologies that are installed to achieve energy savings.

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2011 is poised to be a stellar year for ratepayer-funded energy efficiency and demand response programs. As shown in Figure 6, energy efficiency savings are on a growth path in the U.S. The increase in 2011 electric efficiency budgets of roughly $1.4 billion (from $5.4 billion in 2010 to $6.8 billion in 2011) will continue to transform the ways in which electricity is used by households, businesses, and institutions across the U.S. As presented in Figure 6, IEE projects 2011 total electric savings from ratepayer-funded electric efficiency and demand response programs to meet or exceed 125 TWh.