There’s been a proliferation of new state-level policies enacted in recent years that promote energy efficiency, the report found. These policies include energy efficiency portfolio standards, requirements that utilities adopt cost-effective energy efficiency programs, and regulatory incentive mechanisms to better align utility financial interests with improvements in customer energy efficiency. These programs are funded through rate increases on the sale of electricity and gas hence the “ratepayer-funded” focus of the report.
Support for energy efficiency has grown in recent years as a result of widespread recognition that it’s less expensive to save a kilowatt-hour than to build a plant to produce that same unit of energy. While the new funding described in the report will ultimately come from ratepayers, the alternative would have been to build more plants to meet growing demand for power, the cost of which would have also been passed to those same consumers.
State-level energy efficiency programs have so far been concentrated in a handful of regions, with the top 10 states accounting for about 80 percent of the total spending last year. Among the leaders, California is the heavyweight, having spent about $1 billion in 2008 on ratepayer-funded energy efficiency programs.
But much of the projected increase in spending will be centered in populous states that have historically been minor players on the energy efficiency stage, the report predicts. Maryland, Michigan, North Carolina, Ohio and Pennsylvania, which together represented less than 4 percent of energy efficiency program spending in 2008, could account for more than 60 percent of the projected increase in total U.S. spending through 2020. The cumulative electricity savings from these programs is expected to be between 4.7 percent and 8.6 percent of total U.S. retail electricity sales by 2020.
