Why the Southeast needs to catch up on energy efficiency

This blog was written by John D. Wilson, former Deputy Director for Regulatory Policy at the Southern Alliance for Clean Energy.

Guest Blog | June 22, 2011 | Energy Efficiency

Recently, we shared the great news that most utility customers across the Southeastern states that we focus on have or will very soon have access to meaningful energy efficiency programs. By 2015, these efficiency programs are projected to achieve energy savings ten times what they were just a few years ago.

We’re excited about that news, but we are not satisfied. Southeast utilities are still falling far short of leadership on energy efficiency.

ACEEE released two new reports that look at what it takes to be a leading state on energy efficiency, and what it means to utility customers who have access to effective efficiency programs.

Some of the key findings of ACEEE’s research include:

  • Outside the Southeast, state goals for energy efficiency are often very ambitious. Considering the top ten states with goals that stretch out as far as 2020, the average state has directed its utilities to help customers cut energy use by over 17%.
  • These are NOT pie-in-the-sky goals. ACEEE notes that “most states are meeting or are on track to meet energy savings goals.” In fact, 85% of the states with energy efficiency standards in place for over two years are realizing savings of at least 80% of their goals.
  • While ACEEE did not comprehensively analyze cost-effectiveness across all states, it did find that for every dollar invested by utilities, benefits average an estimated three to five dollars.

When compared with these findings, Southeastern utilities are still not taking advantage of all the benefits that efficiency has to offer. While the potential benefits of energy efficiency in the Southeast are similar to what ACEEE found in other parts of the country,southeastern utilities are aspiring to less than half the energy savings of their peers.

The figure below shows how Southeast utilities compare with “top ten” states in terms of energy efficiency goals. I’ve selected several of the most recent energy efficiency plans shared by Southeast utilities. Duke Energy and the Tennessee Valley Authority currently offer the most ambitious plans across the region among the large utilities. (Several smaller utilities, notably Gainesville Regional Utilities, have been achieving levels of efficiency on par with national leaders for several years, but serve only a small segment of the Southeast.)

This comparison isn’t a result of cherry-picking overly ambitious states that the Southeast can’t use as models because of a large difference in rates. In fact, the “top ten” states include only a few states from regions of the country with significantly higher electric rates. Besides, the fact that other regions of the country pay higher utility rates does not mean the Southeast utilities can’t achieve energy efficiency at national leadership levels. As you may recall, we debunked the myth that “low” electric rates prohibit a utility from achieving significant energy efficiency levels.

Here are the “top ten” states:

State 2020 Energy Savings Goal
(% Retail Sales)
State 2020 Energy Savings Goal
(% Retail Sales)
Massachusetts 26 % Minnesota 17 %
Arizona 22 % Colorado 15 %
Illinois 18 % Indiana 14 %
Hawaii 18 % California 13 %
Washington 17 % Ohio 12 %

These states range from Hawaii to Massachusetts, Arizona to Minnesota. Warm or cool, dry or humid, urban or rural; energy efficiency can be achieved under almost any circumstances. In comparison, however, our utilities appear to be driving Southeast states towards energy savings of 1% to, at most, 8% by 2020. As we’ve noted, this is a big step forwards (from zero to two percent) . . . so take advantage of those new utility energy efficiency programs, but this is still a long way from maximizing the benefits of energy efficiency in the Southeast.

If you find yourself wondering whether your utility is doing all it can to help you out, the lesson from states like Arizona, Illinois and Colorado is that there’s a lot more your utility can be doing. It just takes leadership and investment to achieve the savings.

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