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State Energy Efficiency Policies Save Customers Billions

State Energy Efficiency Policies Save Customers Billions

ACEEE reports outline state Energy Efficiency Resource Standards

States across the country have been reaching or exceeding their energy savings goals established through Energy Efficiency Resource Standards (EERS), thereby lowering utility bills for consumers and reducing the need to build costly new power plants. The forecast is also bright as states expect to achieve even higher energy savings for utility customers in years to come. These are the findings of two reports recently released by the American Council for an Energy-Efficient Economy (ACEEE), Washington, D.C., and written by Michael Sciortino, Seth Nowak, Patti Witte, Dan York, and Martin Kushler.

From 2004 to 2010, 24 states followed the lead set by Texas and Vermont by establishing an EERS, a policy that sets long-term energy savings goals for electric/natural gas utilities. Since then, utilities, regulators, and consumers across the nation have embraced this approach to deliver energy efficiency programs.

The first report, “Energy Efficiency Resource Standards: A Progress Report on State Energy Savings Targets,” documents the performance of every state with an EERS in place for more than two years. Comparing actual performance with the EERS targets, 13 of the 19 states with EERS policies in place for more than two years are achieving 100% or more of their goals, three states are reaching more than 90% of their goals, and the three states falling below 80% of their goals are working hard to catch up. In each case, state EERS policies are driving energy efficiency investments and energy cost savings to unprecedented levels. To download the full report, visit:

According to ACEEE, 22 states adopted EERS between 2007 and 2010, passing the tipping point so that now more than half of all states have EERS in place for electricity, natural gas, or both. Many states with well-established ratepayer-funded energy efficiency portfolios have been expanding and enhancing their efforts, raising annual percent savings targets to unprecedented levels. There is also a new breed of states launching comprehensive and extensive efficiency efforts built to achieve annual savings goals of 1%, 1.5%, and even 2% within just a few years. These “Established Savers” and “Rapid Start” states have been scaling up budgets, enacting both supportive and complementary policies, and bringing together collaborative stakeholder groups to achieve and sustain aggressive savings. Utilities have been responding to this new policy environment by adding and developing programs, efficient technologies, market segmentation strategies, program approaches, and program designs.

For the second report, “Energy Efficiency Resource Standards: State Strategies to Reach Higher Energy Savings,” researchers picked six states in each group to study in order to capture the trends and themes, take a snapshot of results to date, and assess the outlook for the future. After collecting data by utility and by state, conducting interviews with 36 program administrators, managers, and state and nonprofit experts with knowledge of how stepped-up savings levels would be attained and sustained, the ACEEE research team supplemented this information with the broader views of seven national industry experts.

Providing analysis of states with some of the largest and most successful energy efficiency programs, including California, Connecticut, Massachusetts, Minnesota, New York, and Vermont, the report discusses how utilities in these states are employing new strategies to expand existing programs and add new ones, enhance advertising and promotions, and conduct innovative pilot projects.

Six more states — Arizona, Colorado, Illinois, Michigan, Ohio, and Pennsylvania — are also examined as they rapidly ramp up to develop programs required to meet the increasingly higher targets. Utilities in these states are running fewer, simpler programs that can get the most energy savings as quickly as possible.

“Experts who specialize in these states say the potential for cost-effective energy efficiency is more than sufficient to meet the goals that have been established, and they put the likelihood of states continuing to meet their goals in the 90% range,” says Martin Kushler, ACEEE senior research fellow. “The greatest challenge for the future isn’t technical — it’s inspiring the political will necessary to pass these energy- and money-saving standards in every state.”

To download the second report in full, visit:

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