Energy Efficiency Mandates What Are They About? Do They Work? 2009 NASUCA Mid-Year Meetings Cynthia Mitchell, Principal Energy Economics Inc.

DOE’s 2006 National Action Plan for Energy Efficiency “NAPPE” “Modify policies to align utility incentives with the delivery of cost-effective energy efficiency, and modify ratemaking practices to promote efficiency investments.”

Energy Independence and Security Act of 2007 “EISA” Modified PURPA 1978 to promote EE investments Align utility incentives with the delivery of cost- effective EE Remove the throughput incentive (aka “lost revenues”) Provide additional utility incentives

American Recovery and Reinvestment Act of 2009 “Ensure utility financial incentives are aligned with helping customers use energy more efficiently.” “Provide timely cost recovery and timely earnings opportunity for utilities with cost- effective measurable and verifiable energy savings.”

Back to the Future CA decoupling; 2007 net benefits /shared savings IOUs 9 – 12% sharing rate Jim Rogers, Duke Energy net benefits / shared savings IOU 80% sharing rate Arkansas: decoupling; lost revenues; addtl. utility incentives New Mexico: decoupling; 1 cent kWh & $10 kW lifecycle EE savings paid in Year 1.

CA Cumulative Energy GWh Savings: Utility EE Programs and Bldg. & Appliance Standards

Per Capita Electricity Use in the U.S. and CA:

March 2009 PUF Article CA electricity per capita consumption: correlation or “cause and effect” < 20% energy efficiency savings > 20% CA electricity prices 20% CA moderate cooling season Trend: decrease industrial energy intensity; larger households; more MF dwellings; “conservation ethic”

CA Cumulative Energy GWh Savings: Utility EE Programs and Bldg. & Appliance Standards

Re-ordered CA Cumulative Energy GWh Savings: Utility EE Programs and Standards

Let’s Talk CFLs…. Wal-Mart effect Market transformation CFL quality: utilities vs. “Wal-Mart” Legislative phase-out incandescents Ratepayers as consumers pay 2 times+ Residential lighting largely winter off peak Negative interactive effects

What is (?) Working Efficiency Vermont 1990; Efficiency Maine 2002; Delaware Sustainable Energy Utility 2007 Northwest Energy Efficiency Alliance (NEEA); Northeast Energy Efficiency Partnership (NEEP); Midwest Energy Efficiency Alliance (MEEA) State public – private partnerships: Connecticut, Illinois, Maryland, Minnesota, New Jersey, New York; Ohio

Closing Thought: FINANCING! We currently have on-bill financing for power plants, and T&D. We must be able to pay for energy efficiency and other sustainable resources in a similar manner.