A Whirlwind Tour of Recent Efficiency Developments in the States and DC

Steven NadelACEEEOctober 2009

ACEEE’s 2009 State Energy Efficiency Scorecard Results

ACEEE 2009 State Scorecard Most Improved States

46th ↑ 38th

47th ↑ 36th

30th ↑ 20th

32nd ↑ 20th

24th ↑ 16th

19th ↑ 10th

Building energy codes and energy use disclosure; est. ‘Sustainable Energy Utility’; lead by example

District of Columbia

Increased commitments to utility-sector efficiency programs and incentives

South Dakota

Lead by Example; Residential building energy codes; utility-sector efficiency resources

Tennessee

Efficiency Resource Standard for electricity and natural gas; Sustainable Energy Utility;

Delaware

Utility efficiency program resources; state financial incentives

Colorado

Building energy codes; Efficiency Maine efforts; Land-use planning

Maine

2007 Spending on Ratepayer-Funded Energy Efficiency Programs

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

Verm

ont

Californ

ia

Connec

ticut

Minn

esot

aIo

wa

New Ham

pshir

e

Wisc

onsin

Main

e

Nevada

Hawaii

Mon

tana

Kentu

cky

Tennes

see

Ohio

South

Car

olina

New Mexic

o

Mar

yland

Nebras

ka

Alaska

Arkan

sas

Miss

ouri

Miss

issippi

Oklaho

ma

Wyo

ming

Distric

t of C

olumbia

West

Virgin

ia

EE

Pro

gra

m S

pen

din

g a

s %

of

Uti

lity

Rev

enu

es

Top 15 states account for 82% of total spending

Major State Efficiency Legislation in 2009

• Hawaii, Iowa, Illinois and Delaware adopt new or expanded EERS

• Maine adopts requirement for utilities to acquire all cost-effective efficiency resources

• Washington State adopts a variety of efficiency standards originally set by California; Arizona also adopts additional standards

• Sustainable Energy Utilities created in Delaware and D.C.

State Energy Efficiency Resource Standards

Standard

Voluntary Goal

Pending Standard or Goal

Combined RES/EERS

California

•$3.1 billion approved for utility programs 2010-2012•Savings goal about 1%/year•New statewide programs on:

•Also focus on marketing and evaluation•Evaluation goals broadened and approaches to be reconsidered.

• Move toward deemed savings estimates that will remain in effect through the 3-year period

Vermont – Raising Efficiencyto a New Level

Source: Efficiency Vermont and VT Dept of Public Service

Vermont Gas Savings

•Vermont Gas saved ~1.2% in 2007•Has comprehensive set of programs

• Prescriptive• Custom

•Vermont beginning some programs for homes with oil heat – RGGI $

Massachusetts

•Passed Green Communities Act in 2008• Automatic building code updates• Decoupling

•Just negotiated multiyear utility goals: 2.4%/year for electric utilities in 2012•Spending will start ramping up to over $300 million/yr•Savings will start ramping up in 2010 at rate of about 40%/year

Connecticut

•2007 law mandates all cost-effective efficiency•Utilities filed plan in 2008•Calls for ramping up savings to about 2%/year•PUC has not approved yet – concerned about rate impacts•Decoupling part of the law but so far only implemented for one utility (UI)

Rhode Island

• Utility submitted plan• Ramped up savings goals to 1% in 2009,

plans to reach 2%• Spending tripling by 2011

• First year approved and implementation has begun• Budget up 60%

• Approval of subsequent years pending

Maine

• Efficiency Maine (EM) has been ramping up based on increased funding and staffing

• “Maine Efficiency Trust” legislatively created for 2010 – will take EM out of PUC creating a stand-alone entity coupling SBC, RGGI and stimulus dollars

• All cost-effective efficiency requirement• New statewide building code based on current IECC and

ASHRAE 90.1 codes (2009 codes for buildings/energy)• RGGI auction proceeds – 85% dedicated to electricity

efficiency and 15% for fossil fuel efficiency

New York

•Savings goal of 15% by 2015 established• Includes codes and standards

•Now establishing gas savings targets• Proposal is for 14.7% savings by 2020

•Utilities beginning programs, to complement NYSERDA programs•Many delays getting programs approved and implemented•Governor has just proposed moving $90 million of RGGI funds to help balance state budget

Northwest

•6th Power Plan calls for ramping up to about 1.5% electric savings/year•Washington requirement to acquire all cost effective resources begins 2010•Energy Trust of Oregon budget has expanded; unclear whether budget will grow modestly or substantially going forward•Idaho a quiet success story

• 0.43% electric savings in 2007• Idaho Power decoupling pilot going well

Northwest 6th Power Plan

• Meet 90% of growth with efficiency

Northwest 6th Power Plan

•Increase efficiency spending 2-3X

Hawaii

•Have a combined EE & RE standard•Electric utility programs saved >1% in 2007•New EE only EERS adopted in 2009 and calls for 4,300 GWh of EE savings by 2030

• This is 40% of 2007 sales• Interim goals to be set

•EE no longer counts for RES as of 2015

Minnesota

•2007 law requires utilities to save 1.0-1.5% per year•Also calls for decoupling and incentives•2009 change gives gas utilities 2 more years•Xcel most aggressive – planned savings of 1.3% electric, 1.2% gas in 2012•Implementation begins in 2010•Expanding existing programs, beginning behavior effort, community-based efforts

Wisconsin

• Historically a strong state for DSM programs• Now statewide implementation through Focus on

Energy: oversight by Wisconsin PSC• non-profit administration• Utilities also doing some programs in parallel.

• Spending and savings grown since 2005 after all-stakeholder effort to refresh policies

• As part of Midwest Governors effort trying to set 2%/year EE target• May come before legislature in 2010 in conjunction with

climate change bill• Wisconsin PSC is conducting quadrennial review of

appropriate level of EE program funding and savings goal as required by Act 141

Iowa

• Iowa quietly doing a lot of DSM • 0.84% of electric sales in 2007• 0.68% of gas sales in 2007

• New 5 year plans just approved• For Mid-American, 1.5% electric savings by

2010 and 0.85% gas savings by 2013

Pennsylvania

•Act 129 calls for 3% electric savings (cumulative) by 2013•Also 4.5% peak savings (100 hours)•Utilities have filed plans, awaiting approval•Programs start 1Q 2010

PECO Plan

New Jersey

• Programs currently administered statewide by contractors hired by BPU

• Legislature directed BPU to develop binding savings goals – authorized up to 20% savings by 2020• Not happened yet

• Also some proposals to have utilities re-engage in operating efficiency programs

Maryland

• Legislature established 15% by 2015 savings goal• Utilities responsible for 10%, state for 5%

• Utilities programs approved for initial years• Fall a little short of being on-track for their 10%; will

need to beef up in future• Most programs have now started• All 3 major utilities now have decoupling• State-operated programs slow to get started

as funding delayed

Delaware

• State has established a Sustainable Energy Utility, funded with bond funds• Administered by a private contractor• Just getting started

• In 2009 passed EERS:• 15% electric savings by 2015• 10% gas savings by 2015• EE as priority resource in loading order• Develop electric and natural gas decoupling• Workgroups established to begin developing details

District of Columbia

•Clean and Affordable Energy Act of 2008• The Sustainable Energy Trust Fund to be administered by third-

party. 2009 budget - $7.5 million; 2012 budget - $20 million• Disclosure of energy efficiency benchmarking for government and

large private commercial buildings

•Pepco: Prescriptive and custom business programs $12.7 million budget from 2009-2011.•As of late Dec. 2009, builders must use the 2008 D.C. Construction Codes (based on ‘30% solution’ for residential buildings)•Pepco approved for electric decoupling

Illinois

• EERS passed in 2007 calls for ramping up electric EE programs to 2%/yr savings by 2015• Targets start at 0.2% per year• Utilities on-track to exceed initial targets• Legislation includes cost-caps which will need to be

raised if want to save >~1%/yr

• In 2009, gas EERS adopted• 8.6% cumulative savings by 2020

Ohio

• EERS adopted in 2008• 22% electric savings by 2025• Targets start slow, hit 2%/yr in 2019• PUC developed implementing rules

Industrial self-direct discussions may be reopened

• Utilities starting programs

• Legislation and rules authorize decoupling and incentives• Utilities can file on case by case basis• Duke recently had incentives approved

Michigan

• 2008 law (PA 295) requires utility energy efficiency programs and establishes savings targets, ramping up to 1%/yr for electric, 0.75%/yr for gas• Includes industrial self-direct option

• Initial utility plans were filed and approved in 2009, and programs have begun

• A utility incentive mechanism has been approved• Decoupling for gas utilities was authorized in the

legislation, it is being considered by the MPSC for electric utilities • Sales have plummeted due to recession, which

increased utility interest in decoupling

Southwest

Source: Geller, SWEEP, 2009

Nevada

• Nevada Power saved more than 1% in 2008

• Utility earns higher RoR on EE investments

• Spending expected to be ~$75 million/yr over 2010-2012

• EE part of combined RES-EERS; up to 25% can be EE

Utah

• Rocky Mountain Power saving ~1.1% of sales in 2009

• Approval to spend 4.6% of revenue on DSM• Gas DSM spending doubles in 2009 to ~$40m• Utah legislature urged PSC to identify and

approve energy efficiency programs to reduce electricity usage by 1% and gas usage by 0.5% per year

Colorado

• Legislature directed PSC to set savings targets

• Targets are 0.53% in first year, 11.5% by 2020• Applies to Public Service CO, Black Hills

• Incentives approved for both utilities• Also targets and decoupling for gas EE

Arizona

• Settlement in APS rate case includes savings goals of:• 1.0% in 2010• 1.25% in 2011• 1.5% in 2012

• Commission now reviewing• Shareholder incentives adopted

New Mexico

• EERS passed in 2008 sets goal of 10% cumulative savings by 2020

• PSNM starting initial programs• Shareholder incentives and decoupling

authorized by legislature, incentives now pending before PSC

Carolinas

• NC has combined RES/EERS• Cumulative EE targets 0.75% in 2012, 5%

in 2020

• Duke and Progress both proposed programs in NC and SC • Duke programs and incentives pending, but

a settlement agreement has been reached• Progress’s programs and incentives

recently approved in NC and SC

Virginia

• 2007 law directed utilities to achieve 10% savings by 2022

• Utilities and SCC interpreting this as voluntary

• Dominion Power has proposed programs that will save ~3% by 2024• Further programs being developed

Florida

• Legislature passed bill directing PSC to set targets and consider incentives

• A second bill outlawed RIM test• Docket now underway

• PSC considering modified RIM test and goal of only 20% of load growth

• Efficiency advocates seeking changes• Incentives also on table

Texas

• Legislature almost passed expansion of efficiency programs, increasing goal, expanding program types, and instructing PUC to develop incentives• Last minute politics on other issues got in the way

• PUCT now considering moving on their own with at least initial steps• Working to raise goal to 30% of load growth by

2012 and 50% by 2014 – consensus has not yet been reached

• Larger reforms likely in future• Broaden eligible efficiency programs

South Central

•Missouri utilities starting programs; discussions on incentives have begun•Arkansas utilities operating “quick start” programs and have just filed expanded plans, generally including incentives•Public Service of Oklahoma has begun programs; has 25% shared savings incentive•Kansas has authorized EE programs and pending incentives – some utility programs now operating•Louisiana has started an efficiency docket

Update on State Recovery Act Programs

•State Energy Program: $1.5b / $3b allocated to the states, which are beginning to use funds for new/existing programs. State energy plans have mostly focused on public facilities and incentives, but plans vary greatly by state.•WAP: $2.4b / $4.7b allocated •Energy Efficiency Conservation Block Grant (EECBG): Application and review process continues; Competitive Grant program (retrofit ramp-ups) funding opportunity announcement recently released•Appliance Rebates: $296m to the states; application deadline passed mid-October

Conclusions

• EE programs expanding• Leading states doing more• Substantial programs in Midwest,

Southwest and Mid-Atlantic• Other regions getting started

• Far more states now doing DSM than not

Contact Information

Steven NadelLaura FurreyMaggie EldridgeMichael Sciortinolfurrey@aceee.org 202-507-4000www.aceee.org