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Energy Efficiency Resource Standards
Energy Efficiency Resource Standards
Energy Efficiency Resource Standards
Energy Efficiency Resource Standards
Energy Efficiency Resource Standards
Energy Efficiency Resource Standards
Energy Efficiency Resource Standards
Energy Efficiency Resource Standards
Energy Efficiency Resource Standards
Energy Efficiency Resource Standards
Energy Efficiency Resource Standards
Energy Efficiency Resource Standards
Energy Efficiency Resource Standards
Energy Efficiency Resource Standards
Energy Efficiency Resource Standards
Energy Efficiency Resource Standards
Energy Efficiency Resource Standards
Energy Efficiency Resource Standards
Energy Efficiency Resource Standards
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Energy Efficiency Resource Standards

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An Energy Efficiency Resource Standard (EERS) is a flexible mechanism to ensure that utilities adopt energy efficiency as a clean, cost-effective energy resource. …

An Energy Efficiency Resource Standard (EERS) is a flexible mechanism to ensure that utilities adopt energy efficiency as a clean, cost-effective energy resource.

A federal EERS would require that electricity and natural gas utilities help their customers reduce energy use by a specified and increasing amount each year, based on a percentage of total energy sales. It complements a renewable electricity standard (RES), which requires that a percentage of electricity generation be from renewable sources.

EERS is a tested policy measure that has successfully reduced energy use in several states. A national EERS would lower energy costs, reduce air pollution and global warming, create jobs, and improve energy reliability throughout the nation.

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  • Transcript

    • 1. Energy Efficiency Resource Standards Lowell Ungar Director of Policy Alliance to Save Energy
    • 2. Presentation Outline <ul><li>Utility and State Efficiency Programs </li></ul><ul><li>State-level EERS programs </li></ul><ul><li>Federal EERS—Issues </li></ul><ul><ul><li>Scope and Targets </li></ul></ul><ul><ul><li>Trading and alternative compliance </li></ul></ul><ul><ul><li>EM&amp;V and Administration </li></ul></ul><ul><li>Efficiency in an RES </li></ul>
    • 3. Utility Energy Efficiency Programs <ul><li>Help customers save electricity or natural gas </li></ul><ul><li>Many kinds of programs </li></ul><ul><ul><li>Consumer education </li></ul></ul><ul><ul><li>Technical training </li></ul></ul><ul><ul><li>Energy audits </li></ul></ul><ul><ul><li>Appliance rebates </li></ul></ul><ul><ul><li>Financing </li></ul></ul><ul><li>$3.7 billion in 2008 </li></ul>
    • 4. Why Should Ratepayers Fund Energy Efficiency? <ul><li>Because it’s cheaper, quicker, and cleaner than providing more energy </li></ul><ul><li>Demand-Side Management (DSM) avoids 30 GW of peak load—about 100 power plants </li></ul><ul><li>Reported cost of about 3-4 cents per kWh </li></ul>
    • 5. Program Opportunities Energy Efficiency Potential 40% Adapted from McKinsey Analysis
    • 6. Energy Efficiency Resource Standards (EERS) <ul><li>Electric and natural gas utilities required to achieve set level of customer energy savings </li></ul><ul><ul><li>Similar to a Renewable Electricity Standard (RES) </li></ul></ul><ul><li>Complements other policies to spur utility programs </li></ul><ul><ul><li>Public Benefits Fund </li></ul></ul><ul><ul><li>Integrated Resource Planning </li></ul></ul><ul><ul><li>Competitive bid in wholesale markets </li></ul></ul><ul><ul><li>Utility rate reforms </li></ul></ul>
    • 7. State-Level EERS <ul><li>Spreading rapidly: </li></ul><ul><ul><li>~10 states set efficiency targets </li></ul></ul><ul><ul><li>~5 states include efficiency in renewable standard </li></ul></ul><ul><ul><li>~5 states have related requirements </li></ul></ul>
    • 8. State-Level EERS - Examples <ul><li>Texas – initially 10% of peak load growth, increased to 20% </li></ul><ul><li>Nevada – combined EERS and RES; EE capped at 25% of total </li></ul><ul><li>Ohio – ramps up to 2%/year target </li></ul><ul><li>Connecticut – 1%/year target as separate tier in RES, plus new “all cost-effective efficiency” requirement </li></ul><ul><li>California – CPUC sets electric and gas targets based on potential study </li></ul>
    • 9. Federal EERS <ul><li>Save American Energy Act </li></ul><ul><ul><li>H.R. 889 by Rep. Markey and S. 548 by Sen. Schumer </li></ul></ul><ul><li>Bingaman draft RES </li></ul>
    • 10. Federal EERS Potential Benefits <ul><li>By 2020: </li></ul><ul><ul><li>117,000 MW peak demand savings (390 power plants) </li></ul></ul><ul><ul><li>260 MMT CO 2 emission reductions (48 million cars) </li></ul></ul><ul><ul><li>$168 billion net savings in utility bills </li></ul></ul><ul><ul><li>222,000 net jobs created </li></ul></ul><ul><li>(ACEEE estimates for Save American Energy Act) </li></ul><ul><li>Bring efficiency programs to additional states and regions. </li></ul>
    • 11. Save American Energy Act: Scope <ul><li>Applies to local distribution companies (LDCs) </li></ul><ul><ul><li>Regulated even in restructured-market states </li></ul></ul><ul><ul><li>Size threshold </li></ul></ul><ul><li>Counts savings from: </li></ul><ul><ul><li>Utility energy efficiency programs </li></ul></ul><ul><ul><li>Combined heat &amp; power and recycled energy </li></ul></ul><ul><ul><li>Distribution system savings </li></ul></ul><ul><ul><li>Building codes and appliance standards </li></ul></ul>
    • 12. Save American Energy Act: Targets <ul><li>Requires savings rising to 15% electricity and 10% natural gas by 2020 </li></ul><ul><ul><li>Estimated savings from efficiency programs, not a sales limit </li></ul></ul><ul><ul><li>Codes and standards may account for ~5% electric and 3% natural gas </li></ul></ul><ul><ul><li>State EERS and policies may account for ~6% electric </li></ul></ul>
    • 13. Save American Energy Act: Trading and Alternatives <ul><li>Utilities can buy savings from customers and third parties through bilateral contracts </li></ul><ul><ul><li>In-state or in power pool with PUC approval </li></ul></ul><ul><ul><li>EM&amp;V rules still apply </li></ul></ul><ul><ul><li>No credit markets </li></ul></ul><ul><li>Buyout: 5 cents/kWh or $5/million Btu </li></ul>
    • 14. Save American Energy Act: Implementation <ul><li>DOE sets rules </li></ul><ul><li>States administer with DOE review </li></ul><ul><ul><li>If states choose not to, DOE administers </li></ul></ul><ul><li>Does not affect state EERS </li></ul><ul><ul><li>Same programs can qualify for both </li></ul></ul>
    • 15. Save American Energy Act: EM&amp;V <ul><li>DOE sets Measurement and Verification requirements </li></ul><ul><ul><li>Utility played significant role </li></ul></ul><ul><ul><li>Additional to business-as-usual practices </li></ul></ul><ul><ul><li>May have outside (including federal) funding </li></ul></ul><ul><ul><li>Account for useful life of measures </li></ul></ul><ul><ul><li>May use “deemed” savings, sampling </li></ul></ul><ul><ul><li>Third-party verification </li></ul></ul><ul><li>States can apply their own rules if at least as accurate </li></ul>
    • 16. Renewable Electricity Standard: Bingaman Draft <ul><li>Energy efficiency can meet up to one-fourth of requirement (5% savings in 2020) </li></ul><ul><ul><li>Customer savings, CHP, and distribution system, but NOT codes or standards </li></ul></ul><ul><li>Trading of credits </li></ul><ul><li>Applies to Load Serving Entitites </li></ul><ul><li>Current state EERS add up to ~6% savings  No additional efficiency </li></ul>
    • 17. <ul><li>H.R. 889 , the “Save American Energy Act,” introduced by Rep. Edward Markey (D-MA) on February 4, 2009. </li></ul><ul><ul><li>EERS included in the Waxman-Markey in the American Clean Energy and Security Act of 2009 discussion draft. </li></ul></ul><ul><ul><li>Cosponsors include Rep. Olver (D-MA), Rep. Hirono (D-HI), and Rep. Schakowsky (D-IL). Likely others that the Markey office has not yet released. </li></ul></ul><ul><ul><li>Coalition is targeting Blue Dogs, e.g. Barrow (D-GA), Matheson (D-UT), Gordon (D-TN), Holden (D-PA), and others, e.g. Welch (D-VT), </li></ul></ul><ul><ul><li>Need for letters and visits from in-state businesses and organizations </li></ul></ul>House side EERS bill:
    • 18. <ul><li>S. 548 , the “Save American Energy Act,” introduced by Sen. Charles Schumer (D-NY) on March 9, 2009. </li></ul><ul><ul><li>Coalition meetings last week with Bingaman’s staff cracked open the door for a stand-alone bill </li></ul></ul><ul><ul><li>No official cosponsors yet - a Republican cosponsor will be critical for gaining support throughout the E&amp;NR committee. </li></ul></ul><ul><ul><li>Coalition still supports a stand-alone bill, but if made to compromise, would take a 10% carve-out of an RPS (currently 5%) </li></ul></ul><ul><ul><li>Need for letters and visits, particularly from in-state businesses, particularly to Republican and moderate Dems. </li></ul></ul>Senate side EERS bill:
    • 19. Thank You! Lowell Ungar Alliance to Save Energy Phone: (202) 857-0666 Email: [email_address] Website: www.ase.org

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