Utility Energy Efficiency Programs and Systems Benefit Charges in the Southwest

Howard Geller, Southwest Energy Efficiency Project
Eric Guidry and John Nielsen, Land and Water Fund of the Rockies

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Abstract

The Southwest region is the fastest growing region of the country in terms of both population and electricity demand. This paper first reviews the status of utility energy efficiency programs in Arizona, Colorado, Nevada, New Mexico, Utah, and Wyoming. It then analyzes the potential impacts of adopting a Systems Benefit Charge (SBC) in each state. It finds that total utility spending on energy efficiency programs in the Southwest region was only about $32 million per year as of 2001-02, less than 0.3 percent of utility revenues. Adopting a SBC of two-tenths of a cent per kWh in each state could raise about $290 million per year for energy efficiency efforts. This level of program funding could reduce electricity consumption in the Southwest region by about 7 percent in 2010 and 10 percent in 2020. Projected load growth would fall by about one-quarter and 16 baseload power plants (assuming average capacity of 300 MW per plant) would be avoided by 2020.