State Public Benefits Policies for Energy Efficiency: What Have We Learned?

Martin Kushler and Dan York, American Council for an Energy-Efficient Economy

Keywords

Abstract

This paper presents the highlight results of a national study of state public benefits energy efficiency policies and their implementation. Designed as a comprehensive follow-up to ACEEE’s initial examination of early public benefits efforts in 2000, the current research revisited those state efforts now that they have been in effect for a half-decade or more.

In this study we found that a total of 18 states currently have specific public benefits energy efficiency programs in operation, with combined annual expenditures of over $900 million. Key stakeholders in each state (utilities, state agencies, and advocate groups) were interviewed, and they provided qualitative assessments of their state’s public benefits policy design and implementation, which were generally very positive. We were able to obtain energy savings results from a dozen of those states, and they reported annual incremental savings of nearly 2.8 million MWh. Cost-effectiveness estimates were available from nine of the most active states, and they showed the programs, in aggregate, to be very cost-effective (i.e., median benefit/cost ratio in the range of 2.1 to 2.5 and median cost of conserved electricity equal to 3.0 cents per lifetime kWh saved). Overall, public benefits energy efficiency approaches appear to be a very successful and cost-effective policy mechanism for achieving energy efficiency.