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Energy Efficiency: A Resource Large Enough to Matter (Part 1 of 2)

Scott Johnstone -

I recently had the chance to take part in a plenary panel in Nashville at the annual Energy Efficiency as a Resource conference. This event, put on annually by the American Council for an Energy Efficient Economy (ACEEE), focuses on the latest innovations in developing energy efficiency as a meaningful resource for meeting our energy needs.

My panel was moderated by ACEEE economics and policy wizard Marty Kushler, and had two primary areas of focus:

  • Looking back: How far have the leading programs gotten already; and
  • Looking forward: What will it take to get to the next level?

There’s a lot of ground to cover, so for today’s post I just want to focus on the “looking back” part of the discussion. We’ll get to “looking forward” as part of a future post.

I started my part of the discussion describing the remarkable success of Efficiency Vermont, which VEIC has had the privilege to operate since it was created in the year 2000. Efficiency Vermont is the nation’s first statewide “energy efficiency utility,” an independent, regulated entity charged with delivering comprehensive energy efficiency services to homes and businesses throughout Vermont.

 With a performance-based approach and a consistent level of investment in cost-effective energy efficiency, Efficiency Vermont has made energy efficiency a major part of Vermont’s overall electricity portfolio. Our energy savings as a percentage of utility sales has steadily increased over time, and for the past few years has settled in right around 2%, the deepest sustained level of savings of any state in the nation.

To those outside the industry, saving 2% a year through efficiency may not sound like a lot – but it is. What you need to keep in mind is that energy efficiency savings don’t just last a single year – they recur year after year for the lifetime of the efficiency improvement (such as a high-efficiency motor, or an ENERGY STAR refrigerator). Over time, these cumulative savings really add up. In 2012, energy efficiency as a resource represented 12% of Vermont’s electricity portfolio.

Looked at another way, energy efficiency is now the single-largest “power plant” in Vermont, with the exception of our one nuclear generating station, Vermont Yankee. And with the recent announcement that Vermont Yankee will be shutting down at the end of 2014, energy efficiency will become the single largest generator in the state.

Don’t take my word for it, though – if you look at the Vermont participants in the ISO-New England Forward Capacity Market, you will see who is making commitments to fill our region’s capacity needs. VEIC is a participant in the Forward Capacity Market on behalf of Efficiency Vermont, and our current commitment is over 100 MW (and just to make a good thing better, we reinvest our earnings from the sale of this capacity back into even more energy efficiency).

My fellow panelists shared similar stories about the success their leading programs have had in places like California, Massachusetts, and the Pacific Northwest.

This was all very positive and exciting to talk with the audience about, but what was really interesting was the next part of the conversation, which was about the future: As exciting as the results of leading programs to date have been, what does it take to get to the next level? How far can we actually go?

We’ll save that part of the discussion for Part 2 of my report.
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