Scott Johnstone -
Energy efficiency has an important role to play in reducing greenhouse gas emissions. That finding comes from the U.S. EPA’s proposed Clean Power Plan to regulate these emissions from our nation’s fleet of existing power plants.
Under the plan, states will need to develop a set of strategies to achieve specified levels of carbon dioxide emissions reductions. The plan provides significant flexibility for states to tailor an approach that best meets their needs. Approaches to reduce emissions include improved operation of existing fossil fuel power plants; extending the life of nuclear generation facilities; expanding the use of renewable distributed generation resources such as solar and wind power; and investing in energy efficiency.
At VEIC, we have significant experience in the design and implementation of successful, utility-scale energy efficiency programs that deliver measurable and verifiable carbon emissions reductions. In their most recent year of operation, our three large energy efficiency programs – Efficiency Vermont, the DC Sustainable Energy Utility, and Efficiency Smart – have delivered the combined avoidance of 810,000 tons of CO2 emissions. That’s the equivalent of avoiding burning some 395,000 tons of coal .
Our experience shows that energy efficiency can stand up to the strictest regulatory scrutiny in delivering measurable results that are independently confirmed by third party evaluators. Energy efficiency, done right, is a proven method to reduce energy use, which in turn reduces carbon emissions associated with the generation of that energy.
Notably, we have demonstrated this to be an effective strategy in a wide range of settings. Efficiency Vermont operates in a very rural state; the DC Sustainable Energy Utility is set in a major metropolitan area; and Efficiency Smart’s work is centered in the industrial Midwest. The performance benchmarks that each of these programs are held accountable to are customized to meet the unique needs and circumstances of these three very different parts of the country.
In addition, energy efficiency is a very low-cost method for filling the supply portfolio with carbon-free energy. VEIC can acquire a kilowatt hour of energy efficiency for about half the cost of comparable supply. By reducing the overall cost of the power supply portfolio, utilities can reduce costs for their entire customer base, not just those customers who are participating in efficiency programs.
Lastly, using energy efficiency as a compliance tool for 111(d) regulations delivers direct economic benefits to customers, and indirect benefits to the local economy. The nearly 15,000 customers who participated in our Efficiency Smart program in the Midwest in 2013 will receive $27.2 million in net economic benefits over the lifetime of the efficiency measures they installed last year alone. This is money that can be redirected to local job creation and other local investments.
To be clear, we are just at the beginning of this discussion. The EPA’s proposed rule still faces a comment period and potential legal challenges. The earliest it would go into effect is mid-2015, after which there will still be a period of time for each state to develop its compliance plan. That may seem like a long time off, but it’s not too soon to start planning. States and utilities will benefit from gaining a clear understanding of energy efficiency’s potential role in complying with the new regulations while also delivering economic benefits to customers.