implementing energy efficiency standards to meet emissions targets in georgia

8/10/2019 Implementing Energy Efficiency Standards to Meet Emissions Targets in Georgia

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ROOSEVELT INSTITUTE | CAMPUS NETWORK PRESENTS:

IMPLEMENTING ENERGYEFFICIENCY STANDARDS TO MEET

EMISSIONS TARGETS IN GEORGIA

WHITE PAPER BYTORRE LAVELLE

SENIOR FELLOW FOR ENERGY AND ENVIRONMENTUNIVERSITY OF GEORGIA

DECEMBER 11, 2014


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KEY ARGUMENTS Since the industrial revolution, fossil fuels have

increased greenhouse gases by approximately 30percent and mean global temperatures haverisen 0.6 degrees Celsius.

Georgia, home to some of the dirtiest coal plantsin the nation, is required under new EPAguidelines to reduce carbon emissions by 44percent.

Benefits of energy efficiency include minimizingthe cost of compliance, reducing future energybills for all customers, creating jobs, andproviding states with a secure energy future.

States with specific energy efficiency plans haveseen an increase in energy sector jobs and gainsin GDP due to cost savings, and are on track toreduce electricity demand by 25 percent or moreby 2030.

Torre Lavelle is the Roosevelt Institute | CampusNetwork Senior Fellow for Energy and Environment,where she serves to advance student engagement inenvironmental policy discourse at the local, state,and national level. As a student at the University ofGeorgia, Torre has conducted research on urbantransportation systems, founded a studentorganization, and works at the Center for IntegrativeConservation Research. Her primary policy focus ison forwarding carbon technologies, reinterpreting

transportation, and examining th e relationshipbetween public health and the environment.

For media inquiries, please contact Rachel Goldfarb at 212.444.9130 x 213 [email protected] .

The views and opinions expressed in this paper arethose of the author and do not necessarilyrepresent the views of the Roosevelt Institute, itsdonors, or its directors.

Copyright 2014, the Roosevelt Institute. All rights reserved. WWW.ROOSEVELTCAMPUSNETWORK.ORG 1

EXECUTIVE SUMMARYThere are signicant obstacles to increasing deployment of energy e fficiency and renewable energy throughoutthe U.S. Inconsistent policy support from Washington and the steep drop in U.S. natural gas prices since 2008have undercut the cost competitiveness of renewables and diminished the incentive for cu ing energy use inhomes and businesses. While a number of policy measures are critical to pushing clean energy infrastructureforward in the wake of the updated U.S. Environmental Protection Agency (EPA) carbon emissions regulations,the introduction of an Energy E fficiency Resource Standard (EERS) to improve energy e fficiency and cut energy

bills would be especially comprehensive. EERS programs set energy e fficiency performance targets for utilitiesand have been adopted in 26 states, but are nonexistent in the Southeast.

Georgias energy policy council has c onrmed that energy e fficiency is the cheapest and cleanest way to increaseelectric power supply and recommended that energy e fficiency be aggressively pursued at all opportunities. Aspart of this e ffort, Georgia should introduce an EERS program.

This paper describes briey the history of energy e fficiency and EERS, particularly their economic andenvironmental benets. I argue that Georgia should reduce carbon emissions through energy savings on thedemand side, especially in light of doubt from the Georgia Environmental Protection Division that it will be ableto meet new EPA regulations.
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Implementing Energy E ffi ciency Standards to MeetEmissions Targets in Georgia

By Torre Lavelle, December 11, 2014

INTRODUCTION

On June 25, 2013, the White House released its greatly anticipated climate action plan. It mandated that the U.S.Environmental Pr otection Agency (EPA) regulate carbon emission s under section 111 of the Clean Air Act andspecically requested regulation of carbon pollution by the power sector, which is responsible for nearly 40percent of the co untrys emissions. A year later, the EPA proposed rules that req uire existing power plants tocut carbon dioxide emission levels from 2005 by 30 percent with a deadline of 2030.

The EPAs state-specic goals provide individual states with exibility in policy implementation routes, but doesidentify three pillars for a solid system of carbon reduction: heat rate im provements, fewer carbon-in uenced

electricity generating units, and energy e fficiency. States must submit their plans of execution by June 2016, butsome have raised concerns that the EPA proposal is overly ambitious. Georgia, which is home to some of thedirtiest coal plants in the nation and must reduce emissions by approximately 44 percent, has expressedreservations about whether this goal is achievable.

Energy e fficiency means using less energy to produce the same amount of output, or gaining the mostproductivity from each unit of energy consumed. In contrast, energy conservation means reducing or eliminatinga good to save energy. For example, turning o ff a light to conserve energy is energy conservation. Replacing anincandescent bulb with an LED bulb, which uses less energy to produce the same amount of light, is energyefficiency. 1 Energy e fficiency is now recognized as a key element of utility investments and operations, typicallycosting utilities 1/2 to 1/3 the cost of other electricity resource options such as building new power plants. 2 Oneavenue of energy e fficiency implementation is through Energy E fficiency Resource Standard (EERS) programs,which set specic energy savings targets that are met through customer energy e fficiency, and have beenadopted by 26 states. Usually determined by state legislatures and implemented by utility commissions, astatewide EERS program sets multi-year electric or natural gas e fficiency targets for all eligible utilities. 3 Thesestatewide EERS programs will be the focus of this paper.

Studies show that if Americans took steps to improve the energy e fficiency of their homes and buildings, theirenergy bills could be reduced by 10 to 30 percent. Collectively, these e fforts could decrease the nations totalenergy demand by 20 percent by 2025 and cut expected growth in both electricity and natural gas consumptionby half.4 This would result in hundreds of billions of dollars in saved energy costs over the next 10 to 15 years.Energy e fficiency measures can delay or prevent the need for new power plants, create sustainable jobs, andkeep energy prices stable. 5

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1 Understanding Energy E fficiency | SEEA (n.d.) Retrieved from h p://www.seealliance.org/about/2 The Best Value for Americas Energy Dollar: A National Review of the Cost of Utility Energy E fficiency Programs | ACEEE(n.d.) Retrieved from h p://www.aceee.org/sites/default/le s/publications/researchreports/u1402.pdf3 Energy Efficiency Resource Standards: A Progress Report on State Experience | ACEEE (June 2011) Retrieved from h p://www.aceee.org/sites/default/les/publications/researchreports/u112.pdf4 Energy Efficiency: Reduce Energy Bills, Protect the Environment | EPA (n.d.) Retrieved from h p://www.epa.gov/cleanenergy/documents/suca/consumer_fact_sheet.pdf5 The Best Value for Americas Energy Dollar: A National Review of the Cost of Utility Energy E fficiency Programs | ACEEE

Copyright 2014, the Roosevelt Institute. All rights reserved. WWW.ROOSEVELTCAMPUSNETWORK.ORG
http://www.epa.gov/cleanenergy/documents/suca/consumer_fact_sheet.pdfhttp://www.epa.gov/cleanenergy/documents/suca/consumer_fact_sheet.pdfhttp://www.aceee.org/sites/default/files/publications/researchreports/u112.pdfhttp://www.seealliance.org/about/http://www.rooseveltcampusnetwork.org/http://www.rooseveltcampusnetwork.org/http://www.rooseveltcampusnetwork.org/http://www.epa.gov/cleanenergy/documents/suca/consumer_fact_sheet.pdfhttp://www.epa.gov/cleanenergy/documents/suca/consumer_fact_sheet.pdfhttp://www.epa.gov/cleanenergy/documents/suca/consumer_fact_sheet.pdfhttp://www.epa.gov/cleanenergy/documents/suca/consumer_fact_sheet.pdfhttp://www.aceee.org/sites/default/files/publications/researchreports/u112.pdfhttp://www.aceee.org/sites/default/files/publications/researchreports/u112.pdfhttp://www.aceee.org/sites/default/files/publications/researchreports/u112.pdfhttp://www.aceee.org/sites/default/files/publications/researchreports/u112.pdfhttp://www.aceee.org/sites/default/files/publications/researchreports/u1402.pdfhttp://www.aceee.org/sites/default/files/publications/researchreports/u1402.pdfhttp://www.seealliance.org/about/http://www.seealliance.org/about/


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In calculating state emissions reduction goals under the Clean Power Plan, the EPA envisioned energy e fficiencyas a key determinant in reducing power sector carbon pollution. These cost-e ffective policies will not just meetbut actually exceed the level of stringency set by the EPA.

This white paper examines the recommendation that Georgia should pursue energy e fficiency as a means ofmeeting EPA carbon emissions guidelines through adopting an EERS program. First, this white paper will explainthe case for action through the lens of climate change, which will continue as long as we fail to address ourenergy consumpt ion stru cturally in the long-term. The second section reviews current carbon emission reductionstrategies and how energy e fficiency augments those strategies. The thi rd section examines best practices forenergy e fficiency programs, from a policy standpoint and using lessons learned from successful state models.Finally, this white paper will demonstrate how an EERS program in Georgia would increase energy e fficiency by aset target, create jobs, keep energy dollars local, and increase the competitiveness of Georgia businesses.

THE CASE FOR ACTION

Climate Change

Climate change is overwhelmingly the result of the increasing concentration of greenhouse gases produced byhuman activities. Since the industrial revolution, fossil fuels (coal, oil, and natural gas) have increased greenhousegases by approximately 30 percent. 6 Between 1860 and 1998, mean global temperatures have increased 0.6degrees Celsius. 7

The ve ho est years on record have occurred since 1997, and are linked with increased storm intensity and anincrease in heat-related illnesses and death. Rising seas, another symptom of climate change, threaten todecimate shorelines, property, wetlands, and mangroves, which protect coasts against storms. Most recentstudies suggest that sea levels may rise between four and 36 inches over the next 100 years, with the la erprojection pushing every city on the East Coast under water. 8 Economically, businesses around the globe will beaffected if action is not taken to curb worldwide carbon emissions. According to a report by the Britishgovernment, climate change could cost between 5 and 20 percent of the annual gross domestic product. 9

The benets of strong, early action to combat climate change considerably outweigh the costs. Of the variousatmospheric gases contributing to human-induced climate change, carbon dioxide (CO 2) accounts forapproximately 82 percent of all U.S. gas emissions. The main human activity that emits CO 2 is the use of fossilfuels, particularly the production of electricity used to power homes, business, and industry. The EPA hastherefore focused e fforts to reduce emissions on the nations largest sources of CO 2, including power plants. 10

As addressed in the 2009 Endangerment and Cause or Contribute Findings for Greenhouse Gases undersection 202(a) of the Clean Air Act, the threat of climate change to public health and welfare will continue to

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6 Overview of Climate Change | U.S. Department of Transportation (n.d.) Retrieved from h p://climate.dot.gov/about/overview/science.html7 Global Average Temperatures | IPCC (n.d.) Retrieved from h p://www.ipcc.ch/publications_and_data/ ar4/wg1/en/tssts-3-1-1.html8 Biological Impacts of Climate Change | Principles of Conservation Biology (2006). Print.9 Climate Change Impacts: Economic Loss and Damage | The Nature Conservancy (n.d.) Retrieved from h p://www.nature.org/ourinitiatives/urgentissues/global-warming-climate-change/threats-impacts/economic-loss-and-damage.xml10 Overview of Greenhouse Gases | EPA (n.d.) Retrieved from h p://www.epa.go v/climatechange/ghgemissions/gases/co2.html

http://www.epa.gov/climatechange/ghgemissions/gases/co2.htmlhttp://www.epa.gov/climatechange/ghgemissions/gases/co2.htmlhttp://www.nature.org/ourinitiatives/urgentissues/global-warming-climate-change/threats-impacts/economic-loss-and-damage.xmlhttp://www.nature.org/ourinitiatives/urgentissues/global-warming-climate-change/threats-impacts/economic-loss-and-damage.xmlhttp://climate.dot.gov/about/overview/science.htmlhttp://www.rooseveltcampusnetwork.org/http://www.rooseveltcampusnetwork.org/http://www.rooseveltcampusnetwork.org/http://www.epa.gov/climatechange/ghgemissions/gases/co2.htmlhttp://www.rooseveltcampusnetwork.org/http://www.rooseveltcampusnetwork.org/http://www.epa.gov/climatechange/ghgemissions/gases/co2.htmlhttp://www.epa.gov/climatechange/ghgemissions/gases/co2.htmlhttp://www.epa.gov/climatechange/ghgemissions/gases/co2.htmlhttp://www.epa.gov/climatechange/ghgemissions/gases/co2.htmlhttp://www.nature.org/ourinitiatives/urgentissues/global-warming-climate-change/threats-impacts/economic-loss-and-damage.xmlhttp://www.nature.org/ourinitiatives/urgentissues/global-warming-climate-change/threats-impacts/economic-loss-and-damage.xmlhttp://www.nature.org/ourinitiatives/urgentissues/global-warming-climate-change/threats-impacts/economic-loss-and-damage.xmlhttp://www.nature.org/ourinitiatives/urgentissues/global-warming-climate-change/threats-impacts/economic-loss-and-damage.xmlhttp://www.ipcc.ch/publications_and_data/ar4/wg1/en/tssts-3-1-1.htmlhttp://www.ipcc.ch/publications_and_data/ar4/wg1/en/tssts-3-1-1.htmlhttp://www.ipcc.ch/publications_and_data/ar4/wg1/en/tssts-3-1-1.htmlhttp://www.ipcc.ch/publications_and_data/ar4/wg1/en/tssts-3-1-1.htmlhttp://climate.dot.gov/about/overview/science.htmlhttp://climate.dot.gov/about/overview/science.htmlhttp://climate.dot.gov/about/overview/science.htmlhttp://climate.dot.gov/about/overview/science.html


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increase if systematic changes are not undertaken to curb carbon emissions, such as targeted energy e fficiencyprograms.

Current EPA and CO 2 Reduction StrategiesThe EPA is the government agency responsible for protecting human health and the environment through policyand legislation and is working to address the challenge of climate change through standards that reduceemissions from their biggest sources.

In April 2012, the EPA proposed establishing CO 2 performance standards for existing fossil fuel-red electricgenerating units. Although recognized as a key source of greenhouse gas emissions, power plants are notcurrently regulated in their production of hazardous air pollutants .11 Specically, section 111(d) of the Clean AirAct will require the states, working in conjunction with the EPA, to regulate through a three-step process:

First, as demonstrated in steps one through four of Figure 1, the EPA will release guideline documents toorganize the best system of emission reduction, identifying energy requirements, environmental impact, and costfor each pollutant solution covered. These emission guidelines are open to public notice and comment.

Second, each state will establish a standard of performance and a plan detailing its implementation andenforcement. Under section 111, this standard is dened as a level of stringency for emissions of air pollutantswhich reects the degree of emission limitation available through the application of the best system of reductionemission. Critically, states play a dominant role in organizing how entities within their domain will comply withthe EPA standards.

Third, as shown in step ve of Figure 1, each state will submit a section 111(d) plan to the EPA and will beapproved based on whether it satises the criteria in the agencys guidelines, including the best system ofemission reduction and enforceability. 12 Utilities will then codify the regulations into their state plans, asdemonstrated in step six.

This process is important because of the exibility given to state governments to determine the best systems ofemission reduction. In particular, combinations of various strategies are encouraged, and EERS programs serve

as one method of driving aggressive energy e fficiency savings.

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11 Energy Efficiency and Greenhouse Gas Limits for Existing Power Plants: Learning from EPA Precedent | Nicholas Institutefor Environmental Policy Solutions (n.d.) Retrieved from h p://www.aceee.org/sites/default/les/publications/researchreports/e13c.pdf12 The Carbon Pollution Standards for Existing Power Plants: How They Work | Environmental Defense Fund (n.d.) Retrievedfrom h p://www.edf.org/media/carbon-pollution-standards-existing-power-plants-how-they-work

http://www.aceee.org/sites/default/files/publications/researchreports/e13c.pdfhttp://www.aceee.org/sites/default/files/publications/researchreports/e13c.pdfhttp://www.aceee.org/sites/default/files/publications/researchreports/e13c.pdfhttp://www.aceee.org/sites/default/files/publications/researchreports/e13c.pdfhttp://www.rooseveltcampusnetwork.org/http://www.rooseveltcampusnetwork.org/http://www.edf.org/media/carbon-pollution-standards-existing-power-plants-how-they-workhttp://www.edf.org/media/carbon-pollution-standards-existing-power-plants-how-they-workhttp://www.aceee.org/sites/default/files/publications/researchreports/e13c.pdfhttp://www.aceee.org/sites/default/files/publications/researchreports/e13c.pdfhttp://www.aceee.org/sites/default/files/publications/researchreports/e13c.pdfhttp://www.aceee.org/sites/default/files/publications/researchreports/e13c.pdf


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Figure 1. Timeline of the implementation of the EPA Carbon Pollution Standards 13

Along with the three-step process laid out by the EPA, a set of best practices to reduce CO 2 emissions is

provided. States can use this information as they create plans that include a combination of measures suitable toits particular situation and policy objectives. These best practices provide a wide range of tools to comprise thebest system for reducing carbon pollution. This best practice solution set is as follows:

1. Heat Rate Improvements: Reduce the carbon intensity of electricity generation to improve the thermalcapability of individual power plants.

2. Redispatch to Natural Gas-Combined Cycle: Redistribute combustion from higher to lower emi ingunits.

3. Renewables and Nuclear: Switch to low- or zero-carbon emission options.4. Energy Efficiency: Deploy end-use energy e fficiency measures to reduce the amount of generation.

The EPA set a target of a 30 percent reduction in emission rates by 2030 based on 2005 levels. As noted above,energy e fficiency is a core component of a successful emissions reduction program. Increasing energy e fficiencyshould be viewed as a particularly progressive tool because it is untested in the 111(d) context and therefore theEPA and state regulators have broader exibility in interpreting the types of compliance strategies allowable.

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13 Global Average Temperatures | IPCC

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ENERGY EFFICIENCY

Energy E fficiency ProgramsEnergy e fficiency programs reduce carbon emission by decreasing energy consumption and thus the burning offossil fuels.14 Energy e fficiency programs have been called the largest, least expensive, most quickly deployable,least visible, and most neglected method of limiting CO 2 emissions. 15 However, energy e fficiency is by no means anew reduction strategy, with air quality programs such as the Title IV Acid Rain Trading Program, the New SourceReview, and the National Ambient Air Quality Standar ds Program each se ing a precedent that could informsection 111(d) of the Clean Air Act. 16 An updat ed form of energy e fficiency, particularly EERS pr ograms, focuseson air quality standards for CO 2 and the role of the utility in se ing specic targets in conjunction with the state.

Energy e fficiency policies and programs seek to produce the same level of energy production while consuming less energy. To clarify what is meant by this term, the following characterize the four main types of energyefficiency technol ogies/p rograms:

1. Energy efficiency reduces energy consumption and generation through using less energy. Long-lastingmeasures tend to reduce energy at all times and lead to signicant reduction in peak demand.

2. Conservation involves reducing the level of energy services, typically involving behavioral overtechnological changes, but is usually not as long-lasting or reliable as energy e fficiency measures.3. Demand response/load management typically involves participating customers reducing their overall

electricity costs by decreasing their electricity use at certain times in response to peak electricity griddemand.

4. Direct load control is a form of demand response in which the utility controls individual units in toreduce usage. 17

Although four options are presented, the rst program type, as exemplied in the rst row of Table 1, has thegreatest energy savings, both substantial and year-round. Additionally, it is the responsibility of the utility toprovide comprehensive incentives that are e ffective and far-reaching.

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14 Overview of Greenhouse Gases | EPA 15 Energy End-Use E fficiency | Rocky Mountain Institute (n.d.) Retrieved from h p://www.udel.edu/igert/JournalClub/JC5.pdf16 Regulation of CO Emissions From Existing Power Plants Under 111(d) of the Clean Air Act: Program Design and StatutoryAuthority | Environmental Law Institute (2014) Retrieved from h p://www.eli.org/sites/default/les/docs/article_2014_04_44.10366.pdf17 Examining the Peak Demand Impacts of Energy E fficiency: A Review of Program Experience and Industry Practices | EPA(February 2007) Re trieved from h p://www.epa.gov/statelocalclimate/documents/pdf/york_paper_ee_peak_demand_4-12-2007.pdf

http://www.epa.gov/statelocalclimate/documents/pdf/york_paper_ee_peak_demand_4-12-2007.pdfhttp://www.epa.gov/statelocalclimate/documents/pdf/york_paper_ee_peak_demand_4-12-2007.pdfhttp://www.epa.gov/statelocalclimate/documents/pdf/york_paper_ee_peak_demand_4-12-2007.pdfhttp://www.epa.gov/statelocalclimate/documents/pdf/york_paper_ee_peak_demand_4-12-2007.pdfhttp://www.eli.org/sites/default/files/docs/article_2014_04_44.10366.pdfhttp://www.udel.edu/igert/JournalClub/JC5.pdfhttp://www.epa.gov/statelocalclimate/documents/pdf/york_paper_ee_peak_demand_4-12-2007.pdfhttp://www.epa.gov/statelocalclimate/documents/pdf/york_paper_ee_peak_demand_4-12-2007.pdfhttp://www.epa.gov/statelocalclimate/documents/pdf/york_paper_ee_peak_demand_4-12-2007.pdfhttp://www.rooseveltcampusnetwork.org/http://www.rooseveltcampusnetwork.org/http://www.epa.gov/statelocalclimate/documents/pdf/york_paper_ee_peak_demand_4-12-2007.pdfhttp://www.epa.gov/statelocalclimate/documents/pdf/york_paper_ee_peak_demand_4-12-2007.pdfhttp://www.epa.gov/statelocalclimate/documents/pdf/york_paper_ee_peak_demand_4-12-2007.pdfhttp://www.epa.gov/statelocalclimate/documents/pdf/york_paper_ee_peak_demand_4-12-2007.pdfhttp://www.eli.org/sites/default/files/docs/article_2014_04_44.10366.pdfhttp://www.eli.org/sites/default/files/docs/article_2014_04_44.10366.pdfhttp://www.eli.org/sites/default/files/docs/article_2014_04_44.10366.pdfhttp://www.eli.org/sites/default/files/docs/article_2014_04_44.10366.pdfhttp://www.udel.edu/igert/JournalClub/JC5.pdfhttp://www.udel.edu/igert/JournalClub/JC5.pdfhttp://www.udel.edu/igert/JournalClub/JC5.pdfhttp://www.udel.edu/igert/JournalClub/JC5.pdf


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Table 1. Energy E ffi ciency Example: Your Electric Hot Water Heater 18

Program Type How It Might Work Energy Savings

Energy Efficiency

You participate in a utility-sponsored program to have your hotwater heater insulated for free or you take advantage of

incentives o ffered by your utility to upgrade your electric hotwater heater to a more e fficient model.

Substantial and

year-round

ConservationYour utility sends emails and bill stu ffers to encourage you to takeshorter showers, make sure you completely ll the dishwasherbefore you run it and wash most loads of clothing on cold.

Moderate and year-round

DemandResponse / LoadManagement

You sign up for a residential time-of-use rate that has high mid-daycosts and lower nights and weekends cost. You consciously avoidtaking showers or running your clothes washer during peak hours,shi ing these activities to nights and weekends.

Minimal or none

Direct LoadControl

Your utility installs a switch on your hot water heater and cyclesyour hot water heater o ff during times of system-wide peakelectricity demand.

Minor andintermi ent

The exibility that the EPA has given to energy e fficiency policies allows for any of the following to beincorporated into state plans for emissions reduction:

EERS programs; Building energy codes; Demand-side energy e fficiency programs; Appliance and equipment e fficiency standards; and Financial mechanisms and incentives for energy e fficiency. 19

In several states, EERS programs have been successfully implemented to carry out substantial, year-roundenergy savings and are most heavily encouraged by the EPA.

Energy E fficiency Reduction Standards

EERS, when codied by law, are regulatory mechanisms that encourage utilities to reduce barriers to effi

ciency ina cost-e ffective manner so that customers benet. A er EERS set energy savings performance targets, utilitiesproduce a portfolio of e fficiency programs to meet that goal, usually focusing on energy use by di fferentcustomer classes. One of the major aims of EERS policies is to incentivize investment in energy e fficiencyupgrades that otherwise might not be completed for various reasons, including consumer impediments or lack ofinformation. Some EERS programs, for example, allocate a portion of utility funds to provide discounted energyefficient appliances, energy audits, consumer education, or home weatherization upgrades. Any initial increase inutility rates in the short term gives rise to added costs that are reduced and more o en than not completelyoffset by lower energy use among some customers. In turn, this improvement upon system-wide energyproductivity leads to restricted bill increases for all customers when the need for new power plants anddistribution infrastructure is reduced. 20

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18 Making the Argument for Energy E fficiency in Georgia | Southeast Energy E fficiency Alliance and Southface (September2014) Print.19 A Southeastern Snapshot: EPAs Clean Power Plan and se ction 111(d) of the Clean Air Act | SEEA (Oct ober 2014) Retrievedfrom h p://www.seealliance.org/wp-content/uploads/111d-Fact-Sheet-FINAL.pdf20 The State Clean Energy Cookbook | The Hoover Institute (n.d.) Retrieved from le:///Users/torre12/Downloads/239353520-The-State-Clean-Energy-Cookbook-A-Dozen-Recipes-for-State-Action-on-Energy-E fficiency-and-Renewable-Energy%20(4).pdf

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Twenty-six states have now enacted long-term (3+) binding energy savings targets (e.g., 3 percent incrementalsavings per year, or 30 percent cumulative savings by 2020). For each calendar year, utilities implement energyefficiency programs that meet electric and natural gas energy savings equivalent to the set percentages. If autilitys incremental energy savings in any year exceed the performance standard implemented, they may beincorporated into the next years target. 21

Figure 2. The 26 states that have adopted and funded EERS policies, with two states having a combined EERSand Renewable E nergy Standard (RES). 22

These percentage targets achieve a long-term commitment to energy e fficiency as a utility system, buildingvaluable customer engagement as well as the market infrastructure and workforce capable of continuing highlevels of energy savings. Thirteen of the twenty states with EERS policies at least two years old are achieving 100percent (or greater) of goals set, three states are reaching 90 percent of their goals, and a mere three stateshave savings below 80 percent of their targets.

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21 Energy Efficiency Resoure Standards: A State Model | ACEEE (n.d.) Retrieved from h p://aceee.org/les/pdf/white-paper/eers_statemodel.pdf22 Energy Efficiency Resource Standards: A Progress Report on State Experience | ACEEE (n.d.) Retriev ed from h p://www.aceee.org/les/pdf/policy-brief/eers-04-2014.pdf

http://www.aceee.org/files/pdf/policy-brief/eers-04-2014.pdfhttp://www.rooseveltcampusnetwork.org/http://www.rooseveltcampusnetwork.org/http://www.rooseveltcampusnetwork.org/http://www.aceee.org/files/pdf/policy-brief/eers-04-2014.pdfhttp://www.aceee.org/files/pdf/policy-brief/eers-04-2014.pdfhttp://www.aceee.org/files/pdf/policy-brief/eers-04-2014.pdfhttp://www.aceee.org/files/pdf/policy-brief/eers-04-2014.pdfhttp://aceee.org/files/pdf/white-paper/eers_statemodel.pdfhttp://aceee.org/files/pdf/white-paper/eers_statemodel.pdfhttp://aceee.org/files/pdf/white-paper/eers_statemodel.pdfhttp://aceee.org/files/pdf/white-paper/eers_statemodel.pdf


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Table 2. State EERS Targets vs. Achieved Savings in 2010 23

State leaders in EERS, including California, Massachuse s, Washington, Rhode Island, and others, operate in thefollowing manner:

1. State law requires utilities to procure all cost-e ffective e fficiency resources. For example, Californiaestablished energy e fficiency as its highest priority for energy procurement and designated that all cost-effective energy resources are to be pursued rst. Then, cost-e ffective renewable resources are to beused, followed by conventional energy sources to meet demand. 24

2. Planning processes are organized by the utilities, stakeholder e fficiency councils, and public utilitycommissions to establish specic percentage savings targets to meet the cost-e ffective e fficiencyprocurement requirement. For example, Texas electricity restructuring law (SB-7-1999, signed into lawby then-Governor George W. Bush), required electric utilities to o ffset a portion of their demand growththrough end-use energy e fficiency programs. The Public Utility Commission of Texas implementeddemand growth savings regulations of 5 percent in 2002 and increased to 10 percent in 2003. 25

3. These model states have fully funded increasingly aggressive energy savings targets. 26 For example, in2009 the Arizona Corporation Commission ordered all investor-owned utilities to achieve 1.25 percentannual electricity savings beginning in 2011, and increasing to 2 percent by 2013. This EERS will ultimatelyculminate in a 22 percent energy savings by 2020. 27 Arizonas 2012 electric e fficiency expenditurestotaled $130,847,729. 28 This cost heavily contrasts with that of a new power plant, which is about $1billion.29

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23 The State Clean Energy Cookbook | The Hoover Institute24 How the most e fficient states convince utilities to conserve energy | UtilityDive (16 November 2014) Retrieved from h p://www.utilitydive.com/news/how-the-most-e fficient-states-con vince-utilities-to-conserve-energy/333580/25 Energy Efficiency Resource Standards: Experience and Recommendations | ACEEE (March 2013) Retrieved from h p://www.dnrec.delaware.gov/energy/information/Documents/EERS/EERS%20Experience%20and%20Recommendations.pdf26 Energy Efficiency Resource Standards: A Progress Report on State Experience | ACEEE (June 2011) Retrieved from h p://www.aceee.org/sites/default/les/publications/researchreports/u112.pdf27 Utilities Summary | ACEEE (n.d.) Retrieved from h p://database.aceee.org/state/utilities-summary28 Summary of Electric Utility Cust omer-Funded Energy E fficiency Savings, Expenditures, and Budgets (March 2014)Retrieved from h p://www.edisonfoundation.net/iei/Documents/InstElectricInnovation_USEESummary_2014.pdf29 Power plant cost to top $1 billion | Milwaulkee Wisconsin Journal Se ntinel (14 June 2008) Retrieved from h p://www.jsonline.com/business/29482814.html

http://www.rooseveltcampusnetwork.org/http://www.edisonfoundation.net/iei/Documents/InstElectricInnovation_USEESummary_2014.pdfhttp://www.edisonfoundation.net/iei/Documents/InstElectricInnovation_USEESummary_2014.pdfhttp://www.edisonfoundation.net/iei/Documents/InstElectricInnovation_USEESummary_2014.pdfhttp://database.aceee.org/state/utilities-summaryhttp://database.aceee.org/state/utilities-summaryhttp://database.aceee.org/state/utilities-summaryhttp://www.rooseveltcampusnetwork.org/http://www.rooseveltcampusnetwork.org/http://www.jsonline.com/business/29482814.htmlhttp://www.jsonline.com/business/29482814.htmlhttp://www.jsonline.com/business/29482814.htmlhttp://www.jsonline.com/business/29482814.htmlhttp://www.edisonfoundation.net/iei/Documents/InstElectricInnovation_USEESummary_2014.pdfhttp://www.edisonfoundation.net/iei/Documents/InstElectricInnovation_USEESummary_2014.pdfhttp://database.aceee.org/state/utilities-summaryhttp://database.aceee.org/state/utilities-summaryhttp://www.aceee.org/sites/default/files/publications/researchreports/u112.pdfhttp://www.aceee.org/sites/default/files/publications/researchreports/u112.pdfhttp://www.aceee.org/sites/default/files/publications/researchreports/u112.pdfhttp://www.aceee.org/sites/default/files/publications/researchreports/u112.pdfhttp://www.dnrec.delaware.gov/energy/information/Documents/EERS/EERS%20Experience%20and%20Recommendations.pdfhttp://www.dnrec.delaware.gov/energy/information/Documents/EERS/EERS%20Experience%20and%20Recommendations.pdfhttp://www.dnrec.delaware.gov/energy/information/Documents/EERS/EERS%20Experience%20and%20Recommendations.pdfhttp://www.dnrec.delaware.gov/energy/information/Documents/EERS/EERS%20Experience%20and%20Recommendations.pdfhttp://www.utilitydive.com/news/how-the-most-efficient-states-convince-utilities-to-conserve-energy/333580/http://www.utilitydive.com/news/how-the-most-efficient-states-convince-utilities-to-conserve-energy/333580/http://www.utilitydive.com/news/how-the-most-efficient-states-convince-utilities-to-conserve-energy/333580/http://www.utilitydive.com/news/how-the-most-efficient-states-convince-utilities-to-conserve-energy/333580/


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Energy E fficiency and EERS Program ImportanceEnergy e fficiency resource standards work against the traditional strategies for new energy resources, whichinclude building large new energy infrastructures such as power plants. External costs such as land, air, and waterdegradation are not even factored into the expense of new power plants. On the other hand, end-use energyefficiency provides energy service equal to or greater than resources that also contribute to negative economicand environmental damages. If Americans took advantage of energy e fficiency improvement, benets wouldinclude:

Energy e ffi ciency beats traditional energy sources in cost-e ff ectiveness. Natural gas utility energyefficiency programs run at an average of 35 cents per therm as opposed to the national average gascommodity price of 49 cents per therm. Both natural gas and electricity energy e fficiency programs haveremaine d low-cost options over the last decade, demonstrating long-term viability. 30

Reduces long-term risk in the power sector by diversifying energy sources and providing resilience tofossil fuel price hikes, fuel shortages, and drought.

Provides compliance benets by helping states meet ozone, sulfur dioxide, mercury, and waterstandards.

Improves public health through reduction of air pollution. Reduces energy bills for households between 10 and 30 percent through cumulative energy savings.

Each dollar that is invested in electric energy effi

ciency measures yields $1.24 to $4.00 in total benetsfor all customers. These benets include avoided energy and capacity costs, lower energy costs duringpeak demand periods, avoided costs from new power lines, and reduced pollution. 31

Creates local jobs in the energy e fficiency industry. Using an estimated energy savings target of 1.5percent annually in all 50 states, an estimated 611,000 jobs would be created by 2030 in addition to a$17.2 billion increase in GDP. The net savings that would be gained through avoided electricity use areprojected at upwards of $48 billion. 32

Reduces fresh water use in the power sector. Aids business retention by allowing business to stabilize and control their energy levels and costs. 33 Allows the most e ffi cient implementation timeline. Implementation can begin immediately, unlike

infrastructure redesign and power plant additions.

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30 A National Review of the Cost of Utility Energy E fficiency Programs | ACEEE (25 March 2014) Retrieved from h p://aceee.org/research-report/u140231 Energy Efficiency Resource Standards: A Progress Report on State Experience | ACEEE32 A National Review of the Cost of Utility Energy E fficiency Programs | ACEEE 33 Energy Efficiency: Reduce Energy Bills, Protect the Environment | EPA

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Figure 3. Utility Program Costs as Compared to Energy E ffi ciency 34

Additionally, as demonstrated in Figure 3, EERS programs are a clear cost saving strategy. Combining the cost ofrunning e fficiency programs in 20 states from 2009 to 2012, this chart shows an average cost of 2.8 cents perkilowa -hour, or about 1/2 to 1/3 the cost of alternative new electricity resource options 35, 36

Implementing EERS programs nationwide could decrease the nations total energy demand by 20 percent by2025 and cut expected growth in both electricity and natural gas in half. This alone would result in hundreds ofbillions of dollars of saved energy costs over the next 10 to 15 years. In short, energy e fficiency measures delay orprevent the need for new power plants, create sustainable jobs, and keep energy prices stable. 37

GEORGIA AND EERS

Georgias Need for an EERS ProgramThe Southeasts economic wellbeing is closely tied to its energy use and decision-making. Although states withinthis region generate the lowest incomes, they have the highest percentage of revenue diverted to utility bills. TheSoutheast is also highly energy intensive, channeling more money to produce one dollar of GDP than any otherregion in the nation. Therefore the EPAs Clean Power Plan has an especially signicant role for states in thisgeographic area, and energy e fficiency serves to lead as the lowest cost and most rapidly deployable energyresource. 38

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34 The Best Value for Americas Energy Dollar: A National Review of the Cost of Utility Energy E fficiency Programs | ACEEE. Retrieved from h p://gallery.mailchimp.com/ce17780900c3d223633ecfa59/les/Lazard_Levelized_Cost_of_Energy_v7.0.1.pdf35 Energy Efficiency Resource Standards: A Progress Report on State Experience | ACEEE36 How the most e fficient states convince utilities to conserve energy | UtilityDive37 Energy Efficiency: Reduce Energy Bills, Protect the Environment | EPA (n.d.) Retrieved from h p://www.epa.gov/cleanenergy/documents/suca/consumer_fact_.pdf

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The 2006 report of the Georgia Governors Energy Policy Council stated that the Council recommends as itshighest priority that Georgia should aggressively pursue all cost-e ffective energy e fficiency opportunities. 39 Three large electric power plants have been proposed in the past four years alone for Georgia. For example, LSPower Energy Associates plans to build a 1,200-megawa coal plant in Early County and may sell some of thepower out of state. The owners of Vogtle Electric Generating Plant have proposed expanding the plant with theaddition of two 1,100-megawa nuclear power plants. Construction of these plants tears money away from moreeconomically and environmentally sound practices. New or expanded power plants also result in less job creationthan energy e fficiency and renewable energy. 40

Two events this y ear mark Georgia as the perfect test case for broader energy e fficiency measures and policiesto the Southeastern U.S., which has experienced both record growth and increasing air quality issues. In June2014, the EPA an nounced its proposal to cut carbon emissions from existing power plants 30 percent by 2030.Georgia, home to some of the dirtiest coal plants in the nation, is required to reduce emissions by 4 4 percent.Georgia must su bmit an implementation plan in 2016. The states lead regulator on air quality has voicednumerous times his doubts that Georgia will be able to meet the new standard. Although Georgia Power, themain electric utility of the state, has already conrmed its plans to shu er several older coal-red plants, carbonemissions will still need to be reduced by 28.7 percent. 41

Additionally, an August report ranked Atlanta-based So uthern Company, a parent company of Georgia Power, as26th out of 32 companies nationally in terms of cumulative energy savings from energy e fficiency programs. WhileSouthern said that the strength of resources varies nationally, the report noted that utilities in the Southeastdeliver only modest amounts of renewable energy due, in large part, to weaker state renewable energy andenergy e fficiency policies. 42

Three studies of Georgias energy e fficiency potential have been conducted within the last decade. The 2007Nexant report concludes that apparently signicant potential for increased energy e fficiency exists in Georgia,where the economy could benet from e ffects associated with reduced energy consumption and peak powerrequirements. Likewise, while the EPAs Clean Power Plan uses a 9.83 percent cumulative energy e fficiencysavings target between 2017 and 2029, two of the studies demonstrate that this level of savings is achievablewithin only 10 years.43

For all these reasons, Georgia is ripe for the creation of an EERS program. Based on the successes ofimplementation in other states, Georgia is predicted to be able to meet more than 60 percent of its carbonemissions state target through energy e fficiency with cost savings of approximately $20 million and energysavings of $11 million. Net job growth for the state is estimated at 18,500. 44

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38 Energy Efficiency-Related Topics for State Consideration As A Part of Comments on EPAs Proposed Clean Power Plan |SEEA (11 November 2014) Retrieved from h p://www.seealliance.org/wp-content/uploads/ee-issues-for-comment-nal.pdf39 State Energy Strategy for Georgia | Governors Energy Pol icy Council (December 2006) Print.40 Energy Efficiency and Job Creation | American Council for an Energy-E fficient Economy (1992) Print.41 Lead State Regulator Discusses Challenges of Proposed EPA Carbon Rule | WABE (July 2014) Retrieved from h p://wabe.org/post/lead-state-regulator-discusses-challenges-proposed-epa-carbon-rule42 Report: Georgia Giant Ranks Low in Alternative Energy | AJC (August 2014) Retrieved from h p://www.ajc.com/news/business/report-georgia-giant-ranks-low-in-alternative-ener/ngtYg/43 Achievable Ener gy Efficiency Potential Assessment: Final Study for Georgia Power | Nexa nt (2007) Retrieved from h p://www.psc.state.ga.us/factsv2/Document.aspx?documentNumber=100970.44 Energy Efficienc y: A Resource for the EPA Clean Air Compliance and Economic Dev elopment in Georgia and theSoutheast | ACEEE

http://www.psc.state.ga.us/factsv2/Document.aspx?documentNumber=100970http://www.psc.state.ga.us/factsv2/Document.aspx?documentNumber=100970http://www.ajc.com/news/business/report-georgia-giant-ranks-low-in-alternative-ener/ngtYg/http://www.ajc.com/news/business/report-georgia-giant-ranks-low-in-alternative-ener/ngtYg/http://wabe.org/post/lead-state-regulator-discusses-challenges-proposed-epa-carbon-rulehttp://www.seealliance.org/wp-content/uploads/ee-issues-for-comment-final.pdfhttp://www.rooseveltcampusnetwork.org/http://www.psc.state.ga.us/factsv2/Document.aspx?documentNumber=100970http://www.psc.state.ga.us/factsv2/Document.aspx?documentNumber=100970http://www.psc.state.ga.us/factsv2/Document.aspx?documentNumber=100970http://www.ajc.com/news/business/report-georgia-giant-ranks-low-in-alternative-ener/ngtYg/http://www.rooseveltcampusnetwork.org/http://www.rooseveltcampusnetwork.org/http://www.psc.state.ga.us/factsv2/Document.aspx?documentNumber=100970http://www.psc.state.ga.us/factsv2/Document.aspx?documentNumber=100970http://www.psc.state.ga.us/factsv2/Document.aspx?documentNumber=100970http://www.psc.state.ga.us/factsv2/Document.aspx?documentNumber=100970http://www.ajc.com/news/business/report-georgia-giant-ranks-low-in-alternative-ener/ngtYg/http://www.ajc.com/news/business/report-georgia-giant-ranks-low-in-alternative-ener/ngtYg/http://www.ajc.com/news/business/report-georgia-giant-ranks-low-in-alternative-ener/ngtYg/http://www.ajc.com/news/business/report-georgia-giant-ranks-low-in-alternative-ener/ngtYg/http://wabe.org/post/lead-state-regulator-discusses-challenges-proposed-epa-carbon-rulehttp://wabe.org/post/lead-state-regulator-discusses-challenges-proposed-epa-carbon-rulehttp://wabe.org/post/lead-state-regulator-discusses-challenges-proposed-epa-carbon-rulehttp://wabe.org/post/lead-state-regulator-discusses-challenges-proposed-epa-carbon-rulehttp://www.seealliance.org/wp-content/uploads/ee-issues-for-comment-final.pdfhttp://www.seealliance.org/wp-content/uploads/ee-issues-for-comment-final.pdf


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Design Considerations

A well-designed EERS policy for Georgia must take advantage of the exibility in choice modeled by the current26 EERS states, particularly in terms of technology method, implementation strategy, and program managementfor utilities. In general, a more broadly-dened EERS will encourage more cost-e ffective e fficiency investments.There are several questions that an implementing body should take into consideration before se ing standards,and answers, while exible, should fall within a range of best practices as seen in other states.

What types of e fficiency technologies and programs will be included?o Programs to meet EERS goals may authorize e fficiency measures in both natural gas and

electricity technologies, including heating, cooling, and lighting. Programs may includeequipment upgrades, building retrots, and fuel switching.

How will performance targets be set?o Policymakers should set targets using independent third-party assessments of potential energy

savings of the state and targets set in similar states. E fficiency targets are generally tied toprojected load growth and the targets should increase over time in order to allow stakeholderstime to plan for growing e fficiency demand. State EERS annual savings targets range from 0.15

percent in Texas to 2 percent in Illinois and Indiana. How will the cost-e ffectiveness of eligible energy e fficiency measures be dened?o Although the term is subject to a range of denitions, most states including New York,

Florida, and Pennsylvania measure costs in terms of the aggregate benets of avoidingenergy-supply investment versus the EERS implementation costs.

How will savings be measured and veried?o A majority of states use evaluation models that focus on bo om-up accounting, meaning that

the savings of individual e fforts across the total number of actions are extrapolated, such as inthe case of light bulb upgrades. Meter-based statistical end-user analyses may also be used.

How will the EERS be enforced?o States with EERS programs o en adopt positive incentives to meet or outperform targets set.

More important is that stakeholders are involved throughout the EERS design andimplementation process so that potential compliance issues can be addressed up front. A

critical factor of EERS programs is their emphasis on a quantitative and consistent frameworkthrough which to measure energy e fficiency savings.

How long will the EERS be in e ffect?o An EERS program should typically be in e ffect for at least ve to ten years, with periodic

reviews. The longer an EERS is in place, the higher likelihood that the set target will be reachedand that the policy will result in developing markets for e fficiency.

CONCLUSION AND RECOMMENDATIONIn June 2013, President Obama called on the EPA to develop a rule to regulate greenhouse gases from existingpower plants. Section 111(d) of the Clean Air Act provides states with exibility to pursue many options to meetEPA standards, including end-use energy e fficiency. As the largest, least expensive, most quickly deployable,least visible, and most neglected method of limiting CO 2 emissions, energy e fficiency has begun to be viewed as autility system in itself. 45 The Chair of the Washington State Utilities and Transportation Commission has noted

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45 Energy End-Use E fficiency | Rocky Mountain Institute

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that 85 percent of the states load growth was met through energy e fficiency upgrades, and this directly resultedin power plants that wouldnt have to be built. 46

Benets from energy e fficiency include minimizing the cost of compliance, reducing energy bills for all customers,growing the economy and creating jobs. It also makes sense, even without the EPA climate rule, to invest in thestates energy future. Thus, over half of the states now embrace EERS programs. States use this type of policy toboth inuence the implementation of strong energy e fficiency tools and decrease energy consumption incommunities.

Georgia, as one of the least energy e fficient states and home to some of the dirtiest power plants, shouldconsider the successful precedent of EERS program in other states. Thus, I recommend that Georgia shouldadopt an EERS to help improve energy e fficiency and cut energy bills. An EERS should provide exibility in termsof efficiency measures covered, and should address cost-e ffectiveness, customer feedback, and total incrementalcosts.

It makes both economic and environmental sense to expand energy options to include an EERS. Implementationof an EERS program will make signicant strides toward addressing the 44 percent reduction in Georgias

emission rates required by the EPA, and contribute to necessary and comprehensive climate change reform. Theenvironmental implications are clear, and now political will has made a signicant improvement upon our energysystem feasible, so it's time to make it a reality.

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46 The State Clean Energy Cookbook | The Hoover Institute (n.d.) Retrieved from le:///Users/torre12/Downloads/239353520-The-State-Clean-Energy-Cookbook-A-Dozen-Recipes-for-State-Action-on-Energy-E fficiency-and-Renewable-Energy%20(4).pdf
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