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Abstract This document provides the basic provisions that should be considered for inclusion in a state energy efficiency resource standard. As “model language,” this is intended as an educational resource, providing state legislators, regulators, and other stakeholders with a starting point in drafting a state-specific energy efficiency resource standard and as an initial framework from which the negotiations process may progress, taking into consideration the regulatory environment of the individual state. Given that the energy industry is becoming increasingly more dynamic, this document will continue to change and will consistently be a “work in progress,” attempting to capture the most recent developments in energy efficiency resource standards. Introduction “Energy efficiency” is a means of using less energy to provide the same or greater level of energy services to consumers. Energy efficiency is a clean, cheap and readily available source of energy, one that reduces Americans’ energy bills and green house gas emissions while creating sustainable jobs – today. Over the past several decades, states have enacted a number of policies aimed at saving energy, from establishing appliance standards and building codes to utility policies, such as an Energy Efficiency Resource Standard (EERS). Studies show that large energy efficiency opportunities are available in all states, with gains on the order of 20%-30% achievable by 2025 (ACEEE 2008; Eldridge et al. 2008a; Elliott et al. 2007a; Elliot et al. 2007b; Geller et al. 2007; Laitner and Kushler 2007). These studies recommend a broad suite of energy policies and programs which, if implemented, could lead to cost-effective reductions in projected future use of electricity from conventional sources. These recommendations typically include adoption of an EERS, expanded demand response1 initiatives, policies supporting combined heat and power (CHP), manufacturing initiatives, state and local government facilities initiatives, more stringent appliance and equipment efficiency standards and building codes, enhanced research, development and deployment strategies, consumer outreach and education, and low-income efficiency programs (Furrey et al. 2009). 2 The EERS represents the core of these policies, providing a foundation upon which the other polices may be layered to achieve the greatest savings. For the purposes of this document, an EERS can be defined as a mechanism established by law that encourages more efficient use of electricity and natural gas by requiring utilities to save a certain amount of energy either on an annual basis, on a cumulative basis, or both. Utilities achieve these savings by implementing energy efficiency programs to help their customers save energy in their homes and businesses. The savings targets, generally expressed as a percentage of energy sales (the baseline) slowly increase over time, achieving greater energy savings in subsequent years. EERS targets are generally achieved through three types of initiatives which are discussed more fully below: • End-use efficiency measures at customer facilities. • Distributed generation efficiency measures at end-user sites such as fuel cells, CHP, and recycled energy technologies, with credit for electricity efficiency savings relative to the regional or national average generation-plant efficiency. • Transmission and distribution improvements that improve efficiency, such as superconducting transmission technology and high-efficiency transformers (Nadel 2006). 1 Demand response programs allow the utility to reduce participating customers’ energy use during times of peak demand. 2 Implementing these types of policies and programs could, for example, lead to energy savings of 29% in Florida (Elliott et al. 2007a), 22% in Texas (Elliot et al. 2007b; Laitner, Elliott, and Eldridge 2007), 19% in Virginia (ACEEE 2008), and 29% in Maryland (Eldridge et al. 2008b). 3PDF Image | Energy Efficiency Resource Standards
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