The Shifting Landscape of Ratepayer-Funded Energy Efficiency in the U.S.

Publication Type

Report

Date Published

10/2009

Authors

Abstract

Over the last two decades, utility ratepayer funding for energy efficiency programs has seen both booms and busts. Currently, roughly 35 states implement some set of ratepayer-funded electric and/or natural gas energy efficiency programs, with a total U.S. budget of $3.1 billion in 2008 (CEE 2008).1 The top 10 states account for about 80% of this total, each of which planned to spend $100 million or more in 2008. California, the undisputed heavyweight in terms of the absolute magnitude of its spending on energy efficiency, represented one-third of the total U.S. energy efficiency program budget in 2008. A proliferation of new state-level policies enacted over the past several years suggests that the next decade may see a dramatic and sustained increase in overall funding levels, and a fundamental re-drawing of the energy efficiency map. These new policies include: energy efficiency portfolio or resource standards (EEPS or EERS), requirements that utilities acquire all cost-effective energy efficiency, strengthened integrated resource planning (IRP) or demand-side management (DSM) planning requirements, and regulatory incentive mechanisms to better align utility financial interests with improvements in customer energy efficiency. To assess the impact of these new policies on energy efficiency spending and savings, we developed a set of projections (low, medium, and high) of ratepayer-funded energy efficiency program spending and savings through 2020, based on a state-by-state review of energy efficiency policies currently on the books or in the pipeline, as well as recent IRPs and DSM plans.

Year of Publication

2009

Organization

Research Areas

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