Recent Efficiency Developments in the States

1. Recent Efficiency Developments in the States Steven Nadel ACEEE October 2009

2. ACEEE’s 2009 State Energy Efficiency Scorecard Results

3. ACEEE 2009 State Scorecard Most Improved States

4. Top Ten States on Utility Spending and Savings 4 in New England 5 in New England 3 in New England

5. State Energy Efficiency Resource Standards 19 Standard Voluntary Goal Pending Standard or Goal Combined RES/EERS

6. Decoupling Status 10 Source: IEE State Energy Efficiency Regulatory Frameworks

7. Incentives Status 19 Source: IEE State Energy Efficiency Regulatory Frameworks

8. Northwest • 6th Power Plan calls for ramping up to about 1.5% electric savings/year • Washington requirement to acquire all cost effective resources begins 2010 • Energy Trust of Oregon budget has expanded; unclear whether budget will grow modestly or substantially going forward • Idaho a quiet success story • 0.43% electric savings in 2007 • Idaho Power decoupling pilot going well

9. Northwest: 3 Decades of Conservation

10. Northwest IRP Analysis

11. Portfolio Analysis

12. Northwest 6th Power Plan • Meet 90% of growth with efficiency

13. Northwest 6th Power Plan • Increase efficiency spending 2-3X

14. Hawaii • Have a combined EE & RE standard • In 2007, electric utility programs saved >1% • New EE only EERS adopted in 2009 and calls for 4300 GWh of EE savings by 2030 • This is 40% of 2007 sales • Interim goals to be set • EE no longer counts for RES as of 2015

15. Minnesota • 2007 law requires utilities to save 1.0-1.5% per year • Also calls for decoupling and incentives • Xcel most aggressive – planned savings of 1.3% electric, 1.2% gas in 2012 • Implementation begins in 2010 • Expanding existing programs, beginning behavior effort, community-based efforts

16. Wisconsin • Historically a strong state for DSM programs • Now statewide implementation through Focus on Energy: oversight by Wisconsin PSC • non-profit administration • Utilities also doing some programs in parallel. • Spending and savings grown since 2005 after all-stakeholder effort to refresh policies • As part of Midwest Governors effort trying to set 2%/year EE target • May come before legislature in 2010 in conjunction with climate change bill • Wisconsin PSC is conducting quadrennial review of appropriate level of EE program funding and savings goals as required by Act 141

17. Iowa • Iowa quietly doing a lot of DSM • 0.84% of electric sales in 2007 • 0.68% of gas sales in 2007 • New 5 year plans just approved • For Mid-American, 1.5% electric savings by 2010 and 0.85% gas savings by 2013

18. New York • Savings goal of 15% by 2015 established • Includes codes and standards • Now establishing gas savings targets • Proposal is for 14.7% savings by 2020 • Utilities beginning programs, to complement NYSERDA programs • Many delays getting programs approved and implemented • Governor has just proposed moving $90m of RGGI funds to help balance state budget

19. New Jersey • Programs currently administered statewide by contractors hired by BPU • Legislature directed BPU to develop binding savings goals – authorized up to 20% savings by 2020 • Not happened yet • Also some proposals to have utilities re-engage in operating efficiency programs

20. Pennsylvania • Act 129 calls for 3% electric savings (cumulative) by 2013 • Also 4.5% peak savings (100 hours) • Utilities have filed plans, awaiting approval • Programs start 1Q 2010 PECO Plan

21. Maryland • Legislature established 15% by 2015 savings goal • Utilities responsible for 10%, state for 5% • Utilities programs approved for initial years • Fall a little short of being on-track for their 10%; will need to beef up in future • Most programs have now started • All 3 major utilities now have decoupling • State-operated programs slow to get started as funding delayed

22. Delaware • State has established a Sustainable Energy Utility, funded with bond funds • Administered by a private contractor • Just getting started • In 2009 passed EERS: • 15% electric savings by 2015 • 10% gas savings by 2015 • EE as priority resource in loading order • Electric and Natural Gas Decoupling • Workgroups established to begin developing details

23. Illinois • EERS passed in 2007 calls for ramping up electric EE programs to 2%/yr savings by 2015 • Targets start at 0.2% per year • Utilities on-track to exceed initial targets • Legislation includes cost-caps which will need to be raised if want to save >~1%/yr • In 2009, gas EERS adopted • 8.6% cumulative savings by 2020

24. Ohio • EERS adopted in 2008 • 22% electric savings by 2025 • Targets start slow, hit 2%/yr in 2019 • PUC developed implementing rules • Utilities starting programs • Legislation and rules authorize decoupling and incentives • Utilities can file on case by case basis • Duke recently had incentives approved

25. Michigan • 2008 law (PA 295) requires utility energy efficiency programs and establishes savings targets, ramping up to 1%/yr for electric, 0.75%/yr for gas • Includes industrial self-direct option • Initial utility plans were filed and approved in 2009, and programs have begun • A utility incentive mechanism has been approved • Decoupling for gas utilities was authorized in the legislation, it is being considered by the MPSC for electric utilities • Sales have plummeted due to recession, which increased utility interest in decoupling

26. Southwest Source: Geller, SWEEP, 2009

27. Nevada • Nevada Power saved more than 1% in 2008 • Utility earns higher RoR on EE investments • Spending expected to be ~$75 million/yr over 2010-2012 • Exceeding maximum amount of EE permitted under combined RES-EERS

28. Utah • Rocky Mountain Power saving ~1.1% of sales in 2009 • Approval to spend 4.6% of revenue on DSM • Utah legislature urged PSC to identify and approve energy efficiency programs to reduce electricity usage by 1% and gas usage by 0.5%

29. Colorado • Legislature directed PSC to set savings targets • Targets are 0.53% in first year, 11.5% by 2020 • Applies to Public Service CO, Blackhills • Incentives approved for both utilities • Also targets and decoupling for gas EE

30. Arizona • Settlement in APS rate case includes savings goals of: • 1.0% in 2010 • 1.25% in 2011 • 1.5% in 2012 • Commission now reviewing • Shareholder incentives adopted

31. Conclusion • Most aggressive states are in New England: 2+% savings/year • Many other regions doing a lot – ramping up to 1-2% savings per year • Other regions lagging but most are at least getting started

32. Federal Legislation Status • House passed combined energy and climate change bill (ACES) • Senate Energy reported out energy-only bill (ACELA) • Senate EPW now working on cap and trade bill • These bills will be eventually combined, along with other provisions, into a more comprehensive bill • Might be floor debate in Nov., Dec., Jan. or Feb. • Is there 60 votes? Combine with nuclear, clean coal and offshore oil/gas?

33. Efficiency Elements in House and Senate Energy Bill • Energy efficiency resource standards • Appliance and equipment standards • Improved building codes • Residential and commercial retrofits • Building labeling • Appliance incentives (House only so far) • Job training – IAC, BAC • Programs for industry (Senate only so far) • Demand response (House only so far) • Energy Star (Senate only so far)

34. Contact Information Steven Nadel snadel@aceee.org 202-507-4000 www.aceee.org