The 14 best states for energy efficiency

By Elisa Wood and Reid Smith

April 16, 2009

Once a “token gesture,” energy efficiency is now increasingly becoming a “first fuel” — the resource utilities seek before any other, even before renewable energy or other in-favor generation sources.

So says the report, “Meeting Aggressive New State Goals for Utility-Sector Energy Efficiency: Examining Key Factors Associated with High Savings,” issued today by the American Council for an Energy-Efficient Economy.

Chances are you are experiencing the benefits of efficiency – or are about to do so – if you live in one of 14 states the report identifies as leaders: California, Massachusetts, Connecticut, Vermont, Wisconsin, New York, Oregon, Minnesota, New Jersey, Washington, Texas, Iowa, Rhode Island, and Nevada.

These states show the biggest gains from efficiency. They also spend the most on programs and have the greatest legislative support.

What else makes the states stand out?

*Almost all offer direct financial incentives for delivering utility energy efficiency programs well.

*Eight of the top 14 states have an energy efficiency resource standard (EERS), which requires they meet a certain percentage of energy demand through efficiency. Typically, the requirement ramps up gradually over several years. Such standards do not deliver a lot of savings yet, but will in later years as requirements increase.

The report also looked at which efficiency measures generate the most savings. Lighting retrofits top the list, accounting for 63% to 92% of all residential energy savings and 55% to 69% of commercial and industrial savings.

The winning states still have a long way to go. Few report energy efficiency savings of 1.5% to 2.0% per year or more – the amount targeted by many state policies. Vermont is an exception with energy savings close to 2.0% of total electricity sales. What can speed delivery of results? There is no magic bullet, but the report recommends shareholder incentives, decoupling and support from top utility management.

The report is available for free download at http://www.aceee.org/