Finding Common Ground on Energy Efficiency

Deck: 

Policy recommendations for utilities and regulators.

Fortnightly Magazine - December 2014
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Much of the potential for energy efficiency in the United States remains untapped, owing in large part to a wide divergence of views over analytic and political constructs.

To break the logjam and optimize this potential, we must, quite simply, start thinking about energy efficiency as a resource - not unlike fossil fuels or renewable generation, and even if it cannot be metered.

An optimal energy system is a mix of supply- and demand-side resources. Pursuing a strategy that contains a least-cost mix of these resources will produce a cost-effective, reliable, and environmentally responsible portfolio. However, that will also require a policy and regulatory structure that allows utilities to be indifferent between supply- and demand-side options for meeting resource needs.

As a resource, energy efficiency offers several advantages. It lowers costs, reduces fuel price risk, improves system reliability and energy security, creates jobs through direct and induced impacts, and offers a number of co-benefits such as increased property values. Perhaps the most important reason for pursuing energy efficiency is the reduction in greenhouse gases. Investing in energy-efficiency measures is cheaper per ton of carbon dioxide avoided than any other emission reduction alternative.

Despite its abundant benefits, current energy-efficiency policies and analytical frameworks have been punitive to energy efficiency in three fundamental areas:

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