Five Efficiency Policy Developments to Watch in 2012

Happy 2012 everyone! As we head full steam into 2012, NEEP’s Policy Team is keeping a close eye on five key policy developments that will have an impact on energy efficiency policy this year: 1. Major Energy Efficiency Polices under Attack 2012 looks to be a year in which landmark energy efficiency laws come under attack in state legislatures. In Massachusetts and Maine, for instance, their energy efficiency programs have come under scrutiny for being too costly. Legislative efforts are also underway to undermine building energy codes, similar to those in Maine and Pennsylvania last year. The silver lining may be that energy efficiency proponents will have the opportunity to show the real and significant benefits of energy efficiency to residents and businesses throughout the Northeast. (Check out the following links for more on state energy efficiency success stories in Massachusetts, Maryland, Maine, and Pennsylvania, to name a few). 2. Energy Efficiency Plans up for Extension This year will also see further debate on existing state energy efficiency programs. Many states continue to struggle under economic pressures, but there are a number of reasons to believe that program administrators will be able to achieve higher levels of savings. Rhode Island and Vermont just approved three-year energy efficiency plans calling for over two percent electricity savings each year, as Massachusetts has already done under the Green Communities Act. New York and Maryland renewed their commitments to their aggressive energy efficiency programs. NEEP will be paying close attention to regulatory developments in Connecticut, Massachusetts, Maine, and Pennsylvania, all of which must re-authorize their multi-year programs later this year. 3. Energy Efficiency Finance, Building Energy Rating, and Oil Heat Efficiency Most of the states in the Northeast already have binding energy savings targets (see NEEP’s Policy Snapshot for more details). But a number of new energy savings policies are also being explored in states across the region as well. New energy efficiency financing programs in Connecticut, Maine, Massachusetts, and New York that have the potential to drive significantly greater program participation in the residential sector. Legislation to extend programs to oil-heated homes has been debated in state legislatures. And cities and states are exploring building energy disclosure policies that would help consumers put a market value on energy savings. Any of these measures could be boosters for energy savings efforts and keep the Northeast a leader in energy policy innovation. 4. RGGI and Federal Pollution Rules Another unknown is the impact of rules regulating greenhouse gas emissions and other air pollutants. Despite attacks from anti-regulatory groups like Americans for Prosperity, the Regional Greenhouse Gas Initiative (RGGI), which caps carbon emissions from the electric sector, remains strong going into its program review later this year. Changes to the RGGI system could provide new revenues for state energy efficiency programs. Likewise, the U.S. Environmental Protection Agency (EPA) has issued a number of new regulations on air emissions that may require coal plants throughout the region to shut down. This could also drive states to invest in efficiency programs, as efficiency is a resource that can be scaled up quickly and cheaply in comparison with new plants. 5. Natural Gas Prices as Wildcard The boom in natural gas drilling has driven down the price of electricity and heating and reduced carbon emissions in the Northeast, both good developments for ratepayers. Falling prices though have a complicated effect on efficiency programs, which are tied to the price of supply-side energy resources. If gas prices continue to fall, states may be tempted to invest less in energy efficiency, despite the fact that gas prices will, inevitably rise again, as well as the fact that gas-powered electricity generation is still a significant contributor to air pollution. Policy decisions based on recent drops in natural gas prices are far from certain, however, particularly in light of intense opposition to the hydraulic fracturing in New York and Pennsylvania where much of the drilling is taking place. Worth Reading! Here are a few new reports and resources that we have been reading: There are lots of additional energy savings out there, according to ACEEE. They found that the nation could reduce energy use by 40 to 60 percent by 2050 through policy and program efforts. “The Long-Term Energy Efficiency Potential” paper is located here. The Institute for Electric Efficiency (IEE) found that savings from ratepayer funded efficiency programs across the nation continue to grow, reaching 112 million MWh in 2010. That’s enough to power about 10 million homes. Check out the full report here.

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