Electric utilities are the largest energy-efficiency providers in the U.S., according to a new report by the Institute for Electric Efficiency (IEE). The report, based on data collected by the Consortium for Energy Efficiency, estimates that ratepayer-funded efficiency efforts saved enough electricity in 2009 to power 8 million homes for a year (the latest year for which savings data are available).
In most states, utility customers fund energy efficiency (EE) programs that are administered by utilities or third-party entities (states or regional efficiency organizations). These funds are approved by state regulatory commissions and such EE programs have been in place since the early 1990s. (These ratepayer-funded EE programs are separate from the energy efficiency activity funded by the American Recovery and Reinvestment Act of 2009, which was a one-time stimulus provided by the federal government.)
Between 2007 and 2010, the IEE report found that electric utility programs accounted for 85 to 89 percent of the total ratepayer dollars spent in the U.S. for energy efficiency programs to benefit consumers and businesses. Third-party entities managed the remaining energy efficiency program budgets in the U.S.
The IEE report also found that during the past three years, electric utility budgets for EE activities doubled between 2007 and 2010, growing from $2.7 billion in 2007 to $5.4 billion in 2010.
Given the growth of state regulatory and legislative policies supporting EE efforts, IEE projects that ratepayer-funded EE budgets are highly likely to reach or exceed $12 billion annually by 2020.