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Utility Program Overview
Utility energy efficiency and load management programs, also
known as demand-side management or DSM programs, are a primary strategy
for increasing energy efficiency in the Southwest and throughout
the United States. Utilities educate customers, provide rebates
and other financial incentives, and offer technical assistance in
order to increase the adoption of cost-effective energy efficiency
measures. The rationale for such programs is that it is far less
costly to save energy than to supply energy from any new source,
and it is better for the environment too.
SWEEP actively promotes the expansion and improvement of utility
energy efficiency programs in the region. We work on legislation
to establish energy savings goals or requirements, convenient program
cost recovery, and financial incentives so that utilities and their
shareholders are not penalized when they help their customers save
energy. We advise utilities as they design and operate energy efficiency
programs, and we frequently appear before state utility commissions
when rules or plans for utility energy efficiency programs
are under review.
Electric utilities in the Southwest greatly expanded their
energy efficiency programs in recent years.
As shown in Table 1 below, total funding for these programs was
only about $29 million in 2002, SWEEP's first full year of
activity. Funding steadily increased to $284 million in
2010 and approximately $335 million in 2012.
Table 1: Electric Utility Spending on DSM Programs in the Southwest,
2002-11
|
State
|
DSM program budget
(million $ per year)
|
|
2002
|
2004
|
2006
|
2008
|
2010 |
2012
|
|
AZ
|
4
|
4
|
19
|
45
|
94
|
120
|
|
CO
|
11
|
21
|
18
|
28
|
66
|
98
|
|
NV
|
3
|
11
|
30
|
55
|
46
|
37 |
|
NM
|
1
|
1
|
1
|
10
|
24 |
27
|
|
UT
|
9
|
16
|
27
|
36
|
51
|
49 |
|
WY
|
~0
|
~0
|
~0
|
~0
|
3
|
4 |
|
Region
|
29
|
54
|
95
|
174 |
284 |
335 |
Utility energy efficiency programs in the region are yielding
significant benefits. SWEEP estimates that households and businesses
will save nearly $4.6 billion as a result of utility DSM programs implemented
during 2003-12 (see Table 2 below). These programs have already cut
carbon dioxide emissions be over 28 million metric tons, with even
greater reductions in the future due to energy efficiency measures
now in operation. And the programs are reducing load growth and
thus reducing the need for costly and controversial new power plants.
Table 2: Electricity Savings, Net Economic Benefits, and Avoided CO2
Emissions from Utility DSM Programs in the Southwest
|
Year
|
First-year Energy Savings
(GWh/yr)
|
Energy Savings from Cumulative Programs
(GWh/yr)
|
Net Economic Benefits from Annual Programs1
(Million $)
|
Avoided CO2 Emissions2
(1000 metric tons)
|
|
2003
|
175
|
175
|
113
|
122
|
|
2004
|
239
|
414
|
146
|
290
|
|
2005
|
280
|
694
|
189
|
486
|
|
2006
|
476
|
1,170
|
256
|
819
|
|
2007
|
743
|
1,913
|
332
|
1,339
|
|
2008
|
1,046
|
2,959
|
459
|
2,071
|
|
2009
|
1,510
|
5,230 |
649 |
3,661 |
|
2010 |
1,690 |
6,920 |
726 |
4,844 |
|
2011 |
1890 |
8,810 |
864 |
6,167 |
|
2012 |
2075 |
10,885 |
904 |
7620 |
|
Total
|
10,885
|
--
|
4,683 |
28,441 |
The growth in DSM activity has been heavily influenced by
policies enacted in recent years. Table 3 summarizes the key
policies affecting DSM efforts in each state. In short there are
many more policies in place today compared to five or six years
ago.
Table 3: Key Policies Influencing Electric Utility
DSM Programs in the Southwest
|
Policy
|
|
AZ |
CO
|
NM
|
NV
|
UT |
WY
|
|
Energy efficiency goals or standards |
X |
X |
X |
X |
|
|
|
Integrated Resource Planning |
X |
X |
X |
X |
X |
|
|
Use of Societal or Utility Cost
Test as sole/primary cost-effectiveness test |
X |
X |
X |
|
X |
|
|
Convenient DSM cost recovery mechanism |
X |
X |
X |
X |
X |
X |
|
Financial Incentive for utility shareholders |
X |
X |
X |
|
|
|
|
Electric decoupling or lost revenue recovery mechanism |
X |
|
|
X |
|
|
|
Gas decoupling or lost revenue recovery mechanism |
X |
|
|
X |
X |
X |
|
Collaboration in DSM program design/analysis |
X |
X |
X |
X |
X |
|
|
Industrial self-direction option |
X |
X |
X |
|
X |
X |
Contact us:
For more information about SWEEP's utilities program, please
contact:
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“By
investing a total of $17 billion in best practice
utility energy efficiency programs, the Southwest region
could realize $37 billion in utility system and public
health benefits —meaning $20 billion in net benefits or
$2650 for every household in the region today.”
Follow these links for information on utility energy
efficiency programs currently implemented
in each state:
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