Saturday, May 25, 2024


Keeping Energy Dollars from Leaving the State Economy

by Ed Burke, Dennis K. Burke Inc.


State economic engines are getting a real boost from energy efficiency programs. Each year, states spend billions on energy, and energy efficiency is helping them recapture some of those dollars. Lower energy bills put money in the ratepayer’s pocket, and that frees up those savings for families and businesses to spend.

It’s not just about the cost savings — it’s about cleaner air too. Since energy efficiency cuts energy usage, it also reduces the impact that energy would have had on the environment.

“Massachusetts and California are the two most energy-efficient states in the nation,” announced the American Council for an Energy-Efficient Economy (ACEEE). The two states tied for first place in the ACEEE’s 2016 State Energy Efficiency Scorecard. Rounding out the top five were Vermont, Rhode Island, Connecticut and New York.

Each year, the Scorecard ranks the states in six categories: utility programs, transportation, building energy codes, combined heat and power, state initiatives and appliance standards.

Massachusetts being recognized as one of the most energy-efficient states in the country may feel a bit routine — it’s the Commonwealth’s sixth straight year in the top slot.

Massachusetts has a healthy incentive program to encourage energy-efficiency upgrades, and almost every project involves some sort of rebate-savings program.

“The Baker-Polito administration is committed to supporting energy-efficiency policies, which are consistently proven to be the most cost-effective way to reduce ratepayer costs and lower emissions,” said Judith Judson, the Massachusetts Department of Energy Resources Commissioner. “The Commonwealth’s commitment to energy efficiency cuts across all of ACEEE’s criteria.”

Judson points to Massachusetts utilities delivering 3 percent savings on electric sales in 2015. “By working with our utility partners, the Commonwealth’s ratepayers continue to realize billions of dollars in benefits from our energy-efficiency policies and programs.”

She also noted that the 2016-2018 statewide energy efficiency plan sets aggressive goals. “It sets electric savings at 2.94 percent annual reduction in retail sales,” Judson explained. “It also sets gas savings at 1.24 percent annual reduction in retail sales. This enables $8 billion in benefits for Massachusetts residents and businesses.” The Commissioner credits Massachusetts’ energy-efficiency programs with creating over 69,000 jobs in the state.

Created in 1992, the ENERGY STAR program has been a very successful public-private collaboration. Devices carrying the ENERGY STAR service mark, such as computers and peripherals, kitchen appliances, buildings and other products generally use 20 to 30 percent less energy than required by federal standards.

EPA estimates savings related to ENERGY STAR guidelines from appliances to building at around $430 billion over the lifetime of the program. Over $165 billion in private-sector investments are also linked to the program.

There are at least 16,000 ENERGY STAR “partners” in the ongoing certification program, with about 2.2 million jobs tied to energy-efficiency initiatives across the country, including those in manufacturing, installation, retrofits and construction.

Despite reaping huge returns for taxpayers, the fate of the ENERGY STAR program is far from certain in the president’s budget. Deciding to eliminate the program would severely undermine private-sector efforts and state initiatives. ENERGY STAR partners don’t want to see the program privatized, as it wouldn’t have the same integrity or outreach.

Government Policy
June 2017

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