Environmental Valuation & Cost-Benefit News

A new study of energy efficiency opportunities in Maryland by the American Council for an Energy-Efficient Economy (ACEEE) confirms that reducing electricity consumption is the quickest, cheapest, and cleanest way for policymakers to bring consumer bills down and keep the lights on in a state where the demand for electricity has grown rapidly since 1999.

ACEEE deputy director Bill Prindle, presenting conclusions and recommendations of the study, said ACEEE's analysis confirms that the Governor's goal to achieve a 15 percent reduction in per capita energy use by 2015 "is attainable cost-effectively with the energy efficiency and demand response resources we have in Maryland today."

In addition to programs that promote installation of energy-saving light bulbs and appliances, the ACEEE report recommends a suite of energy efficiency policies including:

* More stringent residential and commercial building energy codes;
* Energy efficiency standards for new appliances and equipment not already covered by current state or federal standards;
* A clean energy Research, Development, and Deployment (RD&D) initiative funded by the state to meet the state's unique needs while helping to build a "green collar" energy industry in the state;
* Policies to encourage new Combined Heat and Power (CHP) systems in the industrial, institutional and commercial sectors; and
* Expanded demand response programs by electric utilities to reduce peak demand for electricity.

Guided by these recommendations, said Maryland Energy Administration director Malcolm Woolf, the state could potentially go well beyond the Governor's "15 by 2015" target. Woolf emphasized that "the full potential, if we are able to take advantage of every energy efficiency opportunity in Maryland, is a 32% reduction in peak demand by 2015 and a staggering 47% by 2025." ACEEE's report, said Woolf, gives the Governor and state lawmakers "a roadmap that will help us identify the most cost-effective ways to reach our goal to provide reliable, affordable, and clean energy for all Marylanders." The analysis "pinpoints where the energy efficiency opportunities lie," added Woolf, and praised the ACEEE research team for using a study methodology that "looked at actual programs other states have implemented, and analyzed real-world results."

Prindle focused on the following key findings in presenting ACEEE's analysis:

* Energy efficiency and demand response are the only resources that can be mobilized immediately, forestalling the prospect of power curtailments in the next few years and keeping the lights on for consumers in the state.
* Every dollar invested in efficiency yields an impressive return of $4 in reduced consumer electricity bills. Energy efficiency policies and programs recommended by ACEEE will cut consumer electricity bills by a net $860 million in 2015 and $2.6 billion in 2025.
* By 2015, residential efficiency programs will reduce an average household's monthly electricity bill by a net $8. Including the benefits of lower wholesale prices, an average household will save a net $10 on monthly bills in 2015, or a 7% savings compared to forecasted bills. These savings grow substantially by 2025.
* All consumers benefit from energy efficiency. By reducing electricity demand, energy efficiency creates a downward pressure on wholesale electricity prices. By 2015, a typical residential consumer can save about $24 a year on monthly electricity bills from lower wholesale prices.
* Investments in energy efficiency create new, high-quality "green-collar" jobs for the state. These investments will create more than 8,000 net new jobs by 2015 and 12,000 by 2025. "That's about the same level of employment we would see if Maryland were able to attract 100 small-sized manufacturing plants," observed Prindle. This would yield more than $450 million in new wages, he said, growing to almost $800 million by 2025.

One of the fundamental conclusions of the ACEEE study, Prindle cautioned, is that there are "no free or even cheap solutions" to the supply and demand challenges in energy markets across the country. "Everything costs money," he stressed. "What we found in Maryland, as we have found in Florida, Texas, and other states, is that the cost of doing nothing is the most expensive and riskiest strategy to take. Focusing first on energy efficiency and other resources on demand side of the market is in fact the lowest cost and least risky way to address the energy problems we're facing today."

Commenting on the demand-side approach recommended by ACEEE, Senator Brian Frosh (D-Montgomergy) observed, "Increasing energy efficiency makes sense from a financial perspective and it makes enormous sense from an environmental perspective. Every kilowatt that you are not generating by burning fossil fuels eliminates greenhouse gases, it reduces pollution of the Chesapeake Bay, and it makes us healthier."

Paula Carmody, People's Counsel for the State of Maryland, serves as the voice for Maryland consumers in two million households statewide. For more than two years, she said, the consumers she represents "have been hammered by dramatic increases in electricity prices." During the past year, Carmody said her office has been helping an increasing number of Maryland residents and businesses deal with new issues related to the reliability of the state's power supply. Carmody said her office "has looked at this issue over the years and we are convinced that relying on energy efficiency and conservation programs is a cheaper, faster, and healthier way of meeting our energy needs. This approach provides a single solution to the multitude of energy-related problems and challenges we are currently facing in Maryland - price, reliability, environmental, and health. Energy efficiency is an integrated solution to all of these challenges."

Energy Efficiency: The First Fuel for a Clean Energy Future—Resources for Meeting Maryland's Electricity Needs can be downloaded for free at http://aceee.org/pubs/e082.htm or purchased for $50 plus $5 postage and handling from ACEEE Publications, 1001 Connecticut Avenue, N.W., Suite 801, Washington, D.C. 20036-5525, phone: 202-429-0063, fax: 202-429-0193, e-mail: aceee_publications@aceee.org.

American Council for an Energy-Efficient Economy (ACEEE) www.aceee.org
http://www.aceee.org/press/e082-final.htm
February 19, 2008