CPP and energy efficiency: What are the synergies?

ByLauren Casentini, CLEAResult Senior Vice President of Policy & Regulatory Affairs

With the final Clean Power Plan now in place, states, utilities and businesses are starting to plan how they will comply with the new EPA rule and the steps needed to do so.

With the final Clean Power Plan (CPP) now in place, states, utilities and businesses are starting to plan how they will comply with the new EPA rule and the steps needed to do so. Energy efficiency may not have been part of the state target calculations, but it will be a key component of most state compliance plans. Here are five ways the CPP is likely to impact the energy efficiency industry and affect consumers, utilities and businesses alike.

1. States and utilities will increase investment in energy efficiency
As the lowest-cost energy resource in America[1], energy efficiency can be realized through diverse sets of programs available to states and utilities, saving residential and business consumers money on their energy bills. Taken as a whole, it can add up to huge sums: The American Council for an Energy-Efficient Economy (ACEEE) estimates that energy efficiency saved US consumers $800 billion in 2014 alone, or about $2,500 per person.[2] Looking forward, the National Resource Defense Council estimates efficiency investments from the CPP to save Americans nearly $85 annually, totaling to $155 billion by 2030[3].

Energy efficiency also produces substantial economic benefits for local and state economies.[4] Nevada estimates that 4,680 new jobs can be created through 2020 by implementing energy efficiency programs[5]; California calculates that energy efficiency jobs accounted for 300,000 positions, or 70 percent of the green economy in the state[6].

States’ CPP plans will undoubtedly rely on energy efficiency as a resource; not only is it cost effective to implement, but it also produces widespread economic benefits. The increase in energy efficiency investment as a result of the CPP will ripple through the industry and greater economy, producing an array of societal benefits.

2. Low income communities may quickly see clean energy investments at an unprecedented rate
While states don’t have to show progress toward their emissions reduction targets until 2022, the EPA is stimulating savings in the interim by giving states an opportunity to redeem credits prior to that date through low-income energy efficiency programs and select renewable projects.[7] What’s more, states are required to incorporate the needs of low-income and underserved communities in their final compliance plans.[8] All told, the early action and final plans will encourage additional low-income energy efficiency programs, bringing equity and resources to a historically-underserved population segment.

Low-income programs that collaborate with community members to save energy and money are advantageous for states and utilities alike. CLEAResult supports low-income programs across the country, in both rural and urban areas. A number of these programs have recently received attention from the White House – including a new CLEAResult and E4TheFuture collaboration focused on energy efficiency and Native American tribal communities in Michigan.[9]

3. Energy efficiency investments will strengthen relations between utilities and their customers
Now that the Clean Power Plan is final, the public is taking notice, and many will be curious to see how their respective state agencies and businesses react and plan. Utilities will have a unique opportunity to connect the dots for their customers between energy efficiency and CPP compliance, encouraging involvement and demonstrating immediate action from the consumer and provider perspective.

Programs centered on the consumer-utility relationship will produce benefits for all involved. Studies by J.D. Power show that satisfaction is much higher when customers are familiar with their energy efficiency programs.[10] Utilities have an opportunity to meet multiple goals through energy efficiency, and it will be important for utilities and states to find trusted partners that can successfully represent their programs and realize the projected energy savings. Creative marketing techniques and friendly energy advisors are often key to improving customer experience, and we are excited to continue being an interface on behalf of utilities for their customers.

4. Increased investment will improve and advance energy efficiency technology and methods
Market and stakeholder support has spurred rapid evolution of energy efficient technology in the past 20 years, leading to innovative new technologies and spurring not only new companies and markets but also increasing American energy productivity. We anticipate an increase in innovation with CPP-funneled investment, whether it’s in the newly stimulated marketplace or as a result of government initiatives, such as the renewal of residential PACE financing, the newly announced HUD and DOE programs and the Interagency Task Force to Promote a Clean Energy Future for All Americans[11].

Advances in software to enable energy efficiency, such as those occurring in behavioral demand response, smart devices in the home or strategic energy modeling, will also have a profound effect on the energy efficiency market in conjunction with the CPP. Residential and commercial energy consumers alike are coming to rely increasingly on technological advances that allow them to control their energy use. States and utilities can utilize these advances through programs centered on deploying new technologies in the market and capturing savings.

5. Business investment in energy efficiency will create happier, more productive workforces
As we see the millennial generation move into the workforce in steadily increasing numbers, an employer’s use of energy will become increasingly important. A recent study found that 83 percent of millennials expect businesses to “try harder and achieve more” in social responsibility[12], including energy use and its impact on climate change. As states, utilities and businesses work to comply with the CPP, these changes will, in turn, improve businesses reputation and loyalty among the newest members of the workforce.

The CPP, among many other factors, has brought the energy efficiency industry into a pivotal role – one that will push the boundaries of how we use energy.

1 ACEEE. (2014) “The Best Value for America’s Energy Dollar: A National Review of the Cost of Utility Energy Efficiency Programs”
2 ACEEE. (2014) “Energy Efficiency in the United States: 35 Years and Counting”
3 http://www.nrdc.org/climate/files/cpp-benefits-analysis-150804.pdf
4 National Resource Defense Council. (2015) “California’s Golden Energy Efficiency Opportunity”
5 Southwest Energy Efficiency Project. (2015) “The $20 Billion Bonanza”
6 Ibid.
7 http://www.epa.gov/airquality/cpp/fs-cpp-ceip.pdf
8 ACEEE. (2015). “Energy Efficiency in the Clean Power Plan: Take One”
9 The White House Office of the Press Secretary. (August 24, 2015). “FACT SHEET: President Obama Announces New Actions to Bring Renewable Energy and Energy Efficiency to Households across the Country”
10 J.D. Power. (2014) “Customer Impact Report: Energy Efficiency Programs and Awareness”
11 The White House Office of the Press Secretary. (August 24, 2015). “FACT SHEET: President Obama Announces New Actions to Bring Renewable Energy and Energy Efficiency to Households across the Country”

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