Groups send letter highlighting the need for an Energy Efficiency Resource Standard for utilities to create jobs, cut energy bills and reduce greenhouse gas emissions

WASHINGTON—In a letter sent to Sen. Harry Reid today, 57 business leaders, trade associations and environmental organizations call on the Senate to pass a strong Energy Efficiency Resource Standard for utilities as a core measure in climate and energy legislation.

The letter, delivered to Capitol Hill on Wednesday, July 21, urges Congress to grab the “low-hanging fruit” of energy efficiency, which is the cheapest, fastest and cleanest way to meet growing energy demand.  The groups call for a common sense standard that would reduce energy usage by 1 percent per year, ramping up over time, calling such a standard critical to cutting carbon emissions and creating jobs.

A stand-alone Energy Efficiency Resource Standard (EERS) for utilities, which could be met by the establishment of customer programs and incentives to invest in efficiency upgrades, has the potential to create up to 900,000 new jobs. As a policy that drives energy efficiency investments, an EERS could save the country over $100 billion in energy costs by 2020, with individuals and businesses seeing energy bills drop by more than 30 percent.

“As the Senate works to assemble a comprehensive climate and energy bill to create clean energy jobs, reduce global warming pollution and respond to the disaster in the Gulf of Mexico, we urge you to include a minimum Energy Efficiency Resource Standard (EERS) for utilities.  The most affordable alternative to continued use of carbon-intensive fossil fuels is energy efficiency,” the letter reads.

Existing Senate bills include efficiency provisions, but none come close to delivering 1 percent energy savings per year, which experts say is easily  achievable, with 20 states having at least the same standard. A series of analyses have shown that the existing proposals are leaving billions of dollars and hundreds of thousands of jobs on the table by not including stronger efficiency standards. Consensus is growing that energy efficiency is crucial to achieving energy independence, reducing greenhouse gas pollution, and promoting job growth in the United States. Senate legislation must include a strong EERS to ensure that the savings and jobs it entails are realized.

Full text of the letter:

July 21, 2010

The Honorable Harry Reid, Majority Leader

United States Senate

522 Hart Senate Office Building

Washington, DC 20510

Dear Majority Leader Reid:

As the Senate works to assemble a comprehensive climate and energy bill to create clean energy jobs, reduce global warming pollution and respond to the disaster in the Gulf of Mexico, we urge you to include a minimum Energy Efficiency Resource Standard (EERS) for utilities.  The most affordable alternative to continued use of carbon-intensive fossil fuels is energy efficiency.  Utilities could meet the standard by establishing efficiency programs for their residential, commercial and industrial customers – providing incentives to those who invest in high efficiency heating and air-conditioning systems, lighting, appliances, insulation, windows, whole building retrofits, industrial processes, combined heat and power systems, and other measures.  We believe the standard should decrease usage by at least 1 percent per year in 2012, ramping up to higher savings levels by 2020.

While twenty states already require 1 percent or greater savings, in most of the country the savings remain largely untapped although they are available to utilities at a cost of less than 3 cents/kWh, much lower than the cost of generating and distributing power, according to a study by the American Council for an Energy-Efficient Economy (ACEEE).

By requiring utilities to help their customers save energy, Congress will:

• Create hundreds of thousands of new jobs – Shifting energy dollars from one of the least labor-intensive activities in the economy—operating power plants—towards a set of extremely labor intensive activities—retrofitting existing homes and office buildings and installing high efficiency lighting, equipment and appliances in all of them—will directly create hundreds of thousands of new jobs – up to 900,000, according to a July 2009 analysis by McKinsey & Co.  Increasing investment in efficiency creates even more jobs indirectly, as people begin to realize lower energy bills and invest these savings in their local economies.   An ACEEE analysis of just the federal EERS estimates it will create more than 100,000 jobs by 2020 and more than 240,000 jobs by 2030.

• Lower the national energy bill by $100 billion – The McKinsey 2009 analysis found that adopting policies to drive investment in all cost-effective energy efficiency could reduce the nation’s energy bill $1.2 trillion by 2020.  Individuals and businesses can reduce their energy bills by over 30 percent.  Even consumers who did not participate in efficiency programs would benefit because lower overall consumption reduces fuel prices as well as air and carbon pollution and strain on the electric grid.  The ACEEE analysis of just the federal EERS estimates net present value savings of more than $100 billion, after considering both the energy bill savings plus the cost to utilities and consumers of energy-saving investments.

• Reduce greenhouse gas emissions: A 1% per year standard alone would avoid about 215 million metric tons (MMT) of carbon dioxide in the year 2020 and 306 MMT in 2030, including savings from existing state EERS that also could be used to meet a federal program. These avoided emissions amount to approximately 9% of electric-sector 2005 emissions by 2020 and 13% by 2030.  As the annual savings target increases, these emissions reductions will increase as well.

• Reduce the need for new power plant and transmission line construction – The ACEEE analysis estimates energy savings from a federal EERS of more than 370 billion kWh in 2030, and a reduction in required peak generating capacity of about 119,000 MW.

Several Senate bills contain energy efficiency provisions, but none comes close to delivering savings of 1 percent per year.  The American Power Act (APA, drafted by Senators Kerry and Lieberman) and the Clean Energy Jobs and American Power Act (S. 1733) include a 20 percent and 33 percent efficiency investment requirement for natural gas utility carbon allowances respectively, but none for electric utilities.  The American Clean Energy Leadership Act (ACELA, S. 1462) has a 15 percent by 2020 renewable electricity standard (RES) that allows up to about 27 percent of the standard to be met with energy efficiency.

A June 2010 ACEEE analysis of the APA and ACELA utility efficiency provisions found that the APA allocations would save 0.2 quads of energy annually by 2020, but the ACELA RES would not achieve any additional energy savings because the requirement is below business-as-usual projections.  In comparison, a 1 percent per year EERS would save 2.4 quads annually in 2020 and 3.9 in 2030. The 2030 figure equals almost the annual energy use of the state of New York.

An EERS of at least 1 percent per year in 2012, ramping up to higher savings levels by 2020, is critical to driving energy efficiency investments in the U.S.  We urge you to include an EERS in comprehensive climate and energy legislation.

Sincerely,

A.O. Smith

Alliance to Save Energy

American Council for an Energy-Efficient Economy

Aspen Skiing Company

Ben & Jerry’s

Best Buy

Business for Innovative Climate and Energy Policy

Ceres

Citizens for Pennsylvania’s Future

Citizens Utility Board of Wisconsin

Clif Bar & Company

Conservation Law Foundation

Conservation Services Group

Danfoss

eBay

Efficiency First

Eileen Fisher

ENE

Energy Future Coalition

Environment America

Environment and Energy Study Institute

Environmental Law and Policy Center

Fresh Energy

Gap Inc.

Interfaith Power and Light

Johnson Controls

Jones Lang LaSalle

Levi Strauss & Co.

Lime Energy

National Association of Energy Service Companies

National Association of State Energy Officials

National Community Action Foundation

National Housing Trust

Natural Resources Defense Council

New Mexico Coalition for Clean Affordable Energy

Nike

Northeast Energy Efficiency Council

O Power

Ohio Environmental Council

Outdoor Industry Association

Pace Energy and Climate Center

Recycled Energy Development

Serious Materials

Seventh Generation

Sierra Club

Southern Alliance for Clean Energy

Southwest Energy Efficiency Project

Starbucks

Stonyfield Farm

Symantec

Target Corporation

The North Face

Timberland

US Fuel Cell Council

Utah Clean Energy

Warner Power Solutions LLC (NH)

Western Resource Advocates