"Energy Efficiency is at the heart of energy affordability." Tony Earley, Chairman, CEO and President of PG&E Corporation


Energy Efficiency: Still the Best Value

By Jonathan Marshall

Want to know just how seriously California and its utilities take energy efficiency? A new report tells it all: In 2013, California budgeted 250 percent as much as the next biggest spender, New York, for customer-funded electric energy efficiency programs.  In fact, California’s $1.5 billion in budgeted expenditures accounted for more than one-fifth of the national total in 2013.

Although the report doesn’t mention specific utilities, PG&E alone budgeted more in 2013 for electric energy efficiency programs (nearly $350 million) than all but four other states besides California.Why Energy Efficiency Matters

The new report, by the Edison Foundation Institute for Electric Innovation, highlights the laudable growth of electric efficiency programs nationwide, not just in California. Overall, such programs saved enough energy in 2012 to serve more than 12 million homes and to avoid the emission of 89 million metric tons of carbon dioxide. (That’s about equal to the annual emissions of 18.7 million cars.)

“Year-over-year, we are seeing an impressive and steady increase in electric efficiency investments by electric utilities, reflecting the industry’s commitment to helping customers manage and save energy while optimizing the nation’s power grid through low-cost, demand-side resources,” said Lisa Wood, the Institute’s executive director. “Electric utilities are by far the largest energy efficiency providers in the country, making up 89 percent of the total customer-funded electric efficiency expenditures nationwide in 2012.”

New research also confirms that those expenditures were, by and large, a great investment. A just-released study from Lawrence Berkeley National Laboratory concludes that efficiency programs saved energy at a program cost of just over $0.02 per kilowatt-hour (kWh) over the years 2009-2011.

Another brand-new study, this time from the respected American Council for an Energy-Efficient Economy (ACEEE), pegs the average program cost of electric energy efficiency programs for the years 2009-2012 slightly higher at 2.8 cents per kWh, still a great bargain.

You can’t build a new generating plant of any type for anything close to that price. A recent comparison of unsubsidized generation costs by technology gives wind power (in the best locations) the lowest cost, at as little as 4.5 cents per kWh. The next most affordable technologies are gas combined cycle, coal, and solar photovoltaic, at just over $.06 per kWh, under optimum conditions.

The ACEEE study includes a bit of sobering information for California. Probably because the state has been in the energy efficiency business for so long, it has picked most of the low-hanging fruit already. As a result, the cost of saving energy here is around 4.5 cents per kWh. The payoff from every dollar invested here in energy efficiency, while still good, declined from $1.83 in 2009 to $1.24 in 2011, the last year for which estimates are available.

Bear in mind, however, that these figures don’t include many other benefits of energy efficiency, including reduced costs for electric distribution and transmission, lower wholesale energy costs, and cleaner air.

Bottom line: Efficiency programs are still the best investment society can make in its energy resources. As for California, we’ll just have to keep working harder and smarter to make sure the dividends from our ongoing efficiency investments keep on coming.

Note: Last year alone, PG&E’s diverse and award-winning efficiency programs avoided the release of more than 900,000 metric tons of carbon dioxide emissions, equal to the annual greenhouse gas emissions from nearly 200,000 passenger cars in California. Our programs helped customers save $300 million on their energy bills in 2012.

Email Jonathan Marshall at jonathan.marshall@pge.com.

This story originally appeared on pgecurrents.com.