Spend or save? It's the age-old question facing anyone with a checkbook and a piggy bank. Now, policymakers are applying the same concept to the public’s consumption of power.
While states continue to pursue and promote greater use of renewable power to help address global climate change and energy shortages, many also are looking at efficiency as a policy tool to help them achieve the same goal. Call it the piggy bank approach. This spring, two states adopted standards to achieve energy savings through greater efficiency at the utility and consumer levels.
In February, New Mexico Gov. Bill Richardson signed legislation strengthening the state’s Efficient Use of Energy Act. The legislation directs electric and gas utilities to provide cost-effective and achievable energy--efficiency resources to their customers. Mirroring the state’s renewable portfolio standard, which requires utilities to derive a minimum amount of power from alternative energy sources, the law also establishes an efficiency standard for providers. Electric utilities must achieve a savings of at least five percent from their 2005 sales levels through efficiency measures by the year 2014. That number increases to 10 percent by 2020.
To meet the requirements of the changes, utilities in New Mexico could fund and implement a variety of programs, such as rebates for energy-efficient appliances, compact fluorescent lamp exchanges and home weatherization assistance. The law also declares that it is necessary to provide financial incentives for energy efficiency and load-management resources and that energy-efficiency programs must be cost effective and less expensive than pursuing new sources of supply.
Following New Mexico’s lead, Vermont also has approved a bill that will promote energy efficiency and renewable energy throughout the state.
Vermont’s Energy Efficiency and Affordability Act of 2008 creates a new $4 million fuel-efficiency fund that will be financed from existing revenues and from the sale of emission credits. Among other things, the new law expands net metering to include renewable energy systems up to 250 kilowatts in capacity, up from only 15 kilowatts, and allows for combined heat and power systems up to 20 kilowatts in capacity.
The bill also doubles the cap on net-metered systems to 2 percent of the peak demand as of 1996. It allows farms to have Rickall their electric meters consolidated on paper into one net-metered system, and it allows groups of buildings, such as a school district or town center, to also be consolidated on paper into one net-metered system.