Overviews of the energy efficiency programs reviewed
for this chapter are provided in Table 6-2 and 6-3. Key
findings drawn from these programs include:
• Energy efficiency resources are being acquired on aver
age at about one-half the cost of the typical new
power sources, and about one-third of the cost of nat
ural gas supply in many cases—and contribute to an
overall lower cost energy system for rate-payers (EIA,
• Many energy efficiency programs are being delivered at
a total program cost of about $0.02 to $0.03 per life
time kilowatt-hour (kWh) saved and $0.30 to $2.00
per lifetime million British thermal units (MMBtu)
saved. These costs are less than the avoided costs seen
in most regions of the country. Funding for the majority
of programs reviewed ranges from about 1 to 3 per
cent of electric utility revenue and 0.5 to 1 percent of
gas utility revenue.
• Even low energy cost states, such as those in the Pacific
Northwest, have reason to invest in energy efficiency,
as energy efficiency provides a low-cost, reliable
resource that reduces customer utility bills. Energy effi
ciency also costs less than constructing new genera
tion, and provides a hedge against market, fuel, and
environmental risks (Northwest Power and Conservation
• Well-designed programs provide opportunities for cus
tomers of all types to adopt energy savings measures
and reduce their energy bills. These programs can help
customers make sound energy use decisions, increase
control over their energy bills, and empower them to
manage their energy usage. Customers can experience
significant savings depending on their own habits and
the program offered.
• Consistently funded, well-designed efficiency programs
are cutting electricity and natural gas load—providing
annual savings for a given program year of 0.15 to 1
percent of energy sales. These savings typically will
accrue at this level for 10 to 15 years. These programs
are helping to offset 20 to 50 percent of expected
energy growth in some regions without compromising
end-user activity or economic well being.
• Research and development enables a continuing source
of new technologies and methods for improving energy
efficiency and helping customers control their
• Many state and regional studies have found that pur
suing economically attractive, but as yet untapped
energy efficiency could yield more than 20 percent sav
ings in total electricity demand nationwide by 2025.
These savings could help cut load growth by half or
more, compared to current forecasts. Savings in direct
use of natural gas could similarly provide a 50 percent
or greater reduction in natural gas demand growth.
Potential varies by customer segment, but there are
cost-effective opportunities for all customer classes.
• Energy efficiency programs are being operated success
fully across many different contexts: regulated and
unregulated markets; utility, state, or third-party
administration; investor-owned, public, and coopera
tives; and gas and electric utilities.
• Energy efficiency resources are being acquired through
a variety of mechanisms including system benefits
charges (SBCs), energy efficiency portfolio standards
(EEPSs), and resource planning (or cost of service)
• Cost-effective energy efficiency programs for electricity
and natural gas can be specifically targeted to reduce
• Effective models are available for delivering gas and
electric energy efficiency programs to all customer classes.
Models may vary based on whether a utility is in the ini
tial stages of energy efficiency programming, or has
been implementing programs for a number of years.
To create a sustainable, aggressive national commitment to energy efficiency