Energy efficiency is key to reducing customer bills, for those that participate in savings programs as well as all customers, reducing the need for generation that can reduce pollution from that generation, and stimulating economic development by creating jobs and keeping money in customers’ pockets. Despite all these benefits, utilities across the Southeast have historically underutilized energy efficiency. Read on for key data points and takeaways from SACE’s seventh edition “Energy Efficiency in the Southeast” report, watch a recording of our report webinar, and read the report for full context.
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As detailed in the report, the region as a whole lags utilities across the country in reducing energy waste through energy efficiency programs. This is despite utilities in the Southeast projecting unprecedented levels of load growth.
Laggards and a Leader-by-Default
Alabama Power, Florida Power & Light (FPL), Duke Energy Florida, and Tennessee Valley Authority (TVA) continue to bring down the regional average. Particularly because FPL and TVA are such large utilities, the fact that these utilities continue to deliver meager results from energy efficiency brings the Southeast regional savings average down considerably. While TVA saw a bump from its near-zero performance of past years, FPL, Duke Energy Florida, and Alabama Power did not see a change in 2024 from their dismal energy efficiency savings of the past.
Duke Energy’s utilities in North and South Carolina, Duke Energy Progress and Duke Energy Carolinas are once again the default leaders in the region. However, they fall below national peers, have yet to fully rebound to their pre-2020 performance of approximately 1%, and reported savings rely heavily on savings from short-term measures. Because most of Duke’s residential program savings are from behavioral measures, there remains significant potential for more durable measures like insulation, sealing, and heat pumps that would also address Duke’s high demand during extreme weather, particularly in the winter when the hugely inefficient electric resistance heating is prevalent across the territory. Behavioral measures like Duke’s Home Energy Reports help customers understand where their homes could be made more efficient, but they produce only barely noticeable reductions in customer bills and do little to lower the utility load growth that drives up all customer costs over time.
Southeast states’ savings levels follow the trends of the large utilities in those states, making the Carolinas again the leaders in a region that is far behind others across the country. Utility energy efficiency savings are usually reported on a per-utility basis, with leading utilities saving 1.5% or more per year. Statewide savings numbers usually are lower because they may include areas with utilities that do not operate energy efficiency programs or underperforming utilities.
Alabama, Florida, and Tennessee bring the regional average down, but also continue to have significant potential in the measures that could bring down costs for customers and address peak demand, both winter and summer, for utilities.
A Tale of Two Promises: Duke and Georgia Power
In the residential sector, the key to major bill reductions is weatherization plus efficient HVAC, with an emphasis on the former. In a showing of its continued regional leadership, Duke Energy agreed with SACE and other environmental organizations in a legal settlement to pilot weatherization programs targeted to low-income customers. Those programs are now underway, and this leadership helped inspire a similar effort at neighboring Dominion Energy. While these programs are nascent and have not grown to scale, they offer hope that robust residential utility energy efficiency programs could come to the Carolinas.
In neighboring Georgia, Georgia Power initially agreed to a legal settlement requiring the company to submit and support a portfolio of energy efficiency programs in 2025 that would grow to save at least 0.75% of annual sales. This promise would have made Georgia Power a regional leader in energy efficiency. Georgia Power submitted the programs for approval with supporting testimony, but then cut a separate deal with state regulators backing out of the 0.75% pledge. This is an example of why Georgia Power and Georgia in general remain so far below the national average in energy efficiency savings.
Federal Funds in Limbo
The Inflation Reduction Act (IRA), passed in 2022, made billions of federal dollars available to states to create and expand energy efficiency programs. However, the future of these programs remains uncertain in many states. All states in the Southeast had their applications for the funding approved by the U.S. Department of Energy, but several have suspended or delayed plans to launch as they have not yet received their obligated funds from DOE under the Trump administration. Only Georgia and North Carolina have their programs up and running in the Southeast.
Path Forward for Energy Efficiency in the Southeast
The Southeast is at a challenging moment amidst an affordability crisis and unprecedented load growth due to data centers, doubly stressing utility planning and customer finances. The region also continues to experience the impacts of climate change driven by carbon pollution. Energy efficiency is a key tool to manage rising electricity bills and carbon emissions, one that Southeast utilities are underutilizing. Since most utilities are regulated at the state level, it falls to states to ensure their policies drive utilities to pursue this cost-effective and widely available resource.
While the Southeast’s record on meager energy efficiency savings has been lackluster to date, this is an opportunity to turn that into an advantage. There is vast potential for both broader and deeper savings across the region that can be tapped into to address the affordability crisis, load growth, and climate change.
