GUEST COLUMN: Energy efficiency first option

GUEST COLUMN: Energy efficiency first option

BY JAMES R. POWELL

Recent national and state news stories point to an ever increasing recognition that we must begin to formulate a sustainable energy future, protect our natural heritage, and also maintain reliable and affordable electric service. Are these goals realistic and achievable? Or is it asking too much to have both affordable electricity while also addressing climate change and protecting this beautiful state? The answer is yes, we can achieve both, and the quickest and least costly vehicle to get us there is energy efficiency.

The simple truth is that Tennessee wastes too much energy. Based on 2005 data from the U.S. Energy Information Administration, Tennessee residents have the second highest annual electric consumption in the U.S., using 6,868 kilowatt-hours per person compared to 4,594 kilowatt-hours per person nationally. Only Alabama residents use more electricity than Tennessee residents. Additional efforts are needed to reduce our electricity use through individual conservation and utility-sponsored energy efficiency and demand-side management (DSM) programs.

While additional generation will likely be needed in the future, too little emphasis has been given to the reality of achievable energy efficiency and the broad public benefits to Tennessee's residents and businesses of expanding energy efficiency programs. For example:

n Energy efficiency is the quickest way to meet future demand and to mitigate environmental and climate change impacts. No waiting for construction of new clean power plants, transmission lines or for the effects of a carbon trading-program to take effect.

n Recent studies by the Edison Foundation and the Electric Power Research Institute (EPRI), both funded by investor-owned utilities, found that energy efficiency programs could reduce future energy demand in the U.S. by 38 to 65 percent by 2030. EPRI's analysis found that the 65 percent savings would be even greater with improved energy codes and efficiency standards. McKinsey and Company, a global energy consulting firm, found that energy efficiency can offset more than 80 percent of increased electricity demand by 2030.

n Energy efficiency programs provide electricity for an average cost of three or four cents compared with seven to 14 cents per kilowatt-hour to build new generation and transmission facilities. The Edison Foundation reports that even with the added expense of DSM programs, including advanced metering infrastructure, customers would realize a 7 to 15 percent reduction in costs, compared to just building new generation facilities to meet demand.

n Based on a recent analysis by the American Council for an Energy Efficient Economy, implementing an energy efficiency resource standard (EERS) during the next decade could save enough energy to meet the needs of more than 1.52 million homes in Tennessee, resulting in $3.5 billion in net energy savings to residents and businesses, and producing nearly 5,100 net jobs in the state.

Congress had been working on an energy-efficiency standard that would reduce electricity usage 15 percent and natural gas usage 10 percent by 2020, but opponents managed to reduce that goal to only a 5 to 8 percent energy-efficiency gain by 2020. For all practical terms, this is business as usual. In addition, the scope of utilities affected by the standard has been narrowed: utilities selling 46 percent of Tennessee's electricity will be exempt. In effect, the House bill now requires Tennessee to save only 2.5 to 4 percent of energy by 2020. A nearly trivial task, this low goal for energy efficiency will fail to realize the cost-savings opportunities that serious efficiency programs can provide.

After years of limited DSM and energy efficiency efforts from utilities in Tennessee, it is past time to get serious about meeting our energy needs at minimum cost to our residents. It's up to Congress to pass this critical legislation including a meaningful energy efficiency standard. Make sure you let them know your thoughts.

Jim Powell is an independent energy consultant on energy efficiency and renewable energy to states, local governments and industry.