Southeast US underperforms in energy efficiency savings – report

Southeast US underperforms in energy efficiency savings – report

Abbie Bennett

15 Feb, 2022

Electric utilities in the U.S. Southeast consistently underperform other areas of the U.S. in energy efficiency savings, leading to some of the highest electricity usage and monthly energy bills in the country, according to a new report from the Southern Alliance for Clean Energy released Feb. 14.

Between 2019 and 2020—the most recent year with complete data — efficiency savings as a percentage of retail sales in the Southeast dropped from .25% to .2%, according to the "Energy Efficiency in the Southeast" annual report which compiles efficiency performance data from nearly 500 electric utilities in the Southeast.

"The COVID-19 pandemic had a significant negative effect on utility efficiency performance in 2020," the report said. "Safety fears led utilities to suspend in home services and economic uncertainty reduced business participation in efficiency programs."

The highest performing region during that time period was the Western-Pacific region at 1.39%, with nearly seven times more efficiency savings than the Southeast. SACE measures regions and utilities based on efficiency savings as a percentage of annual electric retail sales.

Among Southeastern states, North Carolina and South Carolina's energy efficiency savings were the strongest, accounting for about 64% of total savings in the Southeast while making up 24% of the region's retail sales. Alabama, Kentucky, Mississippi and Tennessee underperformed compared to other Southeastern states and Florida delivered about half as much efficiency savings compared to its share of retail sales, according to the report.

Nearly every utility system in the Southeast saw significant efficiency declines during the COVID-19 pandemic, and average savings for the region as a whole fell 20% from the previous year, down to less than a quarter of the national average.

Even the Southeast utility with the most efficiency savings as a percentage of retail sales, Duke Energy Corp. subsidiary Duke Energy Carolinas LLC saw a 19% savings drop from 2019 to 2020, bringing it nearly even with corporate sibling Duke Energy Progress LLC. Energy efficiency savings for low-income customers at both utilities suffered, with savings dropping 75%-84%, according to the report. Duke Energy's performance hovers around the national average, trailing about half of the nation's other major utilities. But Duke Energy's subsidiaries still had annual savings more than twice as high as the next-highest ranking in the region, Southern Co. subsidiary Georgia Power Co.

SACE ranked the Tennessee Valley Authority's energy efficiency spending and savings performance among the lowestcompared to other major U.S. utilities. The federal power authority previously eliminated its efficiency incentive programs, dropping the TVA's annual percentage of efficiency savings to about .02% in 2019, SACE said. The average for major utilities was about 50x higher than TVA's annual percentage, according to the report.

Policy changes

Policy developments in the Southeast could help boost future efficiency levels and renewables, SACE said, such as South Carolina's 2019 Energy Freedom Act, North Carolina's 2021 House Bill 951 and the revision of Florida's energy efficiency rules.

Increasing energy efficiency, which SACE said Southeastern utilities have underutilized and underinvested in, could help those utilities meet carbon reduction goals without the massive cost and complication of supply-side resources such as new power plants.

"Energy efficiency reduces emissions and helps utilities integrate intermittent renewable energy sources," report authors said. "With the urgent need to stabilize our climate, reducing energy consumption is our least cost and most abundant solution."