Efficiency Obligations in the US – Successes, Challenges, Lessons
International experience shows that energy efficiency delivers multiple benefits to the energy system, consumers, and the economy—often at lower cost than supply-side resources. To quote Miguel Arias Cañete, the EU Climate Action and Energy Commissioner, “… the energy we do not use is the cheapest, most sustainable, and most secure energy there is.” An energy efficiency obligation (EEO) can be a powerful, highly cost-effective tool for delivering those energy savings and benefits. At a meeting held during the COP 21 talks in Paris, Richard Cowart drew on U.S. experience with EEOs to describe the key features and various framework options to consider when establishing an EEO.In the United States, the obligation to meet the EEO energy savings targets is incumbent upon either regulated distribution utilities, competitive retail suppliers, or distribution companies. Switching to a national mandate could help overcome the slow progress and underperformance demonstrated in many states. Mr. Cowart also emphasizes the need for strong, independent oversight of the EEO scheme, with rigorous measurement and verification processes. Carbon auction revenues offer a new opportunity to fund EEO programs. The Regional Greenhouse Gas Initiative (RGGI), a nine-state “cap-and-invest” program in the northeastern U.S., boasts a 40 percent reduction in carbon dioxide emissions and more than $1 billion reinvested in energy efficiency, renewable energy, and low-income households since 2005.