Full Title: Next Generation Energy Efficiency Resource Standards Update
Author(s): Jasmine Mah, Steve Nadel, and Sagarika Subramanian
Publisher(s): American Council for an Energy-Efficient Economy
Publication Date: January 29, 2025
Full Text: Download Resource
Description (excerpt):
Presently, 26 states plus the District of Columbia have EERS policies in place. These states accounted for over 80% of utility energy efficiency program savings in 2023, making EERS policies a critical part of utility energy efficiency programs. On average, in 2023, utilities achieved 99% of their EERS goals, with some utilities exceeding goals and others falling a little short. Utilities exceeding goals were often aided by performance incentives that reward utilities for exceeding EERS minimums.
In this study, the authors examined four specific next generation elements:
– Mandatory emissions reduction targets or a decarbonization goal
– Electrification, including enabling and encouragement policies and sometimes explicit targets
– Minimum targets for underserved customers, such as low-income households
– Energy burden maximums or affordability provisions
In addition, a few states have additional EERS provisions, such as peak demand savings (a key feature of the Texas EERS) and requirements for measures with long-term savings (e.g., a provision in the Illinois EERS). Only a few states have these provisions, so while we note them where relevant, we do not cover them in depth because they are infrequent. Of the EERS states, the authors identified at least one next generation element in 23 (including DC).
In many of the case study states, these next generation elements are resulting in increasing low-income and electrification program activity, particularly for low-income programs in all the case study states (Illinois, Massachusetts, Michigan, Minnesota, and New York) and electrification programs in Massachusetts and New York. Next generation policies are also contributing to complementary policies such as new construction requirements in Massachusetts and New York, electric rate redesign efforts in Massachusetts, and low-income rates in Illinois and Minnesota. More impacts are likely to become apparent in the next few years after new programs and policies triggered by recent legislation and commission orders take effect.