Energy bill could open Southeast’s EE market

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Courtesy of Energy Efficiency Markets LLC

I live a kind of Tale of Two Cities, or rather tale of two regions. My work requires that I spend a lot of time covering the Northeast power markets, but I live in Southeast. So after reporting on the rich world of efficiency incentives available in places like Connecticut, Massachusetts and New York, wasn’t I surprised to find my local utility offers pauper’s fare, nothing more than an energy audit.

This is in keeping with a culture of inefficiency in the Southeast. For example, Energy Star appliances have achieved only 20% market penetration in the region, compared with a 30% penetration elsewhere.

But this culture could change soon because of the politics behind the proposed federal renewable portfolio standard. RPS opponents in the Southeast say the region can’t afford the standard because it lacks vast wind and solar resources

True or not, the Southeast was given a reprieve in the Waxman-Markey bill passed by the House June 26. If states cannot secure enough renewable energy to meet the standard, they can substitute with some energy efficiency. The bill requires that 6% of power come from renewables in 2012 rising to 20% by 2020. But states can substitute up to 25% of the requirement with energy efficiency. Moreover, a state governor may petition to increase the efficiency portion to 40%.

So if the Southeast can’t – or won’t – develop enough renewable energy to meet the RPS, it can rely on energy efficiency to fulfill nearly half the requirement. As a result, we could see a broad new market for energy efficiency build up in the Southeast. The World Resources Institute underscored this possibility in a brief, “Southeast Energy Opportunities,” circulated last week. The Southeast has the potential to reduce total expected electricity use 11% by 2015, enough to meet most of the region’s new power needs through 2015, according to the brief. That may be why the Rocky Mountain Institute ranked six of the Southeast states in the top ten for energy efficiency potential.

Efficiency advocates see the Southeast as an important market because its households tend to heat and cool with electric energy. In fact, electricity consumption per person is almost 40% higher than the national average. Moreover, the region has the fastest growing population in the United States. Greater population equals more demand for electricity equals more power plants – unless the need is offset through efficiency.

Of course, none of this is set stone yet. By most reports the energy bill faces rough going in the Senate, which is expected to take it up in the fall.

So those of us in the Southeast may look northward with envy for awhile longer – but perhaps eventually the tale will take a turn.

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