Key highlights of this report published by The Southern Alliance for Clean Energy are:
Utilities in the Southeast still have abundant, low-cost efficiency potential available at a time when utilities are projecting high load growth. Utilities such as Georgia Power and Duke Energy have been in the national spotlight due to unprecedented load growth projections from data centers, but when it comes to delivering energy efficiency savings, we have yet to see anything other than business as usual. Projected annual load growth greatly outpaces the current level of energy reductions from efficiency programs. In contrast, most utilities in the region fail to even keep pace with the national average savings for investor-owned utilities (IOUs)
The Southeast is home to some of the largest electric utilities in the nation. Underperformance in energy efficiency program savings by these utilities holds back the region as a whole, denying cost savings and improvements in comfort and performance for homes and businesses alike. Utility giants like the Tennessee Valley Authority (TVA) and Florida Power & Light (FPL) have ranked below the national and regional average for savings every year for the past five years, despite comprising the majority of retail sales in the region. While FPL has demonstrated its commitment to least-cost resources such as solar energy, it has, so far, failed to demonstrate a similar commitment to energy efficiency.
The Inflation Reduction Act made billions of federal dollars available to states to expand energy efficiency. For instance, the Home Efficiency Rebate (HER) funds were designed to provide deeper, whole-home energy efficiency measures such as insulation and leak-sealing, particularly for low-income households. However, in most states the future of these rebate programs remains uncertain even amidst the current affordability debate. States that had their rebate program applications approved by the U.S. Department of Energy have suspended or delayed their plans to launch as they have not yet received their obligated funds. The Southeast has only two states–Georgia and North Carolina–that have rebate programs up and running.
In the absence of other serious energy efficiency efforts in the region, Duke Energy’s subsidiaries operating in the Carolinas have continued to lead the Southeast in rankings of utility energy efficiency program savings at 0.74% and 0.61% respectively. However, they fall below leading efficiency programs nationally, which can achieve energy reductions of 1.5% of retail sales. They also have yet to match their own historical pre-pandemic performance of approximately 1%. Further, much of Duke’s residential energy efficiency program savings fade within a year because they come from targeted customer education rather than home performance improvements such as insulation and duct-sealing.
The Southeast faces an affordability crisis and unprecedented load growth due to data centers, doubly stressing utility planning and customer finances. Past underutilization of energy efficiency means that utilities in the region still have abundant, low-cost efficiency potential available now. A well-designed portfolio of energy efficiency programs can produce significant cost savings for customers while also reducing exposure to fuel cost volatility and the financial risk that utilities will overbuild to meet load that may not materialize. Now more than ever, southeast utilities should seriously pursue energy efficiency for customer and utility cost savings and for risk management.
Access the report here