Editor’s note: This commentary is by Jim Merriam, the director of Efficiency Vermont.
In the year 2000, Vermont embarked on a ground-breaking experiment. It created the nation’s first “energy efficiency utility” – Efficiency Vermont – in recognition of the fact that the cheapest and cleanest unit of energy is the one that you don’t use.
In the years that have followed, Efficiency Vermont and our customers have won national recognition for finding innovative and effective ways for Vermont families and businesses to save money, save energy, and reduce their carbon footprint through energy efficiency.
Fourteen years into our efforts, it is natural to ask, “What’s next?”, or even, “Is there anything still left for Efficiency Vermont to do?”
To answer those questions, let’s start with where we are today:
• In 2013, Efficiency Vermont bought energy efficiency for less than half the cost of comparable electric supply: 4.1 cents per kilowatt hour for efficiency versus 8.4 cents for supply.
• A recent report from VELCO, the state’s transmission company, found that Vermont’s energy efficiency investments have resulted in the avoidance or deferral of $279 million in regional transmission projects.
• In 2013, Vermont’s electricity usage was 13 percent lower than it otherwise would have been, thanks to the work of Efficiency Vermont and our customers.
• An independent study commissioned by the Public Service Department in 2011 found that every $1 invested in energy efficiency returns $5 in benefits to the Vermont economy.
• In the area of thermal efficiency, Efficiency Vermont’s Home Performance with ENERGY STAR service helped nearly 1,200 Vermonters tighten up their homes in 2013, significantly reducing their heating costs.
Efficiency Vermont’s energy-saving efforts in 2013 had the environmental impact of taking more than 135,000 gasoline-powered cars off the road for a year.
This technology will provide Vermonters with a vastly improved ability to understand how they use energy, and how they can reduce their energy costs and use through both energy efficiency and conservation.
The fundamental drivers of these results have remained the same throughout Efficiency Vermont’s existence: Focusing on customer solutions that are cost-effective and innovative, and that leverage the private-sector marketplace. That focus is complemented by rigorous third-party oversight that provides accountability to the public and policy makers.
So what about the future?
From a strictly economic point of view, there is a lot of untapped, cost-effective energy efficiency savings in Vermont’s homes and businesses. Currently, electric energy efficiency is less than half the cost of electric supply. As long as efficiency is less expensive than supply, every unit of energy we save through efficiency saves money for Vermonters.
In addition, the technology and policy landscapes for energy efficiency, and Efficiency Vermont specifically, are constantly changing and evolving. Ten years ago, LED lighting — which can be up to 80 percent more efficient than incandescent technology and more than 50 percent more efficient than compact fluorescent technology — was barely a gleam in the eye of the marketplace. Today, it is becoming the standard: Thanks to an incentive from Efficiency Vermont, you can go to your local hardware store and buy a high-quality LED bulb for $4.99.
One of the most striking technology changes in recent years is in the use of electricity for heating. In years past, electric resistance heating systems were inefficient, costly to use, and a logical target for replacement with fossil fuel systems. But today, electric-powered air source heat pumps are so efficient that they can provide heat at half the cost of oil or a third of the cost of propane. As a result, after years of focusing on reducing the use of electricity, Efficiency Vermont is now identifying technologies such as this where it might actually make sense to use electricity instead of other sources of more costly, more polluting energy.
At the same time, Efficiency Vermont is becoming increasingly focused on the need to reduce peak demand as a way to minimize Vermont’s share of steadily-growing regional transmission costs. As noted earlier, this focus is already paying off, with VELCO finding that Vermont’s energy efficiency investments have helped to avoid or defer $279 million in transmission projects across New England – savings that flow to all ratepayers by reducing or offsetting future rate increases.
More and more, individual consumers will be able to play a larger role in helping to reduce these costs (and their own bills). Vermont is a national leader in the deployment of advanced metering infrastructure (sometimes referred to as the “smart grid”). This technology will provide Vermonters with a vastly improved ability to understand how they use energy, and how they can reduce their energy costs and use through both energy efficiency and conservation. Efficiency Vermont will be there to help Vermonters take advantage of these opportunities in ways that are effective for consumers and easy to engage in.
Finally, it is important to emphasize that Efficiency Vermont doesn’t operate in a vacuum. We evolve and improve based on the changing needs of our customers and the changing policy priorities of the state. Case in point: Our original mandate to focus solely on electric efficiency was expanded in 2008 to encompass heating fuel efficiency, recognizing the substantial cost and saving opportunities that an “all fuels” efficiency approach represented. As the state continues to chart its energy future, Efficiency Vermont is actively working to ensure that we are well-positioned to continue to help Vermonters meet their energy needs.
As Efficiency Vermont’s director, I’m proud of the results that we have achieved to date, but I never want to see us rest on our past successes. There is still a lot of work to be done to help Vermonters reduce their energy costs, and to help the state as a whole meet its energy and economic development goals. We are committed, and I am personally committed, to making sure that Efficiency Vermont continues to meet public expectations of high performance, innovation, accountability, and transparency in the years to come.