This commentary originally appeared on EDF's Energy Exchange blog.
This week the Texas Legislature convened for its third Special Session in a row, yet the state’s electricity market still sits at a crossroads. The Public Utility Commission of Texas (PUC), Texas’ governing body for electricity, has been at a stalemate since Commissioner Rolando Pablos stepped down in February. The two remaining commissioners, Chairman Donna Nelson and Ken Anderson, seem to be waiting on a third deciding member to step up and address the looming Texas Energy Crunch. With the PUC divided and the legislature nearly adjourned, the state looks to Governor Perry to appoint a third commissioner to the PUC—breaking the longstanding stalemate on Texas’ power supply.
When appointed, the new commissioner will be in unique position to champion innovative, common-sense solutions to solve the Texas Energy Crunch. One of the most expedient and cost-effective ways to bolster the state’s electricity supply is to reduce the amount of energy needed to fuel our commercial buildings and homes through energy efficiency upgrades. In an upcoming post, I’ll discuss innovative ways to weigh the benefits of energy efficiency upgrades versus new fossil-fueled power plants. For now, though, let’s review where energy efficiency stands in Texas today.
Texas prides itself on establishing the nation’s first energy efficiency resource standard in 1999. The standard applies to transmission and distribution utilities, so-called “wires” companies, which are still regulated by the state. The standard is meant to reduce energy use to offset costly power line upgrades required to send electricity to Texas’ rapidly growing population. Unfortunately, since 1999, Texas has fallen behind on energy efficiency. Other states now have more aggressive energy-reduction targets that make ours look mediocre. At the same time, Texas imposes energy efficiency program cost caps that make it difficult for utilities to meet even our modest energy efficiency goals. Texas now ranks a sad 33rd on the American Council for an Energy Efficiency Economy’s (ACEEE’s) state rankings.
Texas has the potential to do better. We should look to the states leading the charge for greater energy efficiency (and beating out Texas in the rankings). Michigan, for example, set vigorous energy efficiency goals in 2008. Since then, the state’s largest utility has seen some impressive results. Customers participating in the utility’s efficiency program have saved enough electricity to power 142,000 homes for a year—not to mention $365 million in electricity bills. The driving force behind Michigan’s energy savings is the state’s ambitious energy efficiency goals and streamlined policies. Weighing in at less than half as ambitious, Texas’ energy savings goals pale in comparison to a state like Michigan. On top of that, Michigan integrates energy efficiency into their electricity resource planning and provides utilities an option to decouple profits from sales, so they aren’t penalized for the energy they don’t sell.
My message to the new Texas commissioner, as well as all current commissioners and legislators, is this: Creating a market for energy efficiency is cost-effective and prudent. The cheapest, cleanest, most reliable electricity is the electricity we don’t use. Energy efficiency creates jobs and saves water—which is more important than ever in this era of prolonged drought. Simple, cost-effective energy efficiency upgrades can reduce the amount of energy we use (and pay for) every day without affecting our comfort. Investing in efficiency means taking advantage of innovative technologies in our homes and businesses that make our electricity more reliable, affordable and efficient.
We need, and expect, bold leadership from Texas’ new PUC commissioner. Leadership that will help unleash the full potential of energy efficiency (a solution that Texas has championed in the past) as a low-cost common sense solution to our state’s Energy Crunch.