ACEEE: Utilities Save with Combined Natural Gas, Electric Energy Efficiency Programs

August 7, 2014 By Karen Henry

ACEEE Energy ManageUtility sector energy-efficiency programs have been growing rapidly over the last decade. According to the American Council for an Energy-Efficient Economy (ACEE), gas and electric budgets have more than tripled since 2006. The most typical approach to utility energy-efficiency program delivery has been for electric and natural gas utilities to operate their own separate programs. Unfortunately, this approach misses opportunities for cross-fuel coordination that can save energy and money.

A new ACEEE report, Successful Practices in Combined Gas and Electric Utility Energy Efficiency Programs, examines the challenges utilities face and includes profiles of some of the leading combined programs and their performance results.

Challenges surrounding combined programs include such things as the cross-fuel competition that may arise. Tensions and competition may also grow between the electric and gas divisions of dual-fuel utilities. The administrative effort required for coordination among gas and electric utilities or divisions within the same organization is another concern, as is the reluctance to lose some of the marketing benefits utilities enjoy from being the sole sponsor of an energy efficiency program.

While there is no single arrangement for combined programs, ACEEE said there are many models to learn from, representing a variety of organizational structures:

  • Combination utilities (providing both natural gas and electricity).
  • Integrated statewide programs administered by multiple utilities.
  • Third-party administrators.
  • Coordinated programs run by two separate (usually single-fuel) utilities.

Top-performing states in terms of overall energy efficiency program results tend to have the most robust laws, regulations, and policy structures supporting combined gas and electric programs. These states include California, Connecticut, Illinois, Maine, Massachusetts, Rhode Island and Vermont.

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