ACEEE State Energy Efficiency Scorecard: Winners, Losers and What’s Next

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OscarMassachusetts for the third year won the Oscar of energy efficiency,  the top ranking in the annual scorecard  released Nov. 6 by the American Council for an Energy-Efficient Economy.

California was close behind, followed by New York, Oregon, Connecticut, Rhode Island, Vermont, Washington, Maryland, and Illinois.

Started seven years ago by ACEEE, the scorecard creates a highly visible competition to nudge states toward greater energy efficiency. Making plain the good and the bad of each state’s effort, the annual report attracts attention from not only national media, but also local reporters asking why their states excelled or failed.

Perhaps more important, the scorecard sets a new bar each year and offers states strategies to improve. To maintain a certain ranking, a state must perform better than it did the previous year. The scores are based mostly on the size and sophistication of utility and government energy efficiency efforts.

“If you just stay level you can drop in the scorecard. Effectively, we have a rising tide for energy efficiency that is lifting many boats,” said Steve Nadel, ACEEE’s executive director, in a news conference Wednesday.

The Massachusetts and California tussle

And to that point, watch out Massachusetts. California’s boat is floating high nearby. California scored 41 out of 50, just one point behind Massachusetts at 42. Massachusetts swiped the top spot from California three years ago.

Why does Massachusetts continue to have the edge? It has much to do with how its utilities create energy savings, according to Annie Downs, lead author of the scorecard report.

In the utility category, Massachusetts scored 19 out of a possible 20, the only state to score so high. Vermont and Rhode Island were next, with scores of 18.5 each. (It’s interesting to note that National Grid serves both Massachusetts and Rhode Island, along with New York, all states in the top six. National Grid invests more heavily in energy efficiency than any other US utility, except for possibly California’s Pacific Gas & Electric, depending on how the numbers are crunched.)

“The achievements we’re celebrating today are not happening by accident. They are very much by design,” said Massachusetts Gov. Deval Patrick.

Massachusetts’ big energy efficiency push stems from Patrick’s 2008 Green Communities Act. The law kick-started a range of energy efficiency and renewables programs, many focused on helping communities and spurring clean-tech jobs. The energy efficiency industry now employs 46,000 people in Massachusetts, according to Patrick.

California scored four points lower than Massachusetts in the utility category – the most heavily weighed metric in the overall scoring. But  California excelled when it came to building codes, state government initiatives, and appliance standards.

“California obviously has a long history of taking energy efficiency seriously and clean energy more broadly,” said Andrew McAllister, California energy commissioner. “Gov. Brown, as many of you may know, has a long-term – really a life-long – interest in clean energy and is providing renewed impetus to the state and to all of the agencies to get the job done.”

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California is focusing, in particular, on “melding energy efficiency with some of the challenges we face with grid planning and procurement and integrating it much more fully across the board in our long-term planning,” McAllister added.Poster copy

And the losers are…

And then there are the losers – although ACEEE doesn’t use that term. Like a good teacher, ACEEE referred to the bottom five states as those “most in need of improvement” in its news release. Starting with the lowest ranked state, they are North Dakota, Wyoming, South Dakota, Alaska, and Mississippi.

Mississippi, with a mere eight points out of a possible 50, is the most interesting because ACEEE also selected it as one of five most improved states. Mississippi tripled its score over last year, after creating a mandatory energy code for state and commercial buildings, and working on energy savings targets for public buildings and transportation fleets.

Now, Mississippi is positioned to become a regional energy efficiency leader, according to ACEEE. The state jumped up four points in rank.

Mississippi approaches energy efficiency a bit differently than wealthier states, placing a strong emphasis on helping consumers and small businesses reduce electricity bills, according to Brandon Presley, a commissioner for the Mississippi Public Service Commission and president for the Southeastern Association of Regulatory Utility Commissioners President. The US Census Bureau ranked the state last for average median household income from 2010-2012.

Small business owners “tell me their highest overhead, outside of employment, is their utility costs,” he said. Two out of every three jobs in Mississippi come from small business owners who “don’t get bailed out like Wall Street and who don’t get the breaks we see the major corporations get.”

The energy efficiency program is expected to save the state $2 billion and create 9,500 private sector jobs, he said.

“We know that a utility bill impact in Mississippi hurts a consumer much more than it does in other states throughout the country,” Presley added.

In all, US states saved 22 million MWh from utility and public benefits programs in 2011, representing 0.60 percent of retail sales nationally –  a 20 percent increase in savings over the previous year.

Of note, the US continues to see a dampening in electricity sales, which some say is a function of not just the slow economy, but also of the nation’s expanding energy efficiency effort. ACEEE is now studying the connection, and expects to release a paper before the end of the year. The data so far indicates a strong connection between the drop in electricity sales and robust energy efficiency programs, Nadel said.

Other takeaways from the ACEEE announcement:

•        Spending on energy efficiency has jumped significantly since 1998, one of the industry’s low points, and is expected to rise more. Electric utility spending was $900 million in 1998 and $5.9 billion in 2012. Add in gas utilities and total efficiency spending was $7.2 billion. Spending is projected to reach somewhere between $10.8 billion and $16.8 billion by 2025.

•        The energy efficiency market is expected to broaden beyond its Northeast and West Coast centers, with significant expansion occurring in the Midwest and South in the coming years.

•        Efficiency programs are evolving from widget-based (eg installing a hot water heater) to deep, whole building retrofits and efforts to change human behavior.

•        Despite the progress, energy efficiency faced its share of political problems over the last year with attempts in Ohio, North Carolina, Michigan, New Mexico and Maine to weaken programs.

Check back with EnergyEfficiencyMarkets.com for upcoming stories on what the ACEEE report revealed about combined heat and power and transportation efficiency.

Do you want to talk about how your state scored? Join the conversation on Energy Efficiency Markets’ new LinkedIn group.

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Elisa Wood About Elisa Wood

Elisa Wood is the chief editor of MicrogridKnowledge.com. She has been writing about energy for more than two decades for top industry publications. Her work also has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.

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