EmPOWER Energy Efficiency Policy: Delivering Big Returns to Maryland

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Elkton, Maryland

Elkton, Maryland

NRDC’s Deron Lovaas describes the importance of Maryland’s EmPOWER energy efficiency program, especially for low-income households.

Boosting energy efficiency of homes in Maryland is a bread-and-butter issue. Paying too much for electricity and gas at a time when household budgets are still pinched from the great recession can mean having less to spend on nutritious food, healthcare, and other necessities. Thankfully, there’s a growing array of options for improving structures, from inexpensive measures such as installing highly efficient LED light bulbs, to bigger-ticket replacements of heating, ventilation and air conditioning (HVAC) systems or whole-house insulation retrofits. And there’s good state policy driving these investments, with a huge return for all Marylanders

Energy bills are a huge issue for Marylanders such as Debbie Tucker from the small town of Elkton. She lives on a fixed income, and is fortunate that homes including hers at the Gardens at Chesapeake have benefited from a program that helps residents save up to 38 percent on energy bills. As she sums up:

Before the renovation, I had to rely on a wall unit to heat my home. Now I have a central heat and air unit that does a more efficient job of keeping me comfortable. My utility bills have dropped immensely, and living on a fixed income, it allows me to spend more of my income on me!

Such energy efficiency improvements aren’t new to Maryland’s buildings. Driven by good regulatory policy, utilities invested an impressive $850 million in energy efficiency in the 1990s. Our state benefited from improvements that helped cut the annual growth rate of residential electricity sales to 0.83 percent, lower than the average annual population growth rate of 1.03.

All of that came crashing to halt when utilities were deregulated at the end of the decade. Programs were shuttered, and the next eight years (1999-2007) saw little progress on energy efficiency.

We got back on track when the governor and legislature put the EmPOWER law on the books in 2008, mandating that utilities invest in making it easier for their customers to save energy. Specifically, the legislature directed our Public Service Commission (PSC)to require utilities to ramp up their energy efficiency programs starting in 2009. This was easier said than done, given the reckless dismantling of 1990s-era programs. Nonetheless, the first cycle or programs was completed in 2011. A second investment cycle from 2012-2014 put in place a bold new set of programs praised by advocates. Despite that success, the PSC also criticized utilities for moving too slowly to implement low-income energy efficiency programs (LIEEP) and directed the state’s Department of Housing and Community Development (DHCD) to run them instead, which is where they are sited to this day.

The PSC is in the midst of renewing the state’s commitment to energy efficiency with a third investment cycle (2015-2017). I’m proud that our multi-state, multi-year Energy Efficiency for All initiative is helping to organize 23 groups known as the Maryland Energy Efficiency Advocates to encourage the PSC to continue leading Maryland to a less wasteful future (you can see our latest advice and specific recommendations to commissioners here).

As we look forward to a brighter future, it’s worth taking stock of how far we’ve come since EmPOWER was enacted. Jim Grevatt, a consultant with Energy Futures Group reviewed utilityNRDC GrossSavings-thumb-481x290-18862 reports filed with the PSC and found the following:

  • Utilities reported investing $894 Million in EmPOWER energy efficiency and conservation programs between 2009-2014 (in the same ballpark as total 1990s investment);
  • Utilities report these investments will produce $4.3 Billion in energy savings over the estimated life of the energy savings improvements–more than 4 times the utilities’ program costs;
  • The 37.8 million MegaWatt-hours that will be saved over the life of the improvements is enough electricity to power all of Maryland’s 2.1 million households for more than a year; and
  • Energy efficiency savings will keep nearly 27 million metric tons of greenhouse gasses from being released to the atmosphere.

The upshot? EmPOWER has helped pull Maryland into the top ten list of state energy efficiency leaders. It’s also one of the pillars of Maryland’s plan to tackle climate change. Along with a robust Renewable Portfolio Standard (or RPS, which the legislature should double) and Maryland’s leadership role in the Regional Greenhouse Gas Initiative (RGGI, whose Board of Directors is chaired by Maryland’s own Kelly Speakes-Backmann), EmPOWER is a critical pillar of Maryland’s greenhouse gas reduction plan.

The PSC must continue ramping EmPOWER up. Its benefits accrue to all households, since energy efficiency is cheaper than building expensive new power plants, so we all save money. And it’s hard to beat a fourfold return on investment!

It’s also especially important for renters such as Elkton’s Debbie Tucker. Our state has more than 370,000 apartments with low-income tenants. Nearly 60 percent of the state’s rental buildings with five or more apartments were built before 1980. Multifamily affordable housing is often older and drafty, threatening the health and comfort of residents and wasting lots of energy and cash.

So let’s get to work on a bigger and better EmPOWER program, because Marylanders like Debbie deserve energy efficiency for all.

The author, Deron Lovaas, is the state/federal policy & practice director, urban solutions, Washington, D.C., for the Natural Resources Defense Council. This blog originally appeared on Switchboard, NRDC’s staff blog.

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