In West Virginia, there is no requirement that our utilities provide electricity at the lowest cost to their customers. Our state’s utilities are not required to evaluate the costs and risks of a range of options for meeting electricity demand – including traditional power plants, but also energy efficiency and other ways of managing customer demand – in order to figure out which portfolio of resources will meet future electricity demand at the lowest cost. This sort of “least-cost planning” process is required in more than half of U.S. states, but not West Virginia.
Least-cost planning often determine that energy efficiency is the lowest cost alternative. It is cheaper to invest in saving electricity than in building new power plants. Energy efficiency is the best way to hold down West Virginia’s rising electric rates. People who invest in energy efficiency can cut their bills immediately, and everyone saves money when we reduce the need for expensive new power plants.
There is huge potential for energy efficiency in West Virginia. West Virginia households use 25% more electricity than the national average, so even though our electric rates are among the lowest in the country, our bills are not. We have an old and inefficient building stock, an out-of-date energy code for new buildings, and few programs in place to help residents and businesses afford the upfront cost of efficiency improvements.
In other states, utilities are offering programs to help residents and businesses save money by improving efficiency. They can do this through programs like rebates and incentives for more efficient lighting and HVAC equipment, funding low-income weatherization, and offering energy assessments to industrial customers.
West Virginia’s utilities – Appalachian Power, Wheeling Power, Mon Power, and Potomac Edison – are subsidiaries of utilities that also operate in Ohio and Pennsylvania. Ohio has set increasing annual energy efficiency targets for their utilities with a goal of 22% savings by 2025; thus far, most major utilities are exceeding the targets. In 2010 and 2011, an estimated 1700 jobs were created in Ohio because of these utility energy efficiency targets. In Pennsylvania, all but one utility exceeded their target of saving 1% of sales over two years. These efficiency programs created 4,000 new jobs in the state and are projected to save Pennsylvanians $2.3 billion over the lifetime of the efficiency measures (relative to a cost of $280 million). Since March 2011, Appalachian and Wheeling Power have begun rolling out a pilot energy efficiency program in West Virginia, but West Virginia has no long-term energy savings targets in place to make sure that our power companies are offering all West Virginians similar opportunities for savings as their customers in other states.
This year there will be two bills before the West Virginia legislature that can help West Virginians save money through efficiency. Least-cost planning legislation would require our power companies to meet electricity demand at the lowest cost. And legislation for an Energy Efficiency Resource Standard would require our utilities to invest in energy efficiency to achieve a target of 15% savings by 2025, comparable to what is required in other states. Passing these bills would go a long way towards ensuring that we take full advantage of the economic opportunities in energy efficiency and keep electric rates as low as possible.
Energy Efficient West Virginia (www.eewv.org)