Factoid #10 — Western U.S. Could Reduce Electricity Use by 20% From Projected Levels by 2020

On September 15, 2005 the Energy Efficiency Task Force of the Western
Governors’ Association (WGA) submitted an 88-page draft report to the
WGA’s Clean and Diversified Energy Advisory Committee. The report
evaluates the potential for increasing energy efficiency throughout the
Western United States.

The Task Force reviewed seven major efficiency potential studies that
have been completed in the WGA region in the past five years. The
studies vary in terms of their timeframe for projecting electricity
savings potential, their geographical coverage, and their approach.
Some examine technical and economic savings potential only; others
consider achievable savings potential from specific policies and
programs. Nonetheless, the studies as a whole show there is
considerable cost-effective and achievable electricity savings potential
in the western states.

In general, the efficiency potential studies show it is possible to
reduce electricity demand growth by 0.5-2 percent per year through more
concerted energy efficiency efforts. Studies that consider a wider set
of efficiency measures and more aggressive implementation strategies
tend to project savings at the higher end of this range, while those
with more limited measures and/or more conservative assumptions about
measure adoptions are at the lower end. The studies that examined
potential net economic benefits all found that more aggressive,
multi-year energy efficiency efforts could save consumers and businesses
billions of dollars, with very favorable benefit-cost ratios.

Specifically, the report says it is feasible for the region to reduce
electricity use by 20 percent from projected levels in 2020 through full
deployment of Best Practice policies and programs. This is the
equivalent of electricity supplied by 100 baseload power plants – that
is, 48,000 MW of avoided power plant construction during 2005-2020.

Moreover, even greater electricity savings may be possible through
adoption of other strategies not included in the Task Force’s Best
Practices scenario, such as research & development, technology transfer,
and pricing initiatives.

Implementing the Best Practice energy efficiency policies and programs
would provide substantial economic benefits for households and
businesses in western states. By 2020, these efforts could lower
consumer electricity bills in aggregate by $21 billion per year.
Furthermore, the Best Practices scenario would yield $53 billion in net
economic benefits during 2005-2020 on a net present value basis, with an
overall benefit-cost ratio of 2.5.
The benefits result mainly from avoided fuel purchases by utilities, and
avoided investment in generation, transmission, and distribution
infrastructure.

Implementing the Best Practices energy efficiency policies and programs
would also provide some air emissions benefits. Carbon dioxide (CO2)
emissions would decline the most (17 percent by 2020) since CO2 is not a
controlled pollutant. In addition, NOx emissions by power plants would
decline a moderate amount (7 percent by 2020) in the Best Practices
scenario, relative to the Reference Scenario.

Energy efficiency best practices would also result in water savings from
both increased use of energy and water saving devices in homes and
businesses, and less operation of steam-based power plants. The Task
Force estimates that the Best Practices scenario would save 260 billion
gallons of water per year by 2020 relative to the Reference Scenario,
equivalent to the annual water use of about 1.4 million households.
Total water savings during 2005-2020 in this scenario would be
approximately 1.8 trillion gallons.

The report notes that some western states have already taken important
steps to increase energy efficiency but stresses that “much more can and
should be done. Accordingly, the Task Force lists policies that should
be put in place to achieve these dramatic savings. These include a
requirement that utilities invest at least 2 percent of their revenues
into energy efficiency programs.

The extensive and detailed policy recommendations fall into the
following
categories:

* Electric Utility Demand-Side Management Programs
* Gas Utility Demand-Side Management Programs
* Building Energy Codes
* Appliance Efficiency Standards
* Public Sector Initiatives
* Financial Incentives
* Pricing Policies
* Education and Training
* Technology R&D and Transfer
* Regional-Level Initiatives

The full text of the study can be found at:

<http://www.westgov.org/wga/initiatives/cdeac/Energyefficiencydraft9-15.pdf>