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Energy Efficiency in Virginia
A Reliable Path to a Clean Energy Future
State Panel Ok’s Energy Efficiency Steps for Dominion’s Customers
In a major step toward cutting electricity use and air pollution in Virginia, the State Corporation Commission (SCC) has approved several energy-efficiency programs proposed by Dominion Power that SELC had supported, while rejecting others that would not bear true energy savings. (Click here for the full ruling.)
Of eleven programs considered by the SCC, five were approved, including incentives for Dominion's residential customers to install energy efficient lighting and to allow the company to temporarily turn off central heating and air systems during peak demand, energy audits and home improvements for low-income customers, and incentives for commercial customers to install efficient lighting and heating-and-cooling systems. The SCC approval allows Dominion to recoup the cost of these programs on electric bills.
Six other programs, which SELC had opposed, were rejected for rate-recovery as not being in the public interest. Reflecting one of our key recommendations for an established collaborate process to allow all stakeholders to weigh in on Dominion's energy efficiency efforts going forward, the commission set a three-year timeline on the approved programs and required Dominion to provide progress reports every six months.
SELC looks forward to continuing our dialogue with Dominion Power to ensure the most cost-effective efficiency programs are made available so Virginians can reap the full benefits of energy efficiency, including lower electric bills and lower pollution.
Case Summary
To lead Virginia to a clean energy future, SELC is championing increased reliance on energy efficiency, the cleanest, quickest, and least expensive way to meet growing energy demands in the Commonwealth. By giving consumers incentives to invest in energy-saving appliances and building materials, energy efficiency reduces the need to burn coal and other fossil fuels to generate electricity, which in turn reduces air and water pollution, global warming emissions, and the devastation of mountaintop-removal coal mining.
Energy efficiency also fuels job growth. Energy-saving measures such as weatherizing schools and public buildings, performing energy audits on homes and businesses, and implementing energy-saving technologies can create thousands of new jobs for Virginians.
In 2009, we and our allies won passage of state legislation that encourages power companies to develop large-scale energy efficiency programs in Virginia and grants electric utilities a fair rate of return on investments in these programs. Through our work with the State Corporation Commission, we are now shaping the implementation of this law.
SELC is also encouraging state legislators to mandate a specific energy efficiency resource standard, which will hold power companies accountable for reaching efficiency targets that result in significant energy savings at a fair cost to consumers. In addition, we are advocating passage of other energy-saving measures that can be readily implemented.
Virginia’s Untapped Potential
In 2006, Virginia utilities ranked 45th in the U.S. in the percentage of revenues they spend on energy efficiency—a total of just $84,000 statewide that year, according to a study by the American Council for an Energy-Efficient Economy. By comparison, utilities in Alabama and Mississippi spent more than $400,000, and North Carolina energy providers spent $3.8 million that year. Why should Virginia’s power companies invest more in energy efficiency?
• It’s abundant. Virginia utilities alone can realistically meet 12% of their demand through efficiency by 2022. Other measures, such as improved building codes, federal efficiency standards for appliances, and making use of waste heat from electrical generation would yield even more energy savings and could bring Virginia to the goal of meeting 19% of electricity demand through energy efficiency in 2025—a reasonable target identified by a report from the American Council for an Energy-Efficient Economy.
• It's reliable. Virginia utilities can develop programs that deliver substantial, direct kilowatt-hour reductions from permanent energy efficiency improvements.
• It's affordable. Energy efficiency can be "generated" at far less cost than conventional sources--about 3 cents per kWh compared with, for example, the 9.3 cents per kWh for Dominion's Wise County coal-fired power plant now under construction.
• It's ready. Virginia utilities can achieve 1.3% savings of base load demand yearly within just four years of launching energy efficiency programs.
The SCC’s Energy Efficiency Report
The law we helped pass in 2009 required the State Corporation Commission to produce a report on Virginia’s potential for tapping the power of energy efficiency. SELC provided expert testimony as the SCC developed this report, which was released to the General Assembly in November 2009. The report confirms that reducing Virginia's electricity consumption through energy efficiency and other demand-side management techniques is realistic and achievable. Unfortunately, due to a variety of factors, it shortchanges the amount of savings that can be secured, sticking to a modest target required by state legislation passed in 2007.
The SCC cites recent rate hikes as a barrier to pursuing more ambitious efficiency goals, even though none of the rate increases are associated with energy efficiency programs. Rather, they are tied to rising fuel costs and investments in infrastructure for generating, transmitting, and distributing electricity, such as Dominion's Wise County plant. In response, we are making the case that energy efficiency programs should reduce the need for such investments and will help consumers avoid these types of costs. (See our response to the SCC’s report.)