Energy efficiency technology remains the sleeping giant of Virginia’s energy sector. Not only is efficiency technology the cheapest energy resource,[1] efficiency deployment directly reduces fossil fuel pollution and the climate change it causes.[2]

For those reasons, the 2018 Energy Plan should make energy efficiency the Northam administration's priority resource of the Commonwealth.

Focusing on unlocking efficiency technology in the electricity sector is particularly important, given Virginia’s poor utility performance to date,[3] leading to state residential electric bills that are the 8th-highest in the United States, according to the EIA.

The seven recommendations below thus identify the most direct ways the Northam administration can lead the way to finally unlocking energy efficiency in the Commonwealth, for both a cleaner economy and a safer climate.

NRDC thanks the Northam Administration, and in particular DMME, for maximizing the real-world impact and usefulness of its Energy Plan for all of Virginia, by taking the seven commonsense, achievable actions listed below.

Immediately Actionable Administrative Opportunities

1). Efficiency Committee: Via executive order, immediately reconstitute the Executive Committee on Energy Efficiency, to be facilitated in direct partnership with, and with membership comprised of, SCC Staff, AG Consumer Counsel, utilities, EE providers, and advocates from the environmental, low-income, and labor communities, with an explicit and primary charge to: (1) ensure utilities maximize cost-effective EE portfolios under the 2018 Grid Transformation & Security Act (GTSA), including the implementation of cost-effectiveness testing reform; (2) identify AMI-DSM integration best practices to ensure utility grid modernization investments in smart meters lower customer bills; and (3) verify that utilities’ carbon allowance revenues are reinvested to customer benefit (e.g., low-income EE, CHP).

2). Transportation Efficiency: Via executive order, formally collaborate with the regional Transportation and Climate Initiative, to identify the most efficacious ways to increase transportation efficiency, EV penetration, and related charging infrastructure.

Legislative Leadership Opportunities

3). Efficiency Standard Reform: To ensure the utility efficiency investment commitments under the GTSA are realized and effective, convert the state’s currently ineffectual energy efficiency goal into a mandatory EE resource standard, at an annual ramp-up rate of .2% reduction in total retail sales beginning in 2020, until 2% annual savings is reached and maintained.

4). Decoupling: Eliminate the regulated utilities’ incentive to sell more electricity by extending the natural gas utility decoupling mechanism to also include electric utilities. (See, e.g., VA Code § 56-602.)

5). Supply-side Permitting Reform: Require that all cost-effective DSM programs be implemented before supply side resources may be built, and in any supply-side CPCN proceeding, require a demand-side alternatives analysis, including an RFP solicitation of DSM portfolio proposals. Prior to approval, any supply-side CPCN application must first demonstrate that equivalent DSM measures are neither achievable or cost-effective. (See, e.g., VA Code § 56-234.3.)

6). IRP Reform: Require that an independent third party conduct a DSM potential study for each IRP, and require that each IRP consider the potential of peak shifting to displace the need for supply-side peaking plants. (See, e.g., VA Code § 56-598.)

7). Cost-effectiveness Testing Reform: Require that EE programs be reviewed and approved on a portfolio basis, rather than on a piecemeal program basis, and utilize best practices to conduct EE cost-benefit testing, to ensure that all reasonable costs and benefits, including economic, social, and environmental benefits, are captured in EE portfolio evaluation. (See, e.g., VA Code § 56-600.)

[1] See Lawrence Berkeley National Lab, “The Total Cost of Saving Electricity through Utility Customer-Funded Energy Efficiency Programs,” April 2015, available at https://emp.lbl.gov/sites/all/files/total-cost-of-saved-energy.pdf.

[2] See U.S. EPA, “Energy Efficiency as a Low-cost Resource for Achieving Carbon Emissions Reductions,” September 2009, available at https://www.epa.gov/sites/production/files/2015-08/documents/ee_and_carbon.pdf.

[3] See ACEEE, “2017 State Scorecard,” September 2017, at 23, available at http://aceee.org/research-report/u1710.