Energy Efficiency is the Optimal Method for Clean Power Plan Compliance

Release Date: Monday, August 3, 2015

Today’s announcement of EPA’s Clean Power Plan is a positive step towards ensuring that the American economy continues its successful path of doubling energy productivity by 2030, a goal endorsed by the President that would not only reduce emissions below what is required under these new regulations, but would also save the United States $327 billion annually and create 1.3 million net new jobs. The Alliance to Save Energy applauds EPA’s announcement today of the final Clean Power Plan rule, which will help strengthen local economies and create new jobs while preparing for the modern energy economy.

To encourage early investment in renewables and demand-side energy efficiency, the final rule is complemented by a Clean Energy Incentive Program that will enable states to "bank" credits in 2020 and 2021 in complying with the Clean Power Plan during its interim (2022-2029) and final (2030 and onward) performance periods. Under this program, renewable projects that commence construction after a state submits a final plan (or after September 6, 2018 in states covered by a Federal Plan) will receive emission reduction credits (for rate-based plans) or allowances (for mass-based plans) on a one-for-one basis for each MWh generated in 2020 and 2021. Moreover, in clear recognition of the value of energy efficiency and its social, economic and environmental benefits, demand-side measures implemented in low-income communities by these same deadlines will receive double the value of each MWh of generation thereby avoided in 2020 and 2021. 

Alliance to Save Energy President Kateri Callahan said, “As the President has proven over the last six years to be our ‘Energy Efficiency Champion in Chief’, EPA’s finalized Clean Power Plan demonstrates a vital commitment for sustainable and responsible American energy use. The finalized Clean Power Plan offers energy efficiency as the single most effective way for states to reduce emissions and meet their targets, while driving energy productivity and economic prosperity. Coupled with the greatest historical investment in energy efficiency through the American Reinvestment and Recovery Act, federal leadership has recognized that advancing efficiency is an ‘all-around winner’ for the economy, the environment and energy security.”

With flexible state compliance opportunities included within the Clean Power Plan, energy efficiency serves as our country’s cheapest, cleanest, most abundant and most readily available energy resource. As the world looks toward America’s actions and leadership on energy modernization prior to global climate negotiations in Paris at the end of the year, the Clean Power Plan and efficiency’s role in energy affordability provide a model for international energy productivity consensus and progress.

Kelly Speakes-Backman, senior vice president of policy and research at the Alliance to Save Energy, said, “It’s been clear from the start that this plan has been informed by successful state actions on the ground, including policies enacted demonstrating that companies can improve their productivity, states can achieve carbon reduction goals and residents and families can save money on their energy bills through efficiency. From my experience working with the community of utility regulators at the National Association of Regulatory Utility Commissioners, the Regional Greenhouse Gas Initiative and the Maryland Public Service Commission, energy efficiency and demand response will continue to play a crucial role in affordability and protecting reliability by easing congestion on the grid. The Clean Power Plan is a win-win-win for ratepayers, private industry and the national economy.”

Private industry has also spoken up in favor of the Clean Power Plan, with over 300 companies recently writing letters to 29 governors to support expediting the process of modernizing the American energy economy. As businesses increasingly rely on energy efficiency to spur their bottom line, private industry joins voluminous sectors in marching towards a future where we are capable of using less while doing more.

Jane Palmieri, Alliance Board of Directors co-chair and Dow Chemical Company’s business president for building & construction, said, “It’s incredibly important that flexibility has been built into EPA’s Clean Power Plan. Not only does the energy industry have time to find the best fit for compliance, but companies also have a plethora of strategies available to contribute towards the goal of improving the economy and reducing emissions. Energy efficiency can’t be overemphasized as the most practical and effective source of energy for private industry to save costs and improve their bottom line while contributing to a healthier environment.”