The Evidence Is In: Decoupling Spurs Energy Efficiency Investment
NRDC, April 5, 2016. Image credit: fdecomite
The current research was prompted by questions raised about decoupling during our work in Minnesota last year when the state’s largest electric utility, Xcel Energy, with the support of NRDC and Fresh Energy, implemented Minnesota’s first electric decoupling mechanism.
To better understand the link between decoupling and utility spending on energy-efficiency programs and energy savings, we studied five utilities in three states — California, Oregon, and Idaho. In each instance, the utility significantly increased both its efficiency program spending and its energy savings in the years following adoption of decoupling.
In California, with a number of policies in place to promote energy efficiency, the average annual expenditures for efficiency programs increased by up to 207 percent (San Diego Gas & Electric) and average annual program savings ramped up by up to 80 percent (Southern California Edison) after electric decoupling was put in place in 2004 for all major investor-owned utilities.
In Oregon, average annual program expenditures in Portland General Electric’s territory nearly quadrupled, and average annual program savings nearly doubled following adoption of decoupling.
And in Idaho, Idaho Power increased its annual average energy efficiency spending by 425 percent and its annual average efficiency savings by 438 percent since decoupling was put in place in 2007.