Mar 01 2010

A Kilowatt Saved is a Kilowatt Earned

Posted by: Jonathan Marshall

Suppose that for every dollar you invested in the stock market, you could reap an average return of $1.40. Most likely you'd be thrilled--especially after the last decade of losses in the S&P 500.

Yet few business magazines bothered to note the California Public Utilities Commission's estimate last summer that every dollar invested by utilities to promote energy efficiency should save customers at least $1.40--a 40 percent return on investment over just a few years.

Last year, McKinsey & Co. reported even more strikingly that  economy-wide improvements in energy efficiency could save the United States $1.2 trillion--more than a thousand billion dollars--for an investment of less than half that sum. "The reduction in energy use would also result in the abatement of 1.1 gigatons of greenhouse gas emissions annually – the equivalent of taking the entire U.S. fleet of passenger vehicles and light trucks off the roads," it added.

PG&E and other major California utilities have been investing in energy efficiency programs since the mid-1970s. PG&E's programs alone have saved customers more than $24 billion. Now their counterparts nationwide are getting the message, according to a new report from the non-profit Consortium for Energy Efficiency (CEE).

CEE says that U.S. gas and electric utilities spent $5.3 billion last year on efficiency programs, double the amount in 2006. And the number of states with energy efficiency programs jumped from 37 in 2008 to 46 last year.

CEE member utilities reported combined savings on electricity and natural gas of $8.6 billion in 2008. The savings prevented emissions of more than 55 million tonnes of CO2, equal to the output of about 12 coal-fired power plants.

Last fall, the CPUC approved a budget of $3 billion over three years for energy efficiency programs by PG&E, Southern California Edison and San Diego Gas & Electric. The utilities will promote more efficient lighting, air conditioning, consumer electronics and building materials, among other things. Those programs should save the state the cost of building 1,500 megawatts of new generation--and all the carbon pollution that would go with it.

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