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Working Paper Series

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Working Paper #64

Myths and Facts about Electricity in the U.S. South

Marilyn A. Brown,a* Etan Gumerman,b

Xiaojing Sun,a Gyungwon Kim,a and Kenneth Sercyb

a School of Public Policy, Georgia Institute of Technology, Atlanta, GA, 30332, USA

b Nicholas Institute for Environmental Policy Solutions, Duke University, Durham, NC, 27708, USA

September 2011

ABSTRACT

This paper identifies six myths about clean electricity in the southern U.S. These myths are either 

propagated by the public at-large, shared within the environmental advocacy culture, or spread 

imperceptibly between policymakers. Using a widely accepted energy-economic modeling tool, 

we expose these myths as half-truths and the kind of conventional wisdom that constrains 

productive debate. In so doing, we identify new starting points for energy policy development. 

Climate change activists may be surprised to learn that it will take more than a national 

Renewable Electricity Standard or supportive energy efficiency policies to retire coal plants. 

Low-cost fossil generation enthusiasts may be surprised to learn that clean generation can save 

consumers money, even while meeting most demand growth over the next 20 years. This work 

surfaces the myths concealed in public perceptions and illustrates the positions of various 

stakeholders in this large U.S. region. 

Georgia Institute of Technology

D. M. Smith Building

Room 107
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Myths and Facts about Electricity in the U.S. South

Marilyn A. Brown,

a*

Etan Gumerman,

b

Xiaojing Sun,

a

Kenneth Sercy,

b

Gyungwon Kima

*Corresponding author

DM Smith Building, 685 Cherry Street, Room 312

Atlanta, GA 30332-0345

Email: Marilyn.Brown@pubpolicy.gatech.edu

Telephone: 404-385-0303 Fax: 404-385-0504

a School of Public Policy, Georgia Institute of Technology, Atlanta, GA, 30332, USA

b Nicholas Institute for Environmental Policy Solutions, Duke University, Durham, NC, 27708, USA

Keywords: energy efficiency; renewable energy; energy-economic modeling

ABSTRACT

This paper identifies six myths about clean electricity in the southern U.S. These myths are either 

propagated by the public at-large, shared within the environmental advocacy culture, or spread 

imperceptibly between policymakers. Using a widely accepted energy-economic modeling tool, 

we expose these myths as half-truths and the kind of conventional wisdom that constrains 

productive debate. In so doing, we identify new starting points for energy policy development.

Climate change activists may be surprised to learn that it will take more than a national 

Renewable Electricity Standard or supportive energy efficiency policies to retire coal plants. 

Low-cost fossil generation enthusiasts may be surprised to learn that clean generation can save 

consumers money, even while meeting most demand growth over the next 20 years. This work 

surfaces the myths concealed in public perceptions and illustrates the positions of various 

stakeholders in this large U.S. region. 
3

1. Introduction

Shortly before embarking on his trip to the United Nations Climate Change Conference 

in Copenhagen in December 2009, President Obama announced a target for reducing U.S. 

greenhouse gas emissions. The goal was to bring U.S. emissions 17 percent below 2005 levels in 

2020, with an ultimate reduction of 83 percent by 2050. In his 2011 State of The Union speech, 

President Obama proposed an even more ambitious clean energy future for the country: 80 

percent of America's electricity will come from clean energy sources by 2035, including nuclear, 

high-efficiency natural gas generation, renewables and clean coal. These targets may seem 

particularly challenging for the U.S. South1 because of its unique electricity consumption and 

production profile.

1.1 Profile of electricity consumption and production in the U.S. South

In 2009, the South accounted for 42% of U.S. energy consumption and 45% of U.S. 

electricity use (Energy Information Administration, 2011a, Table-2, 2011b, Table 5-7), but is 

home to only 37% of the nation’s population. Half of the nation’s industrial energy use occurs in 

the South, and the region also has higher-than-average per capita consumption of residential 

energy and transportation fuels (Energy Information Administration, 2011a, Table-2; 2011b, 

Table 5-7). Availability of reasonably priced and reliable energy has been a value to businesses 

and industry in the South and has helped to drive the region’s economic development. For 

example, in 2009, the South enjoyed an average electricity-sales-weighted residential electricity 

price of $0.107/kWh (in 2009$) (Energy Information Administration, 2011b, Table 73-120), 

compared with a national average of $0.115/kWh (in 2009$) (Energy Information 

Administration, 2011a, Table 8). Looking ahead, electricity demand in the South is expected to 

grow more rapidly than in the rest of the country reflecting the region’s relatively strong 

 1 The U.S. Census Bureau definition of the South includes 16 states and the District of Columbia, stretching from 

Delaware down the Appalachian Mountains, including the Southern Atlantic seaboard and spanning the Gulf Coast 

to Texas. In contrast, the North American Electric Reliability Corporation (NERC)’s definition of the South, 

includes four sub-regions – Southeastern Electric Reliability Council (SERC), Florida Reliability Coordinating 

Council (FRCC), Southwest Power Pool (SPP), and Electric Reliability Council of Texas (ERCOT) are used in the 

electricity supply modeling summarized in this paper. The Census South is used for demand-side analysis and the 

NERC South is used for supply-side analysis. These differences do not materially affect the results. 
4

economy. While electricity rates are expected to rise in every region of the U.S., the South’s 

rates are expected to remain below the national average. 

These low rates have made it difficult to promote an ethic of energy conservation and 

efficiency. Sales data suggest a low market penetration of energy-efficiency products in the 

South. For each of the five ENERGY STAR appliances with sales data that are tracked by EPA –

air conditioners, clothes washers, dishwashers, refrigerators, and water heaters – the South has a 

lower-than-average rate of market penetration (Swope, 2011). Further evidence of a relatively 

weak energy conservation ethic is provided by the results of a poll conducted in January 2009 by 

Public Agenda. The poll suggests that Americans are divided geographically in terms of their 

views on energy conservation and regulating energy use and prices versus exploring, mining, 

drilling and construction of new power plants. Conservation is supported by a large majority 

nationwide; however, it is close to even with exploration, drilling, and power plant construction 

in the South, at 48% to 45%. Energy policies in the South reflect these preferences. For example, 

as of August, 2011, 27 states nationwide have implemented Energy Efficiency Resource 

Standards or targets to encourage more efficient generation, transmission, and use of electricity. 

Only six of these states are located in the South.2

Coal dominates the power sector in the South as it does nationwide, accounting for 47% 

of electricity generation in both the region and the nation in 2009 (Energy Information 

Administration, 2011b, Table 73-120). However, the South depends less on renewable sources of 

electricity than any other region, with only 4.9% (Energy Information Administration, 2011b, 

Table 73-120) of its electricity generation coming from renewables compared with 10.4%

nationwide (Energy Information Administration, 2011a, Table-8). With a comparable percentage 

of nuclear power and a greater use of natural gas for electricity, the carbon intensity of electricity 

in the South is high. Southern energy policies reflect these differences. For example, as of 

August 2010, 29 states and the District of Columbia have promulgated Renewable Electricity 

Standards (RES), and an additional eight states have renewable energy goals. Among the 

Southern states, only four states along with the District of Columbia have an RES: Delaware, 

Maryland, North Carolina, and Texas. In addition, Oklahoma, Virginia, and West Virginia have 

 2 http://www.pewclimate.org/what_s_being_done/in_the_states/efficiency_resource.cfm
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set voluntary renewable energy goals. The remaining nine Census South states represent the 

largest contiguous block of U.S. states without goals or standards for renewable power.3

When the greater intensity of energy consumption in the South is compounded by the 

carbon intensity of its power generation, the Region’s carbon footprint expands well beyond the 

national average. A study by Brown, Southworth and Sarzynski (2009), for example, estimated 

the per capita carbon footprint of the nation’s largest 100 metropolitan areas, measured in terms 

of the metric tons of carbon emissions per capita from the consumption of residential electricity

and other forms of residential energy, as well as transportation fuels for light duty vehicles and 

freight trucks. Eleven of the 20 metropolitan areas with the largest carbon footprints were found 

to be located in the South (Figure 1). 

Figure 1. Per Capita Carbon Footprints of Metropolitan Areas in the South, 2005

(Map drawn from data published in Brown, Southworth, and Sarzynski, 2009)

 3 http://www.dsireusa.org/summarymaps/index.cfm?ee=1&RE=1
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1.2 The role of myths and misconceptions

Clean energy, defined as energy efficiency and renewable energy in this study, can be an 

important way to meet growing demand while minimizing pollution. However, adoption and 

development of efficiency programs and renewable resources in the South are constrained by 

myths and misconceptions on both sides of the clean energy debate.

Myths serve to restrain thought and behavior and can become powerful tools for 

sustaining the status quo. As Mark Twain said: "It ain't what you don't know that gets you into 

trouble. It's what you know for sure that just ain't so." Understanding myths as well as the belief 

system behind them is not only an important step to improve the clean energy situation in the 

South but also a key component of democratic decision-making. The process of identifying 

stakeholder beliefs and interests can promote a common understanding of dominant agendas and 

can help incentivize collaboration. Conversely, it can identify incommensurable views among 

stakeholders that must be resolved for consensus to occur. Also, by making some stakeholders 

belief systems more visible, our analysis of prevailing myths can improve social responsibility 

and foster desirable change. Numerous examples abound of organizations and stakeholders 

altering their practices in response to a more nuanced understanding of social views . From a 

social construction perspective, the integration of diverse perspectives will foster social learning 

among stakeholders, which has been associated with trust building, increased perceptions of 

transparency, and accountability. 

Myths are folklore, drawn from historical repetition that acquire symbolic value and 

gradually come to constitute reality. Their great appeal lies in their ability to reduce the growing 

complexity of the world into a simple, knowable, and memorable idea. However, over time they 

also become engrained ways of thinking that can prevent stakeholders from recognizing

alternative solutions . Both the strongest proponents and those most wary of clean energy seem 

to be constrained by myths, and with limited progress on energy policy, the South struggles to 

move beyond the status quo. Currently, it is easy for opposing groups to argue for the status quo 

and against a future where we build so much expensive renewable generation that emissions 

decline but electricity rates and bills escalate. A much more productive future could be one 

where investing in clean technologies leads to emissions reductions accompanied by only modest 

energy rates and bill effects. In fact, in two previous studies , we found that the South possesses 

substantial energy efficiency and renewable energy potentials to accomplish those goals.
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Following a description of our methodological approach, we examine six clean energy 

myths in an effort to illuminate opportunities for collaboration that can benefit a diverse mix of 

stakeholders. These myths merge from different origins. The first three myths are commonly 

accepted by the general public and they deal with alternative paths to meet growing electricity 

demand, the sufficiency of renewable resources, and impacts on electricity rates. The next two 

myths, which address the tradeoff between energy efficiency and renewable power and the 

retirement of existing coal plants, are shared within environmental advocacy groups. The last 

myth addresses the impacts of power resource decisions on water consumption, which has 

historically gone unnoticed in the energy industry. The paper ends with a discussion of our 

findings.

2. Methodology

The six myths are examined analytically using an energy-economic modeling tool known 

as SNUG-NEMS (the Southeast NEMS User Group version of the widely accepted National 

Energy Modeling System). NEMS models U.S. energy markets and is the principal modeling 

tool used by the U.S. Energy Information Administration (EIA) to forecast future energy supply 

and demand. Twelve modules represent supply (oil and gas, coal, and renewable fuels), demand 

(residential, commercial, industrial, and transportation sectors), energy conversion (electricity 

and petroleum markets), and macroeconomic and international energy market factors. A 

thirteenth “integrating” module ensures that a general market equilibrium is achieved among the 

other modules. Beginning with current resource supply and price data and making assumptions 

about future consumption patterns and technological development, NEMS carries through the 

market interactions represented by the thirteen modules and solves for the price and quantity of 

each energy type that balances supply and demand in each sector and region represented (Energy 

Information Administration, 2009a). Outputs are intended as forecasts of general trends rather 

than precise statements of what will happen in the future. As such, NEMS is highly suited to 

projecting how alternative assumptions about resource availability, consumer demand, and 

policy implementation may impact energy markets over time.

The NEMS “Reference case” projections are based on federal, state, and local laws and 

regulations in effect at the time of the analysis. The baseline projections developed by NEMS are 
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published annually in the Annual Energy Outlook, which is regarded as a reliable reference in the 

field of energy and climate policy. We have used SNUG-NEMS to perform scenario analysis 

under a consistent modeling framework in order to compare policy options to the Reference case 

projections. Four policy scenarios, described below, and a few policy combinations make the 

eight scenarios that were used to evaluate the myths.

2.1 The Energy Efficiency (EE) scenario

In “Energy Efficiency in the South” (Brown et al., 2010a), we examined the energysaving potential of nine energy efficiency policies in the residential, commercial and industrial 

sectors in the South. In the residential sector, an appliance incentives and standards policy gives 

a 30% subsidy for the capital cost of the most efficient appliance to residential consumers to 

promote the adoption of high-efficiency appliances. At the same time, federal equipment 

standards for dishwashers and clothes washers and dryers were modeled. In terms of residential 

retrofits, consumers would receive a retrofitting incentive equal to 30% of the capital cost if they 

decide to replace their old equipment with the most efficient technology available under the 

context of a federal equipment standard. Finally, an expanded Weatherization Assistance 

Program (WAP) would operate on a national budget allocation of $1.7 billion per year (in $2007) 

through 2030. In order to tighten building codes, building equipment covered by the most 

stringent building code would receive a 30% subsidy of the installation cost, and in addition, the 

least stringent building code would be eliminated every six years.

In commercial buildings, tighter appliance standards are modeled that would eliminate 

the least efficient technology in each of seven appliance categories, in each decade. A second 

policy, heating, ventilation, and air conditioning (HVAC) retrofit incentives, are offered to 

accelerate the installation of nine higher efficiency technologies for space heating, space cooling 

and ventilation. Seven technologies are incentivized by 30%, while the two ventilation 

technologies receive only a 9% incentive because their relative costs are closer among vintage 

classes. A 2% annual efficiency improvement is assumed for the three other end uses not 

included in the technology input file: personal computers, other office equipment, and all other 

miscellaneous uses.
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In the industrial sector, three policies promote improved energy efficiency. An expanded 

level of activity is modeled for DOE’s Industrial Assessment Program, focusing on small and 

medium-sized enterprises, resulting in 1.4% decrease in their industrial energy consumption in 

2030. Higher energy efficiency through industrial process improvements are modeled as the 

result of expanded Save Energy Now (SEN) assessments, targeting large energy-consuming 

firms, leading to a 5.9% reduction of their electricity and natural gas use in 2030. The current 

Investment Tax Credit (ITC) for electricity produced by combined heat and power (CHP) plants

is modeled to extend through 2030, and an expanded research, development and demonstration 

(RD&D) program is assumed to generate an additional 0.7% annual improvement in the energy 

efficiency of eight types of CHP systems from 2011 to 2020.

Table 1 summarizes the nine energy efficiency policies. The results indicated that 

aggressive energy efficiency policies can prevent energy consumption growth over the next 

twenty years, resulting in less demand for new power plants and significant water savings. In this 

paper, all nine energy efficiency policies from the earlier work implemented together are defined 

as the EE scenario. 

2.2 The Renewable Energy (RE) scenario

In “Renewable Energy in the South” (Brown et al., 2010b), we assessed both utility-scale 

renewable generation and customer-owned renewable resources after updating resource 

availability, revising RD&D assumptions, and introducing policies supporting renewable 

resources. The RE scenario in this study uses the same assumptions, resource updates and 

policies, as described below.

We estimated an increased wind resource availability by updating wind resources to those 

measured at 80-meter heights instead of those at 50-meter heights used in NEMS, reflecting 

industry’s move to higher turbine heights and wider rotor diameters.

Policies that stimulate biopower include state sales tax exemptions for biomass and an 

extended Production Tax Credit (PTC) of 9¢/kWh for biopower from 2011 to 2030. We also 

extend the assumption of improved heat rates for biomass integrated gasification combined cycle 

(IGCC) plants, allows them to continue decreasing at 1.76% annually until 2030, rather than only 

until 2022. 
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Instead of assuming that 50% of municipal solid waste is recycled every year between 

2010 and 2030 (the Reference case assumption), we increase the recycling rate by 1% annually 

between 2011 and 2030, starting at 50% in 2010. This rate of growth is slower than the annual 

growth rate that has occurred over the past decade.

Regarding hydropower, the new assumption sets a universal levelized cost of 10¢/kWh 

for every feasible hydro project located in the South, based on an inventory of sites where dams 

already exist in the absence of power generating facilities. This resource availability is updated

based on a report by Hall et al. (2004).

New assumptions about residential and commercial solar photovoltaic (PV) system 

reduce the capital cost for PV modules and rooftop PV systems relative to NEMS assumptions. 

From 2011 to 2030, the residential system costs would decrease by 53% while the commercial 

system costs decrease by 57% in SNUG-NEMS. In addition, a 30% tax credit that is set to expire 

in 2016, is extended to 2030 for rooftop PV, and the same tax credit extension is given to solar 

water heaters, and heat pump water heaters.

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Table 1 summarizes the RE scenario updates, policies and RD&D. The results suggested 

that customer-owned renewables have significant low-cost potential, and utility-scale renewables 

could grow in the South with supportive policies. 

Utility-scale solar also has a new assumption that

increases the sunlight to electricity conversion rate by an additional 2% every five years from 

2011 to 2030.

Table 1 Portfolio of Energy Efficiency and Renewable Energy Policies and 

Assumption Updates

Energy Efficiency Renewable Energy

Residential Buildings

• Appliance Incentives and Standards

• Residential Retrofit and Equipment 

Standards

• Expanded Weatherization Assistance 

Program: 

• Building Codes with Third Party 

• Wind: resource availability updates based 

on 80-meter hubs.

• Biopower: tax incentives and IGCC heat 

rate assumption update

• Municipal Solid Waste: recycling rate 

increases 1% annually

• Hydropower: levelized cost assumption 

 4 The EE and RE scenarios both model CHP policies. The incentive and efficiency levels are higher in the latter 

scenario.
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Verification

Commercial Buildings

• Commercial Appliance Standards 

• Commercial HVAC Retrofit Incentives

Industry

• Industrial Process Improvement: 

• Assessments of Plant Utility Upgrades

• Combined Heat and Power Incentives

and resource availability updates

• Residential and Commercial Solar 

Photovoltaic (PV) systems: capital cost 

assumption update and tax incentive

• Utility PV systems: experience increased 

efficiencies

• Solar Water Heater: tax incentive

• Heat Pump Water Heater: tax incentive

• Combined Heat and Power (CHP): tax 

incentive, system efficiency assumption 

update and advanced R&D efforts

2.3 Renewable Electricity Standard (RES) and Carbon-Constrained Future (CCF) scenarios

Two additional policies are modeled separately, and then combined with the EE and RE 

scenarios. These scenarios are based on federal policies that have periodically been debated in 

bills proposed by the U.S. Congress.

• The RES scenario represents a future with a Federal Renewable Electricity Standard that

requires 25% renewable electricity production by 2025. The EIA released a report in

2009 entitled “Impacts of a 25-Percent Renewable Electricity Standard as Proposed in the 

American Clean Energy and Security Act Discussion Draft.” For the purpose of this 

study, we use the same code for modeling a national RES as was used in the EIA report

(Energy Information Administration, 2009b).

• The CCF scenario was chosen because instituting any of the most recently proposed 

market-based approaches to regulation of greenhouse gases would drive how energy 

efficiency and renewable energy policies are perceived and implemented. This scenario 

is modeled by assuming a price on carbon of $15 per metric ton of CO2 in 2012 (in 

$2007) increasing linearly to $51 per metric ton CO2 in 2030 (in $2007). 

The combined scenarios that will be discussed later in this report are EE with RE (EERE), 

RE+RES, EERE+RES, and EERE+CCF. 

Myths are often transmitted and reinforced via publications and media. In the remainder 

of the paper, our analytical results are paired with media evidence documenting the reality of the
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myths. In addition, we reviewed the Integrated Resource Plans (IRPs) of seven major utility 

companies in the region for evidence of the existence of the myths. The IRP process is used by 

utilities to identify optimal mixes of supply- and demand-side resources to meet their customers’ 

electricity needs. Most electric utility companies produce an integrated resource plan 

approximately every five years, and it typically involves considerable public participation 

through public hearings and other opportunities for experts, business leaders, and other 

stakeholders to express their points of view. The following seven IRPs were examined for 

evidence relevant to each of our six myths.

• Duke Energy Carolinas, LLC, The Duke Energy Carolinas Integrated Resource Plan 

(Annual Report), 2010

• Entergy Louisiana, LLC, An Integrated Resource Plan (2009-2028), 2009

• Dominion North Carolina Power and Dominion Virginia Power, Dominion North 

Carolina Power's and Dominion Virginia Power's 2010 Report of Its Integrated 

Resource Plan, 2010

• Florida Power and Light, Ten Year Power Plant Site Plan (2011-2020), 2011

• Georgia Power Company, 2010 Integrated Resource Plan, 2010

• Progress Energy Carolinas, Integrated Resource Plan, 2009

• Tennessee Valley Authority, Integrated Resource Plan, TVA’s Environmental and 

Energy Future, 2010

In the following section, we use this combination of qualitative and quantitative research 

methodologies to characterize and evaluate six myths about clean energy in the South.

3. Myths and facts

Numerous myths about clean energy have been promulgated by policymakers, business 

leaders and advocacy groups in the South are explored. We evaluate six of these, which address 

alternatives to meeting the region’s growing demand for electricity, the sufficiency of renewable 

resources, impacts on electricity rates, tradeoffs between energy efficiency and renewable power, 

policies that lead to the retirement of existing coal plants, and the impact of clean energy 

investments on water resources. 
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Myth 1: Energy efficiency and renewable energy by themselves cannot meet the South’s 

growing electricity demand.

In the 2009 Annual Energy Outlook the EIA estimates that the total amount of electricity 

generated nationally will increase by 27% between 2010 and 2030. In 2030, 70% of the demand 

is expected to be met with fossil fuels and 17% by nuclear (EIA, 2009a, Table A8). Industry 

leaders have raised doubts about whether energy efficiency and renewable energy by themselves

can meet the nation’s growing demand for electricity. The former chief executive officer of 

ExxonMobil, Lee Raymond, commented that alternative energy resources are merely 

“fashionable” and claimed that “with no readily available economic alternatives on the horizon, 

fossil fuels will continue to supply most of the world’s energy needs for the foreseeable future.” 

(Raymond, 1997) Similarly, the Center for Energy and Economic Development, an organization 

supported by the coal and utilities industries, stated that non-hydro renewable energy is “limited 

to a niche role for peaking power because it is an intermittent resource.” (Sovacool and Brown,

2007). Confidence in energy efficiency and renewables is especially weak in the South. In its

2010 IRP filing, Duke Energy Carolinas plans a resource portfolio that includes 1,267 MW of 

Demand Side Management (DSM) and 633 MW of energy efficiency. However, Duke Energy 

Carolinas concluded that “Even if the Company fully realizes its goals for EE and DSM, the 

resource need grows to approximately 6000 MWs by 2030.” That is, the planned investments in 

energy efficiency and DSM by Duke Energy Carolinas are judged by the utility to be unable to 

offset all of its anticipated growth in electricity demand. Entergy Louisiana expressed a similar 

view about renewable energy in its 2009 IRP stating that “it is not realistic to assume that 

renewable generation will be able to technically or economically satisfy all or even most of 

ELL’s incremental needs.” (Entergy Louisiana LLC, 2009, p.18).

In contrast, our analysis shows that investments in energy efficiency and renewable 

energy over the next two decades could meet incremental growth in electricity demand and 

eliminate the need to expand fossil-fueled electricity generation. In the EE and EERE scenarios, 

future energy consumption would see a slight increase and then decline to a level below 2010 

consumption (Figure 2). Contrary to this myth, the Southern demand growth of 17% projected in 

the EIA Reference case, by 2030, could entirely be met by energy efficiency. Among the three 

sectors studied here, industry leads the energy savings. In the EE scenario in 2030, 41% of the 

total energy savings comes from the industrial sector, followed by 33% from the commercial 
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sector. Residential retrofit and equipment standards, aggressive commercial appliance standards 

and industrial process improvements are particularly cost-effective policies.

Figure 2. Energy Consumption in the Residential, Commercial, and Industrial Sectors in the South

Besides the energy saving from energy efficiency policies, the growth of renewable 

energy also produces energy savings. In particular, customer-side renewable energy such as 

combined heat and power and heat pump water heaters could reduce future consumption 

significantly. On the supply side, renewable generation such as wind and biomass are forecasted 

to grow significantly to meet future demand in a cleaner way. 

In summary, our analysis suggests that efficiency and renewables can meet future 

demand, contrary to the conventional thinking that the growing demand for electricity requires 

expanding the current generation capacity. These results echo our previous findings.

Myth 2: The South does not have sufficient renewable energy resources to meet a Federal 

Renewable Electricity Standard.

A federal RES would require a certain amount of electricity generation coming from 

renewable resources. Among the 16 Southern states and Washington D.C., only five of them 

(Delaware, Maryland, Washington D.C., North Carolina, and Texas) have established a 

mandatory RES. In addition, Virginia has a voluntary RES goal and West Virginia has an 

Alternative and Renewable Energy Portfolio Standard that is similar to an RES but does not 

require a minimum contribution from renewable resources. As a result, West Virginia’s standard 
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could be met solely by alternative resources such as energy efficiency, coal bed methane and 

synthetic gas. Of the 34 states located outside of the South, 25 have RES’s, and five of the other 

nine have voluntary goals.

In the South, one major concern regarding RES legislation is that renewable energy 

resources are insufficient to meet the requirements being debated, such as 25% of the electricity 

demand in 2025 met by renewable resources, and this myth has gained impressive momentum. 

Georgia Public Service Commissioner Stan Wise has stated that “Georgia simply doesn’t have 

the wind, solar or biomass resources required to meet proposed new federal regulations for 

renewable energy generation.” (The Atlanta Journal-Constitution, 2009). Senator Lindsay 

Graham of South Carolina has stated that “we can't meet the targets in the Southeast,” referring 

to a potential nationwide standard for renewable energy (The New York Times, 2010). Similarly, 

the Southeastern Association of Regulatory Utility Commissions expressed their concern that 

their utility members would be forced to buy renewable energy credits from the federal 

government due to “the limited availability and cost-effectiveness of traditional renewable 

energy resources.” (United States Senate Committee on Energy & Natural Resources, 2007).

Such comments create the perception that there are not enough renewable energy resources in the 

South to meet a state or federal RES.

According to EIA’s Reference scenario, only 12% of the total electricity generated in the 

South in 2025 would come from renewable resources (Figure 3). However, EIA’s reference 

scenario project is limited by the renewable resource availability and the capital cost assumptions 

that are inherent to NEMS. In SNUG-NEMS analysis, we update the resource availability for 

wind and hydropower and the capital cost for residential and commercial solar PV according to 

recent studies. These updates, along with a set of other new assumptions and policies described 

in the methodology section, reflect the up-to-date understanding about renewable resources and 

their ability to penetrate the market. 

The results indicate that if an RES is implemented, the share of renewable electricity 

generation would increase significantly, to 22% in 2025, due to the strong growth of wind and 

biopower on the utility side as well as the customer-side renewable generation such as CHP and 

solar photovoltaics. The RES program described in the American Clean Energy and Security Act 

of 2009 includes provisions that would allow credits for qualified state energy efficiency 

programs to satisfy up to 20% of the RES requirement, which translates into requiring only 20% 
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of the total electricity demand in 2025 to be met by renewable sources. As such, the South as a 

whole would have sufficient resources to comply with the standard. 

Figure 3. Renewable Resources as a Percentage of Electricity Generation

in the South in 2025

If the RE scenario is implemented together with an RES (RE+RES), renewable 

generation could ramp to 28% of the electricity generation in 2025. In addition, when energy 

efficiency policies are jointly implemented with RE and RES (EERE+RES) scenarios, the 

overall demand for electricity would shrink while the percentage of renewable electricity would 

remain almost the same compared to the RE+RES scenario. In either case, the South does not 

need to rely on state energy efficiency programs to fulfill the RES goal. Wind, biomass, and 

combined heat and power are the three major renewable resources that would be used in the 

South. Together, they account for 80% of the renewable electricity generation in the EERE+RES 

scenario. 

Some question the feasibility of large-scale increases in renewable generation given the 

intermittency of wind and solar power. SNUG-NEMS accounts for this issue by discounting the 

capacity credit of a plant as intermittent resources are expanded in a region, thereby invoking a 

gradual cost penalty that reflects how much intermittent capacity a region can absorb without 

jeopardizing reliability. Assuming that these cost penalties are sufficient, the scale-up in 

renewable generation projected in the renewable scenarios (EERE and others) should be 

technically feasible.
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We also evaluate the concern that individual states could not meet an RES without 

purchasing a significant amount of Renewable Electricity Credits (RECs). Although NEMS has a 

regional-focused methodology, we can examine the state of Florida’s domestic renewable 

potential since Florida Reliability Coordinating Council (FRCC) represents its own region. 

Because the territory of FRCC almost coincides with the state of Florida, except for a portion of 

northwest Florida, the results for FRCC approximates those of the state. 

Florida is a good test case because it does not possess significant commercial level wind.

Instead, in the SNUG-NEMS modeling of the RES scenario, Florida purchases large amounts of 

wind from the Southeastern Electric Reliability Council (SERC) to offset its high electricity 

costs from natural gas-fired generation. To explore how much the Florida RES relies on its 

purchase of SERC wind, we ran an additional scenario to evaluate what happens when the sale of 

wind power across NERC regions is disallowed. The results suggest that under an RE+RES no 

wind trading scenario, Florida could meet up to 21% of its electricity generation in 2025 using 

local renewable resources. If state energy efficiency programs contribute another 4% of 

electricity demand, Florida could fulfill the RES goal without purchasing any out-of-state RECs. 

When interstate wind trading is excluded, biomass, which accounted for 20% of renewable 

generation in the unconstrained RE+RES scenario, becomes the primary renewable resource in 

Florida, constituting 85% of its renewable generation in 2025.

In summary, in contrast to the myth that the South does not have sufficient resources to 

meet a federal RES, our analysis indicates the opposite. The region has good wind and biomass

resources as well as customer-owned renewable resources. If the energy efficiency and 

renewable energy policies are implemented together with an RES, the South as a region could 

comply with the RES goal. 

Myth 3: Renewable energy cannot be promoted without escalating electricity rates. 

In recent years, Southern lawmakers and utilities operating in the South have claimed that 

the expansion of renewable electricity generation would cause electricity rates to rise in the 

region. Senator Jeff Sessions of Alabama claimed that passing a federal RES would cause 

consumers to “pay more for their electricity to meet this standard. And they are going to have to 

pay a lot more.” (Sessions, 2007). In a discussion of renewable energy in its 2009 IRP, Entergy 

Louisiana states that “If enacted, a federal RPS likely will result in higher cost for customers. 
18

Renewable generation alternatives generally are more costly than conventional generation 

alternatives.” (Entergy Louisiana LLC, 2009, p.6). In addition, Duke Energy Carolinas, Progress 

Energy Carolinas and Georgia Power Company also claim in their planning documents that 

renewable energy would come at a cost premium (Duke Energy Carolinas LLC, 2010; Georgia 

Power Company, 2010; Progress Energy Carolinas, 2009). This idea of higher priced electricity 

is another major reason lawmakers and utilities in the region have opposed legislation that would 

establish an RES and other incentives for renewables and energy efficiency. Our analysis of 

electricity rates under different future scenarios suggests that large gains in renewable generation 

can be achieved without significantly affecting rates. 

An important and often overlooked point is that electricity rates in the South are expected 

to rise over time. In the Reference case, average residential electricity rates in the South are 

forecast to rise by 17% over the next two decades, from $0.094/kWh in 2010 to $0.11/kWh in 

2030 (Figure 4). The South’s residential sector as a whole is projected to spend about $40 billion 

more on energy in 2030 (in $2007), than it spent in 2010. 

Would promoting renewables inflate costs to consumers beyond the increases expected in 

the Reference Case? Our modeling results show that the effect of an RES on rates in the South 

could be negligible (Figure 4). For the average household in the South over the next two decades, 

monthly energy bills under an RES are expected to change by less than $2 relative to the 

Reference case. 

Figure 4. Average Residential Electricity Rate in the South in 2030
19

Moreover with complementary renewable policies and updated resource availability 

inputs, as represented in the RE scenario, forecasted rates in 2030 could be slightly lower than in 

the Reference case (Figure 4). These reductions are largely the result of greater renewable 

resource supply and increases in customer-owned renewable generation such as CHP, heat pump 

water heaters, and demand-side solar PV. As a result, the RE scenario could save the South’s 

residential sector on the order of $100 billion over the next two decades, while driving a large 

expansion of renewable generation in the region. These results show that informed policy 

measures can promote renewable energy and yield energy bill savings to end users in the South 

at the same time.

In the EERE scenario, forecasted rates are reduced even further due to lower demand. 

Residential rates in 2030 under the EERE scenario are $0.091/kWh (Figure 4), which means that 

by 2030 the average household in the South could be saving about $50 per month on energy bills 

relative to the Reference case. When efficiency policies are enacted alone, residential electricity 

rates in 2030 are $0.095/kWh, a 14% reduction from the Reference case in 2030. 

These comparisons highlight the tradeoffs inherent in energy policies with respect to 

program investments, costs to end users, and changes in the mix of resources used for electricity 

generation. Although such tradeoffs exist, they are not always intuitive and have sometimes been 

misread by decision makers. Contrary to conventional wisdom, our modeling shows that 

renewable generation can be stimulated without causing electricity rates to rise for consumers 

any more than is expected with increased fossil generation. Indeed, when energy efficiency is 

promoted at the same time, renewables can be expanded while also achieving substantial 

reductions in end-user electricity rates and bills.

Myth 4: Energy efficiency and renewable energy policies are not compatible. 

The compatibility of energy efficiency and renewable energy policies is a topic of 

ongoing debate. On the one hand, some advocates call for emphasizing energy efficiency over

renewable energy. A Wall Street Journal article in June 2009 stated that “The U.S. government 

is committing billions of dollars to support renewable energy such as wind- and solar-power 

plants. Some say it should use more of that financial clout to encourage less energy consumption 

in the first place.” (The Wall Street Journal, 2009). Many policymakers and analysts agree with 

U.S. Rep. Peter Welch of Vermont that “We should have the policy of efficiency first” 
20

(Efficiency First, 2011). On the other hand, analysts have argued that strong energy efficiency 

policy may undermine domestic renewable technologies and jobs. For example, the World 

Resources Institute suggested that the inclusion of energy efficiency in a federal Clean Energy 

Standard (CES) "reduces the ambition of the overall program, because it would displace new 

clean generation that would otherwise be required. Therefore, if the goal of enacting a CES (or 

RES) is to expand the domestic market for new, cleaner electric generation technologies 

(including the domestic manufacturing and other industry jobs associated with these policies), 

allowing energy efficiency to quality will actually undermine this core CES policy objective.”

(World Resource Institute, 2011). This myth about the competition of energy efficiency and 

renewable energy policies has lead people to believe that one must be pursued over the other. 

Admittedly, there are tradeoffs between energy efficiency and renewable energy. 

According to our SNUG-NEMS analysis, RE policies without EE policies lead to 339 billion 

kWh of renewable generation in 2030 while EE policies without RE policies avoid 264 billion 

kWh of generation. Together, renewable energy and energy efficiency policies lead to less of 

each, 40 billion kWh less efficiency and 78 billion kWh less renewable generation. However, the 

idea that large-scale energy efficiency and renewable energy are incompatible is an 

oversimplification. In fact, they share a common goal which is to increase the share of clean 

generation overall.

What happens when energy efficiency policies act in concert with renewable policies? 

According to our SNUG-NEMS results, the main effect would be that less new fossil generation 

is needed. Though the EERE scenario leads to less new renewables in 2030 than seen in the RE 

scenario, renewable generation still increases significantly, while simultaneously displacing over 

170 billion kWh of fossil generation (Figure 5). Furthermore, a comparison of the new 

incremental generation in 2030 shows that while the RE scenario reduces non-renewable energy 

growth by 50% relative to the Reference case, the EERE scenario leads to negative growth. 

Combining the policies would retire 80 billion kWh of existing natural gas generation in addition 

to avoiding 204 billion kWh of incremental fossil fuel generation. 
21

Figure 5. Net Generation Growth between 2010 and 2030 in the South

(Note: Numbers in parentheses are the difference between the billion kWh of new construction shown 

above the x-axis and the billion kWh of retired generation shown below the x-axis.)

Another way of illustrating how efficiency policies add to renewable efforts is to look at 

how much of the new incremental generation comes from non-fossil generation in the various 

scenarios. As shown in Table 2, clean generation accounts for 64% of the net generation growth 

in the RE scenario and 114% in the EERE scenario. 

Does the expansion of renewable energy policies stunt energy efficiency? Comparing the 

EERE scenario to the EE scenario, the share of renewable electricity more than tripled, while 

efficiency gains dropped by only 40 billion kWh (Table 2). A modest decrease in cost-effective 

efficiency is to be expected, as encouraging renewables should improve renewable penetration 

vis-à-vis non-renewables as well as efficiency. Although efficiency proponents fear that 

promoting renewables would create a large amount of new demand for electricity, the EERE and 

EERE+RES scenarios show that policies promoting renewables lead to the displacement of coal 

and natural gas generation at twice the rate that efficiency is reduced (Figure 5). 
22

The truth is that rather than being caught in rival relationships, energy efficiency and 

renewable energy are aligned. Certainly, there is less renewable growth over time when 

aggressive efficiency policies are adopted, but that is because there is less generation growth 

overall. They both work towards the same goal of realizing a clean energy future, and our 

scenario analysis indicates that they are compatible in this pursuit. If energy efficiency and 

renewable energy are implemented simultaneously, less electricity generation would be needed 

while a greater portion of the remaining demand could be met by cleaner sources of energy. This 

would reduce fossil fuel dependence and yield significant environmental and public health cobenefits as well. 

Myth 5: Cost-effective energy efficiency and renewable energy policies are sufficient to 

retire existing coal plants and reduce air pollution.

Current forecasting expects that coal, natural gas and nuclear will remain the three largest 

sources of electricity generation over the next twenty years. Utility-side renewable generation is 

projected to increase slightly, from 6% in 2010 to 7% in 2030. New coal-fired power plants are 

the largest additional resource. As a result, CO2 emissions in the region would increase steadily 

over the next two decades, reaching 2,650 million metric tons in 2030, which is 247 million tons

more than in 2010.

Energy efficiency and renewable energy both have great potential to mitigate climate 

change by replacing polluting generation. However, there are misconceptions about how 

successful these policies can be by themselves. A recent study from the Sierra Club states that 

wind, solar and energy efficiency alone have the potential to “eliminate demand growth and 

Table 2 Electricity Generation Growth, 2010-2030 (Billion kWh)

Energy Source Reference EE RE EERE

Total Generation Growth, Non-renewable 

Fuels 303 63 153 -20

Renewables 71 47 278 171

Efficiency (energy savings relative to 

Reference case) - 264 -58 224

Total Clean Energy Growth (Renewables and 

Efficiency) 71 311 221 395

Net Generation Growth 374 110 432 150

Renewable Energy (as a percentage of Total 

Generation Growth) 19% 43% 64% 114%
23

displace existing coal consumption” in certain regions in the U.S. (Sierra Club & Climate 

Recovery Partnership, 2011). McKinsey & Company estimated that the climate change 

mitigation potential from energy efficiency could be 1.1 gigatons of GHG emissions per year, 

equivalent to removing the entire fleet of U.S passenger vehicles and light trucks from the road

(McKinsey & Company, 2010). These perspectives promote the belief that energy efficiency and 

renewable energy would be sufficient to retire existing coal plants. 

Our SNUG-NEMS analysis indicates that even with strong policies to promote energy 

efficiency and renewable energy, fossil fuel generation would continue to expand in the next 

twenty years, though at a slower pace relative to the Reference scenario. Widespread deployment 

of energy efficiency measures would displace 32 billion kWh natural gas generation in 2030, and 

if coupled with renewable energy policies, together they would retire over 80 billion kWh of 

natural gas generation (Figure 5). However, in these scenarios, electric generation from coal and 

total CO2 emissions continue to grow (Figure 5 & 6). We conclude that renewable and efficiency 

policies can reduce fossil demand growth and displace existing natural gas generation, but costeffective policies alone will not displace existing coal generation. 

Figure 6. CO2 Emission in the South

31%
24

Recently, scholars have suggested that a price on carbon would need to be added to 

energy efficiency and renewable energy policies in order to displace existing coal generation

(Arar and Southgate, 2009; Bird, Chapman, Logan, Sumner, and Short, 2011; Palmer, Paul, 

Woerman, and Steinberg, 2011; Energy Modeling Forum, 2011). Our EERE+CCF scenario 

represents such a situation. It adds a price on carbon to the energy efficiency and renewable 

energy policies and results in significant retirement of coal generation and much less overall 

demand for new generation by 2030 (Figure 5). The generation gap left by the retired coal-fired 

plants (437 billion kWh) is met almost entirely by new renewable generation (435 billion kWh). 

Moreover, CO2 emissions in the South are projected to decrease by 31% in 2030 relative to the 

Reference scenario (Figure 6).

In order to evaluate the effect of alternative carbon prices on coal plant retirements and 

CO2 emissions, we conducted a sensitivity analysis of the EERE+CCF scenario. Relative to our 

original CCF scenario, we tested two lower prices for CO2 and one higher price to assess 

whether a price threshold exists below which coal plants are not significantly retired. These 

sensitivity cases include the following prices for CO2 in addition to the assumptions that 

comprise the EERE scenario.

• A Low Tax scenario based on a proposal by Roger Pielke, Jr. intended to raise 

revenues for investments in innovation (Pielke Jr., 2010). Specifically, the tax per 

metric ton of CO2 starts at approximately $4 in 2015 and rises to approximately 

$8 in 2030.

• A Moderate Social Cost of Carbon (SCC) scenario based on estimates made by

the U.S. Government Interagency Working Group on the social cost of carbon

(U.S. Environmental Protection Agency, 2010). These prices are based on 

estimates of the monetized damages associated with incremental increases in CO2

emissions. These damage estimates are approximately $23 per metric ton of CO2

in 2015, rising to $32 in 2030.

• A High Tax scenario loosely based on a carbon tax sensitivity side case that was 

published in conjunction with EIA’s Annual Energy Outlook 2011 (Energy 

Information Administration, 2011c). This scenario includes a carbon tax that is 

approximately 50% higher than that used in the CCF scenario, starting at about 

$28 per metric ton of CO2 in 2015 and rising to $78 in 2030. 
25

Table 3 shows that rising carbon prices are associated with reductions in both CO2

emissions and coal generation. Modest levels of coal plant retirements not seen in the EERE 

scenario start to occur even with low carbon prices. The reason that energy efficiency and 

renewable energy resources are unlikely to replace current generation without a price on carbon 

is due to the different economics of existing and new generation. The largest expense of existing 

coal generation is the cost of fuel, which is relatively low and is likely to remain low in the 

absence of targeted policies to penalize coal for its human health and environmental costs. 

Energy efficiency and renewable resources typically cannot compete with such economics, 

particularly with older coal plants that have been fully amortized. In contrast, energy efficiency 

and renewables can be cost effective at meeting growing demand when compared with 

alternative new generation options. 

 

Table 3 Impact of Alternative Carbon Price Scenarios on CO2 Emissions and Coal 

Retirement

Scenario

Carbon Price

($07 / Metric ton of CO2) Change Relative to 2010

2015 - 2030

2030 CO2 

Emissions

2030 Coal 

Generation

Reference $0 10% 15%

EERE $0 1% 1%

+ Low Tax $4 - $8 -2% -5%

+ SCC Moderate $23 - $32 -12% -28%

+ CCF $19 - $52 -22% -55%

+ High Tax $28 - $78 -33% -87%

Since the U.S. has been reluctant to impose a tax on carbon to reflect its social costs (U.S. 

Environmental Protection Agency, 2010), the retirement of coal plants may instead be prompted 

by EPA regulations on air pollution (e.g., sulfur dioxide, nitrogen oxides, and mercury), water 

pollution, and solid combustion byproducts such as coal ash. A recent study by the National 

Research Council estimated that these non-climate damages from coal power plants exceed 3.3 

cents per kWh in $2008 (National Research Council, 2010). Some EPA regulations that address

these externalities have already been promulgated and their costs are embedded in electricity 

prices in the NEMS Reference case. Other regulations are poised for future implementation and 

are not modeled in the Reference case. Altogether, these regulations could require the retrofit, 
26

retirement or replacement of a substantial portion of the existing coal fleet in a short period of 

time. Cichanowicz (2011) estimates the potential for the near-term retirement of 50 GW or more 

of coal capacity and capital costs of approximately $100 billion. The point here is that energy 

efficiency and renewable energy policies are not going to precipitate such changes; rather, coal

will be retired by policies that place an economic penalty on coal reflecting its negative 

externalities.

Myth 6: Power Resource Decisions Have Little Impact on Water Resources.

States generally do not tie water efficiency to energy planning. In fact, most states in the 

South do not have water-energy legislation (Circle of Blue, 2010). While state water policies are 

principally developed as a way to reduce energy consumption, according to a survey of energy 

and water departments by the Center for Energy and Environmental Policy, energy impacts on 

water usage is often ignored (Belden et al., 2008). Additionally, utilities typically neglect water 

scarcity in their integrated planning. Five of seven southern IRP’s reviewed for this paper, have 

no discussions of water requirements for power generation, while TVA and Duke Energy briefly 

mention water as one of many criteria to evaluate future energy portfolios. In contrast, water and 

energy legislation in California and eight states along the Great Lakes (NY, PA, OH, MI, IN, IL, 

WI, and MN) consider the water requirements of power production, declaring that “water 

consumption and diversions must keep energy impacts in mind (Circle of Blue, 2010).” 

Georgia’s Water Stewardship Act of 2010 illustrates the myth in the South that power 

resource decisions have little impact on water consumption. This law requires higher efficiency 

standards for building fixtures and systems such as cooling towers in industrial construction, but 

nothing related to energy generation – it does not consider the water-energy connection. This is 

surprising given the significant impact electric generation has on water use. Next to agricultural 

irrigation, electricity generation accounts for the second most U.S. freshwater withdrawals, 

approximately 39% (Hustson et al., 2004). In the South, this figure is even higher – 54% of 

freshwater withdrawals are for thermoelectric generation, so water conservation through energy 

planning could have an even bigger impact in this region. 

The reason power decisions can impact water quantity usage is that water withdrawal and 

consumption vary by the fuel type, the cooling system, the power generation technology and the 

extent of efficiency programs. The quantity of water required for power generation is 
27

significantly different for withdrawal versus consumption. Water withdrawal indicates water that 

is removed, heated and returned to its source; while the water consumed in this process may be 

modest, the impact on ecosystems can be significant. Water consumption refers to water losses

due to evaporation, uptake by plants, or direct use by people. For example, the typical water 

withdrawal rate of open-loop coal-fueled plants is 75,000 to 190,000 liters per MWh generated. 

In contrast, coal plants with closed-loop technology require only 1,100 to 2,300 liters per MWh.

Certain renewables barely withdraw any water, as electricity generated by photovoltaic solar and 

wind does not require the use of cooling water. Ultimately, the greatest reductions in water 

withdrawal occur when energy generation is reduced through efficiency measures. 

To estimate the impact of power decisions on water scarcity, water consumption of the 

six scenarios were analyzed based on incremental generation. Figure 7 shows how much less 

water would be consumed in the South in 2030 relative to 2010 water consumption under six 

alternative future generation scenarios. Enhanced energy efficiency and renewable energy 

policies tend to reduce both water withdrawal and consumption. Using conservative 

assumptions, such as all new thermal electricity being generated by closed-loop cooling systems 

due to permitting restrictions on open-loop system, the six scenarios would contribute to water

savings in the range of 674 to 1,293 billion liters in 2030. For example, rather than consuming an 

additional 520 billion liters of water to generate electricity in the year 2030, the CCF scenario 

would reduce water consumption in the South by 674 billion liters, resulting in a net savings of 

1,293 billion liters. A total of 1,293 billion liters of water savings represents the equivalent 

amount of water to supply 34 days of indoor water use for households in the South and 13 days 

for all households in the United States in 2030.

5

While the water co-benefits of clean energy policies attract little attention in energy and 

water planning today, states and utilities with growing populations and shrinking water resources 

should examine the water implication of their power decisions. Whether this amount of water is 

significant enough to change decision making associated with new power resources is an open 

question, but ignoring the relationship seems imprudent. 

 5 To calculate equivalent effects, we used several indicators such as estimated population of the United States and 

the Southern states in 2030 by U.S. Census Bureau and about 265 liters of average daily indoor water use per capita, 

consisting of showers (16%), clothes washers (22%), dishwashers (1%), toilets (27%), baths (2%), leaks (14%), 

faucets (16%), and other domestic uses (2%) (Vickers, 2001). 
28

Figure 7. Estimated Water Consumption Savings in 2030 beyond 2010 in the South

(Note: Numbers in parentheses are the difference between the billion liters of additional water 

consumption required for new generation shown above the x-axis and the billion liters of water savings

resulting from retired generating plants shown below the x-axis.) 

4. Conclusions

Myths about clean energy exist in the South and have powerful influence on technology 

investment decisions and public policies. By providing alternative views and interpretations of 

six myths, this paper seeks to motivate a lively debate about the real options for a clean energy 

future in the southern U.S.

Energy policy analysis requires sophisticated energy-economic modeling. Spreadsheet 

analysis and simple economic logic have limited abilities to unravel complex, inter-linked 

relationships with feedback loops and iterative effects. As a result, they can fail to anticipate the 

first- and second-order effects of possible policy interventions and technological change. To 

design wise energy policies for the South, policymakers should acknowlege the risk and 

uncertainties associated with each decision, diversify their information sources, engage the 
29

public, utilize sophisticated modeling tools, and adopt an iterative risk management approach to 

minimize the adverse impact of drawing false conclusions for sustained periods of time. 

Results of this paper suggest that with a suite of well-deployed measures, energy 

efficiency and renewable energy are able to work hand-in-hand to meet the projected growth of 

electricity demand in the South without escalating electricity rates. If policies such as a federal 

Renewable Electricity Standard and carbon taxes were to be implemented on top of other

complementary policies, a considerable amount of coal-fired power could be displaced, 

significantly reducing CO2 emissions. The water-saving benefits of a future focus on efficiency 

and renewables could also become increasingly salient as sub-regions of the South experience 

warmer climates and more severe droughts.

Illuminating energy myths and understanding the belief systems that underpin them, can 

help to explain a region’s private investments and public policies. In so doing, productive public 

debate can be fostered and the status quo can be effectively challenged. 
30

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Acknowledgements

This study was funded by Energy Foundation (www.ef.ort), the Kresge Foundation 

(www.kresge.org) and the Turner Foundation (www.turnerfoundation.org); their support is 

greatly appreciated.