National Action Plan for Energy Effi ciency 


Vision for 2025: 

A Framework for Change 

A RESOURCE OF THE NATIONAL ACTION PLAN FOR 

ENERGY EFFICIENCY 

NOVEMBER 2008 
 

Letter from the Co-Chairs of the National Action Plan for Energy Effi ciency 

November 2008 

To all, 

As you know, the National Action Plan for Energy Effi ciency is playing a vital role in advancing the dialogue and the 

pursuit of energy effi ciency in our homes, buildings, and industries —an important energy resource for the country. 

With the commitment and leadership from more than 60 diverse organizations nationwide we have made great 

progress in a short time. We have: 

• 	 Developed fi ve broad and meaningful recommendations for pursuing cost-effective energy effi ciency. 

• 	 Brought together more than 100 organizations from 50 states around this common goal to take energy effi ­

ciency to the next level. 

However, there is much more to do. We remain substantially underinvested in effi ciency at a time when using 

energy wisely can help address rising energy costs, rising emissions of greenhouse gases, and our dependence 

on foreign fuel supplies. 

We need a concerted, sustained effort to overcome what are truly surmountable hurdles to making energy effi ­

ciency a larger part of our supply picture. To continue our progress we need to move from our initial Action Plan 

to implementation. We need a vision for where we want to be and a path for getting there. 

Commensurate with that goal, we are pleased to offer this updated 2025 Vision for the National Action Plan. 

As we released it last year, the Vision outlines what our long-term goals should be if we are to truly achieve all 

cost-effective energy effi ciency. With recent refi nements to our approach for measuring progress under the ten 

key implementation goals, we believe the Vision now provides a complete framework for changing our course 

on energy effi ciency. 

This Vision represents the thinking of many leading organizations nationwide. Importantly, we believe that this 

Vision is a living document that looks out to long-term needs and will be modifi ed to refl ect new information 

and changing conditions. 

We thank the Leadership Group for its contribution to this document. It is a pleasure to work with this committed 

group to advance energy effi ciency to address the critical energy and environmental issues facing the country. 

Sincerely, 

Marsha H. Smith  James E. Rogers 

President, National Association of   President, Chairman, and CEO 

Regulatory Utility Commissioners  Duke Energy 

Commissioner, Idaho Public Utilities Commission 
National Action Plan for Energy Effi ciency 


Vision for 2025:
 

A Framework for Change
 

A RESOURCE OF THE NATIONAL ACTION PLAN FOR
 

ENERGY EFFICIENCY
 

NOVEMBER 2008
 
The Leadership Group of the National Action Plan for Energy Effi ciency is committed to taking action to increase 

investment in cost-effective energy effi ciency. The Vision for 2025 was developed under the guidance of and with input 

from the Leadership Group. The document does not necessarily represent a consensus view and does not represent an 

endorsement by the organizations of Leadership Group members. 

The Vision is a product of the National Action Plan for Energy Effi ciency Leadership Group and does not refl ect the 

views, policies, or otherwise of the federal government. The role of U.S. DOE and U.S. EPA is limited to facilitation of 

the Action Plan. 

This document was originally published in November 2007, and was revised in November 2008 to include more 

information on establishing a baseline for measuring progress. 

If this document is referenced, it should be cited as: 

National Action Plan for Energy Effi ciency (2008). National Action Plan for Energy Effi ciency Vision for 2025: A 

Framework for Change. <www.epa.gov/eeactionplan> 

For More Information 

For more information about the Vision for 2025 and the National Action Plan for Energy Effi ciency, please contact: 

Stacy Angel Larry Mansueti 

U.S. Environmental Protection Agency U.S. Department of Energy 

Offi ce of Air and Radiation Offi ce of Electricity Delivery and Energy Reliability 

Climate Protection Partnerships Division Tel: (202) 586-2588 

Tel: (202) 343-9606 E-mail: lawrence.mansueti@hq.doe.gov 

E-mail: angel.stacy@epa.gov 

or visit www.epa.gov/eeactionplan
 
Table of Contents
 

List of Figures .................................................................................................................................................... i
 

List of Tables ..................................................................................................................................................... i
 

List of Abbreviations and Acronyms...................................................................................................................ii
 

Acknowledgements .........................................................................................................................................iv
 

Executive Summary ................................................................................................................................. ES-1
 

Background .......................................................................................................................................... ES-1
 

Achieve All Cost-Effective Energy Effi ciency ........................................................................................... ES-2
 

Ten Implementation Goals ..................................................................................................................... ES-2
 

Measuring Progress ............................................................................................................................... ES-4
 

The Energy System in 2025 ................................................................................................................... ES-7
 

Related State, Regional, and National Policies........................................................................................ ES-9
 

Next Steps ............................................................................................................................................ ES-9
 

Notes.................................................................................................................................................. ES-11
 

1: Introduction ............................................................................................................................................ 1-1
 

Scope of the Vision for 2025 ................................................................................................................... 1-1
 

This Document........................................................................................................................................ 1-5
 

Development of the Action Plan Vision for 2025 ..................................................................................... 1-5
 

The Intent of the 2025 Vision .................................................................................................................. 1-7
 

Notes...................................................................................................................................................... 1-7
 

2: The Goals of the 2025 Vision ................................................................................................................ 2-1
 

The Long-Term Goal: Achieve All Cost-Effective Energy Effi ciency ............................................................ 2-1
 

Ten Implementation Goals ....................................................................................................................... 2-1
 

Measuring Progress ................................................................................................................................. 2-4
 

National Benefi ts ................................................................................................................................... 2-14
 

Notes.................................................................................................................................................... 2-16
 

3: The Vision for 2025 ................................................................................................................................ 3-1
 

A Look at 2025....................................................................................................................................... 3-1
 

Evolving Policies and Technologies ........................................................................................................... 3-4
 

Notes...................................................................................................................................................... 3-7
 

National Action Plan for Energy Effi ciency 
Table of Contents (continued)
 

4: Related State, Regional, and National Policies .................................................................................... 4-1
 

Introduction to Policies ............................................................................................................................ 4-1
 

Recommendations and Considerations.................................................................................................... 4-1
 

Notes...................................................................................................................................................... 4-3
 

5: Tools and Assistance to Help Realize the Vision .................................................................................. 5-1
 

National Action Plan for Energy Effi ciency Tools ....................................................................................... 5-1
 

Federal Government Assistance ............................................................................................................... 5-1
 

Leveraging Other Resources .................................................................................................................... 5-3
 

Engaging All Stakeholders....................................................................................................................... 5-3
 

Appendix A: National Action Plan for Energy Efficiency Leadership Group ........................................ A-1
 

Appendix B: Related Studies and Documents .........................................................................................B-1
 

Appendix C: Energy Effi ciency Benefits Analysis Assumptions .............................................................C-1
 

Appendix D: Approach for Measuring Progress at the State Level ...................................................... D-1
 

Collection of Information ........................................................................................................................D-1
 

Determining the Status of a Policy...........................................................................................................D-1
 

Notes......................................................................................................................................................D-6
 

Appendix E: Approach for Measuring Progress by National Benefi ts ................................................... E-1
 

Background ............................................................................................................................................ E-1
 

Metric 1: Projected Energy Savings from Existing Energy Savings Goals and Targets (kWh) ....................... E-1
 

Metric 2: Current Energy Savings (kWh, kW, and Therms) ....................................................................... E-6
 

Metric 3: Current Avoided Emissions of Carbon Dioxide (Tons) ................................................................ E-7
 

Metric 4: Current Funding for Energy Effi ciency Programs ....................................................................... E-7
 

Metric 5: Current Energy Consumption Across the Building and Industrial Sectors (kWh, Therms) ........... E-9
 

Additional Work...................................................................................................................................... E-9
 

Notes.................................................................................................................................................... E-11
 

Appendix F: References ............................................................................................................................. F-1
 

National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
 

 

 

 

List of Figures
 

Figure ES-1. National Action Plan for Energy Effi ciency Recommendations ................................................. ES-1
 

Figure 1-1. Reasons for the National Action Plan for Energy Effi ciency .......................................................... 1-2
 

Figure 1-2. National Action Plan for Energy Effi ciency Recommendations and Options ................................. 1-3
 

Figure 3-1. Achieving All Cost-Effective Energy Effi ciency: Key Perspectives .................................................. 3-2
 

Figure 3-2. Important Features of Energy Systems and Services in 2025 to Achieve All Cost-Effective 


Energy Effi ciency ........................................................................................................................ 3-5
 

Figure C-1. Assumptions and Inputs.............................................................................................................C-1
 

Figure E-1. 2006 U.S. Building and Industrial Energy Use ............................................................................. E-9
 

List of Tables 

Table ES-1. Progress in Meeting Implementation Goals............................................................................... ES-5
 

Table ES-2. Current Benefi ts from and Funding for State- and Utility-Administered 


Table ES-3. Changes to Watch in Evolving Technology, Policy, and Program Practices for 


Table 2-3. Current Benefi ts from and Funding for State- and Utility-Administered Energy 


Energy Effi ciency Programs....................................................................................................... ES-7
 

Energy Effi ciency ...................................................................................................................... ES-8
 

Table ES-4. National Action Plan for Energy Effi ciency Tools by Implementation Goals .............................. ES-10
 

Table 1-1. Commitments to Implement the Recommendations of the Action Plan (as of November 2008)............1-4
 

Table 2-1. Progress in Meeting Implementation Goals: Approach for Electricity Services ................................ 2-5
 

Table 2-2. Progress in Meeting Implementation Goals: Approach for Natural Gas Services ............................ 2-7
 

Effi ciency Programs .................................................................................................................... 2-15
 

Table 3-1. Overview of Evolving Technologies and Practices .......................................................................... 3-6
 

Table 5-1. National Action Plan for Energy Effi ciency Tools by Implementation Goals .................................... 5-2
 

Table E-1. Basis and Scope of Energy Savings Projections by State ................................................................ E-3
 

Table E-2. 2005 Non-Baseload Output CO2

 Emission Factors by NERC Region .............................................. E-8 


National Action Plan for Energy Effi ciency i
 

 

 

 

List of Abbreviations and Acronyms
 

A
 

ACEEE American Council for an Energy-Efficient 

Economy 

AMI advanced metering infrastructure 

B 

Btu British thermal unit 

C 

CEE Consortium for Energy Efficiency 

CHP combined heat and power 

CO2

 carbon dioxide 

D 

DOE U.S. Department of Energy 

E 

EEPS energy efficiency portfolio standard 

EERE U.S. Department of Energy, Office of Energy 

Efficiency and Renewable Energy 

eGRID Emissions and Generation Resource Integrated Database 

EIA Energy Information Administration 

EM&V evaluation, measurement, and verification 

EPA U.S. Environmental Protection Agency 

F 

FERC Federal Energy Regulatory Commission
 

G
 

GJ/t gigajoules per tonne 

GW gigawatt 

GWh gigawatt-hour 

H 

HVAC heating, ventilation, and air conditioning 

I 

IECC International Energy Conservation Code 

IOU investor-owned utility 

IRP integrated resource plan 

ISO independent system operator 

K 

kW kilowatt 

kWh kilowatt-hour 

L 

LBNL Lawrence Berkeley National Laboratory 

LIHEAP Low Income Home Energy Assistance 

Program 

M 

MEEA Midwest Energy Efficiency Alliance 

MMBtu million British thermal units 

MMcf million cubic feet 

MtC metric tonnes of carbon 

MtCO2

e metric tonnes of carbon dioxide equivalent 

MW megawatt 

MWh megawatt-hour 

ii National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
 

 

List of Abbreviations and Acronyms (continued)
 

N S
 

NARUC National Association of Regulatory Utility 

Commissioners 

NEEA Northwest Energy Efficiency Alliance 

NEEP Northeast Energy Efficiency Partnership 

NPCC Northwest Power and Conservation Council 

NYSERDA New York State Energy Research and 

Development Authority 

P 

SEEA Southeast Energy Efficiency Alliance 

SWEEP Southwest Energy Efficiency Partnership 

T 

Tcf trillion cubic feet 

TRC total resource cost test 

TWh terawatt-hour 

W 

ppm parts per million units WAP Weatherization Assistance Program 

R 

R&D research and development 

RPS renewable portfolio standard 

National Action Plan for Energy Effi ciency iii
Acknowledgements
 

This National Action Plan for Energy Effi ciency Vision 

for 2025: A Framework for Change is a resource of the 

National Action Plan for Energy Effi ciency. 

In addition to direction and comment by the larger 

Action Plan Leadership Group (see Appendix A), two 

smaller work groups of Leadership Group members provided valuable input in 2007 and 2008. The members of 

the two Vision work groups are: 

Cheryl Buley† New York State Public Service 

Commission 

Kateri Callahan† Alliance to Save Energy 

Glenn Cannon* Waverly Light and Power 

Jorge Carrasco* Seattle City Light 

Sheryl Carter* Natural Resources Defense 

Council 

Daniel Francis† American Electric Power 

Ollie Frazier* Duke Energy 

Anne George* Connecticut Department of 

Public Utility Control 

Phil Giudice† Massachusetts Division of Energy 

Resources 

Dian Grueneich*† California Public Utilities 

Commission 

Jeff Genzer* National Association of State 

Energy Offi cials 

Leonard Haynes†

 Southern Company 

Joe Hoagland† Tennessee Valley Authority 

Sandra Hochstetter*† Arkansas Electric Cooperative 

Corporation (formerly with 

the Arkansas Public Service 

Commission) 

*2007 work group †

2008 work group 

Mark Hoffman† Consortium for Energy Effi ciency 

Eric Hsieh† National Electrical Manufacturers 

Association 

Chris James* Formerly with the Connecticut 

Department of Environmental 

Protection 

Mary Kenkel*† Alliance One (consultant to Duke 

Energy) 

Michelle New* National Association of State 

Energy Offi cials 

Bill Prindle* American Council for an EnergyEffi cient Economy 

Roland Risser* Pacifi c Gas and Electric 

Richard Robinson*† National Rural Electric 

Cooperative Association 

Gene Rodrigues* Southern California Edison 

James Rogers* Duke Energy 

Marsha Smith* Idaho Public Utilities Commission 

Andrew Spahn† National Council on Electricity 

Policy 

Jim Spiers*† Tri-State Generation and 

Transmission Association, Inc. 

Richard Steeves† Connecticut Consumer Counsel 

Janet Streff* Minnesota Department of 

Commerce 

Rick Tempchin† Edison Electric Institute 

Mark Tye†

 Santee Cooper 

Rick Voytas†

 Ameren Services 

Mike Winka* New Jersey Board of Public 

Utilities 

iv National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Joel Bluestein, Jessica Rackley, and Anne Hampson of 

ICF International provided research, drafting, and other 

technical consulting support to the Vision. Chuck Goldman, Ranjit Bharvirkar, and Galen Barbose from Lawrence Berkeley National Laboratory provided additional 

consulting support to the approach for measuring progress by national benefi ts. Rich Sedano, Cathie Murray, 

and Brenda Hausauer of the Regulatory Assistance Project and Alison Silverstein of Alison Silverstein Consulting 

provided their expertise during review and editing. 

The U.S. Department of Energy and U.S. Environmental 

Protection Agency facilitate the National Action Plan 

for Energy Effi ciency, including this document. Key staff 

include Larry Mansueti with DOE’s Offi ce of Electricity 

Delivery and Energy Reliability, Dan Beckley with DOE’s 

Offi ce of Energy Effi ciency and Renewable Energy, and 

Kathleen Hogan, Stacy Angel, and Katrina Pielli, with 

EPA’s Climate Protection Partnership Division. 

Eastern Research Group, Inc., provided technical review, 

copyediting, graphics, and production services. 

National Action Plan for Energy Effi ciency v

Executive Summary 


This Vision for the National Action Plan for Energy Efficiency establishes a goal of achieving all costeffective energy efficiency by 2025; presents ten implementation goals for states, utilities, and other 

stakeholders to consider to achieve this goal; describes what 2025 might look like if the goal is achieved; 

and provides a means for measuring progress. It is a framework for implementing the five policy recommendations of the Action Plan, announced in July 2006, which can be modified and improved over time. 

Background 


Through the Leadership Group of the National Action 

Plan for Energy Effi ciency (Action Plan), more than 60 

diverse leading organizations recognized the importance of bringing greater emphasis to the role that 

cost-effective energy effi ciency1

 can and should play 

in supplying our future energy needs. Improving the 

energy effi ciency of homes, businesses, schools, governments, and industries—which consume more than 

70 percent of the natural gas and electricity used in 

the United States—is one of the most constructive, 

cost-effective ways to address the challenges of high 

energy prices, energy security and independence, air 

pollution, and global climate change in the near future. 

Energy effi ciency can play a signifi cant role in meeting 

our energy requirements, and it is a critical component 

of the overall modernization of utility energy systems 

worthy of the 21st century. 

Despite the value that cost-effective energy effi ciency 

offers, it is not achieving its full potential for a number 

of reasons. In July 2006, the Action Plan presented 

fi ve key policy recommendations (see Figure ES-1) for 

fully developing the cost-effective energy effi ciency 

resources in this country, building upon experiences in 

particular states and regions. It was a call to action to 

take investment in energy effi ciency to the next level. As 

of November 2008, more than 120 organizations have 

endorsed these recommendations and/or made commitments to take energy effi ciency to the next level within 

their spheres of infl uence. 

As a next step, the Action Plan co-chairs challenged the 

Leadership Group to defi ne a vision that would detail 

the steps necessary to fully implement the Action Plan. 

The Vision presented in this document is the response 

to that challenge. It includes establishment of a longterm aspirational goal and ten key implementation 

goals. It also describes what 2025 could look like if the 

Figure ES-1. National Action Plan for Energy Effi ciency Recommendations 

• Recognize energy efficiency as a high-priority energy resource. 

• Make a strong, long-term commitment to implement cost-effective energy efficiency as a resource. 

• Broadly communicate the benefits of and opportunities for energy effi ciency. 

• Promote sufficient, timely, and stable program funding to deliver energy efficiency where cost-effective. 

• Modify policies to align utility incentives with the delivery of cost-effective energy effi ciency and 

modify ratemaking practices to promote energy effi ciency investments. 

National Action Plan for Energy Effi ciency ES-1
long-term goal were achieved and provides a means for 

measuring progress over time. The Vision is provided 

as a framework to guide the changing policies toward 

energy effi ciency for natural gas and electricity; it can 

be modifi ed and improved over time. 

Achieve All Cost-Effective 

Energy Effi ciency 

The long-term aspirational goal for the Action Plan is to 

achieve all cost-effective energy effi ciency by the year 

2025. Based on studies, the effi ciency resource available may be able to meet 50 percent or more of the 

expected load growth over this time frame, similar to 

meeting 20 percent of electricity consumption and 10 

percent of natural gas consumption.2

 The benefi ts from 

achieving this magnitude of energy effi ciency nationally 

can be estimated to be more than $100 billion in lower 

energy bills in 2025 than would otherwise occur, over 

$500 billion in net savings, and substantial reductions in 

greenhouse gas emissions. 

Importantly, the energy effi ciency resource’s role in 

meeting load and load growth may vary across the 

country due to regional differences in growth patterns, 

costs of energy, and other factors. Furthermore, the 

long-term goal is not a statement about the need for 

new power supply additions in the future, as new plants 

may be a critical component of the desired modernization of the energy supply and delivery system. However, 

the greater the energy effi ciency savings, the greater 

the likelihood that effi ciency gains can help replace 

older, less effi cient power supply options, resulting in 

substantial environmental benefi ts. 

Ten Implementation Goals 

Over two decades of program experience support the 

implementation of a number of policies to enhance 

the likelihood that the long-term goal will be achieved. 

Energy effi ciency needs to be valued similarly to supply 

options. Utilities and investors need to be fi nancially 

interested in saving energy. State activity is key in this 

transformation of natural gas and electricity supply and 

delivery, including updating and enforcing codes and 

standards to ensure that savings are captured as new 

buildings and products enter the system. Customers 

must also have the proper incentives to make investments in cost-effective energy effi ciency. With such 

policies in place, cost-effective energy effi ciency can be 

a key component of the modernization of the energy 

supply and delivery system and help to transform how 

customers receive and value energy services. 

These policies are included in the following ten implementation goals. These goals provide a framework for 

implementing the recommendations of the Action Plan 

(see Figure ES-1) by outlining the key steps state decisionmakers should consider to help achieve the 2025 Vision. 

The time line for achieving these implementation goals 

is by 2015 to 2020, so that the necessary policy foundation is in place to help ensure success of the 2025 Vision. 

The Vision goals are not numbered to show priorities. 

Accomplishing all goals is necessary to be capturing all 

cost-effective energy effi ciency by 2025. 

Goal One: Establishing Cost-Effective Energy 

Efficiency as a High-Priority Resource 

Utilities3 and applicable agencies are encouraged to: 

• 	 Create a process, such as a state or regional collaborative, to explore the energy effi ciency potential in 

the state and commit to its full development. 

• 	 Regularly identify cost-effective achievable energy 

effi ciency potential in conjunction with ratemaking 

bodies. 

• 	 Set energy savings goals or targets consistent with 

the cost-effective potential. 

• 	 Integrate energy effi ciency into energy resource plans 

at the utility, state, and regional levels, and include 

provisions for regular updates. 

Goal Two: Developing Processes to Align 

Utility and Other Program Administrator 

Incentives Such That Efficiency and Supply 

Resources Are on a Level Playing Field 

ES-2	 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Applicable agencies are encouraged to: 

• 	 Explore establishing revenue mechanisms to promote 

utility and other program administrator indifference 

to supplying energy savings, as compared to energy 

generation options. 

• 	 Consider how to remove utility and other program 

administrator disincentives to energy effi ciency, such 

as by removing the utility throughput disincentive 

and exploring other ratemaking ideas. 

• 	 Ensure timely cost recovery in place for parties that 

administer energy effi ciency programs. 

Goal Three: Establishing Cost-Effectiveness Tests 

Applicable agencies along with key stakeholders are 

encouraged to: 

• 	 Establish a process to examine how to defi ne costeffective energy effi ciency practices that capture the 

long-term resource value of energy effi ciency. 

• 	 Incorporate cost-effectiveness tests into ratemaking 

procedures going forward. 

Goal Four: Establishing Evaluation, Measurement, and Verifi cation Mechanisms 

Ratemaking bodies are encouraged to: 

• 	 Work with stakeholders to adopt effective, transparent practices for the evaluation, measurement, and 

verifi cation (EM&V) of energy effi ciency savings. 

Program administrators are encouraged to: 

• 	 Conduct EM&V consistent with these practices. 

Goal Five: Establishing Effective Energy Effi ­

ciency Delivery Mechanisms 

Applicable agencies are encouraged to: 

• 	 Clearly establish who will administer energy effi ­

ciency programs. 

• 	 Review programs, funding, customer coverage, and 

goals for effi ciency programs; ensure proper administration and cost recovery of programs, as well as 

ensuring that goals are met. 

• 	 Establish goals and funding on a multi-year basis to 

be measured by evaluation of programs established. 

• 	 Create strong public education programs for energy 

effi ciency. 

• 	 Ensure that the program administrator shares best 

practice information regionally and nationally. 

Goal Six: Developing State Policies to Ensure 

Robust Energy Effi ciency Practices 

Applicable agencies are encouraged to: 

• 	 Have a mechanism to review and update building 

codes. 

• 	 Establish enforcement and monitoring mechanisms 

of energy codes. 

• 	 Adopt and implement state-level appliance standards 

for those appliances not addressed by the federal 

government. 

• 	 Develop and implement lead-by-example energy 

effi ciency programs at the state and local levels. 

Goal Seven: Aligning Customer Pricing and 

Incentives to Encourage Investment in Energy 

Effi ciency 

Utilities and ratemaking bodies are encouraged to: 

• 	 Examine, propose, and modify rates considering 

impact on customer incentives to pursue energy 

effi ciency. 

• 	 Create mechanisms to reduce customer disincentives 

for energy effi ciency (e.g., fi nancing mechanisms). 

Goal Eight: Establishing State of the Art Billing Systems 

Utilities are encouraged to: 

• 	 Work with customers to develop methods of supplying consistent energy use and cost information 

across states, service territories, and the nation. 

National Action Plan for Energy Effi ciency	 ES-3
Goal Nine: Implementing State of the Art 

Efficiency Information Sharing and Delivery 

Systems 

Utilities and other program administrators are encouraged to: 

• 	 In conjunction with their regulatory bodies, explore 

the development and implementation of state of the 

art energy delivery information, including smart grid 

infrastructures, data analysis, two-way communication programs, etc. 

• 	 Explore methods of integrating advanced technologies 

to help curb demand peaks and monitor effi ciency 

upgrades to prevent equipment degradation, etc. 

• 	 Coordinate demand response and energy effi ciency 

programs to maximize value to customers. 

• 	 Support development of an energy effi ciency services 

and program delivery channel (e.g., quality trained 

technicians), with specifi c attention to residential 

programs. 

Goal Ten: Implementing Advanced Technologies 

Applicable agencies and utilities are encouraged to: 

• 	 Review policies to ensure that barriers to advanced 

technologies, such as combined heat and power 

(CHP), are removed; ensure inclusion into the 

broader resource plans. 

• 	 Work collectively to review advanced technologies 

and determine rapid integration timelines. 

Measuring Progress 

Measurement of the progress toward full implementation of these ten goals by 2015 to 2020 is an important part of the Vision. Progress will be measured and 

reported on every few years. As of December 31, 2007, 

based on information collected from across the country 

(see Table ES-1), there is a strong basis of experience 

with these energy effi ciency policies upon which to 

draw and to expand. For example, more than a dozen 

states have: 

• 	 Established a policy to recognize energy effi ciency as 

a high-priority resource. 

• 	 Identifi ed the cost-effective, achievable potential for 

energy effi ciency over the long term, and established 

energy savings goals or targets consistent with this 

potential. 

• 	 Established cost-effectiveness tests for energy 

effi ciency consistent with the long-term benefi ts of 

energy effi ciency. 

• 	 Established energy effi ciency programs for their various types of customers. 

There is also more progress to make. For example, 

several states have partially implemented the following 

policy steps to advance energy effi ciency: 

• 	 Integrated energy effi ciency savings goals or 

expected energy savings targets into state energy 

resource plans, with provisions for regular updates. 

• 	 Provided for stable (multi-year) funding for energy 

effi ciency programs, consistent with energy effi ciency 

goals. 

These policies go hand in hand with signifi cant investment in energy effi ciency, as well as capturing the 

energy savings and environmental benefi ts from these 

programs. As of 2008, the most recent national benefi ts 

data show that: 

• 	 Cumulative electricity savings total 63 billion kilowatt-hours (kWh) (about 2 percent of retail sales) as 

of 2006, including incremental electricity savings of 

over 8 billion kWh in 2006 alone. These cumulative 

savings have avoided the need for 16 gigawatts of 

new capacity, equivalent to 32 new 500-megawatt 

power plants.4 

• 	 Cumulative natural gas savings total 135 million 

therms (0.1 percent of retail sales) as of 2006.5 

• 	 Greenhouse gas emissions are being reduced by 

nearly 50 million metric tons annually, equivalent to 

emissions from 9 million vehicles per year.6 

ES-4	 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
 

Table ES-1. Progress in Meeting Implementation Goals 

Implementation Goal and Key Steps 

States Having Adopted Policy 

Step as of December 31, 2007 

Electricity Services Natural Gas Services 

Completely Partially Completely Partially 

Goal One: Establishing Cost-Effective Energy Efficiency as a High-Priority Resource 

1 Process in place, such as a state and/or regional collaborative, 

to pursue energy effi ciency as a high-priority resource. 14 0 14 0 

2 Policy established to recognize energy effi ciency as highpriority resource. 21 22 8 8 

3 Potential identifi ed for cost-effective, achievable energy effi ­

ciency over the long term. 25 1 13 0 

4 Energy effi ciency savings goals or expected energy savings 

targets established consistent with cost-effective potential. 15 3 5 2 

5 Energy efficiency savings goals and targets integrated into state 

energy resource plan, with provisions for regular updates. 0 16 0 1 

6 Energy effi ciency savings goals and targets integrated into a 

regional energy resource plan.** TBD TBD TBD TBD 

Goal Two: Developing Processes to Align Utility and Other Program Administrator Incentives 

Such That Efficiency and Supply Resources Are on a Level Playing Field 

7 Utility and other program administrator disincentives are removed. 17 8 18 5 

8 Utility and other program administrator incentives for energy 

efficiency savings reviewed and established as necessary. 10 5 5 2 

9 Timely cost recovery in place.** TBD TBD TBD TBD 

Goal Three: Establishing Cost-Effectiveness Tests 

10 Cost-effectiveness tests adopted which refl ect the long-term 

resource value of energy effi ciency. 29 2 9 0 

Goal Four: Establishing Evaluation, Measurement, and Verifi cation Mechanisms 

11 Robust, transparent EM&V procedures established. 14 6 5 2 

Goal Five: Establishing Effective Energy Efficiency Delivery Mechanisms 

12 Administrator(s) for energy efficiency programs clearly established. 24 2 13 1 

13 Stable (multi-year) and suffi cient funding in place consistent 

with energy effi ciency goals. 4 9 2 4 

14 Programs established to deliver energy efficiency to key customer classes and meet energy efficiency goals and targets. 24 2 7 0 

15 Strong public education programs on energy efficiency in place. 18 5 13 6 

16 

Energy effi ciency program administrator engaged in 

developing and sharing program best practices at the 

regional and/or national level. 

30 0 18 0 

National Action Plan for Energy Effi ciency ES-5
Table ES-1. Progress in Meeting Implementation Goals (continued) 

Implementation Goal and Key Steps 

States Having Adopted Policy 

Step as of December 31, 2007 

Electricity Services Natural Gas Services 

Completely Partially Completely Partially 

Goal Six: Developing State Policies to Ensure Robust Energy Effi ciency Practices 

17 State policies require routine review and updating of building codes. 28 13 28 13 

18 Building codes effectively enforced.** TBD TBD TBD TBD 

19 State appliance standards in place. 11 0 11 0 

20 Strong state and local government lead-by example programs in place. 13 24 13 24 

Goal Seven: Aligning Customer Pricing and Incentives to Encourage Investment in Energy 

Effi ciency 

21 Rates examined and modifi ed considering impact on customer incentives to pursue energy effi ciency. 7 5 2 0 

22 Mechanisms in place to reduce consumer disincentives for 

energy effi ciency (e.g., including fi nancing mechanisms). 4 1 0 0 

Goal Eight: Establishing State of the Art Billing Systems 

23 Consistent information to customers on energy use, costs of 

energy use, and options for reducing costs.** TBD TBD TBD TBD 

Goal Nine: Implementing State of the Art Efficiency Information Sharing and Delivery Systems 

24 

Investments in advanced metering, smart grid infrastructure, 

data analysis, and two-way communication to enhance 

energy effi ciency. 

5 29 *** *** 

25 

Coordinated energy effi ciency and demand response 

programs established by customer class to target energy 

effi ciency for enhanced value to customers.** 

TBD TBD *** *** 

26 Residential programs established to use trained and certifi ed 

professionals as part of energy efficiency program delivery. 9 0 9 0 

Goal Ten: Implementing Advanced Technologies 

27 Policies in place to remove barriers to combined heat and power. 11 24 *** *** 

28 Timelines developed for the integration of advanced technologies.** TBD TBD TBD TBD 

* The Vision goals are not numbered to show priorities. See Appendix D for additional information on how these numbers have been determined.
 

** See Appendix D for discussion of why progress on this policy step is not currently measured.
 

*** Steps 24, 25, and 27 do not apply to natural gas.
 

TBD = To be determined
 

ES-6 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Table ES-2. Current Benefits from and Funding for State- and Utility-Administered 

Energy Effi ciency Programs* 

Annual 

Benefi ts and 

Funding 

Energy Savings 

Avoided CO2 

Emissions 

(million tons) 

Effi ciency Funding 

Energy Use 

(kWh or 

therms) 

Peak 

Capacity 

(GW) 

2006

 Spending 

($ billion) 

2007 

Budgets 

($ billion) 

Electricity 

Incremental 8 billion 1.3 5.8 $1.60 (0.5% of 

utility revenues) 

$1.88 

Cumulative 

63 billion 

(2% of retail 

sales) 

16.0 46.1 

Natural Gas 

Incremental N/A — N/A $0.29 (0.3% of 

utility revenues) 

$0.28 

Cumulative 

135 million 

(0.1% of retail 

sales) 

— 0.8 

Sources: ACEEE (Eldridge et al., 2008), CEE (Nevius et al., 2008), eGRID2007 Version 1.0 (EPA, 2008a), EIA energy sales and savings data (EIA, 2007, 

2008a, 2008b, 2008c), and American Gas Association statistics (AGA, 2008). 

*For information on how these numbers were derived, see Chapter 2 of the full Vision for 2025 report. 

N/A = Not available 

• 	 Approximately $2 billion (approximately 0.5 percent 

of utility revenues) is being invested annually in stateand utility-administered energy effi ciency programs.7 

• 	 State energy savings goals and utility energy savings 

targets are in place to encourage cumulative savings 

exceeding 200 billion kWh in the year 2025, in addition to current energy savings.8 

Additional details on the estimates for current investments and benefi ts are provided in Table ES-2. Improving the available data will be an ongoing effort as the 

Action Plan continues to measure progress toward all 

cost-effective energy effi ciency. 

The Energy System in 2025 


An energy system in 2025 that would evolve with the 

suite of energy effi ciency policies in place as outlined 

above and that captures all cost-effective energy effi ­

ciency will be different from the one we have today. 

Some of the key differences based on the effects that 

some of these policy changes are having in parts of the 

country, as well as expectations of some of the advantages that new technology and system modernization 

can bring, are highlighted below from the perspectives 

of the energy customer and society. 

• 	 Customers across the residential, commercial, and 

industrial sectors would have ready, uniform access 

to comprehensive energy effi ciency services across 

the country. These services would bring a range of 

effi ciency improvements to homes, buildings, and 

National Action Plan for Energy Effi ciency	 ES-7
Table ES-3. Changes to Watch in Evolving Technology, Policy, and Program 

Practices for Energy Effi ciency 

Policy Area Changes to Watch 

Evaluation, measurement, and 

verifi cation 

• Development of national standards 

• Requirements for independent verifi cation 

• Growing role for smart grid technologies in EM&V 

• Requirements for state and regional carbon programs 

Demand response, advanced 

metering, and smart grids 

• New technologies, such as advanced meters and smart appliances/ 

controls 

• Data collection networks and data analysis to enhance energy effi ciency 

• New customer interfaces 

• Increased interoperability 

Regional resource planning • Regional value of energy effi ciency identifi ed 

Building energy effi ciency expertise/workforce • Development and use of energy effi ciency curriculum for various segments of the workforce 

• Development and broad use of training and certifi cation programs 

Integration of R&D, building 

codes, appliance standards, and 

market transformation efforts 

• Regional and national coordination across these efforts 

Sources: PJM, 2007; CEC and CPUC, 2005; Business Roundtable, 2007; Elliott et al., 2007; Roseman and Hochstetter, 2007; Schiller Consulting, 2007; 

Western Governors’ Association, 2006. 

facilities and reduce customers’ bills below what they 

would have been without these programs. Customers would also have clear information on the cost of 

energy and increased awareness of their total energy 

use. In addition, new effi cient appliances and other 

equipment will help to control the peak demand 

of utility systems and give large customers greater 

fl exibility in how they manage and control their own 

operations to reduce energy use, reduce costs, and 

increase their own competitive positions. New homes 

and buildings would meet up-to-date energy codes. 

• 	 Society would benefi t from signifi cantly modernized 

energy supply, transmission, and distribution systems 

and, with increased investment in cost-effective 

energy effi ciency, would benefi t from lower overall 

cost of energy supply, increased fuel diversity, and 

lower emissions of air pollutants and greenhouse 

gases. The low-income populations would benefi t, in 

particular, from the lower energy bills resulting from 

a commitment to deliver energy effi ciency to these 

customer classes. Society may also see economic 

benefi ts from the greater employment necessary 

to build an industry capable of delivering energy 

effi ciency services at this broad scale, from a robust 

business in energy effi ciency products and services, 

and from using more capital locally. 

There are a number of challenges to achieving this Vision, 

including the necessary evolution of technology, policy, 

and program practices. Table ES-3 highlights some of 

these evolving areas, including evaluation approaches 

for effi ciency resources, customer involvement through 

demand response programs and smart grid technology, 

regional resource planning, workforce building, and integration across energy effi ciency efforts. 

ES-8	 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Related State, Regional, and 

National Policies 

Other energy and environmental policy decisions at the 

state, regional, and national levels can affect energy 

effi ciency. Ideally, these policies will be designed and 

implemented in a manner that helps remove barriers to 

energy effi ciency and helps capture energy effi ciency 

resources for a lower-cost energy system than otherwise 

would be necessary. Integrating energy effi ciency considerations into related policy areas, as appropriate, will 

be critical to achieving this Vision. Such related policy 

areas are those designed to: 

• 	 Limit emissions of greenhouse gases. 

• 	 Encourage the use of clean, effi cient distributed 

generation. 

• 	 Promote clean energy supply, such as renewable energy. 

• 	 Promote load reductions at critical peak times 

through demand response. 

• 	 Modernize and maintain the nation’s electric transmission and distribution system, including “smart 

grid” and advanced meter infrastructure. 

• 	 Maintain a suffi cient reserve margin for reliable electricity supply. 

Next Steps 


This Vision is offered as a framework to assist change 

in energy effi ciency and related policies and programs 

at the state level across the country, toward the goal of 

achieving all cost-effective energy effi ciency in 2025. 

It presents a snapshot of where the country is as of 

December 31, 2007 based on the collection and organization of available information on the existing policy 

and program options. The decision of whether to adopt 

a policy or program and particular design details at the 

state level are, of course, to be determined through 

state processes that address state goals, objectives, and 

circumstances. The Action Plan Leadership Group and 

other public and private sources provide a wealth of 

tools and assistance to parties taking action to advance 

the Vision, as summarized in Table ES-4. 

The Vision will be updated as new information becomes 

available and improved as information changes. Information on measuring progress at the state level will be 

updated on a regular basis at the Action Plan Web site, 

www.epa.gov/eeactionplan. People are encouraged to 

provide additional information and their comments for 

how to refi ne this Vision to the Action Plan Leadership 

Group. Please send feedback to the Action Plan sponsors via Larry Mansueti, U.S. Department of Energy 

(lawrence.mansueti@hq.doe.gov, 202-586-2588) and 

Stacy Angel, U.S. Environmental Protection Agency 

(angel.stacy@epa.gov, 202-343-9606). 

National Action Plan for Energy Effi ciency	 ES-9
Table ES-4. National Action Plan for Energy Efficiency Tools by Implementation Goals 

Type of Tool or Resource 

Goal Introduced in 

Action Plan 

Report 

Detailed 

Guide/ 

Material 

Detailed Action Plan Tools and Resources 

Goal One: Establishing CostEffective Energy Effi ciency as a 

High-Priority Resource X X 

• Guide to Resource Planning with Energy 

Effi ciency 

• Guide for Conducting Energy Effi ciency 

Potential Studies 

• Communications Kit 

Goal Two: Developing Processes 

to Align Utility and Other Program 

Administrator Incentives Such That 

Effi ciency and Supply Resources 

Are on a Level Playing Field 

X X 

• Aligning Utility Incentives with Investment in 

Energy Effi ciency Paper 

Goal Three: Establishing CostEffectiveness Tests 

X X 

• Understanding Cost-Effectiveness of Energy 

Efficiency Programs Paper 

• Guide to Resource Planning with Energy 

Effi ciency 

• Guide for Conducting Energy Effi ciency 

Potential Studies 

Goal Four: Establishing Evaluation, 

Measurement, and Verifi cation 

Mechanisms 

X X 

• Model Energy Effi ciency Program Impact 

Evaluation Guide 

Goal Five: Establishing Effective 

Energy Effi ciency Delivery 

Mechanisms 

X 

• Program Design and Implementation Best 

Practices Guidance (under development) 

Goal Six: Developing State Policies 

to Ensure Robust Energy Effi ciency 

Practices X 

• Building Codes for Energy Efficiency Fact Sheet 

• Efficiency Program Interactions with Codes 

Paper (under development) 

• State and Local Lead-by-Example Guide 

(under development) 

Goal Seven: Aligning Customer 

Pricing and Incentives to Encourage Investment in Energy Effi ciency X 

• Executive Briefi ngs on Customer Incentives 

Through Rate Design (under development) 

Goal Eight: Establishing State of 

the Art Billing Systems X 

• Utility Best Practices Guidance for Providing 

Business Customers with Energy Use and 

Cost Data 

Goal Nine: Implementing State 

of the Art Effi ciency Information 

Sharing and Delivery Systems 

• Paper on Coordination of Demand Response 

and Energy Effi ciency (under development) 

Goal Ten: Implementing Advanced 

Technologies 

• Most Energy-Efficient Economy Scoping Paper 

(under development) 

ES-10 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Notes 


1. “Energy effi ciency” refers to using less energy to provide the 

same or an improved level of service to the energy consumer in 

an economically effi cient way. As used here, the term includes 

using less energy at any time, including at times of peak demand 

through demand response and peak shaving efforts. 

2. 	 The energy effi ciency savings as a percent of load growth and 

savings depend on forecast assumptions used and vary by region. 

This magnitude of savings is consistent with the potential savings 

documented in a number of recent studies. See Appendix B for 

references for these studies. 

3. 	 “Utility” refers to any organization that delivers electric and gas 

utility services to end-users, including investor-owned, cooperatively owned, and publicly owned utilities. 

4. 	 Annual incremental electricity savings are from the American 

Council for an Energy-Effi cient Economy (ACEEE) (Eldridge et 

al., 2008) and cumulative electricity savings are from Energy 

Information Administration (EIA) Form-861 data (EIA, 2008b), 

both for year 2006. Values refl ect reported data for administered 

energy effi ciency programs only and do not include low-income 

programs nor other load management efforts such as demand 

response. Cumulative savings do not capture those programs 

administered by state entities. Peak electricity savings are from 

EIA Form-861 data for year 2006 and refl ect reported data for 

utility-administered energy effi ciency programs only and do not 

include load management programs. 

5. 	 Natural gas savings are from the Consortium for Energy Effi ciency 

(CEE) for their members only (Nevius et al., 2008) and include 

estimated savings from measures installed in 2006, as well as 

those installed as early as 1992 that were still generating savings 

as of 2006. 

6. 	 The 2005 non-baseload output carbon dioxide (CO2

) emission 

rates from eGRID2007 Version 1.0 were applied to 2006 electricity savings. Emissions savings from natural gas savings assume 

0.00585 tons CO2

 per therm. Vehicle conversion assumes that 

5.46 tons CO2

 are emitted per vehicle annually. 

7. 	 Annual spending value considers both ACEEE’s 2006 actual 

electricity effi ciency program spending (Eldridge et al., 2008) and 

CEE’s 2007 budget estimates for residential, commercial, and 

industrial electricity and gas effi ciency programs (Nevius et al., 

2008). CEE budget estimates capture both CEE members and 

nonmember administrators of energy effi ciency program respondents. Program funding for low-income, load management, and 

other programs is not included in these estimates. Actual 2006 

spending for electricity effi ciency programs comes from ACEEE, 

leveraging EIA and ACEEE’s independent information collection 

efforts. 

8. 	 Expected energy to be saved through energy savings goals 

assumes energy savings post-2007 from 14 states. More details 

on this methodology are included in Appendix E. No states were 

found to have comparable, enforceable savings goals for natural 

gas. 

National Action Plan for Energy Effi ciency	 ES-11

1: Introduction
 

Improving the energy efficiency of homes, businesses, schools, governments, and industries—which 

consume more than 70 percent of the natural gas and electricity used in the United States—is one of the 

most constructive, cost-effective ways to address the challenges of high energy prices, energy security 

and independence, environmental concerns, and global climate change in the near term (Figure 1-1). 

Mining this efficiency could help us meet on the order of 50 percent or more of the expected growth in 

U.S. consumption of electricity and natural gas in the coming decades, yielding many billions of dollars in 

saved energy bills and avoiding significant emissions of greenhouse gases and other air pollutants.1 

Scope of the Vision for 2025
 

Recognizing the large opportunity for energy effi ciency, 

more than 60 leading organizations representing diverse 

stakeholders from across the country joined together to 

develop the National Action Plan for Energy Effi ciency. The 

Action Plan identifies many of the key barriers contributing to underinvestment in energy efficiency, outlines fi ve 

key policy recommendations for achieving all cost-effective 

energy efficiency, focusing largely on state-level energy 

efficiency policies, and provides a number of options to 

consider in pursing these recommendations (Figure 1-2). 

As of November 2008, more than 120 organizations have 

endorsed the Action Plan recommendations and/or made 

public commitments to implement them in their areas 

(Table 1-1). 

As a next step, the Action Plan co-chairs challenged the 

Leadership Group to define a vision for the Action Plan 

which would detail the steps necessary to fully implement 

the recommendations of the Action Plan. The Vision presented in this document is the response to that challenge. 

This Vision includes establishment of a long-term aspirational goal and the establishment of ten key implementation goals. It also describes what 2025 could look 

like if the goal were achieved and provides a means for 

measuring progress over time. Further, the Vision reviews 

the potential interactions between the largely statelevel energy effi ciency policies of the Action Plan and 

other existing state, regional, or federal policies such as 

clean energy portfolio standards2

 and greenhouse gas 

mitigation policies and provides recommendations to 

ensure that these polices are designed to leverage energy 

effi ciency as a cost-effective resource. 

The 2025 Vision is offered as a general framework for 

pursuing a variety of policy options at the state level for 

advancing cost-effective energy effi ciency as would be 

consistent with regional, state, and local circumstances, 

maintaining a fundamental principle of the Action Plan 

that one size does not fi t all. This general framework 

leaves the policy details and the decision of whether to 

implement a policy to be determined through appropriate processes. It is a framework that can be updated 

and improved over time. 

This document does not address the best practices for 

developing and implementing cost-effective energy effi ­

ciency program and portfolios, as these issues have been 

addressed elsewhere through the Action Plan.3

 However, 

it does offer the implementation goals and policy steps 

to assist in the establishment of the necessary policy 

framework to support the growth of best practice energy 

effi ciency programs across the country. These types of 

programs are of interest for the following reasons: 

• 	Large energy savings available in existing 

homes, buildings, and industrial facilities. The 

homes, commercial buildings, and industrial facilities already in place offer many opportunities for 

saving energy cost-effectively. Options exist through 

improved building envelopes and tighter ducts in 

addition to more effi cient lighting, appliances, heating and cooling, and a variety of industrial process 

National Action Plan for Energy Effi ciency 1-1
 

Figure 1-1. Reasons for the National Action Plan for Energy Effi ciency 

• Energy efficiency is a large, untapped, lowcost energy resource. Energy effi ciency on the order 

needed to meet 50 percent or more of expected growth 

for natural gas and electricity is available at a cost of less 

than half of new generation, in many parts of the country. Overall savings from pursing this effi ciency would be 

more than $100 billion annually by 2025.* 

• Energy efficiency improves energy security. 

Energy effi ciency reduces the level of U.S. per capita 

energy consumption, thus decreasing the vulnerability 

of the economy and individual consumers to disruptions 

from natural disasters or terrorist acts. Energy effi ciency 

also improves system reliability and reduces the potential 

for disruptions from brownouts or blackouts. 

• Energy efficiency mitigates risk of future 

carbon policy. Pending regulation of greenhouse 

gas emissions presents signifi cant uncertainty as to the 

generation investments that will contribute to a low-cost 

energy system for the future. Importantly, energy effi ­

ciency is low-cost now, will stay low-cost, and presents 

an important resource option for the future, particularly 

while waiting for the uncertainty to be resolved. Effi ­

ciency also makes sizable reductions in carbon emissions 

more attainable. Without moderating demand growth, 

investment in energy effi ciency and other clean energy 

sources will be necessary. 

• Higher prices do not remove the barriers that 

impede investment in cost-effective energy 

effi ciency. Price signals alone (based on time of use 

rates) are insuffi cient to realize the full energy effi ciency 

potential, in part due to large and persistent market barriers, including the principal-agent problem** transaction costs, and lack of information as well as customer 

requirements for very short paybacks.*** Specifi c 

policies are necessary to target and overcome these 

well-defi ned barriers for energy effi ciency. Many policies 

play a role in overcoming the barriers, such as up-todate appliance standards, building codes, and organized 

energy effi ciency programs. 

• Carbon policies will not necessarily remove 

the barriers to energy effi ciency. A variety of 

approaches for limiting emissions of greenhouse gases 

are at various stages of discussion and development 

across the country at the state, regional, and national 

levels. Most approaches (e.g., cap and trade and carbon 

taxes) provide a carbon price signal but do not directly 

address the unique barriers to energy effi ciency. Therefore, provisions to address these barriers to effi ciency 

within carbon policies as well as complementary policies 

to promote the delivery of cost-effective energy effi ­

ciency will be essential to mine the low-cost greenhouse 

gas reductions from energy effi ciency. 

• Utilities are well-positioned to deliver energy 

efficiency programs, but regulatory changes 

may be necessary so that they are as profi table when saving energy as in generating 

or delivering energy. Utilities typically have strong 

relationships with their customers, will accept longer 

paybacks for investments than customers will, and have 

access to lower-cost capital. However, the regulatory 

structure has historically rewarded utilities for building 

supply infrastructure (e.g., power plants, transmission 

lines, pipelines) and selling energy, while discouraging 

energy effi ciency, even when energy-saving measures 

cost less than constructing new infrastructure. Some 

states have modifi ed utility regulatory policies to eliminate effi ciency disincentives. Alternative mechanisms 

such as third-party administration of energy effi ciency 

programs have also been used. 

• Parties embrace energy efficiency for different reasons and solutions can be designed to 

address all these motivations. For all of these reasons, advancing energy effi ciency programs and policies 

requires attention and commitment by a critical mass of 

leading parties, including regulators, utilities, state governments, consumer advocates, environmental groups, 

and large end-users. 

* See Chapter 2 for more information on these benefi ts.
 

** The principal-agent problem exists when the entity who makes energy effi ciency investments, such as a landlord, is different from the entity who 


pays the energy bills, such as a tenant. 

*** See Appendix B for references to studies that discuss the existing barriers to energy effi ciency in more detail. 

Note: This set of reasons is based on experience of the Action Plan Leadership Group and input received through Regional Implementation Meetings and 

the Sector Collaborative for Energy Effi ciency. 

1-2 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
 

Figure 1-2. National Action Plan for Energy Efficiency Recommendations and Options 

Recognize energy efficiency as a high-priority 

energy resource. 

Options to consider: 

• Establishing policies to establish energy effi ciency as 

a priority resource. 

• Integrating energy effi ciency into utility, state, and 

regional resource planning activities. 

• Quantifying and establishing the value of energy effi ­

ciency, considering energy savings, capacity savings, 

and environmental benefi ts, as appropriate. 

Make a strong, long-term commitment to 

implement cost-effective energy efficiency as a 

resource. 

Options to consider: 

• Establishing appropriate cost-effectiveness tests for 

a portfolio of programs to refl ect the long-term 

benefi ts of energy effi ciency. 

• Establishing the potential for long-term, costeffective energy-effi ciency savings by customer class 

through proven programs, innovative initiatives, and 

cutting-edge technologies. 

• Establishing funding requirements for delivering 

long-term, cost-effective energy effi ciency. 

• Developing long-term energy saving goals as part of 

energy planning processes. 

• Developing robust measurement and verifi cation procedures. 

• Designating which organization(s) is responsible for 

administering the energy-effi ciency programs. 

• Providing for frequent updates to energy resource plans 

to accommodate new information and technology. 

Broadly communicate the benefits of and 

opportunities for energy effi ciency. 

Options to consider: 

• Establishing and educating stakeholders on the 

business case for energy effi ciency at the state, utility, and other appropriate level, addressing relevant 

customer, utility, and societal perspectives. 

• Communicating the role of energy effi ciency in 

lowering customer energy bills and system costs 

and risks over time. 

• Communicating the role of building codes, appliance standards, and tax and other incentives. 

Provide sufficient, timely, and stable program funding to deliver energy effi ciency 

where cost-effective. 

Options to consider: 

• Deciding on and committing to a consistent way 

for program administrators to recover energy 

effi ciency costs in a timely manner. 

• Establishing funding mechanisms for energy effi ­

ciency from among the available options, such 

as revenue requirement or resource procurement 

funding, system benefi ts charges, rate-basing, 

shared-savings, and incentive mechanisms. 

• Establishing funding for multi-year periods. 

Modify policies to align utility incentives 

with the delivery of cost-effective energy 

efficiency and modify ratemaking practices 

to promote energy effi ciency investments. 

Options to consider: 

• Addressing the typical utility throughput incentive and removing other regulatory and management disincentives to energy effi ciency. 

• Providing utility incentives for the successful 

management of energy effi ciency programs. 

• Including the impact on adoption of energy 

effi ciency as one of the goals of retail rate 

design, recognizing that it must be balanced 

with other objectives. 

• Eliminating rate designs that discourage energy 

effi ciency by not increasing costs as customers 

consume more electricity or natural gas. 

• Adopting rate designs that encourage energy 

effi ciency by considering the unique characteristics of each customer class and including 

partnering tariffs with other mechanisms that 

encourage energy effi ciency, such as benefi tsharing programs and on-bill fi nancing. 

National Action Plan for Energy Effi ciency 1-3
Table 1-1. Commitments to Implement the Recommendations of the Action Plan 

(as of November 2008)* 

Type of Commitment Number of Organizations 

Establishing and supporting state-level collaborative processes to explore how 

best to increase investment in energy effi ciency 16 

Additional money to be spent on energy effi ciency programs 9 

Start new and/or expand existing energy effi ciency programs 19 

Exploring policies and practices to align utility incentives with the delivery of 

cost-effective energy effi ciency 5 

Advancing efforts to include energy effi ciency on a consistent and comparable 

basis with supply-side resources in future resource planning activities 24 

Meeting aggressive energy savings goals 38 

Proactively educating stakeholders on the benefi ts of and opportunities for 

energy effi ciency 72 

* See the Action Plan Web site (www.epa.gov/eeactionplan) for a full listing of energy effi ciency commitments. 

improvements. The buildings in existence today will 

remain the vast majority of the nation’s buildings and 

facilities for years to come, and there are a variety of 

proven, cost-effective energy effi ciency programs that 

can be employed to pursue these opportunities. 

• 	Importance of new construction. Efforts to 

encourage higher energy effi ciency in building codes 

and building beyond code complement energy effi ­

ciency programs focused on existing buildings and 

facilities. In any given year, more energy savings can 

be harvested from existing buildings in total than 

from new construction, but new buildings determine 

the long-term energy footprint of the built infrastructure. Thus it is critical to identify and realize the 

cost-effective effi ciency potential in new buildings. 

There are a number of approaches for improving the 

requirements, training, and verifi cation of new construction efforts. 

• 	Opportunities across customer classes. Energy 

effi ciency measures are available and can be pursued 

in all customer classes. Conventional regulatory cost 

allocation practices can be applied to energy effi ­

ciency to ensure that all classes pay their fair share 

of program costs. The barriers to energy effi ciency in 

each of the customer classes are distinct; policies and 

programs can account for these differences. Energy 

effi ciency programs may be especially important and 

yet challenging for low-income energy consumers, 

because these customers can face diffi cult economic 

choices that lead to ineffi cient energy use. Because 

of the larger economic barriers in place and because 

of the distinct social value associated with energy 

effi ciency for low-income households, programs 

targeting these households may not be expected by 

some regulatory authorities to meet the same costeffectiveness thresholds as other programs. 

• 	Evolving technology will offer new opportunities. Technology performance and costs are evolving rapidly, offering new opportunities to meet 

load growth. These new technologies need to be 

effectively integrated into energy effi ciency program 

design as well as the enabling policies for energy 

effi ciency programs to capture these new opportunities. This document incorporates several policies for 

making progress with the integration of these technologies. It is expected that this is one of the areas 

that will be updated in the future. 

1-4 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
This Document
 

The 2025 Vision is presented in the following sections: 

• 	Chapter 2: The Goals of the 2025 Vision. This 

chapter outlines the long-term goal of this Vision and 

ten implementation goals for pursing the steps necessary to meet the long-term goal. It also outlines how 

to measure progress toward the 2025 goal in terms 

of state progress toward adopting the various policy 

steps, as well as national benefi ts. 

• 	Chapter 3: The Vision for 2025. This chapter 

describes what the energy system could look like in 

2025 if the Vision is achieved and the Action Plan 

recommendations are fully implemented from a variety of perspectives. It also outlines a number of evolving policies and technologies and the role they may 

play in achieving the Vision. As the Vision is updated 

in the future, attention will be paid to how best to 

address these changes. 

• 	Chapter 4: Related State, Regional, and National 

Policies. This chapter identifi es important interrelationships between other federal, regional, and state 

energy and environmental policies, and provides a 

number of recommendations and considerations for 

integrating these efforts so that they act in tandem to 

promote investment in cost-effective energy effi ­

ciency and do not impede each other. 

• 	Chapter 5: Tools and Assistance to Help Realize 

the Vision. This chapter reviews the progress that is 

expected through the fi rst goal period of this national 

Vision and shows the tools and resources that are 

available to help states make progress toward these 

goals. 

Development of the Action Plan 

Vision for 2025 

The National Action Plan for Energy Effi ciency was developed by a diverse group of leading organizations from 

across the country, including public and private utilities, 

regulators, other state decision-makers, policy advocates, 

and large end-users. It also engaged many trade associations (see Appendix A). The Action Plan process is chaired 

by James Rogers, CEO and President of Duke Energy and 

Marsha Smith, President of the National Association of 

Regulatory Utility Commissioners (NARUC) and Commissioner, Idaho Public Utilities Commission.4

 It is facilitated 

by the U.S. Environmental Protection Agency (EPA) and 

U.S. Department of Energy (DOE). 

The Vision document was developed under the guidance of a work group of Leadership Group participants. 

The work group was composed of 17 organizations, 

representing stakeholder perspectives including investorowned utilities, regulatory commissions, other state 

decision-makers, cooperatives, municipal utilities, and 

energy and environmental policy advocates. Prior to the 

original November 2007 release, four conference calls 

were held for the work group to discuss the initial outline 

and approach, goals and tracking, complementary policies, and the draft report. Two additional conference calls 

were offered to the entire Leadership Group in order to 

solicit further comments and provide additional information. The Vision work group members are: 

Glenn Cannon Waverly Light and Power 

Jorge Carrasco Seattle City Light 

Sheryl Carter Natural Resources Defense 

Council 

Ollie Frazier Duke Energy 

Anne George Connecticut Department of 

Public Utility Control 

Dian Grueneich California Public Utilities Commission 

Jeff Genzer National Association of State 

Energy Offi cials 

Sandra Hochstetter Arkansas Electric Cooperative 

Corporation (formerly with 

the Arkansas Public Service 

Commission) 

National Action Plan for Energy Effi ciency 1-5
Chris James Formerly with the Connecticut the state level. This information was subsequently sent 

Department of Environmental to state organizations for comment. Members of the 

Protection Vision measuring progress work group are: 

Mary Kenkel Alliance One (consultant to 

Duke Energy) 

Michelle New National Association of State 

Energy Offi cials 

Bill Prindle American Council for an 

Energy-Effi cient Economy 

Roland Risser Pacifi c Gas and Electric 

Richard Robinson National Rural Electric Cooperative Association 

Gene Rodrigues Southern California Edison 

James Rogers Duke Energy 

Marsha Smith NARUC and Idaho Public 

Utilities Commission 

Jim Spiers Tri-State Generation and Transmission Association, Inc. 

Janet Streff Minnesota Department of 

Commerce 

Mike Winka New Jersey Board of Public 

Utilities 

During 2008, another work group was formed to help 

refi ne the initial strawman approach to measuring progress under the Vision. Four conference calls were held 

with the new work group to address the topics of refi ning initial approaches, developing new approaches for 

those policy steps that were not addressed in the Vision, 

and developing new approaches for quantifying the 

national benefi ts. The Leadership Group reviewed and 

provided additional comments on the new approaches 

to measuring progress that were prepared by the work 

group. To integrate the new revised approaches, the 

state-level information compiled for the initial release 

of the Vision was updated and used to develop the 

baseline (December 31, 2007) for measuring progress at 

Cheryl Buley New York State Public Service 

Commission 

Kateri Callahan Alliance to Save Energy 

Daniel Francis American Electric Power 

Phil Giudice Massachusetts Division of 

Energy Resources 

Dian Grueneich California Public Utilities Commission 

Leonard Haynes Southern Company 

Joe Hoagland Tennessee Valley Authority 

Sandy Hochstetter Arkansas Electric Cooperative 

Corporation 

Mark Hoffman Consortium for Energy Effi ­

ciency 

Eric Hsieh National Electrical Manufacturers Association 

Mary Kenkel Alliance One (consultant to 

Duke Energy) 

Richard Robinson National Rural Electric Cooperative Association 

Andrew Spahn National Council on Electricity 

Policy 

Jim Spiers Tri-State Generation and Transmission Association 

Richard Steeves Connecticut Consumer Counsel 

Rick Tempchin Edison Electric Institute 

Mark Tye Santee Cooper 

Rick Voytas Ameren Services 

1-6 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
The Intent of the 2025 Vision
 

This Vision document is offered as a framework to 

guide changes in energy effi ciency policies and programs toward the goals of achieving all cost-effective 

energy effi ciency. The decision of whether to adopt a 

policy or program and particular design details at the 

state level are, of course, to be determined through 

state processes that address state goals, objectives, and 

circumstances. 

Notes
 

1. 	 Meeting 50 percent of energy consumption is similar to meeting 

20 percent of electricity consumption and 10 percent of natural 

gas consumption, subject to forecast assumptions used. These 

savings are consistent with the potential savings documented in a 

number of recent studies. See Appendix B for references for these 

studies. Across the country, the potential for cost-effective energy 

effi ciency varies, subject to a number of area-specifi c factors, 

such as load growth, energy effi ciency approaches pursued, local 

economics, and existing infrastructure. 

2. 	 Clean energy portfolio standards direct utilities and other retail 

electric providers to supply a specifi ed amount of energy from 

clean resources, such as energy effi ciency and renewable energy. 

3. 	 See “Energy Effi ciency Program Best Practices,” Chapter 6 in the 

National Action Plan for Energy Effi ciency Report. 

4. 	 Diane Munns of the Iowa Utilities Board, while President of 

NARUC, served as the initial co-chair of the Action Plan. 

National Action Plan for Energy Effi ciency 1-7

The Goals of the 2: 2025 Vision 

The 2025 Vision for the National Action Plan for Energy Efficiency includes establishment of a long-term 

aspirational goal and ten key implementation goals. These goals, and a set of steps to take to achieve 

them, are offered as a framework for implementing the Action Plan recommendations and to guide 

state-level policies toward energy efficiency where it is cost-effective. In addition, the framework helps 

in measuring progress toward the 2025 Vision. This Vision will be updated and improved over time as 

new information becomes available. 

The Long-Term Goal: Achieve All 


Cost-Effective Energy Effi ciency 


Building upon the fi ve recommendations of the National 

Action Plan, the long-term aspirational goal of this 

effort is to achieve all cost-effective energy effi ciency by 

the year 2025. Achieving this goal will yield important 

environmental and economic benefi ts while integrating 

energy effi ciency into the modernization of the nation’s 

energy system. 

Based on available studies, the cost-effective energy 

effi ciency resource available may be able to meet 50 

percent or more of the expected load growth nationally. 

This is similar to meeting 20 percent of electricity consumption and 10 percent of natural gas consumption 

given current forecasts for future energy demand.1

 Benefi ts from achieving this magnitude of energy effi ciency 

can be estimated to be: 

• 	 More than $100 billion in lower energy bills in 2025 

than would otherwise occur. 

• 	 Annual energy savings exceeding 900 billion kWh. 

• 	 Equivalent to over 50 GW of power, or more than 

100 500-MW power plants over 20 years. 

• 	 Over $500 billion of total net savings.2 

• 	 Reductions in greenhouse gas emissions on the order 

of 500 million metric tons of CO2

 annually, equivalent to 90 million cars off the road. 

These benefi ts refl ect the full implementation of best 

practice energy effi ciency programs currently being 

delivered in some parts of this country, as well as the 

broad adoption of up-to-date building codes and other 

energy effi ciency policies. 

Importantly, the role that the energy effi ciency resource 

may play in meeting load or load growth (or in replacing existing generation options) varies across the 

country due to regional differences in growth patterns, costs of energy, existing infrastructure, and other 

factors. In high growth areas, as an example, perhaps 

less of the expected growth could be addressed and in 

slower growing areas, perhaps substantially more. In 

addition, cost-effectiveness needs to be determined at 

a state and local level. Furthermore, the long-term goal 

is not meant to imply that new power plant additions 

are not needed in the future, as new plants may be a 

critical component of the desired modernization of the 

energy supply and delivery system. Indeed, the greater 

the energy effi ciency savings, the greater the likelihood 

that effi ciency gains can help replace older, less effi cient 

power supply options, resulting in substantial environmental benefi ts. 

Ten Implementation Goals 

For the long-term goal to be achieved, a number of 

policies need to be in place. Energy effi ciency needs to 

be valued similarly to supply options. Utilities and investors need to be fi nancially interested in saving energy. 

States must be active in this transformation of energy 


National Action Plan for Energy Effi ciency 2-1
supply and delivery, including updating and enforcing 

codes and standards to ensure that savings are captured 

as new buildings and products enter the system. Customers must also have the proper incentives to invest 

in cost-effective energy effi ciency. With such policies 

in place, cost-effective energy effi ciency can be a key 

component of the modernization of the energy supply 

and delivery system and help transform how customers 

receive and value energy services. 

These policies are included in the following ten implementation goals. These goals provide a framework for 

implementing the recommendations of the Action Plan 

by outlining the key steps state decision-makers should 

consider to help achieve the 2025 Vision. The timeline 

for achieving these implementation goals is by 2015 to 

2020, so that the necessary policy foundation is in place 

to help ensure success of the 2025 Vision. With most 

of these policy and program steps, there is signifi cant 

experience across the country and substantial materials 

and lessons learned that can be drawn upon. However, 

there are some policies and technologies that are emerging and may evolve in a variety of ways; such policies are 

explored further in Chapter 3, and future updates to the 

Vision will highlight progress in these areas. 

The ten implementation goals and key steps to achieve 

them are outlined below. The Vision goals are not numbered to show priorities. Accomplishing all goals is necessary to be capturing all cost-effective energy effi ciency 

by 2025. A description of how progress in implementing these goals can be measured follows. 

Goal One: Establishing Cost-Effective Energy 

Efficiency as a High-Priority Resource 

Utilities3 and applicable agencies are encouraged to: 

• 	 Create a process, such as a state or regional collaborative, to explore the energy effi ciency potential in 

the state and commit to its full development. 

• 	 Regularly identify cost-effective achievable energy 

effi ciency potential in conjunction with ratemaking 

bodies. 

• 	 Set energy savings goals or targets consistent with 

the cost-effective potential. 

• 	 Integrate energy effi ciency into energy resource plans 

at the utility, state, and regional levels, and include 

provisions for regular updates. 

• 	 Quantify energy savings from building codes and 

incorporate into resource planning. 

Goal Two: Developing Processes to Align 

Utility and Other Program Administrator 

Incentives Such That Efficiency and Supply 

Resources Are on a Level Playing Field 

Applicable agencies are encouraged to: 

• 	 Explore establishing revenue mechanisms to promote 

utility and other program administrator indifference 

to supplying energy savings, as compared to energy 

generation options. 

• 	 Consider how to remove utility and other program 

administrator disincentives to energy effi ciency, such 

as by removing the utility throughput disincentive 

and exploring other ratemaking ideas. 

• 	 Ensure timely cost recovery in place for parties that 

administer energy effi ciency programs. 

Goal Three: Establishing Cost-Effectiveness 

Tests 

Applicable agencies along with key stakeholders are 

encouraged to: 

• 	 Establish a process to examine how to defi ne costeffective energy effi ciency practices that capture the 

long-term resource value of energy effi ciency. 

• 	 Incorporate cost-effectiveness tests into ratemaking 

procedures going forward. 

Goal Four: Establishing Evaluation, Measurement, and Verifi cation Mechanisms 

Ratemaking bodies are encouraged to: 

• 	 Work with stakeholders to adopt effective, transparent practices for the evaluation, measurement, and 

verifi cation (EM&V) of energy effi ciency savings. 

2-2 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
 Program administrators are encouraged to: • 	 Create mechanisms to reduce customer disincentives 

for energy effi ciency (e.g., fi nancing mechanisms). • 	 Conduct EM&V consistent with these practices. 

Goal Eight: Establishing State of the Art Bill- Goal Five: Establishing Effective Energy Effi ­ ing Systems ciency Delivery Mechanisms 

Utilities are encouraged to: Applicable agencies are encouraged to: 

• 	 Clearly establish who will administer energy effi ­

ciency programs. 

• 	 Review programs, funding, customer coverage, and 

goals for effi ciency programs; ensure proper administration and cost recovery of programs, as well as 

ensuring that goals are met. 

• 	 Establish goals and funding on a multi-year basis to 

be measured by evaluation of programs established. 

• 	 Create strong public education programs for energy 

effi ciency. 

• 	 Ensure that the program administrator shares best 

practice information regionally and nationally. 

Goal Six: Developing State Policies to Ensure 

Robust Energy Effi ciency Practices 

Applicable agencies are encouraged to: 

• 	 Have a mechanism to review and update building 

codes. 

• 	 Establish enforcement and monitoring mechanisms 

of energy codes. 

• 	 Adopt and implement state-level appliance standards 

for those appliances not addressed by the federal 

government. 

• 	 Develop and implement lead-by-example energy 

effi ciency programs at the state and local levels. 

Goal Seven: Aligning Customer Pricing and 

Incentives to Encourage Investment in Energy 

Effi ciency 

Utilities and ratemaking bodies are encouraged to: 

• 	 Examine, propose, and modify rates considering 

impact on customer incentives to pursue energy 

effi ciency. 

• 	 Work with customers to develop methods of supplying consistent energy use and cost information 

across states, service territories, and the nation.4 

Goal Nine: Implementing State of the Art 

Efficiency Information Sharing and Delivery 

Systems 

Utilities and other program administrators are encouraged to: 

• 	 In conjunction with their regulatory bodies, explore 

the development and implementation of state of the 

art energy delivery information, including smart grid 

infrastructures, data analysis, two-way communication programs, etc. 

• 	 Explore methods of integrating advanced technologies 

to help curb demand peaks and monitor effi ciency 

upgrades to prevent equipment degradation, etc. 

• 	 Coordinate demand response and energy effi ciency 

programs to maximize value to customers. 

• 	 Support development of an energy effi ciency services 

and program delivery channel (e.g., quality trained 

technicians), with specifi c attention to residential 

programs. 

Goal Ten: Implementing Advanced Technologies 

Applicable agencies and utilities are encouraged to: 

• 	 Review policies to ensure that barriers to advanced 

technologies, such as combined heat and power 

(CHP), are removed; ensure inclusion into the 

broader resource plans. 

• 	 Work collectively to review advanced technologies 

and determine rapid integration timelines. 

National Action Plan for Energy Effi ciency 2-3
The Vision for Cooperatively and 

Publicly Owned Utilities 

The Vision goals are broad, and are intended to 

encourage all types of utilities to take the applicable 

steps to capture the benefi ts of greater energy 

effi ciency. While many of the resource planning 

and energy effi ciency program issues relate to all 

utility types, cooperatively and publicly owned 

utilities operate under different ratemaking and 

utility fi nancing considerations than investor-owned 

utilities. Some of the key steps under Goal Two, 

relating to utility fi nancial incentives, may not apply 

to cooperatively and publicly owned utilities. These 

utilities typically operate on an annual budget basis 

rather than a cost-recovery basis, are regulated by 

their board members, and are typically not subject 

to state utility regulation. 

The key fi nancial indicator for a cooperatively or 

publicly owned utility is its debt coverage ratio (which 

is critical to maintaining a high bond rating and low 

cost capital) or its minimum cash position (for utilities 

with no debt). Typically, such a utility can adjust rates 

whenever the debt coverage ratio or minimum cash 

position falls below a threshold. An investor-owned 

utility may need to wait until a formal rate case 

proceeding to adjust rates for decreases in sales from 

energy effi ciency; the effect of energy effi ciency on 

cooperatively and publicly owned utilities’ fi nancial 

health, however, is relatively modest. The publicly 

and cooperatively owned utilities will experience 

similar fi nancial health problems as investor-owned 

utilities if they do not adjust rates. 

Measuring Progress 

Measurement of the progress in achieving the ten 

implementation goals by 2015 to 2020 is an important part of the Vision. Progress will be measured and 

reported on every few years, with an emphasis on measurable outcomes. Progress will be measured in terms of 

both state policy and program steps, as well as national 

benefi ts. 

State Measuring Progress 

Tables 2-1 and 2-2 summarize (for electricity and natural 

gas services, respectively) the implementation of key 

policy and program steps in support of the Vision across 

the 50 states and the District of Columbia. The tables 

show the number of states that have implemented key 

policy and program steps, in whole or in part, as of 

December 31, 2007. The information they present was 

collected through a series of interactions with state-level 

organizations. More detail on this approach is provided 

below and in Appendix D. The summary of progress 

shows there is a strong base of experience with many 

energy effi ciency policies and programs upon which to 

draw and expand. 

Goal One: Establishing Cost-Effective Energy 

Efficiency as a High-Priority Resource 

Progress can be measured as utilities and applicable 

agencies work to achieve the following: 

1. 	 Process in place, such as a state and/or 

regional collaborative, to pursue energy effi ­

ciency as a high-priority resource. A valuable 

early step is to establish a collaborative process 

involving all appropriate stakeholders. State and 

or regional collaboratives, representing a diverse 

group of stakeholders such as utilities, state policy 

makers, consumers, businesses, and energy service 

companies, help raise awareness of the value of 

greater investment in energy effi ciency, review 

the available options, reach agreement among 

stakeholders on feasible energy savings goals 

and appropriate funding, and resolve important 

program and administrative issues. The resulting 

broader understanding of energy effi ciency leads 

to generally smoother processes in energy effi ­

ciency programming, both as new programs are 

being started and as programs are expanded and 

improved over time. A collaborative for energy effi ­

ciency can be a stand-alone process or one that is 

part of a state energy planning, state clean energy 

planning, or climate change planning process. 

It can have a variety of charters and anticipated 

longevity. Examples include California, Kentucky, 

and Minnesota at the state level and the Western 

2-4 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Table 2-1. Progress in Meeting Implementation Goals: Approach for 

Electricity Services* 

Implementation Goal and Key Steps: Electricity Services 

States Having 

Adopted Policy Step as 

of December 31, 2007 

Completely Partially 

Goal One: Establishing Cost-Effective Energy Efficiency as a High-Priority Resource 

1 Process in place, such as a state and/or regional collaborative, to pursue 

energy effi ciency as a high-priority resource. 14 0 

2 Policy established to recognize energy effi ciency as high-priority resource. 21 22 

3 Potential identifi ed for cost-effective, achievable energy effi ciency over 

the long term. 25 1 

4 Energy effi ciency savings goals or expected energy savings targets established consistent with cost-effective potential. 15 3 

5 Energy effi ciency savings goals and targets integrated into state energy 

resource plan, with provisions for regular updates. 0 16 

6 Energy effi ciency savings goals and targets integrated into a regional 

energy resource plan.** TBD TBD 

Goal Two: Developing Processes to Align Utility and Other Program Administrator Incentives 

Such That Efficiency and Supply Resources Are on a Level Playing Field 

7 Utility and other program administrator disincentives are removed. 17 8 

8 Utility and other program administrator incentives for energy effi ciency 

savings reviewed and established as necessary. 10 5 

9 Timely cost recovery in place.** TBD TBD 

Goal Three: Establishing Cost-Effectiveness Tests 

10 Cost-effectiveness tests adopted which refl ect the long-term resource 

value of energy effi ciency. 29 2 

Goal Four: Establishing Evaluation, Measurement, and Verifi cation Mechanisms 

11 Robust, transparent EM&V procedures established. 14 6 

Goal Five: Establishing Effective Energy Efficiency Delivery Mechanisms 

12 Administrator(s) for energy effi ciency programs clearly established. 24 2 

13 Stable (multi-year) and suffi cient funding in place consistent with energy 

effi ciency goals. 4 9 

14 Programs established to deliver energy effi ciency to key customer classes 

and meet energy effi ciency goals and targets. 24 2 

15 Strong public education programs on energy effi ciency in place. 18 5 

16 Energy effi ciency program administrator engaged in developing and 

sharing program best practices at the regional and/or national level. 30 0 

National Action Plan for Energy Effi ciency 2-5
Table 2-1. Progress in Meeting Implementation Goals: Approach for 

Electricity Services* 

Implementation Goal and Key Steps: Electricity Services 

States Having 

Adopted Policy Step as 

of December 31, 2007 

Completely Partially 

Goal Six: Developing State Policies to Ensure Robust Energy Effi ciency Practices 

17 State policies require routine review and updating of building codes. 28 13 

18 Building codes effectively enforced.** TBD TBD 

19 State appliance standards in place. 11 0 

20 Strong state and local government lead-by example programs in place. 13 24 

Goal Seven: Aligning Customer Pricing and Incentives to Encourage Investment in Energy 

Effi ciency 

21 Rates examined and modifi ed considering impact on customer incentives 

to pursue energy effi ciency. 7 5 

22 Mechanisms in place to reduce consumer disincentives for energy effi ­

ciency (e.g., including fi nancing mechanisms). 4 1 

Goal Eight: Establishing State of the Art Billing Systems 

23 Consistent information to customers on energy use, costs of energy use, 

and options for reducing costs.** TBD TBD 

Goal Nine: Implementing State of the Art Efficiency Information Sharing and Delivery Systems 

24 Investments in advanced metering, smart grid infrastructure, data analysis, and two-way communication to enhance energy effi ciency. 5 29 

25 

Coordinated energy effi ciency and demand response programs established by customer class to target energy effi ciency for enhanced value to 

customers.** 

TBD TBD 

26 Residential programs established to use trained and certifi ed professionals as part of energy effi ciency program delivery. 9 0 

Goal Ten: Implementing Advanced Technologies 

27 Policies in place to remove barriers to combined heat and power. 11 24 

28 Timelines developed for the integration of advanced technologies.** TBD TBD 

* The Vision goals are not numbered to show priorities. See Appendix D for additional information on how these numbers have been determined. 

** See Appendix D for discussion of why progress on this policy step is not currently measured. 

TBD = To be determined 

(continued) 

2-6 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Table 2-2. Progress in Meeting Implementation Goals: Approach for 

Natural Gas Services* 

Implementation Goal and Key Steps: Natural Gas Services 

States Having 

Adopted Policy Step as 

of December 31, 2007 

Completely Partially 

Goal One: Establishing Cost-Effective Energy Efficiency as a High-Priority Resource 

1 Process in place, such as a state and/or regional collaborative, to pursue 

energy effi ciency as a high-priority resource. 14 0 

2 Policy established to recognize energy effi ciency as high-priority resource. 8 8 

3 Potential identifi ed for cost-effective, achievable energy effi ciency over 

the long term. 13 0 

4 Energy effi ciency savings goals or expected energy savings targets established consistent with cost-effective potential. 5 2 

5 Energy effi ciency savings goals and targets integrated into state energy 

resource plan, with provisions for regular updates. 0 1 

6 Energy effi ciency savings goals and targets integrated into a regional 

energy resource plan.** TBD TBD 

Goal Two: Developing Processes to Align Utility and Other Program Administrator Incentives 

Such That Efficiency and Supply Resources Are on a Level Playing Field 

7 Utility and other program administrator disincentives are removed. 18 5 

8 Utility and other program administrator incentives for energy effi ciency 

savings reviewed and established as necessary. 5 2 

9 Timely cost recovery in place.** TBD TBD 

Goal Three: Establishing Cost-Effectiveness Tests 

10 Cost-effectiveness tests adopted which refl ect the long-term resource 

value of energy effi ciency. 9 0 

Goal Four: Establishing Evaluation, Measurement, and Verifi cation Mechanisms 

11 Robust, transparent EM&V procedures established. 5 2 

Goal Five: Establishing Effective Energy Efficiency Delivery Mechanisms 

12 Administrator(s) for energy effi ciency programs clearly established. 13 1 

13 Stable (multi-year) and suffi cient funding in place consistent with energy 

effi ciency goals. 2 4 

14 Programs established to deliver energy effi ciency to key customer classes 

and meet energy effi ciency goals and targets. 7 0 

15 Strong public education programs on energy effi ciency in place. 13 6 

16 Energy effi ciency program administrator engaged in developing and 

sharing program best practices at the regional and/or national level. 18 0 

National Action Plan for Energy Effi ciency 2-7
Table 2-2. Progress in Meeting Implementation Goals: Approach for 

Natural Gas Services* 

Implementation Goal and Key Steps: Natural Gas Services 

States Having 

Adopted Policy Step as 

of December 31, 2007 

Completely Partially 

Goal Six: Developing State Policies to Ensure Robust Energy Effi ciency Practices 

17 State policies require routine review and updating of building codes. 28 13 

18 Building codes effectively enforced.** TBD TBD 

19 State appliance standards in place. 11 0 

20 Strong state and local government lead-by example programs in place. 13 24 

Goal Seven: Aligning Customer Pricing and Incentives to Encourage Investment in Energy 

Effi ciency 

21 Rates examined and modifi ed considering impact on customer incentives 

to pursue energy effi ciency. 2 0 

22 Mechanisms in place to reduce consumer disincentives for energy effi ­

ciency (e.g., including fi nancing mechanisms). 0 0 

Goal Eight: Establishing State of the Art Billing Systems 

23 Consistent information to customers on energy use, costs of energy use, 

and options for reducing costs.** TBD TBD 

Goal Nine: Implementing State of the Art Efficiency Information Sharing and Delivery Systems 

26 Residential programs established to use trained and certifi ed professionals 

as part of energy effi ciency program delivery. 9 0 

Goal Ten: Implementing Advanced Technologies 

28 Timelines developed for the integration of advanced technologies.** TBD TBD 

(continued) 

* The Vision goals are not numbered to show priorities. See Appendix D for additional information on how these numbers have been determined.
 

** See Appendix D for discussion of why progress on this policy step is not currently measured.
 

TBD = To be determined
 

2-8 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Governors’ Association’s Clean and Diversifi ed 

Energy Advisory Committee at the regional level 

(National Action Plan for Energy Effi ciency, 2006).5,6 

Five best practices for successful collaboratives 

have been identifi ed: (1) neutral facilitation of 

meetings, (2) clear objectives for the group overall 

and for each meeting, (3) explicit defi nition of the 

stakeholder group’s role in resource or program 

planning (usually advisory only), (4) explicit and fair 

processes for providing input, and (5) a timeline for 

the stakeholder process (National Action Plan for 

Energy Effi ciency, 2006). 

2. 	 Policy established to recognize energy effi ­

ciency as a high-priority resource. Another 

important early step is recognizing energy effi ­

ciency as a high-priority resource in energy planning. Energy effi ciency needs to be considered 

on the same basis as conventional supply options 

when it is less expensive than the conventional 

options. This may be an important change in 

perspective for entities that are used to focusing 

on conventional supply options. It is important to 

review and address any limitations in state statutes 

to ensure that energy effi ciency can be appropriately considered. Further, explicitly establishing 

energy effi ciency as the fi rst or among the fi rst 

resources requires the relevant entities to bring 

energy effi ciency to the top of their planning process. A number of states have recognized energy 

effi ciency as a high-priority resource due to its 

broad benefi ts through a variety of policy directives. For example, the California Energy Action 

Plan II has established energy effi ciency as the fi rst 

resource to be developed in the state (CEC and 

CPUC, 2005). In addition, legislation passed in 

Illinois in 2007, and gubernatorial action in New 

York, Connecticut and Massachusetts, initiate 

actions that will recognize energy effi ciency as a 

high-priority resource. 

3. 	 Potential identified for cost-effective, achievable energy efficiency over the long term. A 

key step in developing energy effi ciency programs 

is analyzing the potential for all cost-effective 

energy effi ciency in the specifi c jurisdiction over 

the long term across all customer classes. Because 

energy usage patterns, technologies, and costs 

change over time, it is important to have an up-todate study that incorporates the latest information 

on energy costs, energy forecasts, and available 

energy effi ciency options. Such a study helps 

parties have realistic expectations of what can be 

achieved, informs energy effi ciency savings goals 

and funding targets, and guides program design. 

4. 	 Energy efficiency savings goals or expected 

energy savings targets established consistent 

with cost-effective potential. Energy effi ciency 

savings goals or targets are used in states to help 

set a high-level policy direction and to establish 

energy savings targets that can be integrated into 

resource planning efforts. These savings targets 

should refl ect an understanding of the true costeffective potential for increased effectiveness. 

5. 	 Energy efficiency savings goals and targets 

incorporated into state energy resource plan, 

with provisions for regular updates. The integration of energy effi ciency resources, including 

energy savings from building codes, and an energy 

savings target into formalized resource planning 

processes at the state and utility levels can help 

establish the rationale for energy effi ciency funding levels and for properly valuing the benefi ts. 

Resource plans account for the long-term benefi ts 

from energy savings, capacity savings, potential 

reductions of air pollutants and greenhouse gases, 

and improved reliability, as well as other benefi ts. 

Provisions for routine review and updating of these 

resource plans are important. 

6. 	 Energy efficiency savings goals and targets 

integrated into a regional energy resource 

plan. The integration of energy effi ciency resources 

and an energy savings target into a resource planning process at the regional level may also have 

value by developing a view of the resources necessary and the role that energy effi ciency can play 

across a broader area. There may be opportunities 

to explore the role that energy effi ciency can play 

National Action Plan for Energy Effi ciency 2-9
in regional efforts as entities respond to the federal 

policies promulgated by the Federal Energy Regulatory Commission (FERC) and DOE which promote 

the use of regional electric system planning efforts. 

Goal Two: Developing Processes to Align 

Utility and Other Program Administrator 

Incentives Such That Efficiency and Supply 

Resources Are on a Level Playing Field 

Progress can be measured as the following steps are 

achieved: 

7. 	 Utility and other program administrator disincentives are removed. Under conventional 

ratemaking, utilities have typically been compensated based on the volume of energy delivered to 

customers; this creates a disincentive for investing in 

effi ciency, which reduces throughput. Removing this 

disincentive so that utilities are indifferent to selling 

energy or saving energy is an important step. 

8. 	 Utility and other program administrator incentives for energy efficiency savings reviewed 

and established as necessary. Removing the 

utility throughput incentive (see #7) is important but 

does not fully align utility incentives with increased 

cost-effective energy effi ciency. Some states are providing incentives for achievement of specifi c energy 

effi ciency savings to place effi ciency on an equal 

playing fi eld with supply options. Reviewing existing 

utility incentive structures and determining whether 

or not to provide incentives linked to performance, 

or to ensure that appropriate shareholder incentives 

are in place, similar to those associated with generation options, is an important step. 

9. 	 Timely cost recovery in place. A basic requirement for the elimination of disincentives to energy 

effi ciency programs is establishing a fair, expeditious process for recovery of costs. Failure to 

recover program costs directly negatively affects a 

utility’s cash fl ow, net operating income, and earnings. Further, lack of timely cost recovery increases 

regulatory risk and requires the utility to incur carrying costs. 

Goal Three: Establishing Cost-Effectiveness 

Tests 

Progress can be measured as the appropriate state 

agencies accomplish the following step: 

10. 	Cost-effectiveness tests adopted which refl ect 

the long-term resource value of energy effi ­

ciency. Energy effi ciency can provide long-term 

benefi ts to an energy system when it costs less 

to reduce energy consumption than it does to 

generate additional energy, particularly when the 

energy savings are accumulated over time and the 

costs of new generation and transmission can be 

avoided. Cost-effectiveness tests that refl ect these 

long-term benefi ts help stakeholders set goals 

and develop programs to put them on a path to 

capturing all cost-effective energy effi ciency.7

 As an 

example, the total resource cost test compares the 

total costs and benefi ts of an effi ciency program, 

including benefi ts to the utility and all participants 

and avoided costs of energy supply. Cost-effectiveness tests may also require establishing values for 

saved energy (kWh or therms) and capacity (kW or 

decatherms/day). These values may account for a 

variety of costs and risks, including the costs of all 

supply options (including losses); the risks associated with permitting, construction, and operation; 

the costs and risks of fuel supplies; and the costs 

and risks of environmental regulations. They may 

also include the social value of low-income programs, if applicable. 

Goal Four: Establishing Evaluation, Measurement, and Verifi cation Mechanisms 

Progress can be measured as the following step is 

achieved: 

11. 	Robust, transparent EM&V procedures established. Robust and transparent EM&V serves a 

number of objectives including: (1) measuring 

and documenting the impacts of a program and 

how well it met its goals with respect to being a 

reliable energy resource, (2) helping to identify 

ways to improve current and future programs, 

2-10 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
(3) determining the cost-effectiveness of a program, and (4) when public or ratepayer funds are 

involved, documenting compliance with regulatory 

requirements. Establishing robust and transparent 

EM&V approaches will, over time, also contribute 

to greater consistency in EM&V across utilities, 

programs and states; which will reduce the burden 

on individual program developers to establish such 

protocols, and build consistent understanding of 

proven effi ciency programs that can participate 

in regional and national markets. Most existing 

effi ciency programs have some form of EM&V, 

but improving those programs and standardizing 

them over time are a key part of the Vision. EM&V 

of energy effi ciency may also become a feature 

of grid modernization programs where realtime monitoring and evaluation of energy use is 

achieved. 

Goal Five: Establishing Effective Energy Effi ­

ciency Delivery Mechanisms 

Progress can be measured as the following steps are 

achieved: 

12. 	 Administrator(s) for energy effi ciency programs clearly established. There are a variety of 

successful program models for delivering energy 

effi ciency. They use different types of administrators, including utilities, state agencies (e.g., 

NYSERDA), third parties (e.g., Effi ciency Vermont), 

or a combination of administrator types. Clearly 

establishing parties to administer energy effi ciency 

programs is an important step. 

13. 	 Stable (multi-year) and suffi cient funding 

in place consistent with energy effi ciency 

goals. It is critical to establish adequate, multi-year 

funding to support the energy effi ciency program 

measures, consistent with the established energy 

savings target and cost-effective potential. Multiyear funding more easily allows longer-term planning and development of programs, particularly 

ones that have some upfront costs to access the 

larger energy savings in a customer group. Many 

funding mechanisms have been applied for different program structures. Funding might be through 

a systems benefi t charge, another rate mechanism, 

or rate-based recovery mechanisms such as revenue requirement funding or resource procurement 

funding. 

14. 	 Programs established to deliver energy effi ­

ciency to key customer classes and meet 

energy efficiency goals and targets.8 There are 

signifi cant cost-effective energy savings to tap into 

through well-designed energy effi ciency programs 

across all customer classes, for both new and existing buildings. There are many successful effi ciency 

programs, providing reliable results that serve as 

best practice models for new programs. A robust 

effi ciency program portfolio that provides broad 

access to energy savings is the linchpin of a successful energy effi ciency effort. 

15. 	 Strong public education programs on energy 

efficiency in place. Public education is an important element of encouraging customers to take 

advantage of available energy effi ciency programs 

as well as to take greater control of their energy 

costs through energy saving measures they can 

undertake themselves. Many states and utilities 

have public outreach efforts, but greater integration with energy effi ciency programs, both at 

the state and regional level, and leveraging the 

national ENERGY STAR® platform can increase 

overall effectiveness. 

16. 	 Energy efficiency program administrator(s) 

engaged in developing and sharing program 

best practices at the regional and/or national 

level. Sharing of best practices in program design, 

implementation, and evaluation, as well as keeping 

current on emerging technologies and practices, 

is an important part of maintaining well-designed, 

cost-effective programs and potentially enhancing the consistency of energy effi ciency programs 

offered across a state and region. Coordination 

at the national level—such as that offered by 

National Action Plan for Energy Effi ciency 2-11
the Consortium for Energy Effi ciency—can be an 

important way to effectively engage with national 

organizations such as manufacturers, retailers, and 

others that are essential for effective energy effi ­

ciency programs. Coordination and sharing of best 

practice at the regional level (e.g., through NEEP, 

NEEA, SWEEP, MEEA, and SEEA) is also important 

to improve the consistency in energy effi ciency programs offered across a region and to help reduce 

program costs.9

 This coordination can be especially 

effective when utilities serve multiple states in the 

region. The Edison Electric Institute’s newly formed 

Institute for Energy Effi ciency will provide another 

forum for best practice sharing. 

Goal Six: Developing State Policies to Ensure 

Robust Energy Effi ciency Practices 

Progress can be measured as the following steps are 

achieved: 

17. 	 State policies require routine review and 

updating of building codes. New construction 

and major renovations represent cost-effective 

opportunities to incorporate energy-effi ciency measures into buildings because these improvements 

save energy throughout the life of those buildings and can be expensive to adopt later. Building 

energy codes specify a series of effi ciency measures 

including construction practices and technologies that have been shown to yield cost-effective 

savings, providing a minimum set of requirements. 

Building energy codes are typically developed at 

the national level, adopted at the state level, and 

implemented and enforced by local governments. 

Having up-to-date building codes in place is an 

important part of realizing the energy savings in 

new construction and major renovation. 

18. 	Building codes effectively enforced. Up-todate, implemented, and enforced energy codes can 

lock in cost-effective energy savings of 30 percent 

or more at the time of building construction relative to typical practices,10 lowering costs for businesses and consumers. Seeing that the necessary 

training and enforcement of building codes is in 

place is an important part of realizing the savings 

that building codes offer. 

19. 	 State appliance standards in place. State 

appliance effi ciency standards establish minimum 

energy effi ciency levels for appliances and other 

energy-consuming products (if those appliances 

have not already been addressed by federal effi ­

ciency standards). These standards typically prohibit 

the sale of less-effi cient models within a state. 

Many states have implemented appliance and 

equipment effi ciency standards for products not 

addressed by the federal government. 

20. 	 Strong state and local government lead-byexample programs in place. State and local leadby-example initiatives include a range of programs 

and policies that advance the use of clean energy 

within their own facilities, fl eets, and operations. 

In pursuing lead-by-example strategies, states can 

leverage their purchasing power, their control of 

signifi cant energy-using resources, and the high 

visibility of their public facilities to demonstrate 

clean energy technologies and approaches that 

lower their energy costs and reduce emissions. 

Strong programs involve establishing goals and the 

processes necessary to implement them and report 

on progress. Energy effi ciency program administrators can be important partners in helping governments achieve their goals (EPA, 2006). 

Goal Seven: Aligning Customer Pricing and 

Incentives to Encourage Investment in Energy 

Effi ciency 

Progress can be measured as the following steps are 

achieved: 

21. 	Rates examined and modifi ed considering 

impact on customer incentives to pursue 

energy effi ciency. Rate designs with clear and 

meaningful price signals to customers, coupled 

with increased information to customers through 

time- and usage-sensitive rates, can encourage energy effi ciency from the consumer side. 

For example, removing “declining block” rate 

structures that discourage energy effi ciency by 

2-12 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
decreasing costs as more electricity or natural gas is millions of advanced meters are now on order 

consumed may be an initial step. for installation over the next five years. Advanced 

22. 	Mechanisms in place to reduce customer disincentives for energy efficiency (e.g., including 

financing mechanisms). Electricity and natural 

gas rates can also be partnered with other mechanisms that encourage energy effi ciency, such as 

benefi t sharing programs and on-bill fi nancing. 

These mechanisms help provide the fi nancing that 

the customer may need to pursue an energy effi ­

ciency measure. 

Goal Eight: Establishing State of the Art Billing Systems 

Progress can be measured as the following step is achieved: 

23. 	Consistent information to customers on 

energy use, costs of energy use, and options 

for reducing costs. Providing customers with 

clear information on their energy use, the costs 

of energy use, and the variety of options available 

for reducing their costs is an important part of the 

Vision. Further, greater consistency in how energy 

use and cost information is provided to customers 

would assist customers with properties in more 

than one service territory. And greater ability to 

access data on their energy use for several years 

at a time, and to access electronic versions of the 

data, would assist many customers. This step has 

resulted from the Sector Collaborative for Energy 

Effi ciency of the National Action Plan (National 

Action Plan for Energy Effi ciency, 2007). 

Goal Nine: Implementing State of the Art 

Efficiency Information Sharing and Delivery 

Systems 

Progress can be measured as the following steps are 

achieved: 

24. 	 Investment in advanced metering, smart grid 

infrastructure, data analysis, and two-way communication to enhance energy effi ciency. Many 

utilities are studying, piloting, or deploying advanced 

metering as part of grid modernization, and many 

metering, combined with communication, energy 

information collection systems, and time-based rates, 

can be used to help identify and promote energy 

efficiency opportunities, in addition to enhancing 

system reliability and reducing peak demands. These 

technologies enable demand response, automated 

energy management, and better data collection for 

load analysis and program evaluation. Two-way communications between the grid and the customer and 

their energy-using devices help reap the full value 

of advanced meters and automate the operation of 

buildings and energy-using devices in ways that save 

energy and reduce peak loads. Exploration of these 

opportunities and investment as the business case 

can be made is a key step in the Vision. 

25. 	 Coordinated energy efficiency and demand 

response programs established by customer 

class to target energy efficiency for enhanced 

value to customers. Energy effi ciency programs 

aim primarily to reduce total electricity usage (kWh), 

and demand response programs aim to change customers’ usage patterns in response to price signals 

or incentives that vary over time. Demand response 

programs today are targeted primarily toward reducing peak load or total demand at times of system 

emergency when load relief is needed; in the longer 

term, demand response technologies can enable 

round-the-clock, automated customer energy management that is interactive with the grid. Customers 

participating in demand response programs may 

also reduce their energy consumption11 and invest in 

energy effi ciency improvements that save kWh and 

peak demand usage. Coordinated, complementary 

energy effi ciency and demand response measures 

will be valuable for energy customers and important 

to achieving the Vision goals. 

26. 	Residential programs established to use 

trained and certified professionals as part of 

energy efficiency program delivery. Energy 

effi ciency programs play a vital role in increasing 

the availability of qualifi ed energy professionals 

National Action Plan for Energy Effi ciency 2-13
 

for quality program delivery through training and Initial estimates for measuring progress in terms of 

certifi cation. Further, programs using certifi ed tech- these national benefi ts are summarized below. Addinicians from accredited companies can conduct a tional details on the estimates for current investments 

whole-building assessment and recommend and and benefi ts are provided in Table 2-3. 

professionally install comprehensive improvements 

that yield the best results in energy effi ciency, comfort, health and safety, and building durability. 

Goal Ten: Implementing Advanced Technologies 

Progress can be measured as the following steps are 

achieved: 

27. 	 Policies in place to remove barriers to combined heat and power.12 CHP is an effi cient 

distributed generation resource and an important 

component of an integrated energy resource plan. 

Coordinated policies (such as interconnection rules, 

reviewing CHP as part of the planning process and 

incorporating it where effective, and standby rates) 

that remove barriers to CHP are valuable toward 

achieving this integration. 

28. 	 Timelines developed for the integration of 

advanced technologies. To ensure integration 

of advanced technologies and their adaptation 

into the broader resource plans, utilities and their 

regulators are encouraged to work collectively to 

review advanced technologies and determine rapid 

integration timelines. 

National Benefi ts 

Beyond the adoption of key policies and programs at 

the state level, progress will be measured in terms of: 

• 	 Annual energy savings and greenhouse gas emissions avoided from state- and utility-administered 

energy effi ciency programs. 

• 	 Annual investment in energy effi ciency through 

state- and utility-administered energy effi ciency 

programs. 

• 	 Expected future energy savings from established 

energy savings goals across the state and utility policies and resource plans. 

• 	 Cumulative electricity savings total 63 billion kWh 

(about 2 percent of retail sales) as of 2006, including incremental electricity savings of over 8 billion kWh in 2006 alone. These cumulative savings 

have avoided the need for 16 GW of new capacity, 

equivalent to 32 new 500-MW power plants. 

• 	 Cumulative natural gas savings total 135 million 

therms (0.1 percent of retail sales) as of 2006. 

• 	 Greenhouse gas emissions are being reduced by 

nearly 50 million metric tons annually, equivalent to 

emissions from 9 million vehicles per year.13 

• 	 Approximately $2 billion (approximately 0.5 percent 

of utility revenues) is being invested annually in stateand utility-administered energy effi ciency programs. 

• 	 State energy savings goals and utility energy savings 

targets are in place to encourage cumulative savings 

exceeding 200 billion kWh in the year 2025, in addition to current energy savings.14 

These estimates have been developed by collecting 

information from a variety of available information 

sources, which introduces inconsistencies in timeframes, 

reporting categories, universe of respondents, and quality control of data. Due to data limitations, these initial 

values are likely to underestimate the full contribution 

that energy effi ciency investments are making to reduce 

energy demand as well as the full cost of investing in 

energy effi ciency. Some of the key limitations include: 

• 	 The energy savings values only capture savings from 

administered energy effi ciency programs and do 

not refl ect energy savings from other state and local 

efforts such as building energy codes, state-level 

appliance standards, and local and state lead-byexample initiatives. 

• 	 The energy savings values do not include the benefi ts 

from national efforts to promote energy effi ciency, 

2-14 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
federal appliance standards, or the autonomous rate 

of improvement in effi ciency across the economy. 

• 	 The program funding values represent program costs 

alone and not the costs that program participants 

may bear. 

Additional attention will be given to expand the breadth 

and accuracy of energy effi ciency resource information in order to improve the ability to measure progress 

toward all cost-effective energy effi ciency using these 

national performance metrics. 

Table 2-3. Current Benefits from and Funding for State- and Utility-Administered 

Energy Effi ciency Programs 

Annual 

Benefi ts and 

Funding 

Energy Savings 

Avoided CO2 

Emissions 

(million tons) 

Effi ciency Funding 

Energy Use 

(kWh or 

therms) 

Peak 

Capacity 

(GW) 

2006

 Spending 

($ billion) 

2007 

Budgets 

($ billion) 

Electricity 

Incremental 8 billion 1.3 5.8 $1.60 (0.5% of 

utility revenues) 

$1.88 

Cumulative 

63 billion 

(2% of retail 

sales) 

16.0 46.1 

Natural Gas 

Incremental N/A — N/A $0.29 (0.3% of 

utility revenues) 

$0.28 

Cumulative 

135 million 

(0.1% of retail 

sales) 

— 0.8 

N/A = Not available 

a Annual incremental electricity use savings are from ACEEE (Eldridge et al., 2008) and cumulative electricity savings are from EIA Form-861 data (EIA, 2008b), 

both for 2006. Values reflect reported data for administered energy efficiency programs only and do not include low-income programs nor other load management efforts such as demand response. Cumulative electricity use savings do not capture those programs administered by state entities. Natural gas savings 

are from the Consortium for Energy Efficiency (CEE) for their members only (Nevius et al., 2008) and include estimated savings from measures installed in 

2006, as well as from measures installed as early as 1992 that were still generating savings as of 2006. Total retail sales data are from EIA (2008a, 2008c). 

b

 Peak electricity savings are from EIA Form-861 data for 2006 (EIA, 2008b). They refl ect reported data for utility-administered energy effi ciency programs 

only and do not include load management programs. 

c

 2005 non-baseload output CO2 emission rates from eGRID2007 Version 1.0 (EPA, 2008a) were applied to incremental electricity use savings for 2006 

by state and cumulative electricity use savings for 2006 at the NERC region level. The calculation of emissions savings from cumulative natural gas savings assumes 0.00585 tons CO2

 per therm based on EPA’s Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2006 (EPA, 2008b). 

d

 Actual 2006 spending for energy effi ciency programs is from ACEEE (Eldridge et al., 2008) leveraging Form EIA-861 and ACEEE’s independent information collection efforts. Energy effi ciency program budget values are from CEE (Nevius et al., 2008) for residential, commercial, and industrial effi ciency 

programs. Budget estimates are for the 2007 program year, as reported in 2006 by CEE members and nonmember administrators of energy effi ciency 

programs. Budgets are subject to change. The program budgets reported to CEE may not exactly match actual expenditures at the end of the program 

year. Program funding for low-income, load management, and other programs is not included in these estimates. Spending values refl ect a similar 

universe of administered energy effi ciency programs, but different surveys and respondents contribute to inconsistencies. Electric utility revenues refl ect 

2006 total electric industry revenues from retail sales to residential, commercial, and industrial customers (EIA, 2007). Gas utility revenues refl ect 2006 

gas utility industry revenues from sales to residential, commercial, and industrial customers (AGA, 2008). 

National Action Plan for Energy Effi ciency 2-15
Notes 


1. 	 These savings are consistent with the potential savings documented in a number of recent studies. See Appendix B for references for these studies. Appendix C includes information on how 

these benefi ts were derived. 

2. 	 Net savings equals the savings from reduced electricity purchases 

and capital expenditures by the utility minus utility and participant costs of energy effi ciency. Value is given in net present 

value, assuming a 5 percent discount rate. 

3. 	 “Utilities” refers any organization that delivers electric and gas 

utility services to end-users, including investor-owned, cooperatively owned, and publicly owned utilities. 

4. 	 See the fi ndings of the Sector Collaborative for Energy Effi ciency 

for additional information via <www.epa.gov/eeactionplan>. 

5. 	 The Action Plan’s report has a number of examples of successful 

collaborative efforts. Examples can be found on pages 2-14, 3-6, 

3-8, 6-13, and 6-25. The report also lists several best practices to 

follow when soliciting stakeholders’ input, on page 6-32. 

6. 	 See the reports of the Western Governors’ Association’s Clean 

and Diversifi ed Energy Advisory Committee: <http://www.westgov.org/wga/initiatives/cdeac/cdeac-reports.htm>. 

7. 	 For more information on cost-effectiveness tests, see the Action 

Plan Guides on Resource Planning with Energy Effi ciency and 

Conducting Potential Studies. 

8. 	 See Chapter 6, “Energy Effi ciency Program Best Practices,” of the 

Action Plan’s report (National Action Plan for Energy Effi ciency, 

2006). 

9. 	 There are a number of regional energy effi ciency coordination 

organizations across the country. They include the Northeast 

Energy Effi ciency Partnership (NEEP), the Northwest Energy 

Effi ciency Alliance (NEEA), the Midwest Energy Effi ciency Alliance 

(MEEA), the South West Energy Effi ciency Partnership (SWEEP), 

and the new Southeast Energy Effi ciency Alliance (SEEA). 

10. Determined using a Building Codes Assistance Project calculator 

that compares each state’s current code to the 2006 International 

Energy Conservation Code (IECC) for residential and commercial 

construction. The sum of savings in all 50 states produces a 30 to 

40 percent savings range. 

11. Based on a survey of over 100 demand response programs, the 

effect of demand response programs on total energy consumption was found to range from increasing total energy use by 5 

percent to achieving total energy savings in excess of 20 percent 

(King and Delurey, 2005). 

12. The term “clean distributed generation” is used in this document 

to mean distributed generation that is cleaner than the average 

central station power plant. 

13. Vehicle conversion assumes that 5.46 tons CO2

 are emitted per 

vehicle annually. 

14. Expected energy to be saved through energy savings goals assumes 

energy savings post-2007 from 14 states. More details on this 

methodology are included in Appendix E. No states were found to 

have comparable, enforceable savings goals for natural gas. 

2-16 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
3: The Vision for 2025 


The long-term goal for the Vision for the National Action Plan for Energy Efficiency is to achieve all 

cost-effective energy efficiency by 2025. As energy efficiency policies are pursued, the energy system is 

modernized, and new technologies emerge, there will be a lower-cost, more reliable energy system with 

significant environmental benefits. The energy system that offers these benefits is likely to look very different than the one we have today. 

A Look at 2025
 

By 2025, the energy system would focus on providing 

energy services rather than energy supply, energy providers would see energy effi ciency as an important business 

area, a vibrant energy effi ciency services industry would 

be in place, there could be greater reliance on clean 

distributed generation, and the system would be modernized to facilitate appropriate price signals and digital 

communication, analysis, and system control. It would 

be very different in terms of how consumers receive and 

value energy services. Additional description of some of 

the key differences in 2025 is provided below and illustrated in Figure 3-1. This includes a discussion of some 

of the challenges and emerging technologies critical to 

meeting the long-term goal of the Vision. 

Energy Customers 

Customers across the residential, commercial, and industrial sectors will have new opportunities and experiences 

with energy effi ciency services, energy information, and 

energy system interactions. They will be offered a variety 

of innovative energy service packages to help them manage their energy use and costs better, including universal 

access to comprehensive energy effi ciency services. These 

services will routinely assess the energy effi ciency of 

homes, buildings, and industrial plants and help customers undertake low-cost energy effi ciency improvements, 

access high-quality contractors, and access fi nancing 

where necessary. Customers will also have clear information on their use and costs of energy and more options 

for lowering their energy bills by allowing building appliances and controls to help meet peak energy demands. 

For example, with advanced meters, time-of-use information about energy prices, and automated devices to control their energy usage, customers will face higher energy 

costs when energy costs more to provide but be able to 

avoid some of these costs through advances in two-way 

communication and grid-connected controls, appliances, 

and equipment. 

Customers will have lower energy bills in 2025 than 

if cost-effective energy effi ciency programs were not 

pursued. Based on technologies and practices available, today many individual homes and buildings can 

be improved by 20 percent or more, and many industrial plants can be improved by 10 percent or more.1 

These savings are being achieved through well-designed 

energy effi ciency programs and policies that deliver 

a variety of technologies and practices. Some of the 

approaches that can substantially lower the costs of 

energy in existing and new homes, buildings, and industries include: 

• 	Homes: There are a variety of proven programs delivering energy savings to many types of homes. These 

programs range from product-based incentive programs to whole-home audit and improvement programs that use trained, certifi ed home professionals. 

These programs are providing home energy savings 

of 20 percent savings or more and up to 50 percent.2,3 Improvements include greater insulation and 

air sealing, effi cient lighting and appliances, effi cient 

windows, properly sized and installed heating and 

air conditioning, low-standby home products, and 

effi cient water heating. In addition, controls such as 

programmable thermostats deliver signifi cant savings 

National Action Plan for Energy Effi ciency 3-1
• Whole-building design to achieve 

greater energy savings

*These are savings on a per facility basis, refl ecting the energy consumption savings possible to new and existing homes and buildings based on information available today; these savings could be larger in the future based on development from a range of ongoing research and development efforts. 

Figure 3-1. Achieving All Cost-Effective Energy Efficiency: Key Perspectives 

• Effi cient home envelope: insulation 

and air sealing 

• Tight ducts 

• Effi cient windows 

• Efficient, properly sized and installed 

heating and cooling equipment 

• Effi cient lighting and appliances 

• Low-standby energy use 

• Verifi cation of home energy 

effi ciency 

• Grid-connected controls and 

appliances 

• Good information on energy 

use, costs of energy, and savings 

opportunities 

• Whole-building design to 

achieve greater energy savings 

• Lower energy bills 

• Environmental benefi ts 

• Lower greenhouse gas emissions 

• Enhanced reliability through 

reduced peak demands 

• Assistance to low-income and 

elderly customers 

• Economic benefi ts from new jobs 

and growing local services industry 

• Increased fuel diversity to meet 

U.S. electric load 

• Pursue all cost-effective energy 

effi ciency resources 

• Universal effi ciency services across 

all customer classes 

• Enhanced use of clean distributed 

generation 

• Modernized grid supports greater 

data analysis, customer control, 

utility control of peak-driving 

equipment, self-healing capabilities 

• Energy-effi cient equipment 

• Low-standby energy 

• Effi cient lighting systems using 

good design, controls, daylighting, 

and effi cient technology 

• Properly sized, effi cient, and 

controlled cooling and heating 

• Commissioning and 

recommissioning 

• Routine assessment of building 

energy performance 

• Grid-connected controls and 

equipment 

• Good information on energy 

use, costs of energy, and savings 

opportunities 

• Whole-building design to achieve 

greater energy savings 

• Energy-effi cient equipment 

• Effi cient lighting systems using 

good design, controls, daylighting, 

and effi cient technology 

• Effi cient motor systems 

• Manufacturing processes tuned for 

energy effi ciency 

• Waste heat recovered and utilized 

• Good information on energy 

use, costs of energy, and savings 

opportunities 

3-2 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
when used properly. Programs are also resulting in 

the construction of new homes that use substantially 

less energy than today’s homes and go beyond local 

codes; some organizations have set goals for net zero 

energy homes by 2015 to 2020.4 

• 	Buildings: There are a variety of proven programs 

for delivering energy savings to commercial and 

institutional buildings as well—public and private 

offi ce buildings, schools, hospitals, hotels, and others. Proven energy effi ciency programs assist with 

building system improvements, training of building 

operators, commissioning and recommissioning of 

buildings, and routine assessment of building energy 

use. These programs offer savings of 20 percent or 

more at the building level.5

 They deliver technologies such as optimized, effi cient lighting systems 

employing controls and day lighting; properly sized 

and effi cient heating and cooling equipment; and 

low-standby and otherwise effi cient products and 

equipment. Additional savings can be achieved when 

constructing a new building, and some organizations 

have energy savings goals of 50 percent or more for 

newly constructed buildings.6

 Additional savings can 

be achieved from two-way information communications that let customers see and respond to the true 

costs of service for their building energy use. 

• 	Industry: There are also a variety of programs available for the industrial sector, including equipmentspecifi c programs, systems optimization assistance, 

performance contracting, fi nancial incentives, and 

low-interest fi nancing. These programs are identifying 

and achieving energy savings of 10 percent or more.7 

The efforts target high-energy-consuming equipment 

including air compressors, boilers, motors, furnaces, 

chillers, cooling towers, fans, pumps, and refrigeration for replacement, tune-up, and enhanced maintenance. Some programs also help utilize waste heat 

through combined heat and power applications and 

industrial process optimization. 

Society 

Society will benefi t environmentally and economically 

from achieving all cost-effective energy effi ciency and 

integrating it into a modernized energy system. Such 

a modernized system, with more options for meeting 

peak demand, will provide greater reliability and have 

lower costs. Energy prices will be lower than otherwise 

since the most cost-effective resource, on the demand 

or supply side, will be used fi rst, both in planning and 

day-to-day operations. This system will also have lower 

vulnerability to disruptions, such as supply curtailments 

from natural disasters due to greater use of demandside resources. 

Wiser use of natural gas and electricity also has a 

number of environmental benefi ts. These benefi ts 

include lower air pollution and reduced emissions of 

greenhouse gas, lower water use, and a lower environmental impact from fossil fuel extraction. Importantly, it 

offers a low-risk, low-cost approach to address climate 

change emissions between now and 2025 as decisionmakers continue to discuss the level of reductions on 

greenhouse gas emissions that are necessary. By 2025, 

depending on the generation sources at the local level 

and whether effi ciency has displaced existing generation or new generation, millions of tons of emissions 

of carbon dioxide will be prevented from entering the 

atmosphere, tons of reductions that would cost much 

more to go back and capture in 2025. 

Greater investment in energy effi ciency also helps create 

jobs, improve local economies, and assist low-income 

populations. Energy effi ciency programs can create construction and installation jobs, with positive impacts on 

employment and local economies, and the savings from 

energy effi ciency are often redirected to other activities 

that increase local and national employment (Kushler 

et al., 2005; NYSERDA, 2004; Goldstein, 2007). Local 

investments in energy effi ciency can also lead to more 

sustainable local economies, requiring less power from 

elsewhere, as well as reducing load on overly taxed 

transmission systems; and it can create valuable longlasting infrastructure changes to building, equipment 

and appliance stocks (Innovest, 2002). Low-income 

populations can also benefi t when energy effi ciency 

programs are effectively delivered and help relieve some 

of the fi nancial pressures on these customers. However, 

it may be important to target specifi c measures and 

National Action Plan for Energy Effi ciency 3-3
market transformation efforts toward the low-income 

and other “hard-to-reach” groups to address social 

equity issues with those customers that may have had 

less access to specifi c effi ciency benefi ts. 

Further, this is a future that would spur greater technology innovation and increase the opportunity for 

a growing U.S. clean energy technology industry. A 

more energy-effi cient economy benefi ts the entire U.S. 

population, with higher productivity from fewer units of 

energy consumed, fewer dollars spent on energy, and 

less air pollution. 

Evolving Policies and 

Technologies 

Achieving the ten implementation goals by 2015 to 

2020 would create an energy effi ciency picture in 2025 

with a number of important features, as summarized 

above and highlighted in Figure 3-2. There are a number of challenges to achieve this Vision, including the 

necessary evolution of technology, policy, and program 

practices. Some of these evolving areas are described 

below, followed by an overview of what developments 

to look for as progress is made (see Table 3-1). 

Regional Resource Planning 

In some regions, there is growing focus on energy 

resource planning at the regional level or regional 

resource planning (RRP), with the development of 

regional wholesale markets and regional transmission 

organizations, the need for new regional interstate 

transmission, and the need to respond to policies promulgated by FERC and DOE (Roseman and Hochstetter, 

2007). RRP is the planning and evaluation of new major 

generation, transmission, and demand-side resource 

investments based on their regional and state effects on 

electricity service, reliability, and rates. A regional view 

helps identify the value from demand and energy reductions that a more localized perspective could miss. It may 

be an effective planning process that can inform state 

and local energy effi ciency planning processes and serve 

a valuable complementary role without superseding local 

activity or options. 

Evaluation, Measurement, and Verifi cation 

Procedures 

Robust EM&V is essential to the success of achieving all 

cost-effective energy effi ciency. EM&V measures and 

documents the impacts of an energy effi ciency program, allowing energy effi ciency to be a reliable energy 

resource. Effective EM&V protocols are consistent and 

accurate, allow for transparent evaluation of energy 

savings and emission reductions, and are independently 

administered (Schiller Consulting, 2007). While a variety 

of the EM&V protocols in use today may be useful and 

credible, a more consistent, standardized set of independently administered protocols would facilitate greater 

reliance on energy effi ciency as a resource in regional and 

national energy, capacity, and ancillary service markets. 

Additional attention is necessary to reach this milestone. 

Importantly, several developments may push EM&V 

protocols in this direction. New requirements are being 

developed for energy efficiency to participate in regional 

energy markets. Another development is new requirements for greenhouse gas regulations at the state and 

regional level. This may extend internationally as well, as 

interest grows in having consistent approaches for measuring energy savings and the related avoided greenhouse 

gas emissions across country borders. Further, by 2025, 

EM&V protocols may benefit from the wider deployment of measurement technology at customers’ premises 

which may produce data on energy effi ciency savings. 

This technology may improve the quality of EM&V, raise 

the level of savings credited to efficiency as conservative 

estimates are replaced by more accurate data, reduce the 

costs of delivering energy efficiency through advanced 

diagnostics, and reduce the costs of EM&V. 

Demand Response, Advanced Metering, and 

Smart Grids 

These technologies can make a valuable contribution 

to achieving the goals of the Vision. Demand response 

and grid technologies, programs, and pricing can help 

reduce overall energy use when designed with this goal 

in mind. Measures of interest include time-of-use pricing, advanced meters, power quality management, load 

management devices like “smart” thermostats, and 

distributed generation (also see DOE, 2003). As demand 

3-4 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
response programs become more established and offer 

fi nancial, operational, energy, and environmental benefi ts, more utilities and states are expected to develop 

these types of programs. Right now, states are addressing EPAct 2005 requirements to investigate time-based 

pricing and advanced meters. As the development and 

implementation of demand response programs require 

customer contact and education, these efforts can 

be combined with efforts to explore energy effi ciency 

programs for greater energy savings and peak reductions. 

Continued exploration of how to best coordinate energy 

effi ciency and demand response programs, as these technologies evolve, will be important.8

 It is also important to 

encourage smart grid interoperability9

 and coordination 

between and across utilities and regions. 

Building Energy Effi ciency Expertise/Workforce 

The large-scale ramp-up in energy effi ciency programs 

and services described in this Vision requires the efforts 

of a diverse set of professionals well-versed in a many 

aspects of energy effi ciency. Many believe that successfully investing in energy effi ciency as a key component 

of the nation’s energy mix requires substantial additional 

investment in trained personal in a number of areas, 

including: 

• Policy-makers and planners 

• Program designers and implementers 

• Energy service contractors 

• Evaluators 

• And more 

Figure 3-2. Important Features of Energy Systems and Services in 2025 to 

Achieve All Cost-Effective Energy Effi ciency 

• Universal energy effi ciency services provided across residential, commercial, and industrial sectors 

• Funding for energy effi ciency programs that is consistent with cost-effective potential and allows for multiyear program planning 

• Utility incentives aligned with the delivery of cost-effective energy effi ciency 

• Energy savings (capacity and energy) from effi ciency programs integrated into long-term state/regional 

resource plans 

• Consistent, robust, and independent evaluation, measurement, and verifi cation of energy effi ciency programs 

in place 

• Strong public education on energy effi ciency benefi ts and opportunities 

• Updates to building codes to refl ect the current cost-effective potential; enforcement of the updated codes 

• Strong state, local, and federal government lead-by-example energy effi ciency programs 

• Energy bills that provide consistent information on energy use and costs, refl ect true cost of service, and 

provide appropriate price signals 

• New fi nancing mechanisms for a variety of energy effi ciency measures and services 

• Modernized energy systems, including advanced meters, that enable demand-side resources; energyeffi cient appliances and building controls that are connected to the electric grid 

• Energy effi ciency and demand response programs delivered in a coordinated manner 

• Training on energy effi ciency expertise in utility, regulatory, and private sectors 

• Cost-effective, clean, effi cient distributed generation integrated into energy resource plans 

• Integration of R&D, building codes, appliance standards, and market transformation efforts 

National Action Plan for Energy Effi ciency 3-5
Table 3-1. Overview of Evolving Technologies and Practices 

Policy Area Now Long Term Changes to Watch 

Evaluation, • Robust, transparent • Consistent EM&V • Development of national 

measurement, procedures estab­ approaches across the standards 

and verifi cation lished United States 

• Independent administered 

EM&V 

• Requirements for independent verifi cation 

• Growing role for smart 

grid technologies in EM&V 

• Requirements for state 

and regional carbon 

programs 

Demand • Customer energy • Consistent energy use and • New technologies, such 

response, use is not routinely energy cost information as advanced meters and 

advanced linked to the energy available to all customers smart appliances/controls 

metering, system • Customers connected with • Data collection networks 

and smart two-way electricity grid and data analysis to grids 

• Delivery of energy effi ­

ciency enhanced through 

diagnostics 

enhance energy effi ciency 

• New customer interfaces 

• Increased interoperability 

Regional • State-level resource • Regional coordination • Regional value of energy 

resource planning informs state-level resource effi ciency identifi ed 

planning • Some regional 

energy effi ciency 

program coordination 

• Federal policies at 

FERC and DOE 

planning 

Building energy • Some established • Robust energy effi ciency • Development and use of 

effi ciency exper­ protocols and certifi ­ industry across policy, plan- energy effi ciency curricutise/workforce cation programs for 

key industry services 

• Some curriculum 

for universities and 

community colleges 

ning, programming, and 

energy effi ciency services 

lum for various segments 

of the workforce 

• Development and broad 

use of training and certifi ­

cation programs 

Integration of • Some states man­ • States have processes to • Regional and national 

R&D, building aging programs in integrate R&D, updates coordination across these 

codes, appliance and across these to building codes and efforts 

standards, and key program areas appliance standards, and 

market transfor­ market transformation 

mation efforts programs 

Sources: PJM, 2007; CEC and CPUC, 2005; Business Roundtable, 2007; Elliott et al., 2007; Roseman and Hochstetter, 2007; Schiller Consulting, 2007; 

Western Governors’ Association, 2006. 

3-6 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
While there have been important developments in these 

areas—such as programs focusing on quality installation, new training and certifi cation programs for home 

contractors, and new curricula for colleges and universities—more work is necessary to assess the workforce 

infrastructure required to support the robust energy 

effi ciency industry envisioned in 10 or more years, and 

to see that the necessary training is provided. 

Integration of R&D, Building Codes, 

Appliance Standards, and Market 

Transformation Efforts 

While there is signifi cant cost-effective potential for 

meeting growing energy demand through energy effi ­

ciency and demand response technologies and practices 

in the coming years, technology continues to evolve 

and produce new opportunities for additional energy 

savings. Effectively taking advantage of these emerging opportunities requires coordination of the results 

of these R&D efforts with other key policy areas such 

as building codes, appliance standards, and market 

transformation programs. Further, the fi ndings and 

results from delivering energy effi ciency programs can 

inform the development of R&D strategies. Successful 

coordination across all of these efforts is important to 

increasing the overall benefi ts that energy effi ciency can 

provide. 

Notes 

1. 	 Sources are provided in the following notes for each of the 

key sectors: residential, commercial, and industrial. Additional 

sources on cost-effective opportunities for energy savings across 

these sectors can be found in Appendix B. 

2. 	 Home Performance with ENERGY STAR is an example of a whole 

home improvement program offering 20 percent, and up to 50 

percent, savings per home and currently being implemented in 

more than a dozen jurisdictions around the country. 

3. 	 Nadel et al. (2004) found the median achievable potential for 

the residential sector is 26 percent; EPA analysis shows that the 

typical home can save about 30 percent on home energy bills 

through use of ENERGY STAR-qualifi ed products. New homes are 

being constructed to offer savings of 20 percent from improvements to building envelopes and heating, ventilation, and air conditioning, without accounting for energy savings from plug loads 

such as lighting and appliances. 

4. 	 Austin Energy has announced a goal of zero-net-energy new 

homes by 2015; California is developing a roadmap for their new 

homes programs to get to zero-net-energy new homes by 2020; 

and the American Institute of Architects has a goal of zero-carbon new buildings by 2030, with an interim goal of 50 percent 

better than average buildings by 2010. 

5. 	 Nadel et al. (2004) found that the median achievable potential 

for the commercial sector is 22 percent. The Action Plan’s Sector 

Collaborative found savings of 20 to 40 percent to be readily 

achievable in typical offi ce buildings, hotels, and retail stores 

through common energy effi ciency measures. EPA has information on a number of typical buildings that have been improved by 

20 percent, 30 percent, or more. It also has information on more 

than 400 buildings that use 50 percent less energy than average 

buildings. 

6. 	 The American Institute of Architects has a goal of zero-carbon 

new buildings by 2030 with an interim goal of 50 percent better 

than average buildings by 2010. 

7. 	 Nadel et al. (2004) found the median achievable potential for the 

industrial sector is 14 percent. In addition, the DOE Save Energy 

Now program is identifying energy savings at the plant level of 10 

percent or more across audits performed at hundreds of industrial 

facilities. 

8. 	 State decision-makers may want to design price-based demand 

response programs carefully to minimize the use of less-effi cient 

and high-polluting distributed generation, which can negate 

the environmental benefi ts that can be achieved through 

demand response or energy effi ciency. (For discussion, see 

EPA’s analysis on clean energy options for the Ozone Transport 

Commission High Electric Demand Day Ozone Attainment 

Strategies, 2006 and 2007: <http://www.otcair.org/document. 

asp?fview=meeting#>.) 

9. 	 See the GridWise Architecture Council <http://www.gridwiseac. 

org> for more information on interoperability needs and potential 

benefi ts. 

National Action Plan for Energy Effi ciency 3-7

Related State, Regional, 4: and National Policies 

A number of energy and environmental policies are being advanced at the state, regional, and national 

levels that have important interrelationships with the state-level energy efficiency policies of the Action 

Plan and the achievement of the Vision goal. These policies can be designed and implemented through 

a variety of approaches. Some would assist in breaking down the barriers to energy efficiency and work 

in conjunction with the Action Plan to help integrate cost-effective energy efficiency into a modernized 

energy system, while achieving other objectives. Other approaches might overlook energy effi ciency and 

thereby lead to a higher-cost energy system than otherwise necessary. 

Introduction to Policies
 

This chapter identifi es important interrelationships 

between the Action Plan and six other state, regional, 

and federal policy areas. These policy areas are those 

designed to: 

• 	 Limit emissions of greenhouse gases. 

• 	 Encourage the use of clean, effi cient distributed 

generation. 

• 	 Promote clean energy supply, such as renewable 

energy. 

• 	 Promote load reductions at critical peak times 

through demand response. 

• 	 Modernize and maintain the nation’s electric transmission and distribution system, including “smart 

grid” and advanced meter infrastructure. 

• 	 Maintain a suffi cient reserve margin for reliable electricity supply. 

Policies in these areas each impact the nation’s energy 

system and the energy customer. 

Recommendations and 

Considerations 

Key interrelationships, recommendations, and considerations for effectively integrating these efforts so that 


they act together to achieve the goals of the Vision are 

provided below. 

• 	Limit emissions of greenhouse gases. Climate 

change is a serious environmental issue and a number of states are advancing policies to limit emissions 

of these gases. In addition, there are a variety of 

legislative proposals at the federal level. Energy effi ­

ciency is a near-term, low-cost approach for reducing 

emissions of carbon dioxide, the primary greenhouse 

gas.1

 However, particular attention needs to be paid 

to the design of these regulatory approaches so that 

they provide suffi cient funding and/or incentives 

to overcome the market barriers that persistently 

limit greater investment in energy effi ciency, and 

incorporate energy effi ciency as part of the solution. 

If efforts are not taken to integrate cost-effective 

energy effi ciency, carbon regulation can be expected 

to cost society substantially more. States and others 

are exploring a variety of approaches to integrating 

energy effi ciency. It is recommended that: 

–	 Greenhouse gas regulation be designed to 

capture all low-cost carbon emission reductions 

available through energy effi ciency by creating 

funding/incentives for energy effi ciency programs and investments. 

–	 Methodologies for reporting greenhouse gas 

emissions be standardized and include guidance 

for measuring and verifying reductions from 

energy effi ciency. 

National Action Plan for Energy Effi ciency 4-1
–	 Potential costs of reducing emissions of greenhouse gases be refl ected in resource planning 

processes, including the application of costeffectiveness tests for energy effi ciency, where 

appropriate. 

• 	Encourage the use of clean, effi cient distributed generation. Distributed generation brings 

generation close to demand loads. When clean 

and effi cient, distributed generation can help meet 

demand in congested areas, while lowering emissions 

of greenhouse gases and other pollutants and lower 

distribution losses. As an example, many states recognize combined heat and power as a type of clean 

distributed generation since it provides increased effi ­

ciency compared to grid-purchased power and on site 

thermal production, helps meet load in congested 

areas, and avoids line losses.2

 Other examples of 

clean distributed generation include solar and localized wind generation. Distributed generation sources 

can help stave off new larger generation options, 

reduce line losses, and help to provide alternatives to 

meeting existing air pollution requirements such as 

regulations for limiting emissions of nitrogen oxides. 

Some states consider output-based emission regulations for distributed generation to encourage the use 

of greater fuel conversion effi ciency as an air pollution control measures (EPA, 2004). This is in addition 

to the policies included in Goal Ten of the Vision. 

• 	Promote clean energy supply, such as renewable 

energy. Several policies help advance both energy 

effi ciency and renewable energy. For example, clean 

energy portfolio standards are in place in one form or 

another (e.g., renewable portfolio standards, alternative energy portfolio standards) in more than half the 

states across the country, and discussions continue at 

the national level.3

 As energy effi ciency is available in 

many parts of the country, allowing energy effi ciency 

savings to help meet clean energy requirements can 

help bring clean energy into the resource mix at 

lower overall costs. For example, by coupling renewable energy with energy effi ciency, states have found 

that the total cost for portfolio standards is reduced 

(La Capra Associates, 2006). It is recommended that 

energy effi ciency be considered in the development 

of clean energy portfolio policies. In addition, a number of states are promoting distributed renewable 

energy such as photovoltaics. Because these systems 

may best contribute to the overall energy system 

when properly sized to meet local energy demand, it 

may be important to promote them as part of efforts 

that fi rst reduce the demand for energy through 

cost-effective energy effi ciency. It is recommended 

that cost-effective energy effi ciency be explored as 

an important fi rst step to programs that incentivize 

investment in distributed renewable energy. 

• 	Modernize and maintain the nation’s electric 

transmission and distribution system. Economic 

and environmental benefi ts from modernizing the 

electric grid will come from enabling demand-side 

resources to provide supply and ancillary services, 

facilitating the dispatch of the most energy-effi cient 

supply, and reducing line losses. As advanced metering infrastructure is deployed, recognizing opportunities to leverage energy effi ciency through new 

rate designs and customer education campaigns will 

increase the benefi ts achieved by the technology. It is 

recommended that advancements in grid-connected 

appliances, controls, transformers, energy storage, 

and on site generation incorporate energy-effi cient 

design. This is in addition to the policies included in 

Goal Nine of the Vision. 

• 	Maintain a sufficient reserve margin for reliable 

electricity supply. The level of investment needed by 

the utility sector to maintain system reliability can be 

lowered through the delivery of cost-effective energy 

effi ciency, clean distributed generation, demand 

response, grid advancements, and advancements in 

storage capabilities. It is recommended that energy 

effi ciency be recognized as a high priority resource 

in energy resource planning and that this suite of 

demand-related efforts be incorporated in resource 

planning and reliability efforts. Increasing investment 

in energy effi ciency will also increase the diversity of 

fuels and resources used to meet electricity demand 

and maintain resource adequacy. 

4-2 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
In addition to these policies, there are several technology areas to monitor under the Action Plan for inclusion in future updates. These technologies have not 

yet achieved enough penetration to determine how to 

effectively incorporate energy effi ciency, but are anticipated to make signifi cant progress over the coming 

years. These technologies include plug-in hybrid vehicles 

and “smart” appliances. 

• 	Plug-in hybrid vehicles. These vehicles use the 

same technology as electric/gas hybrid vehicles today, 

but include a larger battery that can be recharged 

by plugging it into an electric outlet.4

 Currently, they 

are not mass-produced, so consumers cannot purchase them. However, many believe that they will 

be available on a large scale in the future, providing 

owners the opportunity to charge the battery with 

grid electricity. Studies and demonstrations are in 

place to examine how plug-in hybrids might be integrated into the network to provide demand response 

options—using battery-charged electricity when the 

load curve is at its highest point, a version of pumped 

storage currently in use by many utilities. 

• 	Smart appliances. There is increasing discussion of 

manufacturing appliances that communicate with the 

electric grid. These “smart” appliances “talk” to the 

grid through technology, sensing grid conditions by 

monitoring system frequency and providing automatic demand response in times of disruption.5

 This 

technology is a computer chip that can be integrated 

during the appliance manufacturing process. Pilots 

underway in the Pacifi c Northwest include approximately 200 homes, but this technology is not currently 

available on a large scale (PNNL, 2006). Many experts 

believe that this technology will be widely used 

across the country in the coming years, providing an 

increased opportunity to leverage energy effi ciency. 

Notes 

1. 	 See Appendix B for references to studies that discuss the carbon 

emissions savings from energy effi ciency. 

2. 	 States including Connecticut, Hawaii, Maine, North Carolina, 

Pennsylvania, and Washington include combined heat and power 

as an eligible resource in their renewable portfolio standards. 

3. See EPA’s Guide to Action and policy tracking resources. 

4. 	 For more information on plug-in hybrid vehicles, visit <http:// 

www.pluginpartners.org> or <http://www.calcars.org>. 

5. 	 For more information on “smart” appliances, visit <http://grid 

wise.pnl.gov/technologies> and <http://www.gridwiseac.org>. 

National Action Plan for Energy Effi ciency 4-3

Tools and Assistance to 5: Help Realize the Vision 

This chapter discusses the tools and other assistance currently available to help leading parties realize the 

Vision’s long-term goal of achieving all cost-effective energy efficiency by 2025. A lack of familiarity with 

best practice policy and program options remains a key barrier to increased investment in cost-effective 

energy efficiency and a number of tools and resources are available to help leading parties, including 

regulators, utilities, state governments, consumer advocates, environmental groups, and large end-users 

to explore these options (National Action Plan for Energy Efficiency, 2006). Some of this assistance is 

available through the Action Plan and some is available through other efforts of the federal government 

and the private sector. 

National Action Plan for Energy 

Effi ciency Tools 

A number of tools and resources have been developed 

under the Action Plan to assist organizations as they strive 

to meet their commitments under the Action Plan. These 

tools and resources will help state decision-makers and 

others achieve many of the ten implementation goals outlined in Chapter 2, as shown in Table 5-1 and available on 

the Action Plan Web site, www.epa.gov/eeactionplan. 

The Leadership Group will prioritize the development of 

new tools and assistance based on what is needed to 

help parties meet the Vision goals within their company, 

organization, or state. In addition, materials may need to 

be developed to address some of the challenges to meeting the Vision outlined in Chapter 3 or to facilitate the 

development of other state, regional, and federal policies 

so that they complement the achievement of the Vision 

goals, as outlined in Chapter 4. The Leadership Group 

will consider these gaps when identifying and prioritizing the Action Plan’s future activities. Additional areas for 

attention to address evolving policies and technologies 

for achieving the Vision and integrating with other state, 

regional, and federal policies include: 

• 	 Integration of R&D, building codes, appliance standards, and market transformation efforts. 

• 	 Integration of energy effi ciency into regional energy 

markets. 

• 	 Training on energy effi ciency expertise in the utility, 

regulatory, and private sectors. 

• 	 State, regional, and federal carbon policies designed 

to encourage energy effi ciency where cost-effective. 

In addition to the development of tools and other 

resources, the Leadership Group members are helping 

others through peer-to-peer assistance. 

Federal Government Assistance 


A number of federal programs are available to encourage 

energy efficiency and can be crucial resources for meeting 

the Vision goals. EPA and DOE’s ENERGY STAR program 

is one such resource. Nationally, ENERGY STAR provides 

a platform for program implementation across customer 

classes and defines voluntary efficiency levels for homes, 

buildings, and products. ENERGY STAR is a voluntary 

public-private partnership designed to reduce energy use 

and related greenhouse gas emissions. The program has 

an extensive network of partners including equipment 

manufacturers, retailers, builders, energy service companies, private businesses, and public sector organizations. 

Since the late 1990s, EPA and DOE have worked with 

utilities, state energy offi ces, and regional nonprofi t 

organizations to help leverage ENERGY STAR messaging, tools, and strategies to enhance local energy 

effi ciency programs. Today more than 450 utilities (and 

other effi ciency program administrators), servicing 65 

National Action Plan for Energy Effi ciency 5-1
Table 5-1. National Action Plan for Energy Efficiency Tools by Implementation Goals 

Type of Tool or Resource 

Goal Introduced in 

Action Plan 

Report 

Detailed 

Guide/ 

Material 

Detailed Action Plan Tools and Resources 

Goal One: Establishing CostEffective Energy Effi ciency as a 

High-Priority Resource X X 

• Guide to Resource Planning with Energy 

Effi ciency 

• Guide for Conducting Energy Effi ciency 

Potential Studies 

• Communications Kit 

Goal Two: Developing Processes 

to Align Utility and Other Program 

Administrator Incentives Such That 

Effi ciency and Supply Resources 

Are on a Level Playing Field 

X X 

• Aligning Utility Incentives with Investment in 

Energy Effi ciency Paper 

Goal Three: Establishing CostEffectiveness Tests 

X X 

• Understanding Cost-Effectiveness of Energy 

Efficiency Programs Paper 

• Guide to Resource Planning with Energy 

Effi ciency 

• Guide for Conducting Energy Effi ciency 

Potential Studies 

Goal Four: Establishing Evaluation, 

Measurement, and Verifi cation 

Mechanisms 

X X 

• Model Energy Effi ciency Program Impact 

Evaluation Guide 

Goal Five: Establishing Effective 

Energy Effi ciency Delivery 

Mechanisms 

X 

• Program Design and Implementation Best 

Practices Guidance (under development) 

Goal Six: Developing State Policies 

to Ensure Robust Energy Effi ciency 

Practices X 

• Building Codes for Energy Efficiency Fact Sheet 

• Efficiency Program Interactions with Codes 

Paper (under development) 

• State and Local Lead-by-Example Guide 

(under development) 

Goal Seven: Aligning Customer 

Pricing and Incentives to Encourage Investment in Energy Effi ciency X 

• Executive Briefi ngs on Customer Incentives 

Through Rate Design (under development) 

Goal Eight: Establishing State of 

the Art Billing Systems X 

• Utility Best Practices Guidance for Providing 

Business Customers with Energy Use and 

Cost Data 

Goal Nine: Implementing State 

of the Art Effi ciency Information 

Sharing and Delivery Systems 

• Paper on Coordination of Demand Response 

and Energy Effi ciency (under development) 

Goal Ten: Implementing Advanced 

Technologies 

• Most Energy-Efficient Economy Scoping Paper 

(under development) 

5-2 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
percent of U.S. households, participate in the ENERGY 

STAR program. More information on ENERGY STAR can 

be found at <http://www.energystar.gov>. 

Two other federal resources that provide assistance for 

energy effi ciency measures are the Low Income Home 

Energy Assistance Program (LIHEAP) and the Weatherization Assistance Program (WAP). The LIHEAP, administered by the U.S. Department of Health and Human 

Services, helps eligible low-income homeowners and 

renters pay their heating and cooling bills. The WAP 

helps reduce the energy bills of low-income households 

by making their homes more energy effi cient. Both 

of these programs have proven to be very effective. 

Since 1999, DOE has been encouraging the network 

of weatherization providers to adopt a whole-house 

approach whereby they approach residential energy 

effi ciency as a system rather than as a collection of 

unrelated pieces of equipment (DOE, 2006). 

Federal fi nancial grants can also be used by parties to 

explore energy effi ciency policy and program issues. 

DOE issues many grant solicitations throughout the year 

that provide funding for R&D activities, for the development of specifi c types of technologies, and for many 

other types of activities that promote energy effi ciency. 

The U.S. Department of Agriculture sometimes issues 

funding for the development of energy effi ciency projects in rural areas. 

There are also federal and state tax credits available 

for installing energy effi ciency projects. Many energy 

effi ciency program administrators are now pointing 

consumers and businesses to the new federal tax credits 

and incorporating them in their programs. In addition, 

program administrators can educate their customers 

on existing tax strategies, such as accelerated depreciation and investment tax strategies, to help them recoup 

the costs of their investments faster. Some states offer 

additional tax credits, and/or offer sales tax “holidays,” 

where sales tax is waived at point of sale for a specifi ed 

period of time ranging from one day to a year (National 

Action Plan for Energy Effi ciency, 2006, p. 6-37). 

Leveraging Other Resources
 

Private sector resources will be critical in achieving the 

Action Plan Vision for 2025. Private sector resources 

provide expertise, job training and certifi cation, and 

additional funding and fi nancing of energy effi ciency 

programs and services. Many organizations provide education and training to their members, including training 

on energy effi ciency. Working with these organizations 

provides access to their members, and the opportunity 

to leverage funding or marketing opportunities provided by these organizations (National Action Plan for 

Energy Effi ciency, 2006, p. 6-37). Private foundations 

often provide grants to fund the exploration of energy 

effi ciency policy and program issues. 

In addition, a number of private fi rms and not-for-profi t 

entities deliver energy effi ciency programs throughout 

the United States or in specifi c regions. These fi rms can 

quickly get a program up and running, as they have 

the expertise, processes, and infrastructure to handle 

program activities. New program administrators can 

contract with these organizations to deliver energy effi ­

ciency program design, delivery, and/or implementation 

support in their service territory (National Action Plan 

for Energy Effi ciency, 2006, p. 6-38). Also, those looking to establish an energy effi ciency program can look 

to well-regarded programs as a reference. Utilities that 

are starting up or revising existing programs can look 

to other programs in their area or the country to utilize 

existing and emerging best programs. Many successful 

program models have emerged and are being refi ned to 

achieve even more cost-effective results (National Action 

Plan for Energy Effi ciency, 2006, p. 6-39). The Consortium for Energy Effi ciency’s “Ask an Expert” initiative 

helps share this best practice program information 

beyond their membership. 

Engaging All Stakeholders 

To achieve the full potential for energy savings and the 

related societal benefi ts, many parties need to work 

National Action Plan for Energy Effi ciency 5-3
together toward the Vision. Energy effi ciency policies 

and programs affect numerous parties, including local, 

state, and federal governments; utilities; customers; 

energy effi ciency product and service providers; manufacturers; builders; architects; environmental groups; 

energy system operators; labor advocates; the fi nancial community; and economic development groups. 

Educating and soliciting input from all key parties, either 

through local, state, and regional collaboratives or 

though other outreach efforts, will greatly increase the 

economic and environmental benefi ts achieved through 

energy effi ciency. 

5-4 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
National Action Plan 

Appendix for Energy Effi ciency A: Leadership Group
 

Co-Chairs
 

Marsha Smith 

Commissioner, Idaho Public 

Utilities Commission 

President, National Association of 

Regulatory Utility Commissioners 

James E. Rogers 

Chairman, President, and C.E.O. 

Duke Energy 

Leadership Group 

Barry Abramson
 

Senior Vice President
 

Servidyne Systems, LLC
 

Tracy Babbidge
 

Director, Air Planning
 

Connecticut Department of 


Environmental Protection
 

Angela Beehler
 

Senior Director, Energy Regulation/
 

Legislation
 

Wal-Mart Stores, Inc.
 

Sheila Boeckman
 

Manager of Business Operations and 


Development
 

Waverly Light and Power
 

Bruce Braine
 

Vice President, Strategic Policy 


Analysis 


American Electric Power
 

Jeff Burks
 

Director of Environmental 


Sustainability
 

PNM Resources
 

Kateri Callahan
 

President
 

Alliance to Save Energy
 

Jorge Carrasco
 

Superintendent
 

Seattle City Light
 

Lonnie Carter
 

President and C.E.O.
 

Santee Cooper
 

Sheryl Carter
 

Co-Director, Energy Program
 

Natural Resources Defense Council
 

Gary Connett
 

Director of Environmental Stewardship 


and Member Services
 

Great River Energy
 

Larry Downes
 

Chairman and C.E.O.
 

New Jersey Natural Gas
 

(New Jersey Resources Corporation)
 

Roger Duncan
 

Deputy General Manager, Distributed 


Energy Services
 

Austin Energy
 

Angelo Esposito
 

Senior Vice President, Energy Services 


and Technology
 

New York Power Authority
 

Jeanne Fox
 

President
 

New Jersey Board of Public Utilities
 

Philip Giudice
 

Commissioner
 

Massachusetts Division of Energy 


Resources
 

Dian Grueneich
 

Commissioner
 

California Public Utilities Commission
 

Blair Hamilton
 

Policy Director
 

Vermont Energy Investment 


Corporation
 

Maureen Harris
 

Commissioner
 

New York State Public Service 


Commission
 

Mary Healey 

Consumer Counsel for the State of 

Connecticut 

Connecticut Consumer Counsel 

Joe Hoagland 

Vice President, Energy Effi ciency and 

Demand Response 

Tennessee Valley Authority 

Sandy Hochstetter 

Vice President, Strategic Affairs 

Arkansas Electric Cooperative 

Corporation 

Helen Howes 

Vice President, Environment, Health 

and Safety 

Exelon 

Mary Kenkel 

Consultant, Alliance One 

Duke Energy 

Ruth Kiselewich 

Director, Conservation Programs 

Baltimore Gas and Electric Company 

Martin Kushler 

Director, Utilities Program 

American Council for an 

Energy-Effi cient Economy 

Rick Leuthauser 

Manager of Energy Effi ciency 

MidAmerican Energy Company 

Harris McDowell 

Senator 

Delaware General Assembly 

Ed Melendreras 

Vice President, Sales and Marketing 

Entergy Corporation 

Janine Migden-Ostrander 

Consumers’ Counsel 

Offi ce of the Ohio Consumers’ 

Counsel 

Michael Moehn 

Vice President, Corporate Planning 

Ameren Services 

National Action Plan for Energy Effi ciency A-1
Fred Moore 

Director, Manufacturing and 

Technology, Energy 

The Dow Chemical Company 

Richard Morgan 

Commissioner 

District of Columbia Public Service 

Commission 

Clay Nesler 

Vice President, Global Energy and 

Sustainability 

Johnson Controls, Inc. 

Brock Nicholson 

Deputy Director, Division of Air Quality 

North Carolina Department of 

Environment and Natural Resources 

Jed Nosal 

Chief, Offi ce of Ratepayer Advocacy 

Massachusetts Offi ce of Attorney 

General Martha Coakley 

Pat Oshie 

Commissioner 

Washington Utilities and 

Transportation Commission 

John Perkins 

Consumer Advocate 

Iowa Offi ce of Consumer Advocate 

Douglas Petitt 

Vice President, Government Affairs 

Vectren Corporation 

Phyllis Reha 

Commissioner 

Minnesota Public Utilities Commission 

Roland Risser 

Director, Customer Energy Effi ciency 

Pacifi c Gas and Electric 

Gene Rodrigues 

Director, Energy Effi ciency 

Southern California Edison 

Wayne Rosa 

Energy and Maintenance Manager 

Food Lion, LLC 

Art Rosenfeld 

Commissioner 

California Energy Commission 

Jan Schori 

General Manager 

Sacramento Municipal Utility District 

Ted Schultz Michael Wehling 

Vice President, Energy Effi ciency Strategic Planning and Research 

Duke Energy Puget Sound Energy 

Larry Shirley Henry Yoshimura 

Division Director Manager, Demand Response 

North Carolina Energy Offi ce ISO New England, Inc. 

Paul Sotkiewicz Dan Zaweski 

Senior Economist, Market Services Assistant Vice President of Energy 

Division Effi ciency and Distributed Generation 

PJM Interconnection Long Island Power Authority 

Jim Spiers Observers 

Senior Manager, Planning, Rates, and 

Member Services Rex Boynton 

Tristate Generation and Transmission President 

Association, Inc. North American Technician Excellence 

Susan Story 

President and C.E.O. 

James W. (Jay) Brew 

Counsel 

Gulf Power Company Steel Manufacturers Association 

(Southern Company) Roger Cooper 

Tim Stout Executive Vice President, 

Vice President, Energy Effi ciency 

National Grid 

Policy and Planning 

American Gas Association 

Deb Sundin Mark Crisson 

Director, Business Product Marketing 

Xcel Energy 

President and C.E.O. 

American Public Power Association 

Paul Suskie Dan Delurey 

Chairman Executive Director 

Arkansas Public Service Commission Demand Response Coordinating 

Committee 

Dub Taylor 

Director Reid Detchon 

Texas State Energy Conservation 

Offi ce 

Executive Director 

Energy Future Coalition 

David Van Holde Ron Edelstein 

Energy Manager, Department of 

Natural Resources and Parks 

Director, Regulatory and Government 

Relations 

King County, Washington Gas Technology Institute 

Brenna Walraven Sue Gander 

Managing Director, National Property 

Management 

USAA Realty Company 

Director, Environment, Energy, and 

Natural Resources Division 

National Governors Association– 

Center for Best Practices 

J. Mack Wathen 

Vice President, Regulatory Affairs 

Pepco Holdings, Inc. 

Jeff Genzer 

General Counsel 

National Association of State Energy 

Mike Weedall Offi cials 

Vice President, Energy Effi ciency 

Bonneville Power Administration Donald Gilligan 

President 

National Association of Energy Service 

Companies 

A-2 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Chuck Gray 

Executive Director 

National Association of Regulatory 

Utility Commissioners 

Steve Hauser 

President 

GridWise Alliance 

William Hederman 

Member, IEEE-USA Energy Policy 

Committee 

Institute of Electrical and Electronics 

Engineers 

Marc Hoffman 

Executive Director 

Consortium for Energy Effi ciency 

John Holt 

Senior Manager of Generation and Fuel 

National Rural Electric Cooperative 

Association 

Eric Hsieh 

Manager of Government Relations 

National Electrical Manufacturers 

Association 

Lisa Jacobson 

Executive Director 

Business Council for Sustainable Energy 

Kate Marks 

Energy Program Manager 

National Conference of State 

Legislatures 

Meg Matt 

President and C.E.O. 

Association of Energy Services 

Professionals 

Joseph Mattingly 

Vice President, Secretary and General 

Counsel 

Gas Appliance Manufacturers 

Association 

Kenneth Mentzer 

President and C.E.O. 

North American Insulation 

Manufacturers Association 

Ellen Petrill 

Director, Public/Private Partnerships 

Electric Power Research Institute 

Steven Schiller 

Board Director 

Effi ciency Valuation Organization 

Jerry Schwartz 

Senior Director 

American Forest and Paper Association 

Andrew Spahn 

Executive Director 

National Council on Electricity Policy 

Rick Tempchin 

Director, Retail Distribution Policy 

Edison Electric Institute 

Mark Wolfe 

Executive Director 

Energy Programs Consortium 

Lisa Wood 

Executive Director 

Institute for Electric Effi ciency 

Facilitators 

U.S. Department of Energy 

U.S. Environmental Protection Agency 

National Action Plan for Energy Effi ciency A-3

Appendix Related Studies and B: Documents 

Studies That Include the Potential Magnitude of Energy Savings from Energy 

Effi ciency 

Author/ 

Source, Date Title Magnitude Description (MWh, MW, etc.) Web Site 

William Energy Effi ­ Doubling effi ciency would cut load growth by about http://aceee. 

R. Prindle, ciency’s Role in a two-thirds in 2024, from about 20% to about 6% org/pubs/ 

Anna Monis Carbon Cap-and­ above 2006 levels. Electricity generation is measured e064.pdf?CFI 

Shipley, and Trade System: in GWh; by 2024, under the reference case, genera­ D=3568249& 

R. Neal Elliott Modeling Results tion would reach around 480,000 GWh, and with CFTOKEN=25 

(ACEEE), from doubled effi ciency it would reach around 430,000 476090 

2006 the Regional 

Greenhouse Gas 

Initiative 

GWh. 

ACEEE, 2007 Energy 

Effi ciency 

Resource 

Standards— 

Summary Paper 

ACEEE analysis estimates that EERS requirements now 

in place could reduce national electricity demand by 

more than 1% per year by 2013. 

http://aceee. 

org/energy/ 

state/ 

utpolicy.htm 

McKinsey Curbing Global By capturing the potential available from existing http://www. 

Global Energy Demand technologies with an internal rate of return of 10% or mckinsey. 

Institute, Growth: The more, we could cut global energy demand by half or com/mgi/ 

2007 Energy 

Productivity 

Opportunity 

more over the next 15 years. Collectively, we have the 

potential to cut global energy demand by 135 quadrillion Btus—the equivalent of 64 million barrels of 

oil per day, or almost 150% of the entire U.S. energy 

consumption today. 

publications/ 

Curbing_ 

Global_ 

Energy/index. 

asp 

Michael Rufo California’s This study examines the potential energy and peak http://www. 

and Fred Secret Energy demand savings from energy effi ciency measures in ef.org/ 

Coito, Surplus: The California. The study fi nds that, if all measures that documents/ 

(XENERGY, Potential for are economic were implemented, potential peak Secret_ 

Inc.), 2002 Energy Effi ciency demand savings would amount to roughly 10,000 

MW. Additionally, net program peak savings potential 

ranges from roughly 1,800 MW under current funding (business as usual) to 3,500 MW if funding is 

doubled (advanced effi ciency), to 5,900 MW if funding is quadrupled (maximum effi ciency). 

Surplus.pdf 

National Action Plan for Energy Effi ciency B-1
Studies That Include the Potential Magnitude of Energy Savings from Energy 

Effi ciency (continued) 

Author/ 

Source, Date Title Magnitude Description (MWh, MW, etc.) Web Site 

Optimal Economically This paper looks at the economically achievable http://www. 

Energy, Inc. Achievable potential for energy effi ciency in New England. If the neep.org/fi les/ 

(Northeast Energy region were to commit to fully capturing the energy Updated_ 

Energy Effi ciency effi ciency potential (at an average cost of 3.1 cents Achievable_ 

Effi ciency Potential in per kWh) it could provide energy savings of 17,103 Potential_ 

Partnerships, New England GWh by 2008 and 34,375 GWh by 2013—bringing 2005.pdf 

Inc.), 2004, energy demand back to 1993 levels. This represents a 

updated decrease in energy demand of approximately 1.38% 

2005 a year, as opposed to ISO New England’s forecasted 

1.2% annual increase. 

R. Neal Elliott, 

Maggie 

Eldridge, Anna 

M. Shipley, 

John “Skip” 

Laitner, Steven 

Nadel, Alison 

Silverstein, 

Bruce Hedman, and Mike 

Sloan (ACEEE) 

Potential for 

Energy Effi ciency, 

Demand 

Response, 

and Onsite 

Renewable Energy 

to Meet Texas’s 

Growing 

Electricity Needs 

This paper looks at the immediate and long-term 

future of using energy effi ciency, renewables, and 

demand response in Texas to meet peak demand, to 

enhance energy security, and to sustain the state’s 

economic growth. Across all sectors, these studies show a median technical potential of 33% for 

electricity and 40% for gas, and median economic 

potentials for electricity and gas of 20% and 22% 

respectively. 

http://www. 

environmental 

defense.org/ 

documents/ 

6029_ACEEE_ 

Texas_ 

Report.pdf 

Western Clean Energy, A By adopting the WGA’s best practices scenario in http://www. 

Governors’ Strong Economy the 18 WGA states, load growth could be reduced westgov.org/ 

Association, and a Healthy by as much as 75% over the next 15 years (report wga/publicat/ 

2006 Environment: 

Report of the 

Clean and 

Diversifi ed 

Energy Advisory 

Committee to 

the Western 

Governors 

published in 2006). The best practices scenario shows 

that it is possible to reduce electricity consumption in 

2020 by 20% relative to that in the reference scenario 

(measured in TWh per year). 

CDEAC06.pdf 

Steven Nadel, 

Anna Shipley, and R. 

Neal Elliott 

(ACEEE), 

2004 

The Technical, 

Economic and 

Achievable 

Potential for 

Energy-Effi ciency 

in the U.S.—A 

Meta-Analysis of 

Recent Studies 

This paper summarizes 11 studies on the technical, 

economic, and/or achievable potential for energy effi ­

ciency within the U.S. The studies show, across all sectors, a median technical potential of 33% for electricity and 40% for gas, and median economic potentials 

for electricity and gas of 20% and 22% respectively. 

http://www. 

aceee.org/ 

conf/04ss/ 

rnemeta.pdf 

B-2 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Studies That Include the Potential Magnitude of Energy Savings from Energy 

Effi ciency (continued) 

Author/ 

Source, Date Title Magnitude Description (MWh, MW, etc.) Web Site 

DOE EERE, Projected The Offi ce of Energy Effi ciency and Renewable Energy http://www1. 

2006 Benefi ts of 

Federal Energy 

Effi ciency and 

Renewable 

Energy Programs, 

FY 2007–FY 

2050 

(EERE) estimates benefi ts for each of its nine programs 

in the mid-term (2010–2025) and long term (2030– 

2050). If the goals of EERE’s investment portfolio are 

achieved and the corresponding market outcomes 

realized, nonrenewable energy consumption will drop 

by 8 quadrillion Btus by 2025, or about 28% of the 

expected incremental growth in energy demand over 

this time period; and by 32 quadrillion Btus by 2050, 

or about 78% of the expected incremental growth 

in annual energy demand over this time period. This 

results in a declining demand for nonrenewable 

energy consumption starting in 2030, despite a growing economy. 

eere.energy. 

gov/ba/ 

Studies That Value the Benefits from Energy Effi ciency 

Author/ 

Source, Date Title Magnitude Description (MWh, MW, etc.) Web Site 

Neal Elliott Impacts of Energy This study evaluates the potential reduction in natural http://aceee.org/ 

and Anna Effi ciency and gas consumption energy effi ciency and renewable pubs/e052full. 

Monis-Shipley Renewable energy. It projects an annual consumer savings for pdf?CFID=6528 

(ACEEE), Energy on energy effi ciency only of $32 billion in 2010 and $54 8&CFTOKEN=51 

2005 Natural Gas 

Markets: 

Updated and 

Expanded 

Analysis 

billion in 2020. 121347 

Anthony Save Energy DOE, through its 2006 Save Energy Now initiative, http://www. 

Wright, Now: Results trained teams from 200 plants on ways to reduce eere.energy. 

Michaela from the U.S. energy use and carbon emissions. The results from gov/industry/ 

Martin, Bob DOE 2006 Save this program show that individual plants can: saveenergy 

Gemmer, Paul 

Scheihing, 

and James 

Energy Now 

Assessment 

Initiative 

• Cut energy bills by 10% or more each year (over 

$2.5 million per plant, on average). 

now/partners/ 

pdfs/sen_2006 

_results_ 

Quinn (DOE • Save an average of 17.3% of natural gas annually. summary_ 

EERE), 2007 • Save an average of 20,200 metric tons of CO2 

emissions annually. 

In all, the 200 assessments found over $500 million in 

potential energy savings and 4 million metric tons in 

potential CO2

 emissions reductions. 

9-20-07.pdf 

National Action Plan for Energy Effi ciency B-3
Studies That Value the Benefits from Energy Effi ciency (continued) 

Author/ 

Source, Date Title Magnitude Description (MWh, MW, etc.) Web Site 

DOE EERE DOE’s Save 

Energy Now 

Initiative 

Recognizes High 

Performing 

Plants 

Through its Save Energy Now initiative, DOE gives 

manufacturers the opportunity to receive free energy 

assessments and recognition for energy savings. 

Manufacturers received awards if they reported their 

energy savings results within 6 months and met the 

criteria in one of the following categories: 

1. Energy saver plant—more than 75,000 million 

Btu total energy savings or more than 7.5% total 

energy savings. 

2. Energy champion plant—more than 250,000 

million Btu total energy savings or more than 

15% total energy savings. 

http://www1. 

eere.energy. 

gov/news/ 

progress_ 

alerts/ 

progress_alert. 

asp?aid=248 

Martin Examining the This report identifi es a number of savings/benefi ts http://www. 

Kushler, Dan Potential for from energy effi ciency: pickocc.org/ 

York, and Energy Effi ciency publications/ 

Patti Witte, to Help Address 1. Potential percentage of natural gas savings by sector natural_gas/ 

2005 the Natural Gas 

Crisis in the 

Midwest 

in key benchmark years (2006, 2010, 2015, 2020). 

2. Potential percentage of electricity savings by sector 

in key benchmark years. 

3. Projected net natural gas consumption savings 

(due to energy effi ciency) by sector in key benchmark years (MMcf). 

4. Projected net electricity consumption savings (due 

to energy effi ciency) by sector in key benchmark 

years (MWh). 

5. Projected net natural gas customer dollar savings 

(due to energy effi ciency) by sector in key benchmark years. 

6. Projected net electricity customer dollar savings (due 

to energy effi ciency) by sector in key benchmark 

years, and some other estimates of dollar savings. 

Natural_Gas_ 

Crisis_Report. 

pdf 

Mark The Public This study estimates public benefits of energy effi ciency http://www. 

Bernstein, Benefi t of in Massachusetts and finds that improvements in energy rand.org/pubs/ 

Christopher Energy Effi ciency efficiency in the commercial, industrial, and residential monograph_ 

Pernin, Sam to the State of sectors is associated with benefits to the state economy reports/2005/ 

Loeb, Mark Massachusetts from 1977 to 1997 that range from $1,664 per capita MR1588.pdf 

Hanson to $2,562 per capita in 1998 dollars and approximately 

(RAND), 2002 11% lower air emissions from Massachusetts’ share of 

local emissions from power generation. 

B-4 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Studies That Estimate the Carbon Reduction Benefits from Energy Effi ciency 

Author/ 

Source, Date Title Report Description Web Site 

Charles F. Tackling This report looks at how much energy effi ciency http://www. 

Kutscher Climate Change and renewable technologies can contribute towards ases.org/ 

(American in the U.S.: reducing U.S. carbon emissions to atmospheric con­ climatSolar Potential centrations of 450 to 500 ppm (levels desired by a echange/cliEnergy Carbon number of current legislative proposals). The report mate_change. 

Society), Emissions summarizes the potential carbon reduction contribu­ pdf 

2007 Reductions 

from Energy 

Effi ciency and 

Renewable 

Energy by 2030 

tions from various areas: energy effi ciency, concentrating solar power, photovoltaics, wind, biofuels, 

biomass, and geothermal. The report found that 

energy effi ciency and renewable technologies could 

meet most, if not all, of the U.S. carbon emissions 

reductions that will be needed to help limit the atmospheric concentration of CO2

 to 450 to 500 ppm. 

“Approximately 57% of the total carbon reduction 

contribution is from energy effi ciency and (EE) about 

43% is from renewables. Energy effi ciency measures 

can allow U.S. carbon emissions to remain about 

level through 2030, whereas the renewable supply 

technologies can provide large reductions in carbon 

emissions below current values.” 

Electric Power The Power to EPRI analyzes the technical feasibility of seven http://mydocs. 

Research Reduce CO2 advanced technologies (the “PRISM” analysis), epri.com/ 

Institute Emissions: The and then uses the “MERGE” model to identify the docs/public/ 

(EPRI), 2008 Full Portfolio lowest-cost options for reaching specifi c emissions 

reduction targets. The technologies include energy 

effi ciency, renewable energy, advanced nuclear reactors, advanced coal power plants, carbon capture 

and storage, plug-in hybrid vehicles, and distributed 

energy resources. EPRI’s analysis found that, together, 

these technologies could reduce the estimated cost of 

CO2

 emissions reductions to the U.S. economy by $1 

trillion. 

Discussion 

Paper2007. 

pdf, http:// 

epri.com/ 

portal/server. 

pt?open=512 

&objID=205& 

&PageID=41 

0&mode=2& 

in_hi_userid= 

2&cached= 

true 

National Action Plan for Energy Effi ciency B-5
Studies That Estimate the Carbon Reduction Benefits from Energy Effi ciency 

(continued) 

Author/ 

Source, Date Title Report Description Web Site 

Ernst Worrell, Energy Effi ciency This paper focuses on the U.S. iron and steel indus­ http://www. 

Nathan and Carbon try and identifi es cost-effective energy and carbon energystar. 

Martin, Dioxide dioxide emissions savings that can be accomplished gov/ia/ 

and Lynn Emissions currently and in the short-term future. In a detailed business/ 

Price (Ernest Reduction analysis of U.S. blast furnaces and steel mills (SIC industry/ 

Orlando Opportunities 3312 only), the authors examined over 45 specifi c 41724.pdf 

Lawrence in the U.S. Iron energy effi ciency technologies and measures and estiBerkeley and Steel Sector mated energy savings, carbon dioxide savings, investNational ment costs, and operation and maintenance costs for 

Laboratory), each of these measures. Based on this information, 

1999 they constructed a conservation supply curve for U.S. 

iron and steelmaking that found a total cost-effective 

reduction of 3.8 GJ/t, equivalent to an achievable 

energy savings of 18% of 1994 U.S. iron and steel 

energy use and 19% of 1994 U.S. iron and steel carbon dioxide emissions. 

Howard Cost-Effective This paper proposes and analyzes ten different national http://www. 

Geller, John Carbon Dioxide energy effi ciency measures that could be used to meet aceee.org/ 

DeCicco, and Reduction President Clinton’s former proposal to reduce Green- pubs/ 

Steven Nadel Initiatives house gas emissions to 1990 levels by 2000. If these e934.htm 

(ACEEE), ten initiatives were undertaken, ACEEE projected, 

1993 national CO2

 emissions would be reduced by nearly 

9% in 2000. In addition, national energy use in 2000 

would fall by 7% and consumers’ energy bills would 

be reduced by over $50 billion that year. By 2010, 

CO2

 emissions would fall by 20%, national energy use 

would fall by nearly 17%, and consumers’ energy bills 

would be slashed by over $160 billion per year. These 

reductions in CO2

 emissions, energy consumption, and 

energy bills are relative to projected levels based on the 

reference case in DOE’s Annual Energy Outlook 1993. 

Illinois Modeling of This presentation contains an estimate of reductions http://www. 

Governor Rod Policy Proposals of MtCO2

e, changes in electricity sales due to imple­ epa.state.il.us/ 

R. Blagojevich menting policies, changes in electricity generation, air/climate 

Climate policies’ contributions to generation growth, effects change/ 

Change on coal generation, greenhouse gas policy impact documents/ 

Advisory outside Illinois, and other impacts of adopting a num­ 07-09-06/ 

Group, 2007 ber of policies such as “enhanced energy effi ciency 

programs.” The presentation fi nds that a mixed program could reduce electricity load growth by 100%. 

modelingof-policyproposals.ppt 

B-6 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Studies That Estimate the Carbon Reduction Benefits from Energy Effi ciency 

(continued) 

McKinsey & 

Company, 

2007 

Reducing U.S. 

Greenhouse Gas 

Emissions: How 

Much at What 

Cost? 

This paper analyzes the costs and benefi ts of more 

than 250 possible options to reduce or prevent 

greenhouse gas emissions in the U.S. over the next 

25 years, including various energy effi ciency measures. The study concluded that the U.S. can reduce 

greenhouse gas emissions by 7 to 28 percent by 2030 

using tested approaches and high-potential emerging 

technologies. Improving energy effi ciency in buildings, appliances, and industrial sectors could offset 

85 percent of the increased demand for electricity 

anticipated by 2030, reducing the average net cost to 

the economy of reducing greenhouse gas emissions. 

http://www. 

mckinsey.com/ 

clientservice/ 

ccsi/greenhouse 

gas.asp 

John 

Mortensen 

(National 

Renewable 

Energy 

Laboratory), 

2002 

Projected 

Benefi ts of 

Federal Energy 

Effi ciency and 

Renewable 

Energy Programs: 

FY 2003–FY 

2020 

The report summarizes the results of EERE’s annual 

Government Performance and Results Act data for 

fi scal year 2003. The survey reviewed a number of 

energy, environmental, and fi nancial metrics including 

carbon emissions displaced by EERE’s programs. The 

report predicts that “By 2020, EERE’s programs could 

reduce total fossil energy consumption by 9–15% 

and reduce total carbon emissions by 9–17% compared to the ‘No-EE’ case. Projected growth in fossil 

energy consumption could be reduced by 40–67% by 

2020. Projected growth in carbon emissions could be 

reduced by 34–67% by 2020.” 

http://www1. 

eere.energy. 

gov/ba/pdfs/ 

fy03_benefi ts_ 

report.pdf 

Author/ 

Source, Date Title Report Description Web Site 

Interlaboratory Working 

Group 

(Oak Ridge 

National 

Laboratory 

and Lawrence 

Berkeley 

National 

Laboratory), 

1997 

Scenarios of 

U.S. Carbon 

Reductions: 

Potential Impacts 

of Energy 

Effi cient and 

Low-Carbon 

Technologies 

by 2010 and 

Beyond 

This report shows the results of a study conducted by 

fi ve DOE labs on the U.S. potential to reduce greenhouse gas emissions by employing energy-effi cient 

and low-carbon technologies. The study looked at 

business-as-usual forecasts from the Energy Information Administration’s 1997 Outlook, which projected 

an increase of 390 million metric tonnes of carbon 

(MtC) per year (from 1340 to 1730 MtC) between 

1990 and 2010. The study concluded that, along with 

utility sector investments, a vigorous national commitment to develop and deploy energy-effi cient and lowcarbon technologies could cost-effectively reduce U.S. 

carbon emissions by approximately 390 MtC per year. 

http://enduse. 

lbl.gov/Projects/ 

5Lab.html 

National Action Plan for Energy Effi ciency B-7
Studies That Discuss Existing Barriers to Greater Investment in Energy Effi ciency 

Author/ 

Source, Date Title Report Description Web Site 

Miriam Pye Making Business This paper outlines a number of successful projects http://www. 

(ACEEE), Sense of Energy that have combined energy effi ciency and pollution aceee.org/ 

2008 Effi ciency and 

Pollution 

Prevention 

prevention technologies. The paper also highlights the 

benefi ts of energy effi ciency in preventing pollution 

and reducing greenhouse gases, along with energy 

savings potential and economic benefi ts. An overview 

of barriers to energy effi ciency is also provided, along 

with solutions to overcome these barriers. 

pubs/ 

ie982.htm 

Ernest Worrell 

and Lynn Price 

(Lawrence 

Berkeley 

National 

Laboratory), 

2001 

Johnathan 

Garo Koomey, 

1990 

Barriers and 

Opportunities: 

A Review of 

Selected 

Successful 

Energy-Effi ciency 

Programs 

Energy Effi ciency 

in New Offi ce 

Buildings: An 

Investigation of 

Market Failures 

and Corrective 

Policies 

This paper looks at barriers that prevent the implementation of energy effi ciency improvements. 

This dissertation examines policies used to encourage 

energy efficiency in commercial buildings. It delves into 

the technical evidence for market failures and other 

sources that prevent optimal energy effi ciency measures 

from being used. More specifically, the paper looks 

at technical evidence for market failures affecting the 

energy efficiency of new office buildings and looks at 

the type of market failures and regulatory distortions, 

such as imperfect competition, economic non-rationality, 

and regulatory distortions. The paper also provides 

a number of corrective policies that can be used to 

encourage energy effi ciency. 

http:// 

industrial-energy. 

lbl.gov/node/198 

http://enduse. 

lbl.gov/Info/ 

JGKdissert.pdf 

William H. 

Golove and 

Joseph H. Eto 

(Lawrence 

Berkeley 

National 

Laboratory), 

1996 

Market Barriers 

to Energy 

Effi ciency: 

A Critical 

Reappraisal of 

the Rationale for 

Public Policies to 

Promote Energy 

Effi ciency 

The report discusses seven different market barriers to 

investment in energy effi ciency: 

1. Misplaced incentives. 

2. Lack of access to fi nancing. 

3. Flaws in market structure. 

4. Mis-pricing imposed by regulation. 

5. Decision infl uenced by custom. 

6. Lack of information or misinformation. 

7. “Gold-plating” and inseparability of features. 

http://eetd.lbl. 

gov/ea/EMS/ 

reports/38059. 

pdf 

B-8 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Studies That Discuss Existing Barriers to Greater Investment in Energy 

Effi ciency (continued) 

Author/ 

Source, Date Title Report Description Web Site 

Steven Nadel 

(ACEEE), 

1997 

Appliance 

Energy Effi ciency: 

Opportunities, 

Barriers and 

Policy Solutions 

The study reviews recent progress in improving the 

energy effi ciency of appliances in the United States. 

Nonetheless, for many products in the United States, 

appliance energy effi ciency has not progressed much 

in recent years due to market barriers and the lack of 

certain policies that would require increased effi ciency. 

The paper presents technical opportunities for increasing the energy effi ciency of appliances and discusses 

policies that can overcome barriers to energy effi ciency. 

http://www. 

aceee.org/ 

pubs/a972. 

htm 

Documents That Discuss a Vision for Energy Efficiency and Related Policies, 

Programs, and Technologies 

Author/ 

Source, Date Title Scope Web Site 

Alliance to Vision 2010: The This Web site describes legislative provisions that http://www. 

Save Energy, Alliance Energy should be implemented to improve energy effi ciency in ase.org/ 

2005 Effi ciency Plan different sectors of the economy: transportation, buildings, industry, and electric and natural gas utilities. content/article/ 

detail/2131 

Business More Diverse, The Business Roundtable report was developed by a http://www. 

Roundtable, More Domestic, group of chief executives of major U.S. corporations. businessround 

2007 More Effi cient: 

A Vision for 

America’s Energy 

Future 

The report describes the energy challenges the U.S. is 

facing today and provides specifi c recommendations 

on how to solve energy needs such as increasing the 

effi ciency of buildings, appliances, increased use of 

effi cient generating technologies such as CHP. 

table.org/pdf/ 

Energy/ 

Business_ 

Roundtable_ 

Energy_Report 

_06062007. 

pdf 

California Distributed This report provides a vision for 2020 on how distributed http://www. 

Energy Generation and generation and combined heat and power can be uti­ energy. 

Commission, Cogeneration lized. MWh targets are identified for different distributed ca.gov/2007 

2007 Policy Roadmap 

for California 

generation and combined heat and power technologies. 

Long-term strategies and policies are discussed. 

publications/ 

CEC_500­

2007-021/CEC 

-500-2007­

021.pdf 

National Action Plan for Energy Effi ciency B-9
Documents That Discuss a Vision for Energy Efficiency and Related Policies, 

Programs, and Technologies (continued) 

Author/ 

Source, Date Title Scope Web Site 

California 

Energy 

Commission 

and California 

Public Utilities 

Commission, 

2005 

Energy Action 

Plan II 

The Energy Action Plan sets state goals and identifi es 

policies to help meet the California’s future energy 

needs. The specifi c action areas addressed in the 

paper are energy effi ciency; demand response; renewables; electricity adequacy, reliability, and infrastructure; electricity market structure; natural gas supply; 

transpiration fuels; R&D; and climate change. 

http://www. 

energy.ca.gov/ 

energy_action 

_plan/2005­

09-21_EAP2_ 

FINAL.PDF 

California 

Public Utilities 

Commission, 

2008 

California’s Long 

Term Energy 

Effi ciency Strategic Plan 

California’s fi rst Long Term Energy Effi ciency Strategic 

Plan provides an integrated framework of goals and 

strategies for saving energy, covering government, 

utility, and private sector actions. The plan provides 

a roadmap for 2009 to 2020, focusing on four “Big 

Bold strategies” for energy savings: 

1. All new residential construction in California will 

be zero net energy by 2020. 

2. All new commercial construction in California will 

be zero net energy by 2030. 

3. The heating, ventilation, and air conditioning 

industry will be reshaped to ensure optimal equipment performance. 

4. All eligible low-income homes will be energyeffi cient by 2020. 

http://www. 

californiaenergy 

effi ciency.com 

Representatives High Performance The paper describes how to improve commercial http://www. 

of the commer- Commercial buildings through new designs, new technologies, eere.energy.gov/ 

cial building Buildings: A improved building codes and standards, and other buildings/info/ 

industry (DOE Technology measures. documents/ 

EERE), 2000 Roadmap pdfs/roadmap_ 

lowres.pdf 

Energy Future Challenge and This report provides recommendations and discussion http://www. 

Coalition Opportunity: 

Charting a New 

Energy Future 

of what is needed to address today’s energy challenges. energyfuture 

coalition.org/ 

pubs/EFC 

Report.pdf 

EPA Combined Funding This Web site lists a number of state and federal http://www. 

Heat and Power Database incentives for combined heat and power projects and epa.gov/chp/ 

Partnership for projects using biomass/biogas. funding/ 

funding.html 

B-10 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Documents That Discuss a Vision for Energy Efficiency and Related Policies, 

Programs, and Technologies (continued) 

PJM, 2007 Bringing the 

Smart Grid 

Home 

This piece provides a vision of how the U.S. electrical 

infrastructure will look. The concept of a smart grid is 

examined and its benefi ts are identifi ed. 

http://www2. 

pjm.com/ 

documents/ 

downloads/ 

strategicresponses/ 

letters/ 

smartgrid.pdf 

Author/ 

Source, Date Title Scope Web Site 

McKinsey Curbing Global This paper is a global study on different sectors of the http://www. 

Global Energy Demand economy: buildings, transportation, and industries. It mckinsey.com/ 

Institute, Growth: The details how implementing certain policies and technol­ mgi/publications/ 

2007 Energy Productivity 

Opportunity 

ogy developments can help reduce forecasted energy 

use. 

Curbing_Global_ 

Energy/index.asp 

National 

Energy 

Technology 

Laboratory, 

2007 

National 

Petroleum 

Council, 2007 

A Vision for the 

Modern Grid 

Facing the Hard 

Truths About 

Energy 

This document expands on the vision for a modern 

grid that will “revolutionize the electric system by 

integrating 21st century technology to achieve seamless generation, delivery, and end-use that benefi ts 

the nation.” 

This draft report provides a comprehensive view to 

2030 of global oil and natural gas. 

http://www. 

netl.doe.gov/ 

moderngrid/ 

docs/A%20 

Vision%20 

for%20the 

%20Modern 

%20Grid_ 

Final_v1_0.pdf 

http:// 

downloads. 

connectlive. 

com/events/ 

npc071807/ 

pdf-downloads/ 

Facing_Hard_ 

Truths-Report. 

pdf 

North 2006 Long- This report includes an assessment of the reliability of ftp://www. 

American Term Reliability the bulk power systems in North America, as well as nerc.com/pub/ 

Electric Assessment key fi ndings and actions needed. sys/all_updl/ 

Reliability docs/pubs/ 

Council, 2006 LTRA2006.pdf 

National Action Plan for Energy Effi ciency B-11
Documents That Discuss a Vision for Energy Efficiency and Related Policies, 

Programs, and Technologies (continued) 

Author/ 

Source, Date Title Scope Web Site 

State of New 

Jersey, 2008 

State of New 

Jersey Energy 

Master Plan 

The Energy Master Plan analyzes New Jersey’s current 

and future energy challenges and proposes a series of 

actions to ensure adequate, reliable energy supplies 

that are both environmentally responsible and competitively priced. This roadmap includes several actions 

to maximize energy conservation and energy effi ­

ciency. According to this analysis, the proposed course 

of action would effectively reduce energy consumption by 20 percent, leading to more than $30 billion 

in energy savings between 2010 and 2020. 

http://www. 

nj.gov/emp/ 

Documents with More Information on Energy Efficiency and Related Policies, 

Programs, and Technologies 

Author/ 

Source, Date Title Scope Web Site 

Appliance 

Standards 

Awareness 

Project 

This Web site provides information and resources on 

federal and state appliance standards. 

http://www. 

standardsasap. 

org 

Building Codes 

Assistance 

Project 

This nonprofi t organization is dedicated to helping states adopt and implement up-to-date building 

energy codes. 

http://www. 

bcap-energy.org 

Bonneville 

Power 

Administration 

Industrial Audit 

Guidebook 

This is a guidebook for performing walk-through 

energy audits of industrial facilities. It highlights key 

measures for industrial energy savings. 

http://www. 

bpa.gov/ 

energy/n/ 

projects/ 

industrial/pdf/ 

audit_guide.pdf 

Chris King 

and Dan 

Delurey 

Twins, Siblings, 

or Cousins 

Discusses the effect of demand response programs on 

total energy consumption based on a survey of over 

100 demand response programs. 

Published in 

Public Utilities 

Fortnightly in 

March 2005 

U.S. DOE Information on 

Smart Grid Technologies 

This Web site provides several resources on smart grid 

technology, including results from several ongoing 

federal research efforts. 

http://www. 

oe.energy.gov/ 

smartgrid.htm 

B-12 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Documents with More Information on Energy Efficiency and Related Policies, 

Programs, and Technologies (continued) 

Author/ 

Source, Date Title Scope Web Site 

ERG and 

Energy and 

Environmental 

Analysis (EPA) 

Output-Based 

Regulations: A 

Handbook for 

Air Regulators 

EPA designed this handbook to help air regulators 

understand and then establish output based regulations. The report details the attributes of output-base 

regulations, which reward energy effi cient projects by 

allocating allowances or issuing standards based on 

the productive output of the process instead of how 

much fuel is used. Output-based regulation design 

issues are also discussed. 

http://www. 

epa.gov/ 

cleanrgy/pdf/ 

output_rpt.pdf 

Elliott Roseman 

and Sandra 

Hochstetter 

Regional 

Resource 

Planning Makes 

Sense 

This article gives historical background on the regional 

resource planning process, discusses recent developments, and provides recommendations for how 

regional resource planning should be conducted. 

http://www. 

energypulse. 

net/centers/ 

article/article_ 

display.cfm?a_ 

id=1416 

Galvin Electricity 

Initiative 

Information on 

“Perfect Power” 

systems and 

related efforts 

This privately funded initiative aims to help modernize 

the U.S. electric power system to be environmentally 

sound, fuel-effi cient, and able to withstand natural 

disasters or a potential terrorist attack. The initiative has developed reports and other resources that 

describe technology options, consumer needs, and 

functional specifi cations for achieving the “perfect” 

power system. 

http://www. 

galvinpower.org/ 

Gridwise at 

PNNL and 

Gridwise 

Architecture 

Council 

Information on 

modernizing the 

power grid 

This Web site provides information on how to update/ 

modernize the power grid. It offers a number of 

resources on how to transform the grid, including the 

Gridwise Architecture Council’s interoperability checklist (<http://www.gridwiseac.org/pdfs/gwac_ 

decisionmakerchecklist.pdf>) 

http://gridwise.pnl.gov/ 

technologies 

http://www. 

gridwiseac.org 

Michael R. 

Muller and 

Kyriaki 

Papadaratsakis 

(Industrial 

Assessment 

Center at 

Rutgers 

University), 

2003 

Self-Assessment 

Workbook 

for Small 

Manufacturers 

This workbook provides information on key measures 

for industrial energy savings. 

http://www. 

iac.rutgers. 

edu/database/ 

technicaldocs/ 

IAC_Manuals/ 

selfassessment.pdf 

National Action Plan for Energy Effi ciency B-13
Documents with More Information on Energy Efficiency and Related Policies, 

Programs, and Technologies (continued) 

Author/ 

Source, Date Title Scope Web Site 

Innovest Energy Man- This paper examines energy effi ciency and energy http://www. 

Strategic agement and management performance in the real estate sector. It energystar.gov/ 

Value Investor Returns: fi nds that companies that used energy-effi cient tech­ ia/business/ 

Advisors, The Real Estate nologies and other highly effi cient products achieved guidelines/ 

2003 Sector the best stock and fi nancial performance over a 

2-year period. 

assess_value/ 

reit.pdf 

La Capra 

Associates, 

GDS Associates, 

and Sustainable 

Energy 

Advantage 

(North Carolina 

Utilities 

Commission), 

2006 

Analysis of a 

Renewable 

Portfolio Standard 

for the State of 

North Carolina 

This report identifi es the potential for renewable generation in North Carolina and helps identify achievable 

targets for a statewide renewable portfolio standard. 

http://www. 

lacapra.com/ 

downloads/ 

NC_RPS_ 

Report.pdf 

Martin Examining the The Midwest has a signifi cant number of industries http://www. 

Kushler, Dan Potential for that rely on natural gas and many Midwestern homes aceee.org/ 

York, and Energy Effi ciency are heated by natural gas–fueled space heaters. Due to pubs/u051. 

Patti Witte to Help Address this large reliance on natural gas, the Midwest needs htm 

(ACEEE), the Natural Gas other fuels/technologies to meet its energy needs. This 

2005 Crisis in the 

Midwest 

report examines the potential for energy effi ciency as a 

way to curb the Midwest’s dependence on natural gas. 

Massachusetts 

Technology 

Collaborative 

National 

Action Plan 

for Energy 

Effi ciency, 

2006 

Decoupling of 

Utility Rates 

National Action 

Plan for Energy 

Effi ciency 

This Web site contains a number of reports and other 

information related to decoupling of utility rates. 

The Action Plan is a strategy developed by a diverse 

group of stakeholders to realize energy savings and 

environmental benefi ts through energy effi ciencyrelated policies and other measures. 

http://www. 

mtpc.org/dg/ 

decoupling.htm 

http://www. 

epa.gov/ 

cleanenergy/ 

actionplan/ 

eeactionplan. 

htm 

New Jersey New Jersey’s New Jersey’s Clean Energy Program offers a compre­ http://www. 

Board of Clean Energy hensive suite of programs that makes energy effi ciency njclean 

Public Program 2005 and renewable energy technologies affordable and energy.com/ 

Utilities, Annual Report accessible to residential customers, businesses, schools, fi les/fi le/2005 

Offi ce of and local governments in New Jersey. %20Annual 

Clean Energy, %20Report.pdf 

2005 

B-14 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Documents with More Information on Energy Efficiency and Related Policies, 

Programs, and Technologies (continued) 

Author/ 

Source, Date Title Scope Web Site 

NYSERDA, New York Energy Energy $mart provides funding for energy effi ciency, http://www. 

2007 $martSM Program 

Evaluation and 

Status Report: 

Report to the 

System Benefi ts 

Charge Advisory 

Group 

low-income consumers, R&D, environmental protection programs, and projects in other areas. This report 

describes how much money has been collected for 

the program, how the money is allocated, what types 

of projects have received funding, and identifi es the 

benefi ts of the program. 

nyserda.org/ 

Energy_ 

Information/ 

SBC/sbcmar 

07coverTOC. 

pdf 

Optimal Energy Power to Save: This report presents the potential for energy effi ciency http://www. 

(Natural An Alternative and demand reductions in Texas and recommends ceres.org/pub/ 

Resources Path to Meet strategies to meet this potential. docs/Ceres_ 

Defense Electric Needs in texas_power. 

Council and Texas pdf 

Ceres), 2007 

Plug-in Partners Information on These two Web sites provide information on plug-in http://www. 

National plug-in hybrid hybrids. pluginpartners. 

Campaign and vehicles org 

The California 

Cars Initiative http://www. 

calcars.org 

National Action Plan for Energy Effi ciency B-15

Appendix Energy Effi ciency Benefi ts C: Analysis Assumptions
 

The analysis of program benefits for the Action Plan’s Vision uses the Energy Effi ciency Benefi ts Calculator, a tool that demonstrates the benefits to customers, utilities, and society of implementing energy 

efficiency programs. The Calculator was developed for the Leadership Group and is one of the resources 

available to aid users in educating stakeholders on the benefits of energy effi ciency programs. 

For this analysis, the Calculator was used to estimate 

the benefi ts of displacing more than 50 percent of 

load growth through 2025, or 20 percent of electricity 

consumption and 10 percent of gas consumption in 20 

years. These savings were assumed to be achieved by 

broad adoption of a range of conventional energy effi ­

ciency programs. The estimates are based on assumptions of average program spending levels by utilities or 

other program administrators, with conservatively high 

numbers for the cost of energy effi ciency programs. 

The economic and environmental savings estimate are 

extrapolations of the results from existing utility and 

state programs to a national scope. Emission savings are 

based on a marginal generation factor that is double 

that of the annual average. 

The key assumptions are summarized in Figure C-1. Total 

consumption, load growth, peak demand, and retail 

rate assumptions are based on current data as tabulated 

by the Energy Information Administration (EIA) or as 

projected in the EIA Annual Energy Outlook 2007. 

The levelized program cost of $35.00/MWh for electricity 

and $3.00/MMBtu for gas is assumed. Energy effi ciency 

program costs are based on assumptions of average 

program spending levels by utilities and other program 

administrators, as well as program participants. Administrator costs are assumed at $20.00/MWh for electricity and $1.50/MMBtu for natural gas. Participant costs 

are assumed at $15.00/MWh for electricity and $1.50/ 

MMBtu for natural gas. Many of today’s programs deliver 

energy savings for less than these assumed costs. 

Figure C-1. Assumptions and Inputs 

Electric 

• Annual consumption 2008: 3,992,000 GWh 

• Peak load 2008: 971.926 MW 

• Annual growth in consumption: 1.6%/year 

• Annual revenue (customer bills) 2008: $351,129 

million 

• Effi ciency program cost: $35.00/MWh 

• Power plant capital cost: $1,000/kW 

• Average CO2

 emission factor: 0.52 tonne/MWh 

• Annual cost escalation: 2%/year 

Natural Gas 

• Annual consumption 2008: 22,497 Tcf 

• Annual growth in consumption: 0.7%/year 

• Annual revenue (customer bills) 2008: $190,726 

million 

• Effi ciency program cost: $3.00/MMBtu 

• Average CO2

 emission factor: 0.053 tonne/ 

MMBtu 

• Annual cost escalation: 2%/year 

Other 

• Discount rate for net present value: 5% 

• Energy effi ciency measure life: 15 years 

National Action Plan for Energy Effi ciency C-1

Approach for 

Appendix Measuring Progress D: at the State Level
 

Appendix D provides an explanation of an approach for how progress toward the Vision goals will be 

measured, as presented in Tables 2-1 and 2-2. A summary of existing state policies and actions that can 

assist in achieving the Vision goals has been developed and is described below. This appendix describes 

how the information was collected at the state and regional level and also describes the approach for 

determining if a state has completed a step in whole or in part. This approach was refined by the Action 

Plan Leadership Group in 2008. 

Collection of Information
 

As part of the Action Plan’s Regional Implementation 

Meetings in 2007, the status of various energy effi ciency 

policies or programs was collected at the state level. 

This detailed information has been updated and used to 

develop the baseline (December 31, 2007) for measuring 

progress at the state level. Information on the 28 policy 

or program steps is presented in Tables 2-1 and 2-2. In 

some cases, this information was supplemented with 

additional sources as noted in the specifi c step. Further, 

this information was sent to state organizations for 

additional comment. Information on measuring progress 

at the state level will be updated on a regular basis at the 

Action Plan Web site, www.epa.gov/eeactionplan. 

Determining the Status of a Policy
 

Tables 2-1 and 2-2 summarize the status of a statelevel policy or program based on it being considered to 

be “complete” or “partial/some elements of policy in 

place.” These two categories have been developed from 

more detailed information, based on the format used 

for the Regional Implementation Meetings. If information was not readily available at the state level it is not 

included. If additional information on these policies is 

available based on a review of the current information 

on measuring progress on the Action Plan Web site, 

please send it to Katrina Pielli at pielli.katrina@epa.gov 

and it will be included as the information is updated in 

the future. 

A more detailed explanation of the assessment for each 

of the implementation goals and the key policies or program steps in Tables 2-1 and 2-2 is provided below.1 

Goal One: Establishing Cost-Effective Energy 

Efficiency as a High-Priority Resource 

1. 	 Process in place, such as a state and/or 

regional collaborative, to pursue energy 

efficiency as a high-priority resource. A state 

where stakeholders were involved in an advisory 

or collaborative role with program administrators,2

 while developing energy resource plans and/ 

or energy effi ciency program plans or determining 

the best use of effi ciency or sustainable energy 

funds, was considered as having “completed” 

this step. Collaboratives should incorporate the 

following best practice attributes for successful 

collaborative processes, taken from the Action 

Plan Report: 1) neutral facilitation of meetings; 

2) clear objectives for the group overall and for 

each meeting; 3) explicit defi nition of stakeholder 

group’s role in resource or program planning (usually advisory only); 4) explicit and fair processes 

for providing input; and 5) a timeline for the 

stakeholder process. The sources for this information included interviews with regulators and 

program administrators, as well as online materials such as utility commission orders and rules. 

The totals in Tables 2-1 and 2-2 represent those 

that have been positively confi rmed. There is no 

“partially complete” for this step. 

National Action Plan for Energy Effi ciency D-1
2. 	 Policy established to recognize energy effi ­

ciency as high-priority resource. A state was 

considered to have “completely” established 

energy effi ciency as a high-priority resource, equivalent or superior to supply resources, if there was a 

clearly established policy to that effect (such as an 

integrated resource planning objective of acquiring all cost-effective energy effi ciency). A state was 

considered to have “partially completed” this step 

if it was found to have completed one out of the 

following seven possible policies that states are 

pursuing in this area. The list of possible policies is 

purposely diverse to represent the different circumstances of states and the expectation is not that all 

policies are appropriate for all states. 

–	 Energy effi ciency is integrated into an active 

integrated resource planning, portfolio management, or other planning process. 

–	 Energy effi ciency is procured as a resource for 

default service/standard offer customers. 

–	 Energy effi ciency is an alternative to transmission 

based on a long-term transparent integrated 

resource planning or transmission system plan. 

–	 Energy effi ciency is a biddable commodity. 

–	 State implementation plans include energy effi ­

ciency set-asides. 

–	 Energy effi ciency commitment is in statute. 

–	 Energy effi ciency can be used to fulfi ll requirements of a renewable portfolio standard or 

similar standard. 

3. 	 Potential identified for cost-effective, achievable energy efficiency over the long term. 

A state was considered to have “completely” 

established the potential for cost-effective energy 

effi ciency through a potential study if there was a 

recent (within the past fi ve years), comprehensive 

study available for attainable energy effi ciency. A 

state was considered to have “partially completed” 

this step if, for example, it had announced plans for 

a study but not yet completed it. 

4. 	 Energy efficiency savings goals or expected 

energy savings targets established consistent with cost-effective potential. A state was 

considered to have “completed” this step if it had 

established the potential for cost-effective energy 

effi ciency through a potential study, and also 

established at least one of the following: 

–	 Funding requirements for all long-term, costeffective energy effi ciency. 

–	 Quantitative MW and MWh savings goals established and producing incremental investment. 

If a state had completed one or even both of the 

above items, but had not established the potential 

for cost-effective energy effi ciency by completing a 

potential study, then that state was considered to 

have “partially completed” this step. 

5. 	 Energy efficiency savings goals and targets 

integrated into state energy resource plan, 

with provisions for regular updates. A state 

was considered to have “completed” this step if all 

of the following options have been accomplished: 

–	 Energy effi ciency was integrated into an active 

integrated resource planning, portfolio management, or other resource planning process. 

–	 Resource plans were regularly updated. 

–	 Energy savings from building codes quantifi ed 

and incorporated into resource planning. 

A state was considered to have “partially completed” 

this step if it had completed two of the above items. 

The third option requires that a state quantify the 

impact of building codes in energy saved and the 

state resource planning processes direct utilities to 

explicitly account for building codes in their base case 

load forecast for resource planning. 

6. 	 Energy efficiency savings goals and targets 

integrated into a regional energy resource 

plan. Progress will be measured for this step in the 

future as regional resource planning efforts evolve 

across the country. 

D-2 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Goal Two: Developing Processes to Align 

Utility and Other Program Administrator 

Incentives Such That Efficiency and Supply 

Resources Are on a Level Playing Field 

7. 	 Utility and other program administrator disincentives are removed. A state was considered to 

have “completed” this step if it had addressed the 

utility throughput incentive and removed disincentives, such as through decoupling or lost revenue 

recovery. A state was considered to have “partially completed” this step if it had addressed the 

throughput incentive and removed disincentives 

for one or more utilities, but not for all utilities. If a 

state had an open docket on these issues but had 

not yet issued a fi nal decision, it was not considered to have “partially completed” this step. Note 

that a state that has approved a pilot to remove 

disincentives and includes a date to revisit the pilot 

for future monitoring is considered “complete.” 

8. 	 Utility and other program administrator incentives for energy efficiency savings reviewed 

and established as necessary. A state was considered to have “completed” this step if the utility 

commission has explored establishing incentives for 

energy effi ciency savings for utilities and other program administrators and has issued a decision; or if 

the utility commission has ruled on incentive proposals fi led in the last three years by all utilities or program administrators under their jurisdiction. A state 

was considered to have “partially completed” this 

step if the utility commission has an open docket to 

explore this but has not yet issued a decision, or if 

the utility commission has ruled within the last three 

years on incentive proposals fi led by either half of 

the utilities under their jurisdiction or by program 

administrator/s serving at least half of the state’s 

customers of regulated utilities. 

9. 	 Timely cost recovery in place. Progress on this 

policy is not currently being measured, but it is 

hoped that in each state’s process of exploring 

additional energy effi ciency, the timeliness of program cost recovery will be addressed. 

Goal Three: Establishing Cost-Effectiveness 

Tests 

10. 	 Cost-effectiveness tests adopted which refl ect 

the long-term resource value of energy effi ­

ciency. A state was considered to have “completed” 

this step if it included a testing method such as the 

total resource cost (TRC) or societal cost test in the 

suite of cost-effectiveness tests performed to evaluate energy efficiency programs. The TRC or societal 

tests do not need to be the sole tests performed for 

a state to have “completed” this step. A state was 

considered to have “partially completed” this step if, 

for example, these testing methods were allowed to 

be used but had not been to date, or if a docket was 

open that was looking at cost-benefi t evaluation. 

Goal Four: Establishing Evaluation, Measurement, and Verifi cation Mechanisms 

11. 	 Robust, transparent EM&V procedures established. A state was considered to have “completed” 

this step if it had a robust EM&V process in place. 

Robust procedures include completing impact, market, and process evaluations. A state was considered 

to have “partially completed” this step if, for example, utilities were required to develop a measurement 

and verification process by commission order but this 

action was pending, or if a docket was open that was 

looking at EM&V procedures. 

Goal Five: Establishing Effective Energy Effi ­

ciency Delivery Mechanisms 

12. 	 Administrator(s) for energy effi ciency programs clearly established. A state was considered to have “completed” this step if the energy 

effi ciency delivery structure had been established. 

A state was considered to have “partially completed” this step if, for example, a docket was 

open that was looking at which entity would be 

the energy effi ciency program administrator. 

13. 	 Stable (multi-year) and sufficient funding in 

place consistent with energy effi ciency goals. 

A state was considered to have “completed” this 

step if funding requirements for all long-term, costeffective energy effi ciency had been established. If 

National Action Plan for Energy Effi ciency D-3
a state had completed three of the following fi ve 

items, it was considered to have “partially completed” this step: 

–	 Cost recovery process exists. 

–	 Funding is for multi-year periods (more than 2 

years). 

–	 A base energy effi ciency spending level exists, 

with opportunity to justify higher level. 

–	 A percentage of net (retail) utility revenue presently used for energy effi ciency. 

–	 Other mechanisms that provide stable, multiyear funding to meet energy effi ciency goals. 

14. 	 Programs established to deliver energy effi ­

ciency to key customer classes and meet 

energy efficiency goals and targets. A state 

was considered to have “completed” this step 

if it had established energy effi ciency programs 

that reach all customer classes. Programs for 

low-income customers are a key customer class 

and must be included to “complete” this step. 

If a customer class chooses to opt out of energy 

effi ciency programs because they argue they are 

addressing energy effi ciency on their own, and 

the utility commission states that the utility does 

not need to offer programs to this customer class, 

a state can still “complete” this step. A state was 

considered to have “partially completed” this step 

if, for example, there was an open docket that was 

exploring energy effi ciency programs. 

15. 	 Strong public education programs on energy 

efficiency in place. A state was considered to 

have “completed” this step if all state-approved 

energy effi ciency program portfolios (administered 

by the utility and other program administrators) 

include public education programs. A state was 

considered to have “partially completed” this step 

if state-approved energy effi ciency program portfolios (administered by the utility and other program 

administrators) serving at least half of the state’s 

customers of regulated utilities include public education program/s. 

16. 	 Energy efficiency program administrator 

engaged in developing and sharing program 

best practices at the regional and/or national 

level. A state was considered to have “completed” 

this step if over two-thirds of its energy effi ciency 

budget was administered by entities that either: 1) 

belong to the Consortium for Energy Effi ciency; 2) 

belong to or serve on the board of a regional energy 

effi ciency market transformation organization (such 

as Northeast Energy Effi ciency Partnerships) or a 

regional organization dedicated to the promotion 

of energy effi ciency; or 3) belong to a national or 

regional organization that engages in the development and sharing of program best practices. 

Goal Six: Developing State Policies to Ensure 

Robust Energy Effi ciency Practices 

17. 	 State policies require routine review and 

updating of building codes. A state was considered to have “completed” this step if it had building energy codes in place and these codes were 

regularly updated. A state can also “complete” this 

step if its building codes are reviewed and updated 

to refl ect the current national building code (Model 

Energy Code or IECC model energy code for residential buildings; ASHRAE or IECC model energy 

code for commercial buildings). A state was considered to have “partially completed” this step if it 

had building energy codes in place but they were 

not regularly updated. 

18. 	 Building codes effectively enforced. States do not 

regularly conduct evaluations on code enforcement, 

so this information is not available. The few evaluations done to date are dated and assess the enforcement landscape very differently. Few states have 

plans to conduct future evaluations, given the cost 

of conducting these studies versus the need to use 

building code funding for education and training. 

19. 	 State appliance standards in place. A state was 

considered to have “completed” this step if it has 

D-4 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
appliance and equipment effi ciency standards in 

place that are regularly updated. This step does not 

suggest that state appliance standards are necessary for all appliances; only the set of additional 

appliances that are not addressed by the federal 

government. 

20. 	 Strong state and local government lead-byexample programs in place. In The State Energy 

Effi ciency Scorecard for 2006 (Eldridge et al., 

2007), states are ranked in terms of their enactment of lead-by-example programs. The ranking 

categories are energy effi ciency performance, new 

and existing state building targets, energy-effi cient 

product procurement, and research and development. A state was considered to have “completed” 

this step if it received 2 or more points. A state was 

considered to have “partially completed” this step 

if received below 2 points but above 0 points. 

Goal Seven: Aligning Customer Pricing and 

Incentives to Encourage Investment in Energy 

Effi ciency 

21. 	 Rates examined and modifi ed considering 

impact on customer incentives to pursue energy 

effi ciency. A state was considered to have “completed” this step if it had considered the impact 

on energy efficiency when designing retail rates. 

If a state had not considered that impact but had 

completed two of the three following items, it was 

considered to have “partially completed” this step: 

–	 Declining block rates and fi xed variable rate 

designs have been eliminated. 

–	 Time-sensitive rates in place. 

–	 Usage-sensitive rates in place. 

22. 	Mechanisms in place to reduce consumer disincentives for energy efficiency (e.g., including 

financing mechanisms). A state was considered 

to have “completed” this step if it had mechanisms in place to encourage energy effi ciency. A 

state was considered to have “partially completed” 

this step if the commission had requested that 

utilities submit proposals for mechanisms to reduce 

consumer disincentives or if a utility had submitted 

a proposal but the commission had not yet issued 

an order. Note that incentives for customer installation of energy effi ciency measures and products 

are treated as part of energy effi ciency programs, 

which are addressed in step 14. 

Goal Eight: Establishing State of the Art Billing Systems 

23. 	Consistent information to customers on 

energy use, costs of energy use, and options 

for reducing costs. Progress on this policy is not 

currently measured. It is hoped that, in coming 

years and with further advanced metering infrastructure (AMI) roll-out and increased efforts to 

benchmark building energy use, progress will be 

able to be measured. 

Goal Nine: Implementing State of the Art 

Efficiency Information Sharing and Delivery 

Systems 

24. 	 Investments in advanced metering, smart grid 

infrastructure, data analysis, and two-way 

communication to enhance energy effi ciency. 

A state was considered to have “completed” this 

step if it had electric utilities that had contracted for 

AMI. A state was considered to have “partially completed” this step if it had electric utilities that were 

running AMI pilots, had AMI deployment planned, 

or were planning a deployment. Some “partial” 

states refl ect investments in smart grid infrastructure, data analysis, and two-way communication. 

These states were listed as partial if, for example, 

not all electric utilities in the state had made investments, if investments were not yet installed, or if 

only some of the programs had been invested in. 

Three sources were used for this step: the regional 

summary tables tracking for AMI deployments; 

Appendix F of FERC (2007); and discussion with 

outside parties, including experts at <http://www. 

SmartGridNews.com> and GridWise Alliance. 

National Action Plan for Energy Effi ciency D-5
25. 	Coordinated energy efficiency and demand 

response programs established by customer 

class to target energy efficiency for enhanced 

value to customers. Progress will be measured 

for this step in the future once ongoing related 

work under the National Action Plan for Energy 

Effi ciency is complete. 

26. 	Residential programs established to use 

trained and certified professionals as part of 

energy efficiency program delivery. A state was 

considered to have “completed” this step if utilities 

and other program administrators representing 

75 percent or more of the state’s customers of 

regulated utilities have at least one state-approved 

energy effi ciency program for new and one for 

existing residential homes that utilize professionals trained and certifi ed by one of the following 

organizations: Residential Energy Services Network 

(RESNET), Building Performance Institute (BPI), 

organizations identifi ed under the LEED For Homes 

and the NAHB Green Building Program, and the 

North American Technician Excellence (NATE) or 

comparable HVAC organizations, or utilize utility 

training programs for program delivery. A state 

was considered to have “partially completed” 

this step if utilities and other program administrators representing 50-74 percent of the state’s 

customers of regulated utilities have at least one 

state-approved energy effi ciency program for new 

and one for existing residential homes that utilize 

professionals trained and certifi ed by one of the 

previously listed organizations or a utility training 

program. In addition, a state was considered to 

have “completed” this step if there are established 

programs requiring these certifi ed professionals but 

which exist without utility or state support. In such 

cases, these programs equal or exceed 20 percent 

of market penetration. 

Goal Ten: Implementing Advanced Technologies 

27. 	 Policies in place to remove barriers to combined heat and power. Progress was measured 

on policies associated with interconnection rules; 

reviewing combined heat and power as part of the 

planning process and incorporating it where effective; and standby rates. For states with statewide 

policies on standby rates for distributed generation, the two largest utilities (based on EIA data) 

were also reviewed to see if the policies were being 

implemented in a way that valued the costs and 

benefi ts of distributed generation. If there was no 

state policy, the two largest utilities were reviewed 

to determine if their rates valued the costs and 

benefi ts of distributed generation. A state that had 

completed two of the three following items was 

considered to have “completed” the step below, 

and a state that had completed one of the items 

was considered to have “partially completed” if: 

–	 A statewide interconnection policy is in place. 

–	 As part of the resource planning process, combined heat and power is reviewed and incorporated where effective. 

–	 An effective state standby rate policy is in place, 

or the two largest utilities have implemented 

rates that “value the costs and benefi ts of distributed generation.” 

28. 	 Timelines developed for the integration of 

advanced technologies. Progress on this policy is 

not currently measured. It is hoped that, in coming 

years and with the maturity of energy effi ciency technology efforts, progress will be able to be measured. 

Notes 

1. 	 The Vision goals are not numbered to show priorities. Accomplishing all goals is necessary to be capturing all cost-effective 

energy effi ciency by 2025. 

2. 	 Program administrators can include utilities, third parties, energy 

offi ces and other public sector entities. 

D-6 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Approach for 

Appendix Measuring Progress E: by National Benefi ts 

Appendix E provides additional information on the approaches currently being used to quantitatively 

measure progress toward the Vision goal of achieving all cost-effective energy efficiency. Currently, fi ve 

national metrics are being used, as presented in Chapter 2 and Table 2-3. Existing data, primarily from 

surveys of administered energy efficiency programs, have been used to establish initial national values 

for these metrics for the year 2006.1

 This appendix also outlines the key limitations with the existing data. 

Future efforts will explore options for expanding the breadth and accuracy of energy effi ciency information in order to improve the ability to measure progress. Additional metrics may also be explored. 

Background
 

At its meeting in January 2007, the Action Plan’s Leadership Group established a Work Group on Measuring 

Progress Toward the 2025 Vision. In the spring of 2008 

this Work Group proposed an approach for quantitatively measuring progress toward the Vision goal, 

which the full Leadership Group then reviewed. Expert 

consultants from Lawrence Berkeley National Laboratory (LBNL) were retained to collect the available data 

and develop baseline estimates for 2006. The following 

broad principles were followed throughout this effort: 

• 	 Data will be collected at the state and regional levels, 

but only national numbers will be released within the 

Vision document. 

• 	 New data collection efforts will not be undertaken 

through this effort; data from existing sources will be 

used. 

• 	 Energy effi ciency will be the focus of the metrics 

where possible, rather than the full suite of demandside management efforts. 

• 	 Quantitative metric measurement approach will be 

modifi ed over time as additional, more robust data 

become available. 

• 	 Limitations of the data will be clearly stated and 

areas for improvement will be identifi ed. 

This appendix documents the approaches used to 

measure progress through the fi ve quantitative metrics 

presented in Chapter 2: 

• 	 Metric 1: Projected energy savings from existing 

energy savings goals and targets (kWh). 

• 	 Metric 2: Current energy savings (kWh, kW, and 

therms). 

• 	 Metric 3: Current avoided emissions of carbon dioxide (tons). 

• 	 Metric 4: Current funding of energy effi ciency programs. 

• 	 Metric 5: Current energy consumption across the 

building and industrial sectors (kWh, therms). 

Metric 1: Projected Energy 

Savings from Existing Energy 

Savings Goals and Targets (kWh) 

To ensure a consistent approach to estimating expected 

energy to be saved through energy savings goals and/ 

or targets in place across the country, decisions were 

made as to the scope of the policies to include and a 

general methodology was developed to estimate the 

impacts of the energy savings goals/targets through 

2025. Further, key assumptions were made for each 

National Action Plan for Energy Effi ciency E-1
state. These elements of the approach are detailed 

below. 

Scope of Policies 

Long-term electricity savings projections were developed for 14 states. These states had one or more of the 

following in place by the end of 2007:2 

• 	 Long-term energy savings goals, including (but 

not limited to) formal energy effi ciency portfolio 

standards (EEPS) established through legislation or 

regulatory action.3 

• 	 Renewable portfolio standards (RPS) or broader 

alternative resource portfolio standards under which 

energy effi ciency is a qualifying resource.4 

• 	 Long-term electricity savings projections from the 

most recent integrated resource plans (IRPs) fi led by 

investor-owned utilities (IOUs) in Connecticut, Idaho, 

Montana, and Oregon.5 

Consistent with the broad principles above, states 

were included in this approach only if a goal or target 

was readily available in an existing source.6

 As work 

on projecting the benefi ts of energy savings goals and 

targets continues under the Action Plan, this baseline 

can become more comprehensive. It currently focuses 

exclusively on electricity usage savings (kWh), as these 

are the units in which EEPS and RPS goals are typically 

expressed. Relatively few states have long-term electricity capacity (kW) or gas (therm) savings goals, and the 

few that do represent a fairly minimal part of total electricity and natural gas savings in the U.S. Thus, existing 

work to project the impacts of energy savings goals is 

not yet capturing future electricity capacity and natural 

gas savings from these policies. 

Across the 14 states, the scope of the savings projections varies in terms of the portion of statewide retail 

sales covered and the types of policy interventions 

included (see Table E-1). For example, EEPS and RPS 

policies may apply only to certain types of utilities 

(e.g., just IOUs), or they may apply statewide. Similarly, the policies may establish savings goals solely for 

voluntary, incentive-based energy effi ciency programs, 

or they may establish savings goals that could be met 

through a combination of policy interventions (e.g., 

incentive-based energy effi ciency programs, codes and 

standards, market transformation programs). The projections used to establish the Vision baseline refl ect the 

varying scope of the state policies included, and thus 

some caution must be employed in comparing savings 

projections across states or comparing to historical savings levels. 

General Methodology 

The methodology used to develop savings projections 

included the general elements of load forecasts, compliance, measure lifetime and projection time horizon. 

The general methodology for these key elements is 

described below, followed by the key assumptions and 

sources by state. 

Key Elements 

• 	Load forecasts: EEPS and RPS targets are often 

specifi ed as a percentage of retail sales, in which case 

a load forecast is needed to project energy savings. 

Load forecasts were developed for each state by 

applying the Census region growth rate projections 

from EIA’s 2008 Annual Energy Outlook to 2006 retail 

sales in that state (from EIA Form-861). If necessary, 

any exemptions from compliance obligations were 

accounted for under the state’s EEPS or RPS law (e.g., 

for municipal or small utilities). 

• 	Compliance: The energy savings projections assume 

full compliance with state RPS and EEPS targets, 

although in reality full compliance may not be 

achieved—for example, if cost caps become binding. Similarly, the projection assumes that utilities will 

acquire the energy effi ciency savings targets identifi ed in their IRPs, although IRPs rarely represent fi rm 

long-term commitments or obligations and, in any 

case, utilities regularly revise their long-term energy 

savings goals with each subsequent IRP fi ling. 

• 	Measure lifetime: Many states have an EEPS that 

is specifi ed in terms of incremental annual savings. 

To convert to cumulative savings, a standard 15-year 

measure life was used. 

E-2 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Table E-1. Basis and Scope of Energy Savings Projections by State 

State Basis for Projection Retail Sales Covered Types of Policy Interventions 

CA Regulatory goal to acquire all 

cost-effective energy effi ciency Statewide Voluntary programs, codes and standards, market transformation programs 

CO Statutory savings targets IOU retail sales Voluntary programs 

CT IRP fi lings IOU and competitive 

retail sales Voluntary programs 

HI Expected use of energy 

effi ciency for RPS compliance Statewide Voluntary programs 

ID IRP fi lings IOU retail sales Voluntary programs 

IL Statutory savings targets IOU and competitive 

retail sales Voluntary programs 

MN Statutory savings targets Statewide 

Voluntary programs, codes and standards, market transformation programs, 

utility infrastructure improvements 

MT IRP fi lings NorthWestern Energy 

default service sales Voluntary programs 

NC Expected use of energy 

effi ciency for RPS compliance Statewide Voluntary programs 

NV Expected use of energy 

effi ciency for RPS compliance 

IOU and competitive 

retail sales Voluntary programs 

NY Governor’s savings goal and 

regulatory targets Statewide 

Voluntary programs, codes and standards, market transformation programs, 

utility infrastructure improvements 

OR IRP fi lings IOU retail sales Voluntary programs 

TX Statutory savings targets IOU and competitive 

retail sales Voluntary programs 

WA 

Statutory requirement to 

acquire all cost-effective 

energy effi ciency 

Statewide Voluntary programs 

• 	Projection time horizon: The energy savings projections extend through 2025. Some EEPS policies have 

a specifi c end date (e.g., 2015 or 2020), and similarly, 

energy effi ciency savings projections in utility IRPs 

may not extend all the way to 2025. In these cases, 

energy effi ciency savings were extrapolated through 

2025 by assuming that savings continue to accrue 

based on the annual savings in the last year for which 

the EEPS or IRP specifi es a numerical target. 

State Policies, Key Assumptions, and Data Sources 

• 	California: The California Energy Commission has 

adopted the policy of acquiring all cost-effective 

energy effi ciency in the state. The projection of 

energy effi ciency savings is based on the estimated 

statewide economic potential of 39,576 GWh by 

2016, reported in the Energy Commission’s 2007 

Integrated Energy Policy Report. This potential estimate is annualized by assuming a steady incremental 

National Action Plan for Energy Effi ciency E-3
annual savings rate from 2007 to 2016, and extrapolated past 2016 by assuming that savings continue 

to accrue at the same rate. Note that the California 

Public Utilities Commission has established savings 

targets for the IOUs’ energy effi ciency programs, 

and the state’s publicly owned utilities have also 

fi led, with the Energy Commission, energy effi ciency 

plans containing long-term savings goals. Utilityspecifi c targets within the projection are not explicitly 

accounted for, as they are assumed to be embedded 

within the overall statewide goal of acquiring all costeffective energy effi ciency. 

• 	Colorado: HB07-1037 (2007) requires the Colorado Public Utilities Commission to establish energy 

savings targets for the state’s two electric IOUs and 

establishes a minimum target of 5 percent of retail 

sales in 2006, to be met in 2018 by measures implemented from 2006 to 2018. The savings projection 

for Colorado refl ects statutory minimum targets for 

Aquila and PSCo. 

• 	Connecticut: PA 07-242 (2007) required the state’s 

two electric distribution companies to submit a 

joint comprehensive resource plan to the Connecticut Energy Advisory Board. The plan identifi es two 

alternate energy effi ciency savings targets out to 

2018: a reference case, which assumes continuation of existing funding levels, and a “DSM-Focus” 

case, which is intended to eliminate load growth and 

entails substantially higher funding levels. The Board 

has indicated its support for the DSM-Focus case, and 

the projection is therefore based on that case. 

• 	Hawaii: Under the state’s current RPS law (2006), up 

to 50 percent of the overall target in each year may 

be met through energy effi ciency (including CHP and 

heat pumps). It appears that utilities can count energy 

savings from energy effi ciency measures implemented 

as far back as 1996. Hawaii’s utilities are assumed to 

utilize energy effi ciency for RPS compliance to the 

maximum extent allowed, starting in 2010 (the fi rst 

RPS compliance year). This equates to achieving incremental annual savings of approximately 1.0 percent 

of retail sales per year, on average. 

• 	Idaho: The projection of energy savings refl ects the 

energy effi ciency savings proposed by the state’s three 

IOUs (Idaho Power in 2006, Avista in 2007, Pacifi Corp 

in 2007), in their most recent IRPs. All three IOUs have 

retail load in multiple states, but provide energy effi ­

ciency savings targets only for their service territory as 

a whole. The savings projection prorates their energy 

effi ciency savings targets based on the percentage of 

their 2006 retail sales occurring in Idaho. 

• 	Illinois: SB1592 (2007) established annual energy 

savings targets for all investor-owned distribution 

utilities with more than 100,000 customers in Illinois, 

ramping up from 0.2 percent of distribution sales in 

2008 to 2.0 percent in 2015 and each year thereafter. Because the state’s EEPS applies to distribution 

sales, it effectively covers retail sales by both the IOUs 

and competitive retail providers. No specifi c assumptions were used for Illinois, beyond those described in 

the previous general methodology section. 

• 	Minnesota: HB436 (The Next Generation Energy Act 

of 2007) established a statewide electricity savings 

target equal to 1.5 percent of retail sales beginning in 

2010. No specifi c assumptions were used for Minnesota, beyond those described in the previous general 

methodology section. 

• 	Montana: The state’s “restructured” utility, NorthWestern Energy, is required to periodically fi le a 

long-term default service supply plan. The savings 

projection refl ects the energy effi ciency savings targets proposed in NorthWestern’s 2007 default supply 

procurement plan, which refl ect the utility’s goal of 

acquiring the full achievable, cost-effective potential. 

• 	Nevada: Under the state’s RPS law (2005), which 

applies only to the state’s two IOUs and to competitive retail suppliers, load serving entities can meet 

up to 25 percent of their annual RPS target with 

energy effi ciency measures installed in 2005 or later. 

All energy effi ciency savings receive a multiplier of 

1.05 for line losses, and energy savings during the 

peak period receive an additional multiplier of 2.0. 

Based on the utilities’ 2006 RPS compliance fi ling, 

the net multiplier for all energy savings used for 

E-4 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
RPS compliance in 2006 was approximately 1.35, 

refl ecting the fact that about 29 percent of the total 

energy savings occurred during peak period. The 

savings projection assumes that the utilities will use 

energy effi ciency for RPS compliance to the maximum 

extent allowed, which is consistent with their practice 

thus far, and a multiplier of 1.35 was used. This is 

equivalent to achieving annual incremental savings of 

approximately 0.3 percent of retail sales, on average. 

• 	New York: In 2007, Governor Eliot Spitzer and Lt. 

Governor David A. Paterson announced a comprehensive plan for reducing energy costs and curbing pollution in New York. Their plan included a goal to reduce 

electricity consumption by 15 percent from forecasted 

levels by the year 2015 through new energy effi ciency 

programs in industry and government, and called out 

for the need to create new appliance effi ciency standards and set more rigorous energy building codes. 

The savings projections assume annual savings targets 

by utility consistent with the New York Public Service 

Commission’s 2008 Order to implement the 2007 

savings goal. The savings projections extrapolate past 

2015 by assuming that savings continue to accrue at 

the same rate as in 2015. 

• 	North Carolina: Under the state’s RPS law (2007), a 

utility can meet a portion of its annual RPS requirement with energy effi ciency savings from measures 

implemented in 2007 and later. For IOUs, the contribution of energy effi ciency is capped at 25 percent of 

the total annual RPS requirement. The savings projection assumes that IOUs will use energy effi ciency 

to the maximum extent allowed, which equates to 

average annual incremental savings of approximately 

0.2 percent of retail sales. Unlike IOUs, municipal 

utilities and cooperatives have no cap on the portion 

of their RPS target that can be met with energy effi ­

ciency. All utilities, however, are subject to a variety 

of RPS set-asides (for solar, swine waste, and poultry 

waste). In addition, cooperatives and municipal utilities are allowed to meet up to 30 percent of their 

RPS requirement in each year with large hydroelectric 

power. The projection assumes that, after all RPS setasides are met and the large hydro allowance is fully 

exhausted, municipal utilities and cooperatives will 

meet 75 percent of their remaining RPS target with 

energy effi ciency. This equates to average annual 

incremental savings of approximately 0.2 percent of 

retail sales (the same as for IOUs). 

• 	Oregon: The projection of energy savings refl ects 

the energy effi ciency savings proposed by the state’s 

three IOUs, Portland General Electric (2007), Pacifi -

Corp (2007), and Idaho Power (2006), in their mostrecent IRPs. Pacifi Corp and Idaho Power have retail 

load in multiple states, but provide energy effi ciency 

savings targets only for their service territory as a 

whole. The projection therefore prorates their energy 

effi ciency savings targets based on the percentage of 

their 2006 retail sales occurring in Oregon. 

• 	Texas: HB3693 (2007) established new energy effi ­

ciency targets for the state’s investor-owned distribution utilities, requiring peak demand savings of at 

least 15 percent of peak load growth in 2008 and at 

least 20 percent in 2009 and each year thereafter. 

Because the state’s EEPS applies to distribution sales, 

it effectively covers retail sales by both the IOUs and 

competitive retail providers. In order to project peak 

demand savings, a peak demand forecast for the 

state’s regulated distribution utilities was developed, 

by prorating the statewide peak demand forecast in 

Elliott et al. (2007) based on the regulated distribution utilities’ sales as a percentage of total statewide 

sales. The energy savings projections were derived 

from peak demand savings based on the ratio of 

energy-to-peak demand savings associated with 

energy effi ciency programs implemented during 

2003–2007 (Frontier Associates, 2008). 

• 	Washington: I-937, a voter initiative passed in 2006, 

requires all utilities with more than 25,000 customers to “pursue all available conservation that is 

cost-effective, reliable, and feasible.” The Northwest 

Power and Conservation Council’s (NPCC’s) 2004 

conservation potential study estimated 2,800 average MW of cost-effective and achievable potential 

National Action Plan for Energy Effi ciency E-5
through 2025 for the four-state Pacifi c Northwest 

region, as a whole. The savings projection estimates 

the total achievable potential in Washington by 

prorating NPCC’s estimate of achievable potential 

in the Pacifi c Northwest according to the portion of 

retail sales occurring in Washington. The total savings potential was annualized by assuming a steady 

incremental annual savings rate. 

Metric 2: Current Energy Savings 

(kWh, kW, and Therms) 

Estimates of the energy currently being saved through 

state-level energy effi ciency efforts are an important 

part of measuring progress. Estimates for energy savings for 2006 are provided for savings in electricity use 

(kWh), electricity demand (kW), and natural gas use 

(therms). Due to data limitations, the energy savings 

estimates currently only represent savings from administered energy effi ciency programs and do not refl ect 

energy savings from other state and local efforts such as 

building energy codes, state-level appliance standards, 

and local and state lead-by-example initiatives. Further, 

the energy savings baseline does not include the benefi ts from national efforts to promote energy effi ciency, 

federal appliance standards, or the autonomous rate of 

improvement in effi ciency across the economy. 

For electricity programs, savings estimates are provided 

on both a cumulative (annual) and incremental (also 

annual) basis for both electricity use and capacity. For 

natural gas savings, only cumulative savings were available through an existing national source. Cumulative 

and incremental savings are defi ned as follows.7 

• 	Incremental energy effi ciency savings: The 

changes in energy use (measured in kWh) and peak 

load (measured in kW) caused in the current reporting year by new participants in existing effi ciency programs and all participants in new effi ciency programs. 

The savings reported here are annualized to indicate 

the program effects that would have occurred had 

these participants been initiated into the program on 

January 1 of that year. 

• 	Cumulative energy efficiency savings: The 

total changes in energy use (measured in kWh and 

therms) and peak load (measured in kW) caused in 

the current reporting year by all participants in all 

effi ciency programs. This includes new and existing participants in existing programs (those implemented prior to the current reporting year that were 

in place during the prior reporting year), all participants in new programs (those implemented during 

current reporting year), and participants in programs 

terminated since 1992 (those effects continue even 

though the programs have been discontinued). 

Energy effi ciency programs have a useful life and 

their net effects diminish over time. To the extent 

possible, the cumulative savings consider the useful 

life of energy effi ciency measures by accounting for 

building demolition, equipment degradation, and 

program attrition. The effects of new participants in 

existing programs and all participants in new programs are based on their start-up dates. 

In order to represent the most comprehensive data 

possible, three sources were used to develop the estimates of current energy savings for 2006. Regardless of 

source, savings are for energy effi ciency programs only, 

excluding savings from low-income programs and other 

load management efforts such as demand response. 

The three sources and the purposes for which they were 

used are as follows: 

• 	EIA’s Form EIA-861 (EIA, 2008b). This survey collects information such as NERC region, peak load, 

generation, electric purchases, sales, revenues, 

customer counts, demand-side management programs, green pricing and net metering programs, 

and distributed generation capacity for each electric 

utility in the U.S. The electric utility demand-side 

management programs section includes information about energy effi ciency and load management 

effects and expenditures. This source was used to 

provide current incremental electricity capacity (kW) 

savings and cumulative electricity use (kWh) and 

capacity (kW) savings. 

• 	ACEEE’s The 2008 Energy Effi ciency State 

Scorecard (Eldridge et al., 2008). For this report, 

E-6 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
 

ACEEE conducts a survey that captures multiple data 

sources. Their survey process includes both telephone 

surveys and gathering data from published materials, 

including Form EIA-861, effi ciency program annual 

reports, state regulatory fi lings, program evaluations, 

etc. In some states energy savings are from state- or 

third-party-administered programs as well as programs administered by investor-owned and publicly 

owned utilities. This source was used to provide current incremental electricity use (kWh) savings. 

• 	CEE’s 2007 report, Energy Efficiency Programs: A 

$3.7 Billion U.S. and Canadian Industry (Nevius 

et al., 2008).8 This report includes results from CEE 

surveys, which collect natural gas and electric savings 

from energy effi ciency programs run by CEE members. This source was used to provide current cumulative natural gas use (therms) savings from natural gas 

effi ciency programs. CEE’s estimated gas savings for 

2006 are from measures installed in 2006, as well as 

from measures installed as early as 1992 that were 

still generating savings as of 2006. Compared to the 

well-established electric programs, gas programs 

are still in their infancy. Since very few gas programs 

existed as early as 1992, these programs have had 

much less time to become established and accumulate savings than electric programs. 

Use of these three sources introduces some inconsistencies in terms of the breadth of the programs captured for the different energy savings estimates. For 

example, Form EIA-861 only captures energy savings 

from programs run by electric utilities; ACEEE references 

additional sources to capture state- and third-partyadministered programs. These inconsistencies will be 

addressed in future efforts. 

Metric 3: Current Avoided Emissions of Carbon Dioxide (Tons)
 

Reductions in emissions of CO2 were calculated by 

applying CO2

 emission factors to the energy savings 

estimates developed under Metric 2. CO2

 emission 

factors for electricity use are available from U.S. EPA’s 

Emissions and Generation Resource Integrated Database 

(eGRID).9

 The emission factors used represent annual, 

non-baseload electricity generation from eGRID2007 

Version 1.0, based on 2005 data. The estimates for 

avoided carbon emissions were calculated as follows: 

• 	 Applying the 2005 state-level eGRID factors to the 

state-level estimate of incremental electricity use 

(kWh) savings for 2006. 

• 	 Applying the 2005 eGRID factors at the level of 

electricity grid regions, as determined by NERC,10 

to NERC region estimates of cumulative savings of 

electricity for 2006. These NERC regional emission 

factors are provided in Table E-2. 

• 	 Applying a national emission factor of 0.0585 tons 

per MMBtu to cumulative national savings from 

natural gas energy effi ciency programs for 2006.11 

Metric 4: Current Funding for 


Energy Effi ciency Programs
 

Estimates of the current funding for energy effi ciency 

programs is provided for both actual spending in 2006 

and 2007 estimated budgets for energy effi ciency 

programs in the U.S. These estimates only refl ect the 

funding for administered electricity and natural gas 

effi ciency programs. Similar to energy savings, funding 

values do not refl ect energy savings from other state 

and local efforts such as building energy codes, statelevel appliance standards, and local and state lead-byexample initiatives. Further, current funding does not 

include the benefi ts from national efforts to promote 

energy effi ciency, federal appliance standards, or the 

autonomous rate of improvement in effi ciency across 

the economy. 

The source for national effi ciency spending differs from 

the source for the national budget estimate. Similar to 

the approach to energy savings, funding for low-income 

programs and other load management efforts such as 

demand response was not included in these estimates. 

Both sources capture programs funded by utility ratepayers and system benefi t charges. The two sources, 

National Action Plan for Energy Effi ciency E-7
Table E-2. 2005 Non-Baseload Output CO2

 Emission Factors by NERC Region 

NERC Region Name NERC Region Acronym Non-Baseload CO2

 Emission 

Factor (tons/MWh) 

Alaska Systems Coordinating Council ASCC 0.71 

Florida Reliability Coordinating Council FRCC 0.67 

Hawaiian Islands Coordinating Council HICC 0.85 

Midwest Reliability Organization MRO 1.03 

Northeast Power Coordinating Council NPCC 0.69 

Reliability First Corporation RFC 0.94 

SERC Reliability Corporation SERC 0.86 

Texas Regional Entity TRE 0.56 

Southwest Power Pool SPP 0.78 

Western Electricity Coordinating Council WECC 0.61 

Source: Data derived from eGRID2007 Version 1.0 Year 2005 Summary Tables (EPA, 2008a). 

the purposes for which they were used, and the data 

they represent are as follows: 

• 	ACEEE’s The 2008 Energy Efficiency State Scorecard (Eldridge et al., 2008). This report was used to 

provide actual spending on natural gas and electricity effi ciency programs during 2006. For this report, 

ACEEE conducts a survey that captures multiple data 

sources. Their survey process includes both telephone 

surveys and gathering data from published materials, 

including Form EIA-861, effi ciency program annual 

reports, state regulatory fi lings, program evaluations, 

etc. For 2006, ACEEE reports electricity effi ciency 

program spending from 46 states and natural gas 

program funding from 19 states. 

• 	CEE’s Energy Efficiency Programs: A $3.7 Billion 

U.S. and Canadian Industry (Nevius et al., 2008). 

This report was used to provide expected 2007 budgets, as developed in 2006, for both natural gas and 

electricity natural gas programs. CEE surveys both 

members and non-members to aggregate budget 

estimates. Budget data typically represent authorized amounts approved by a regulatory commission and are not always identical to actual program 

costs and expenditures in a specifi c year. Effi ciency 

program administrators track and report budgets 

using different time periods (i.e. calendar or fi scal 

years) creating inconsistencies when aggregating the 

budget survey results. From their 2006 survey, CEE 

reports 2007 electricity effi ciency program budget 

estimates from 35 states12 and 2007 natural gas program budget estimates from 20 states. 

Even though both sources for funding values capture 

a similar universe of administered energy effi ciency 

program types, actual spending values cannot be compared directly to estimated budget values for the same 

program year. Differences exist between the survey 

instruments used, states and program administrators 

refl ected in reported values, and time periods addressed 

by respondents for reported spending. 

In order to illustrate the magnitude of energy effi ciency 

funding, actual spending values were used to calculate the percent of utility revenues spent in 2006. The 

sources for revenue data differ from effi ciency spending 

surveys and include: 

• 	EIA’s Electric Power Annual (EIA, 2007). This 

source includes a summary table of revenues from 

retail sales of electricity to ultimate customers by 

sector and by provider. It was used to provide electric utility revenues based on total electric industry 

E-8 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Figure E-1. 2006 U.S. Building and Industrial Energy Use 

Electricity Use Natural Gas Use 

(Total = 3.7 trillion kWh) (Total = 137 billion therms) 

Industrial (28%) 

1.0 trillion kWh Residential (37%) 

1.4 trillion kWh 

Commercial (35%) 

1.3 trillion kWh 

Industrial (47%) 

65 billion therms 

Residential (32%) 

44 billion therms 

Commercial (21%) 

28 billion therms 

Sources: Data from Forms EIA-861 and EIA-176 (EIA, 2008b, 2008c). 

revenues from residential, commercial, and industrial 

sectors in 2006. 

• 	American Gas Association statistics (AGA, 2008). 

These statistics include gas utility industry revenues 

from sales by class of services. This source was used 

to provide natural gas utility revenues based on 

revenues from residential, commercial, and industrial 

sectors in 2006. 

Metric 5: Current Energy Consumption Across the Building and 

Industrial Sectors (kWh, Therms) 

The current energy consumed across each of the key 

sectors, residential, commercial, and industrial, is also 

being tracked individually and in total for electricity and 

natural gas. Sources for this information include: 

• 	Form EIA-861, “Annual Electric Power Industry 

Report” (EIA, 2008b). This source was used to provide total electricity consumption based on total 2006 

retail sales to all customers by sector. 

• 	Form EIA-176, “Annual Report of Natural and 

Supplemental Gas Supply and Disposition” (EIA, 

2008c). This source was used to provide total consumption for natural gas based on 2006 volumes 

delivered to residential, commercial, and industrial 

consumers. 

The total building and industrial energy consumption 

for 2006 equals 3.7 trillion kWh of electricity and 137 

billion therms of natural gas. Figure E-1 breaks down 

current energy consumption by building and industrial 

sectors. 

Additional Work 

Additional work to improve the measurement of progress under the Action Plan will proceed in two areas: 

• 	 Outlining and advancing options for improving the 

comprehensiveness, consistency, and accuracy of the 

data used in the approaches outlined above. 

• 	 Exploring the development of additional metrics that 

could not be advanced at this point. 

Each of these work areas is described further in the sections that follow. 

National Action Plan for Energy Effi ciency E-9
Improving Data for Existing Metrics 

Work will be undertaken to improve the comprehensiveness, consistency, and accuracy of the data used to 

measure progress under the Vision. Immediate focus 

will be given to better understanding the key limitations of the data and potential options to address them. 

Several limitations of the existing data underlying these 

metrics are discussed throughout Appendix E, with key 

issues highlighted below: 

• 	 Differences exist in data reported for the same programs on energy effi ciency surveys and state-level 

program fi lings. 

• 	 Evaluation methodologies and assumptions used to 

quantify savings in program fi lings vary across the 

country. 

• 	 Respondents interpret existing surveys differently, 

including some of the key defi nitions such as customer class, program type, program period, and 

other categories. Further, differences in interpretations of defi nitions may exist across survey data and 

program fi lings for the same programs, especially 

if they were completed by different staff within the 

same organization. 

• 	 Existing data are more comprehensive on electricity effi ciency efforts than natural gas. Fewer surveys 

and sources are available on natural gas savings 

and funding; fewer program administrators have 

responded in the past to those natural gas surveys 

that do exist. 

• 	 Work to project energy savings from existing energy 

savings goals and targets is in its infancy. It does not 

yet capture savings targets from all states with IRPs, 

nor does it represent expected savings in electricity 

capacity and natural gas use. 

Exploring New Metrics 

The Action Plan Leadership Group will continue 

to explore additional metrics that may be useful in 

measuring progress toward all cost-effective energy effi ­

ciency. Two metrics that could not be advanced at this 

point, but were considered by the Work Group, are the 

cost-effectiveness of energy effi ciency program delivery 

and energy productivity. More information on these two 

potential metrics and next steps follows: 

• 	Cost-effectiveness of energy effi ciency program 

delivery. The effi ciency programs represented in 

the estimates for current energy savings and current program funding were pursued because they 

were determined to be cost-effective at the state 

level using state-level cost and benefi t information. 

It is not clear that a national estimate of the costeffectiveness of energy effi ciency programs is a useful 

addition to these state-level analyses, given important 

differences in economic factors such as energy costs 

across the country. Further, different approaches and 

assumptions are currently used at the state level for 

estimating costs and benefi ts which also raises questions as to the meaning of a national estimate. This 

area will continue to be explored to determine if a 

national-level metric is possible or useful for future 

Vision measuring progress updates. 

• 	Energy productivity ($GDP/MMBtu). The energy 

productivity metric was proposed to provide an 

important long-term perspective for measuring progress under the Vision. Changes in energy productivity 

may refl ect a broader set of energy effi ciency actions. 

Such broader efforts include energy codes, appliance 

standards, state lead-by-example programs, national 

energy effi ciency efforts, customer-side energy 

effi ciency investments, and market transformation 

effects. Given the complexity and variety of existing 

approaches to this metric, the Action Plan Leadership Group is currently scoping out future work that 

would assist in understanding how such a metric 

could be used appropriately to measure progress 

under the Vision. 

E-10 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
Notes
 

1. 	 The initial national values for avoided emissions of carbon dioxide 

assume 2005 emission factors to 2006 energy use savings. 

Projected energy savings capture goals and targets in place by the 

end of 2007. 

2. 	 The 14 states for which projections were developed for the 

energy savings from their long-term electricity goals are consistent with the states identifi ed as having established savings goals 

and/or targets under implementation goal 1. See Appendix D for 

the methodology for measuring progress at the state level for 

each of the 10 implementation goals. 

3. 	 Virginia is not included in the savings projects, since the 2007 

Virginia legislation that set a 10 percent energy savings target for 

electric utilities in 2022 is not yet binding. Virginia may be added 

to energy projections in the future as the details for implementing this legislation are worked out. 

4. Energy effi ciency qualifi es as a resource under Tier 2 of Pennsylvania’s Alternative Resource Portfolio Standard, along with 

large hydroelectric power, clean coal, municipal solid waste, and 

various other generation resources. LBNL estimates that enough 

large hydroelectric generation exists to fully meet Pennsylvania’s 

Tier 2 standard for the indefi nite future. Pennsylvania therefore 

is excluded from the savings projections, since the portfolio 

standard will not have any signifi cant impact on energy effi ciency 

savings. 

5. 	 Due to the scope of the source study used, a comprehensive 

review of utility resource plans is not included in the baseline. Further, some states with long-term resource planning requirements 

are captured in Metric 1 through their other energy effi ciency 

savings goals. 

6. 	 LBNL is currently analyzing future energy effi ciency savings 

expected to be achieved as a result of EEPS and RPS policies 

enacted in the U.S. Publication of this work is expected in early 

2009. Some of LBNL’s existing work on projecting energy effi ­

ciency savings from goals and targets is captured by Barbose et 

al. (2008). 

7. Defi nitions for cumulative and incremental savings are based on 

Form EIA-861. 

8. 	 CEE is a consortium of energy effi ciency program administrators 

in the U.S. and Canada. Only CEE information for the U.S. is 

captured in the Vision baseline values for national benefi ts. 

9. 	 eGRID is a comprehensive inventory of environmental attributes 

of all U.S. electricity generating plants that provide power to the 

electric grid and report data to the U.S. government. eGRID contains air emissions data for nitrogen oxides, sulfur dioxide, carbon 

dioxide, mercury, and, new this year, methane and nitrous oxide. 

For more on eGRID, visit <http://www.epa.gov/cleanenergy/ 

energy-resources/egrid/index.html>. 

10. A map of NERC regions is available in the eGRID2007 Version 1.0 

Year 2005 Summary Tables (EPA, 2008a). 

11. The national emission factor for natural gas is based on the 

natural gas carbon content coeffi cient in the U.S. EPA’s Inventory 

of U.S. Greenhouse Gas Emissions and Sinks: 1990-2006 (EPA, 

2008b). 

12. In addition to state-level electricity effi ciency program budgets, 

CEE reports estimated budgets for the Bonneville Power Administration and Northwest Energy Effi ciency Alliance. 

National Action Plan for Energy Effi ciency E-11

Appendix

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National Action Plan for Energy Effi ciency F-1
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F-2 National Action Plan for Energy Effi ciency Vision for 2025: A Framework for Change 
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National Action Plan for Energy Effi ciency F-3




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