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New Report Reveals Importance of Energy Efficiency in Keeping Electricity Rates Low

Posted by Allison Eckley on May 29, 2015
New Report Reveals Importance of Energy Efficiency in Keeping Electricity Rates Low

Clean energy is no longer a niche industry—its presence continues to expand nationwide, with the most recent impacts made in rural communities. In fact, in North Carolina, there are now solar farms, LEED certified buildings, waste-to-energy systems, and electric vehicle fueling stations in every corner of the state. According to the NC Sustainable Energy Association (NCSEA), building efficiency and solar sectors are the leading clean energy industry sectors in North Carolina, representing 59% of the state’s clean energy firms and 68% of all clean energy jobs there. But energy efficient solutions aren’t just leading to economic development, job growth and energy diversification—they’re also keeping North Carolinians’ energy bills low.

A newly released NCSEA report, Understanding the Impact of Electric Choices on North Carolina Residential Electricity Rates and Bills, reveals that, despite misconceptions, renewable energy is not the primary driver of North Carolina electric bill increases. When we look at the costs that make up North Carolina electric bills, investments in conventional energy sources (coal, natural gas, and nuclear) make up the vast majority of residential customer charges; accounting for 84% of Duke Energy Carolina and 75% of Duke Energy Progress’ cumulative increases in average residential bills from 2001 through 2014. By contrast, clean energy line items such as the Renewable Energy and Energy Efficiency Portfolio Standard (REPS) account for less than $1 per month of those average bills, while also benefiting North Carolina in the form of economic impacts and net cost savings. In fact, benefits of clean energy line items to North Carolina ratepayers include $162 million in cost savings since 2007 and an estimated additional $489 million saved by 2029.

If we didn’t have the REPS and utility energy efficiency programs, for example, developers and manufacturers would be unable to bring new infrastructure and investment projects, such as solar farms or wind plants, into our cities and homes. As one of the leading states in installed solar capacity and clean energy development, North Carolina invested $651.9 million in renewable energy project in 2014, or nearly 38 times the $17.3 million investment observed in 2007.

Innovative technologies, like Tesla’s Powerwall home batteries, allow homes and businesses to make better use of renewable sources like solar and wind, while also offering a degree of flexibility in energy rates. Without these resources, the utilities would need to invest in additional conventional technologies to meet that same demand, some of which costs more and some less. With a more diversified energy mix and more policies helping to drive adoption of renewable energy technologies, utilities bare less investment burden. This also helps prevent utilities from needing to invest more in building new infrastructure to support higher electricity demands.

So what’s the significance? The answer is that investments in renewable energy and energy efficiency programs and policies are enabling developers to reimagine and revitalize our outdated energy sources, while offering cost savings and long-term benefits to their customers. What many ratepayers don’t know is that the utilities commission can’t approve those programs unless it saves the consumer more money than it costs.

Conventional energy has been the primary energy driver for ages, but times are changing and technologies are becoming smarter, cleaner, and more innovative than ever before, allowing businesses and developers to take advantage of these resources and continue to strengthen the grid.

With the creation of energy storage, smart grids, and energy efficient technologies, utilities, ratepayers, manufacturers, and businesses are all protected from having to pay higher costs incurred by conventional energy resources, and can collectively strive toward a clean energy future that is secure, resilient, and affordable.

 

Allison Eckley is the communications coordinator at NCSEA.

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