A nonprofit organization specializing in energy and environment policy released a report Monday that documents the efficiency of Southeast electric utilities in 2020. Energy efficiency programs lower costs for utility customers, while benefiting the environment.
The Southern Alliance for Clean Energy primarily studied portions of Mississippi, Tennessee, North Carolina, South Carolina, Georgia, Alabama, and Florida. The group considered total electric utility sales in 2020 with total kilowatt hours saved through efficiency programs.
Click here to download the "Energy Efficiency in the Southeast" fourth annual report
The Southeast tends to be the lowest performing region across the country, with Florida dragging down the regional average. On average, Florida saved just .09% of energy in 2020. The national average was eight times more than that at .72%.
During a webinar Tuesday, SACE representatives said the state's poor performance is a direct result of its policies.
Florida has two practices that makes it an outlier: It’s the only state that uses, for this particular purpose, the Ratepayer Impact Measure Test to screen for cost effectiveness, which ends up counting energy savings programs as negatives to a utility's total revenue.
Another policy that sets Florida apart from the rest of the country is the use of a screen, where any measure that pays back customers in two years or less is eliminated.
"It really is restricting energy efficiency, not growing it," said Forest Bradley-Wright, Energy Efficiency program director for SACE.
The cost test Florida should be using, he said, is based on comparing how much money the utility spends on the efficiency programs to how much money those programs will ultimately save the utility system.
For instance, a program Duke Energy uses in North Carolina saved customers more than $600 million in 2017. And the utility received a performance incentive that amounted to 10.5% of that.
But in Florida, Duke Energy has no such program, said SACE’s energy policy manager, Heather Pohnan.
"This is a recurring theme that we see across many of our reports is the gap between Duke operating companies in the Carolinas and in Florida. This is mainly chalked up to state policy differences," she said.
SACE’s energy comparisons for 2020 found that Duke Energy saved about five times more energy in North Carolina than it did in Florida.
Every five years, Florida utilities must file energy-saving goals to the state’s Public Service Commission. The last time this was discussed was back in 2019, when utilities attempted to file goals of zero savings due to those two outlier policies that make it seem like the cost of efficiency is not worth the companies’ bottom lines.
That led the commission to initiate a proceeding to update regulations within the Florida Energy Efficiency Conservation Act for the first time in 30 years.
Bradley-Wright said that could be a positive step forward.
“There have been a series of filings recommending modernizing the energy efficiency policies and practices there to be in line with industry standard practice elsewhere in the country,” he said. “So that could lead to some important changes in savings in the future.”
Although, he said, the commission has not yet indicated its priorities or expectations.
“Ultimately, we don't yet know whether this will end up being a real reform, or if the policy practice will continue to hold energy efficiency back in Florida,” said Bradley-Wright.
The SACE analysis said, "saving energy is the least cost and most abundant solution to stabilize our climate and ensure equity in a clean energy future."
