Energy Efficiency via RGGI: A Model For the Clean Power Plan

Aug. 2, 2015
As states ready for the Clean Power Plan, they should study the RGGI model. That’s the message from the Analysis Group, which has issued the results of its latest report on RGGI’s past three years.

Energy efficiency yields big benefits through the Regional Greenhouse Gas Initiative, and states interested in lowering carbon emissions to meet the EPA’s Clean Power Plan should take notice.

That’s the message from the Analysis Group, which has issued the results of its latest report on RGGI‘s past three years. Analysis didn’t take into account any of the environmental benefits associated with carbon reductions — but only focused on economic yield.

The report addresses RGGI’s second compliance period. RGGI has been in effect for six years, and this is the organization’s second report about the greenhouse gas initiative.

Overall, the report found that economic benefits continue to flow to the states, said Andrea Okie, vice president of the Analysis Group.

“We found the past three years are net positive, providing $1.3 billion in economic benefits, which is $31 per capita.”

In the 2011 report, the  total consumer bill reductions (electric plus avoided oil and gas from heating) were about $1.2 billion, and about $1.05 billion were electric-only savings, she said. In the latest report, total consumer bill reductions (electric plus avoided oil and gas from heating) totaled about $460 million, and about $341 million were electric-only savings. She attributed the lower numbers in the latest report mostly to the lower costs of natural gas.

“During the first compliance period, consumer bill reductions were slightly higher because of the differences in gas prices between 2011 and 2015; gas prices are lower today,” she said.  

Under RGGI, power plant owners need to buy carbon allowances at auction, and the money goes to the Northeast states that take part in RGGI.  The states often put the money generated by the auctions into energy efficiency and renewable energy.

Energy efficiency provided a double bang for the buck by providing savings to consumers but also helping lower the cost of electricity, Okie noted.

“Energy efficiency reduces demand, and that depresses prices,” she said.

What’s more, the energy efficiency created jobs in the efficiency industry.

“When states re-invest the RGGI funds, they create a multiplier effect in the economy. It creates energy auditor jobs and provides more profits for businesses.” In addition, people who save money through efficiency spend the savings,” she said.

A report from Acadia Center also concluded that RGGI is a model for implementing the federal Clean Power Plan. “A new report from Acadia Center shows the northeast and mid-Atlantic states’ Regional Greenhouse Gas Initiative continues to drive down emissions while boosting economic growth, making the program a model for compliance with EPA’s forthcoming Clean Power Plan,” said a press release.

Track the role of energy efficiency in the Clean Power Plan by subscribing to the Energy Efficiency Markets newsletter. It’s free.

About the Author

Lisa Cohn | Contributing Editor

I focus on the West Coast and Midwest. Email me at [email protected]

I’ve been writing about energy for more than 20 years, and my stories have appeared in EnergyBiz, SNL Financial, Mother Earth News, Natural Home Magazine, Horizon Air Magazine, Oregon Business, Open Spaces, the Portland Tribune, The Oregonian, Renewable Energy World, Windpower Monthly and other publications. I’m also a former stringer for the Platts/McGraw-Hill energy publications. I began my career covering energy and environment for The Cape Cod Times, where Elisa Wood also was a reporter. I’ve received numerous writing awards from national, regional and local organizations, including Pacific Northwest Writers Association, Willamette Writers, Associated Oregon Industries, and the Voice of Youth Advocates. I first became interested in energy as a student at Wesleyan University, Middletown, Connecticut, where I helped design and build a solar house.

Twitter: @LisaECohn

Linkedin: LisaEllenCohn

Facebook: Energy Efficiency Markets