Committing to Expanded, Equitable Energy Efficiency in Colorado

This is the first in a series of blogs unpacking and diving deeper into aspects of the report, "Committing to Climate Action: Equitable Pathways for Meeting Colorado’s Climate Goals."

Every day energy efficiency quietly benefits every family across the state of Colorado, but today, on #EEDay2020, we celebrate out loud the dollars saved, the homes comfortably warmed and cooled, and the air cleaned thanks to smarter energy use. 

Energy Efficiency 101

For those who are unfamiliar with what energy energy efficiency is and does, it’s all about getting the same or better performance and less energy use from things around our homes and businesses: think ENERGY STAR-labeled light bulbs and appliances or the insulation in your walls. These all help reduce the amount of energy needed to light, heat, cool, and run your home.

Energy efficient technology and cutting energy waste are responsible for reducing the burden of unaffordable energy bills—particularly for low-income families, creating healthier and more comfortable homes—especially with this year’s record-high temperatures, preserving affordable housing, avoiding the need for new energy generation, reducing air pollution, and creating jobs. It’s a tool capable of bringing benefits to families, utilities, the energy system, and the environment all at once.

Energy Efficiency Expanded

A recently released report by Gridlab, Sierra Club, Evolved Energy Research, and NRDC, with support from PSE Healthy Energy, found that Colorado must dramatically increase energy efficiency to meet its climate goals—and that more ambition on energy efficiency means greater cost savings for Coloradans. Our analysis shows that the state must accelerate adoption of efficient, electric appliances in homes and businesses, ensure that new buildings have efficient shells, and retrofit existing homes to make them more efficient, more comfortable, and more safe. Doing so not only saves people money but also reduces pressure on the electricity system and makes it easier to achieve the steep cuts to electric-sector emissions that are necessary to meet the climate goals. 

In our analysis, the scenario in which the state prioritizes energy efficiency the most—the “Low Demand” scenario—reduces energy burden (the portion of a household’s income spent on energy) substantially compared to business as usual, especially for rural communities, as shown in the figure below. That translates to real savings for Colorado families if policymakers choose to invest in upgrading buildings and incentivizing more efficient appliances through rebates and refunds.

The report also highlights that households with lower incomes spend more of that income on utility bills, making energy costs a substantial burden, and that low-income communities and communities of color often bear a higher burden of pollution. These families would benefit the most from reduced energy use, energy bills, and pollution—and yet they often face barriers to taking advantage of energy efficiency, such as upfront costs, the unwillingness of landlords to upgrade rental units, and at times inconvenient or confusing processes. To better address these issues, our report recommends increased energy efficiency targets for utilities; increased savings, budgets, and incentives for low-income and low-income multifamily customers; and targeting customers who have high energy burdens, high pollution exposure, and difficulty paying their bills.

Equitable Energy Efficiency

The two biggest utilities in the state, Xcel and Tri-State, currently have active proceedings before the Public Utility Commission outlining their energy efficiency program offerings. 

Xcel has an open demand-side management case which discusses efforts by the utility to modify customers' energy use patterns. The case outlines in detail the utility’s ambitious plan to meet or even exceed their Commission-approved energy-savings goal of 500 giga-watt hours (GWh) while also keeping an eye toward getting carbon out of buildings (decarbonization) and integrating more renewable energy. The plan looks to achieve 539 and 524 GWh of energy savings in 2021 and 2022, respectively, through a comprehensive portfolio of electric and gas products for industry, businesses, and single-family and multifamily households, including low-income customers. NRDC and Sierra Club are co-intervening in the case and will be focusing our efforts on expanding Xcel’s low-income and low-income multifamily program budgets and incentives, especially for beneficial electrification programs that would increase adoption of electric products like highly efficient heat pumps that provide deep, long-lasting savings and are more suitable for pathways to decarbonization, unlike new gas products. With more attention on low-income customer programs, we hope to address the report’s findings of currently limited adoption of clean energy technologies for households with high energy burden. 

Tri-State and most of it’s member-customers  do not have significant demand-side management offerings, nor are they currently required to do so by the Colorado Utility Commission, but Tri-State does have an open existing resource assessment case that provides a look at the utility’s potential study—the company’s estimate of the maximum amount of energy efficiency it thinks is achievable. Tri-State’s potential study makes it clear that the utility is underestimating achievable energy efficiency potential. Unfortunately, this falls in line with the low historical savings levels achieved across Tri-State’s service areas, which range from 0.06 to 0.12 percent annual savings as a percent of sales. By contrast, other utilities across the country have been able to reach levels of savings as high as 3.73 percent savings and a median of 1.03 percent savings. 

This efficiency potential study is especially important because it will be foundational to Tri-State’s upcoming electric resource plan (ERP), an exercise where the utility best predicts their customers’ power needs over the next fifteen to twenty years and describes how they plan to meet that need reliably and cost-effectively. This efficiency potential study will likely provide an upper bound to the levels of possible energy savings considered in the ERP, thereby affecting the overall capacity and generation the utility will argue is necessary to meet customers’ needs. It’s critical that Tri-State does not stifle and downplay the energy efficiency opportunities, as this will translate into less access to savings for all customers, especially low-income households. Even more important is to see Tri-state and it’s member utilities come up with an investment plan to help customers start to save energy, which will be faster, cheaper, and cleaner than any other energy supply option available. Rural households are already paying more of their income towards energy than other Coloradans, and saving energy will put money back in their pockets. 

Celebrating Energy Efficiency

On this day, the fifth annual national Energy Efficiency Day, in a difficult year, we are taking a moment to celebrate energy efficiency’s many ways of improving the lives of families across Colorado, but we are also committing to working to reach those families who are not yet benefiting and need it most. We cannot meet our climate goals without reaching every household, and we are calling on state agencies to commit to bringing the benefits of energy efficiency to rural communities, low-income communities, and communities of color through equitable climate action policies.