Michigan Spreads the Energy Efficiency Go(bble)spel

This holiday, between mouthfuls of turkey and stuffing, don’t be surprised if you hear a Michigander give thanks to the growth of energy efficiency. Governor Rick Snyder’s final report on energy efficiency, released today, provides plenty of reasons to express appreciation. A draft report was circulated earlier this fall for comments and the release today marks the culmination of an information gathering exercise. Overall, both the draft and final reports highlight the continued success of energy efficiency and offer an encouraging picture of Michigan’s energy future.


The report begins with a review of Michigan’s current status. It boasts that not only is Michigan presently meeting its energy efficiency targets, but in most cases is exceeding them. As the report transitions to estimating future potential, it’s clear that energy efficiency has a tried and true foundation ready to be built upon. Under the mandated utility cost test (one type of test used to ensure programs are cost-effective), the achievable potential is a 15% savings in electric sales (MWh) and a 17% reduction in electric demand (MW) by 2023. This translates into a ramp up from the current 1% savings in electric sales per year to 1.5%--not quite the 2% we’ve found to be more appropriate, but in the right direction. The best part is this can all be done with a return of more than double the dollars invested!

Some adjustments and additions arose between the draft and final report, most notably the inclusion of comments provided by NRDC. Following a summary of the energy efficiency potential study, a section recognizes that we found the potential to be understated due to limits placed on incentives offered, inadequate consideration of emerging LED technology, and the absence of combined heat and power. Additionally, they acknowledge our findings that a cost cap on energy efficiency budgets at 2% could actually end up costing customers up to $6.4 billion and would force utilities to invest in more expensive resources. For more on the advantages of aggressive energy efficiency programs, click here.


Ultimately, the report shows that even with conservative assumptions and regulatory barriers, energy efficiency is a promising option in Michigan. It remains the cleanest, most cost-effective resource we have in our arsenal to combat climate change and evidence of ample potential in the future is something we can all be thankful for.