Michigan Utilities Smash Energy Efficiency Targets: Customers, Economy, Environment Reap the Rewards

The data is in, and once again, Michigan utilities blew away their energy efficiency goals, saving money for their customers, creating jobs for Michiganders, and reducing the need for generating power in polluting and expensive power plants. 

Earlier this month, the Michigan Public Service Commission published its third annual report on Michigan’s Energy Optimization (EO) standards. These standards, created by the legislature in 2008, require all gas and electric utilities offer programs to help their customers save energy.  The efficiency savings targets have been achieved and exceeded every year since their commencement for both residential and commercial programs, which include things like lighting retrofits, home weatherization, commercial boiler replacements, and behavior programs.  Not only have these efficiency programs demonstrated they work, but the rewards and positive impacts experienced - saved money, saved energy and reduced pollution - will compound year after year.

Every year since 2009, Michigan has exceeded its targets of saved megawatt hours (MWh) of electricity due to the energy efficiency programs. The savings targets increase each year, and Michigan’s actual electric savings in 2011 not only exceeded the savings target for that year, but the 2012 target as well.  The actual amount of electricity saved by the Michigan utilities in 2011 was 1,000,437 MWh.  According to the report, that is enough electric energy to power 1.5 million homes for a year.  The utilities exceeded their natural gas savings target too – saving enough natural gas to heat 40,000 homes for a year.  

Saving energy saves customers money, because it means the utilities will not have to invest as much in more expensive power plants and transmission system upgrades. Last year the utilities invested roughly $200 million in energy efficiency programs, which resulted in an overall customer savings of $709 million.  This means that for every dollar paid to the programs in 2011, customers should receive returns of $3.55.   In addition to helping customers save money, the program helps revitalize Michigan’s economy by using energy investment dollars on in-state labor and services, rather than using those same dollars to import fossil fuels from other states.

These programs are an absolutely critical component of making our electric system sustainable and preventing the most severe impacts of climate change.  Every unit of power we save reduces the need for generating that power in coal-burning power plants which comprise the largest source of the pollution that causes climate change.  The energy efficiency measures installed in 2011 due to these programs will reduce power plant emissions by nearly one million tons per year.  That is about the same about of carbon that would be emitted by 176,000 cars in a year. 

In his recent energy and environment speech I blogged about earlier, Governor Snyder’s described energy efficiency as, “the best example of a no-regrets policy Michigan can have.” As is clear in the report, the data from the last three years demonstrate that the energy efficiency programs of PA 295 are not only successful, but are outperforming expectations.  Large amounts of money, electricity and gas have already been saved and will continue to be in the future.  Tons of toxic emissions have been avoided. This is a great foundation to build on, and over the next few years Michigan policymakers will have the opportunity to take this initial success and turn it into a long-term engine for economic growth and sustainability for its citizens and business.

Lauren Mosena contributed significantly to this post.