Study: Mid-Atlantic Utility Customers Could Miss Out on $1.3 Billion Savings Opportunity

Affects DE, DC, IL, IN, KY, MD, MI, NJ, NC, OH, PA, TN, VA, WV

WASHINGTON (September 17, 2014) – Electric customers in 13 Mid-Atlantic states and the District of Columbia could miss out on as much as $1.3 billion in bill utility savings over the next three years because their regional transmission grid operator, PJM, is significantly undercounting the effectiveness of energy efficiency programs that reduce the need to generate more electricity, according to an analysis released today by The Brattle Group.

Allison Clements, director of the Sustainable FERC Project housed within NRDC and comprised of over two dozen environmental non-profit groups that commissioned the analysis, issued the following statement:

“It appears that by failing to capture all of the savings from existing and planned energy efficiency programs, PJM is over-forecasting future electricity needs, which could significantly increase customer utility bills and lead to unnecessary and expensive construction of power plants that harm their health and the environment. We strongly urge PJM, the utilities serving the mid-Atlantic region, and the affected states to closely review this analysis and give stronger emphasis to the abundant potential for energy efficiency to avoid these problems.”

The report shows PJM, which is responsible for operating the electric transmission grid used by utilities serving all or parts of 13 mid-Atlantic states and the District of Columbia, is over-estimating the region’s electricity needs at an increasing rate into the future – in 2022 by at least 27,245 gigawatt hours, which could require three or more large coal-fired plants running  around-the clock. The Brattle Group concluded the unnecessary cost to customers could total $433 million annually over the next three years, and $127 million a year after that.

PJM’s predictions, known as load forecasting, do not capture all of the energy savings from current or planned efficiency programs, especially in states where efficiency standards are slated to strengthen over time, according to the report.

The Sustainable FERC Project noted that the Brattle analysis could only rely on utility-reported public data that focuses on just one kind of energy efficiency – utility programs – so it is unlikely the analysis calculated all of the efficiency in the region, such as from building codes and industrial improvements. In addition, the analysis does not include utility bill savings from avoiding unnecessary transmission construction, not to mention averting significant environmental damage.   

Sustainable FERC echoed the analysis’ recommendation that PJM initiate a stakeholder working group to engage in a more rigorous examination of possible “missing energy efficiency” in load forecasting in order to avoid leaving customer and pollution savings on the table.  

PJM serves all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and the District of Columbia.

Clements’ blog on the issue can be found here:


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