PEPCO Behind on Efficiency Goals

Hyattsville, MD – Pepco will only meet 71% of its 2011 energy efficiency goal according to a new Maryland PIRG Foundation report, Utility Work Ahead, released today at a news conference at a home undergoing efficiency retrofits in University Park, MD.  Maryland PIRG Advocate Fielding Huseth was joined by energy efficiency business owner David Brosch and homeowner Sarah Elder.

The report found that Pepco is not alone; none of Maryland’s electric utilities is on a trajectory to reach the goals set out in the EmPOWER Maryland Act passed in 2008. In fact, due to the failure of utilities to propose adequate energy efficiency programs, Maryland is on track to fall roughly 25 percent short of the energy savings promised under the codified goal.

“Pepco’s energy efficiency programs are a good start,” said Huseth. “Yet, two years after EmPOWER Maryland went into law, the utility has barely started implementing its plan.”

There is tremendous need for energy efficiency in Maryland. On average, each Marylander used 22 percent more power in 2008 than in 1990. From 1999 to 2008 the electricity portion of an average household’s power bill increased more than 30 percent to $1,650 per year, adjusting for inflation.

By improving energy efficiency and using energy more wisely, Marylanders can cut their electricity consumption, save money and boost the state’s economy. In fact, meeting the goals of EmPOWER Maryland could save consumers and businesses $861 million annually and add 8,000 new jobs in the state by 2015.

Pepco plans to offers a suite of programs to help its customers save energy. The utility will operate four residential programs including a lighting and appliance efficiency and conservation program, two programs to provide homeowners with free energy audits, and a residential heating and cooling program.

For commercial and industrial customers, Pepco has also designed four programs. A rebate program will encourage the purchase of efficient lighting and machinery, a “custom incentive” program will offer subsidies tailored to individual businesses’ needs, the utility will incentivize the purchase of efficient heating and cooling equipment, and a program focused on building management and maintenance will work to educate businesses on low-cost practices to improve efficiency.

In approving the utility programs, the Public Service Commission relied heavily on a narrow definition of cost effectiveness that fails to acknowledge all the benefits of energy efficiency. The report recommends a broader measure of cost-effectiveness that would allow the state to capture more of its energy efficiency potential.

Pepco’s plan misses both the 2011 and 2015 goals for reducing overall use. It meets the 2011 peak demand goal, but not the 2015 goal.  If Pepco fully implements its plan, in 2011 and 2015 the utility will achieve roughly 71 percent of its EmPOWER Maryland energy savings goal. However, it is unlikely that the utility will meet those numbers since the utility has barely begun implementing the programs.

Pepco’s slow start throws into doubt its ability to meet its already low goals. Maryland PIRG Foundation recommends that Pepco adopt more measures to encourage residential efficiency, offer higher incentives, and broaden its marketing and outreach plan. Pepco should also boost its commercial and industrial efficiency offerings and implement them quickly to meet its energy saving targets. 

“Energy efficiency is the best way to lower energy bills, make our grid more stable, and create good quality jobs,” said Huseth.  “By expanding their energy efficiency programs, Pepco can get back on track to hitting their goal while helping to grow the state’s economy.”

Maryland PIRG Foundation’s report provides the first analysis of how on-track Maryland’s utilities are to meeting statewide energy efficiency goals. Under state law, the utilities will be required to report their progress to meeting the EmPOWER Maryland goals to the General Assembly next year.