by Elisa Wood, via Renewable Energy World
Why do some states avoid creating policies that encourage consumers and businesses to save energy? What’s the psychology of the laggards?
A new report by the American Council for an Energy Efficiency Economy sheds some insight as it examines the states that consistently fall behind in the organization’s annual energy efficiency ranking.
The bottom states are: Alabama, Kansas, Mississippi, Missouri, North Dakota, Oklahoma, South Carolina, South Dakota, West Virginia, and Wyoming. The good news is that even these laggards are beginning to adopt policies to save energy, according to the report, “Opportunity Knocks: Examining Low-Ranking States in the State Energy Efficiency Scorecard.”
But they still have a lot of catching up to do. And why did they fall behind in the first place?
The report authors, who interviewed 55 stakeholders, found one reason is a general lack of awareness about energy efficiency’s benefits. Another is an aversion to government mandates. But one of the most fascinating barriers is a misperception about energy costs.
Industry folklore says that consumers in states with low electric rates have no motivation to save energy. This folklore discourages policymakers from putting time and money into energy efficiency programs. In truth, these states have good economic reasons to encourage consumers to insulate, install better lighting, and undertake other energy savings measures. It turns out that even though electric rates are low in these states, consumers are paying high monthly bills.
This may sound counterintuitive. But consider these numbers. In Alabama electric utilities charge 10.67 cents/kWh and households pay an average $147.69/month for electricity. Similarly, in South Carolina rates are 10.5 cents/kWh and monthly bills are $137.59/month. Compare Alabama and South Carolina to Massachusetts and California, two states with aggressive energy efficiency efforts. Massachusetts’ electric rates are high, averaging $14.59 cents/kWh, but monthly bills are low, only $97.34. California, too, has high rates of 14.75 cents/kWh and low monthly bills of $82.85.
So electric rates are higher in Massachusetts and California, yet households in those two states pay less per month for power than households in Alabama and South Carolina. This is because they consume less power. Households in the efficient states have an edge; they need less electricity each month to secure the same level of comfort and service in their homes as those in Alabama and South Carolina. So there should be plenty of good motivation for households in the low-rate states to pursue efficiency measures.
Another point of confusion involves the cost to society of investing in energy efficiency. Because it’s generally categorized with other ‘green’ initiatives, energy efficiency is perceived as boutique and expensive. To the contrary, it is cheaper to avoid energy use than to make new electricity, according to ACEEE. Energy efficiency measures cost an average 2.5 cents/kWh while building a new power plant cost 6 to 15 cents/kWh. Because of this cost differential several states now mandate that utilities institute cost-effective energy efficiency before building new generation.
These are arguments, unfortunately, that might get lost in the din of an election year, one in which energy is shaping up to be a major issue. However, as is often the case, the states are leading the way and not relying on federal policy. Even the laggard states are picking up their pace when it comes to energy efficiency, as the ACEEE report describes. More here.
Elisa Wood is a long-time energy writer whose work appears in many top industry publications. See her articles at RealEnergyWriters.com. This piece was originally published at Renewable Energy World and was reprinted with permission.
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Let’s play Jeopardy. The category is US States. The answer is: “Alabama, Kansas, Mississippi, Missouri, North Dakota, Oklahoma, South Carolina, South Dakota, West Virginia, and Wyoming”.
The correct question is: “What are the most politically conservative states in the US”.
Energy conservation is seen by liberals as politically neutral, but sadly conservatives see it as a liberal issue. It is not about a “lack of awareness”.
The energy efficients are creating tomorrow.
Long live the energy efficients!
Human power is the ultimate in energy efficiency.
I suppose you have to give Alabama an allowance for air conditioning, but I’ve no doubt the general point stands.
I am sure that Alabama has a large % of folks that cannot afford AC.
While efficiency could play a significant part, I would like the AC question by SqueakyRat specifically addressed. I think it will prove huge. I live in a mid-Atlantic state and there’s a major increase in electricity use when AC is needed.
When I lived in Western Mass I didn’t need nor own an AC. In upstate NY we had a window unit in our bedroom that got used maybe 12 days in the entire summer. I know Boston and Chicago can have very hot periods but they’re much shorter than in Alabama.
I doubt there are many people in the south who don’t have at least 1 or 2 window AC’s but they’re not the ones using lots of power anyway. It’s the people with good jobs, big (and yes, poorly insulated) houses, and occupants who want the temperature at 72 when it’s 95 outside – and there are many.
Lastly, many in the south use reverse cycle AC for heating so even in winter they’re using electricity while MA residents are using gas or oil.
It’s not obvious that such differences were addressed in this comparison.
While I wholeheartedly agree, I think the air-conditioning piece is important. My dad always says that he’s CONSERVative. He doesn’t understand how saving money and protecting God’s planet became a liberal concern.
I was raised in Augusta, GA where AC is essential for a large period of the year. Heat is also essential for some parts of the year. During Jan-Feb it gets cold every night(below 50) where some heat was useful. Luckily we had gas heat but we were on the only ones on our block who decided to keep natural gas when a big shake-up happened a few years back.
My family’s from NC and most people I knew in Charlotte had electric heat/cooking though in the west and east had gas or even wood. Spent summers as a teen in Brooklyn and though technically it doesn’t get as hot, heat island effect is mother…not too mention that East Coast humidity.
Now I live in the SF Bay area where I need neither heat or A/C. I have a fan and a heater blanket. Albeit this is in the East Bay but how many places in California really need both a/c in the summer and heat in the winter? And of those how many have huge blocks of communities that are dependent on electric heating and cooking?
…not to mention I would love some data on similar size houses. It’s not just the rich. When I was in Macon, GA after I finished college, I had a 1000 sq ft apt that I paid less than $700 a month utilities(with a cap) included. In Norcal I pay a little less for a 400 sq. ft studio also utilities included.
The southeast is in desperate need of an energy efficiency movement but I think that it needs a different approach. I’ve just started in this field but I’m curious as to what EE experts in that region are doing.
I’m an optomist, the silver lining I see in delaying action is that when these states finally do act the money they do spend will have exponentially more effect, the technology both to save energy and also renewable energy generation have undergone such a dramatic reduction in cost in recent years funded by the early adopters. These laggards will now get to jump on the bandwagon and see the same or even more efficiency gain and renewable generation for many times less cost outlay. As well as the cost benefits they will also benefit from the knowledge acquired by the early adopters.