Energy Efficiency Key to Reducing Consumption, Cutting Bills, Report Says

But Natural Resources Defense Council and local advocates both argue that more needs to be done

NRDC chart
In many ways, trends in the energy sector are increasingly positive for consumers, according to a new report by one of the nation’s most prominent environmental organizations.

Oil and energy consumption remain well below levels seen a decade ago. Growth in electricity sales continues to decline. The single largest factor contributing to those trends is energy efficiency, the nation’s primary and most inexpensive resource when it comes to meeting energy needs, the Natural Resources Defense Council said in its second annual energy report.

For consumers, the foregoing trends translate into more affordable energy bills, according to the report. It argues that increasing energy efficiency reduces consumption and is contributing more to meeting the nation’s energy needs than any other resource, from oil and coal to natural gas and nuclear power.

“Despite what you may be hearing from a final onslaught of negative campaign ads, the security and affordability of America’s energy services has never been better, and energy efficiency is the most important reason why,’’ said Ralph Cavanaugh, co-director of the NRDC energy program. “However, we can and should do more.’’

The report did not detail trends in the nation’s 50 states, but clean-energy advocates argue that New Jersey’s efforts to promote energy efficiency are lagging behind other states.

A recent study by WalletHub seems to confirm that. New Jersey ranked 24th among the 50 states in terms of home-related energy efficiency. The same study found New Jersey fared even worse on car-related energy efficiency, ranking 40th, in terms of annual vehicle-miles driven and gallons of gasoline consumed.
“When Gov. Chris Christie came in, we were one of the leaders in energy efficiency,’’ said Jeff Tittel, director of New Jersey Sierra Club. With the administration’s decisions to pull out of a regional program to curb greenhouse gas emissions — an effort that funded energy-efficiency projects — and the diversion of $1 billion of ratepayers’ money from clean-energy programs, the state is now lagging behind other states, he said.

In New Jersey, some utilities are embracing efforts to curb energy consumption. Public Service Electric & Gas has filed a petition with the state Board of Public Utilities to invest up to $110 million in programs to help hospitals, government facilities, and nonprofit groups reduce their energy costs.

Nationwide, the picture is a lot more positive, according to the NRDC.

“Efficiency helps America get more work out of less oil, natural gas, and electricity while pushing our economy forward and cutting residential, business and industrial customers’ bills,’’ Cavanaugh said.

For instance, the report noted that increased energy efficiency has led the national growth rate for electricity consumption to drop for an extended period — despite population increase — for the first time in modern history. From 2000 to 2013, electricity use rose by less than 7 percent, with an average growth rate of about 0.5 percent, even as the population grew by about twice that amount.

Although the amount of oil used in the United States rose slightly in 2013 (about.1.5 percent), the total is still down about 12 percent from its 2005 peak, according to the report. Part of that decline is due to new fuel economy and clean-car standards. The federal Environmental Protection Agency projects that the decrease in oil use will continue at least to 2025.

The report also noted that coal use has dropped more than one-fifth from the peak year of 2005. That trend is expected to continue as older, inefficient coal plants are retired because it would be too expensive to meet tough new pollution controls imposed by the federal government.

Increasing uses of renewable energy sources, such as wind and solar power, also have contributed to a more positive energy outlook, according to the report.

Nevertheless, the report warns that there are obstacles to continuing progress in promoting renewable energy and energy efficiency projects, both of which result in reductions in electric utilities’ revenues. Without adequate revenue, utilities might be hard-pressed to maintain the reliability of the power grid, many concede.

To address that problem, the report recommends “revenue decoupling,’’ a policy that would allow utilities to recover the costs of maintaining their systems — even if the volume of sales from energy to customers falls — by other rate adjustments on bills. Many states have adopted such a system; New Jersey has yet to do so.

There is a push in New Jersey to possibly adopt decoupling — advocated in stakeholder meetings held by the Senate Environment and Energy Committee this past summer — but so far no bill has been introduced.