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Texas Energy Efficiency Resource Standard

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By Terri Williams October 16th, 2019
3 min read
For business

Today, Choose Energy writer Terri Williams begins a two-part series on Texas energy efficiency. Today’s article discusses the Energy Efficiency Resource Standard and how Texas implements it.

The Energy Efficiency Resource Standard could improve energy savings for customers.

In 1999, Texas became the first state to implement an Energy Efficiency Resource Standard (EERS). Texas Senate Bill 7 required electric utilities to offset 10% of load growth through end-use energy efficiency. The bill also deregulated most of the electric utilities serving residents in the state.

Texas is one of 26 states with a mandatory EERS, although it does not apply to both electric and natural gas utilities. Moreover, the EERS does not require electric utilities to achieve more than 1% annual savings each year.

“Energy Efficiency Resource Standards are critical policy levers to take advantage of our cheapest, quickest and easiest tools to meet our energy needs, cut utility bills, and avoid pollution,” says Pat Remick at the Natural Resources Defense Council (NRDC).

“While people realize smarter energy use makes sense, an EERS ensures progress in this critical area,” Remick explains.

An EERS sets energy efficiency goals

Bur exactly what is an EERS? It’s a policy that requires electricity and natural gas utilities to reach certain levels of energy savings for customers. And while Texas was the first state to implement an EERS, it also has some of the lowest targets in the country. In fact, the American Council for an Energy-Efficient Economy (ACEEE) ranked the Lone Star State in last place among states that have an EERS.

Additionally, Texas uses more energy than any other state and, according to the Department of Energy’s state by state assessment of energy efficiency potential, Texas has the potential to save 87.3 million MWh by 2023. This is the largest amount of potential savings of any state.

Texas is making progress towards energy efficiency

To reach the potential projected by the DOE, Texas needs to take more aggressive action in several areas, in addition to increasing EERS goals. However, according to the ACEEE, these are some of the areas in which the state is making progress:

  • Texas LoanSTAR and PACE (Property Assessed Clean Energy) provide loans for energy efficiency investments.
  • The Texas A&M Energy Systems Laboratory (ESL) concentrates on energy-related research, emissions reduction, and energy efficiency. ESL has played a vital role in state energy standards being implemented.
  • Texas Emissions Reduction Program provides a $2,500 rebate to residents who purchase an electric car.
  • Energy building codes: single family residential construction must comply with the 2015 IRC. Other types of residential and commercial building construction may be in compliance with the 2015 IECC.

The ACEEE also notes the following areas that need improvement:

  • Establishing a carbon pricing policy
  • A building energy disclosure policy
  • Policies that encourage efficient transportation systems
  • Tailpipe emission standards
  • Incentivize creation of low-income housing near transit facilities

Adopting the ACEEE’s 2019 State Alliance Standards Recommendations can also save residents money. The organization projects the following savings for the state of Texas – assuming a compliance date of 2021:

  • Air purifiers: 117.7 GWh in electricity by 2025; 235.4 GWh by 2035
  • Computers and computer monitors: 559.2 GWh in electricity by 2025; 702.8 GWh by 2035
  • Faucets: 259.1 GWh in electricity by 2025; 575.7 GWh by 2035
  • Uninterrupted power supplies: 111.9 GWh in electricity by 2025; 151.6 GWh by 2035

A national EERS could provide savings

The ACEEE is also in favor of a national EERS, stating that by 2030, it would save U.S. utility customers almost $150 billion on energy bills and reduce carbon dioxide pollution significantly – comparable to the emissions produced by nearly 50 million cars.

And the NRDC notes two other advantages. Utility bills affect low and middle-class households more acutely than the average household. While the median average bill accounts for 3.5 to 4.4 percent of monthly income, low-income households experience more than 7 percent. In rural low-income households, this number increases to 9 percent.

Another advantage is that the development of energy efficiency produces jobs in construction and retrofits, manufacturing, installation and maintenance.

Coming tomorrow on Choose Energy: We examine the energy efficiency scorecard and where Texas stands on it.

Terri Williams is a freelance journalist with bylines at The Economist, USA Today, Yahoo, the Houston Chronicle, and U.S. News & World Report. Connect with her on Twitter or LinkedIn.