Electricity Intensity in the Commercial Sector: Market and Public Program Effects

Publicly-funded energy efficiency programs have grown in number, size, and scope in the past two decades. The focus of many of these programs is the commercial buildings sector, which purchases approximately one-third of all the electricity produced in the United States. Using a fixed effects panel model, this study analyzes commercial sector electricity intensity across 42 states from 1989 to 2001; in aggregate, these states account for between 90 and 95 percent of U.S. commercial sector electricity sales. The analysis separates market effects from public program effects, finding that electric utility demand side management programs were responsible for reducing commercial sector electricity intensity in 2001 by 1.9 percent relative to the 1989 level. Further, rapidly expanding market transformation programs were responsible for reducing electricity intensity in this sector by 5.8 percent relative to the 1989 level. The findings suggest that in 2001 the combined effects of these public programs reduced commercial sector retail electricity sales by 77.1 million MWh, representing about 2.3 percent of total U.S. retail electricity sales.