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The Cost of Saving Electricity: A Multi-Program Cost Curve for Programs Funded by U.S. Utility Customers

Author

Listed:
  • Charles A. Goldman

    (Electricity Markets and Policy Department, Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA 94720, USA)

  • Ian Hoffman

    (Electricity Markets and Policy Department, Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA 94720, USA)

  • Sean Murphy

    (Electricity Markets and Policy Department, Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA 94720, USA)

  • Natalie Mims Frick

    (Electricity Markets and Policy Department, Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA 94720, USA)

  • Greg Leventis

    (Electricity Markets and Policy Department, Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA 94720, USA)

  • Lisa Schwartz

    (Electricity Markets and Policy Department, Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA 94720, USA)

Abstract

This study analyzed the cost performance of electricity efficiency programs implemented by 116 investor-owned utilities between 2009 and 2015 in 41 states, representing about three-quarters of the total spending on U.S. efficiency programs. We applied our typology to characterize efficiency programs along several dimensions (market sector, technology, delivery approach, and intervention strategy) and report the costs incurred by utilities and other program administrators to achieve electricity savings as a result of the programs. Such cost performance data can be used to compare relative costs of different types of efficiency programs, evaluate efficiency options alongside other electricity resources, benchmark local efficiency programs against regional and national cost estimates, and assess the costs of meeting state efficiency policies. The savings-weighted average cost of saved electricity for the period was $0.025/kilowatt-hour (kWh). The cost of saved electricity for programs that targeted residential customers was $0.021/kWh, compared to $0.025/kWh for programs for commercial and industrial customers. Ultimately, we developed an aggregate program savings “cost curve” for the actual electricity efficiency resource during the period that provides insights into the relative costs of various types of efficiency programs and the savings contribution of each program type to the efficiency resource at a national level.

Suggested Citation

  • Charles A. Goldman & Ian Hoffman & Sean Murphy & Natalie Mims Frick & Greg Leventis & Lisa Schwartz, 2020. "The Cost of Saving Electricity: A Multi-Program Cost Curve for Programs Funded by U.S. Utility Customers," Energies, MDPI, vol. 13(9), pages 1-19, May.
    • Handle: RePEc:gam:jeners:v:13:y:2020:i:9:p:2369-:d:355960
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    References listed on IDEAS

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    1. Paul L. Joskow & Donald B. Marron, 1992. "What Does a Negawatt Really Cost? Evidence from Utility Conservation Programs," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 41-74.
    2. Hoffman, Ian M. & Goldman, Charles A. & Rybka, Gregory & Leventis, Greg & Schwartz, Lisa & Sanstad, Alan H. & Schiller, Steven, 2017. "Estimating the cost of saving electricity through U.S. utility customer-funded energy efficiency programs," Energy Policy, Elsevier, vol. 104(C), pages 1-12.
    3. Meier, Alan & Rosenfeld, Arthur H. & Wright, Janice, 1982. "Supply curves of conserved energy for California's residential sector," Energy, Elsevier, vol. 7(4), pages 347-358.
    4. Toshi H. Arimura, Shanjun Li, Richard G. Newell, and Karen Palmer, 2012. "Cost-Effectiveness of Electricity Energy Efficiency Programs," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    5. Joseph Eto & Edward Vine & Leslie Shown & Richard Sonnenblick & Chris Payne, 1996. "The Total Cost and Measured Performance of Utility-Sponsored Energy Efficiency Programs," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 31-51.
    6. Hirst, Eric & Goldman, Charles, 1990. "Review of demand-side data needs for least-cost utility planning," Energy, Elsevier, vol. 15(5), pages 403-411.
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    Cited by:

    1. Kang, Heejae & Kim, Yoori & Lee, Jungbae & Baek, Jungho, 2022. "Estimating the cost of saving electricity of energy efficiency programs: A case study of South Korea," Energy Policy, Elsevier, vol. 160(C).
    2. Knight, Patrick & Biewald, Bruce & Takahashi, Kenji, 2022. "The cost of energy efficiency programs: Estimates from utility-reported datasets," Energy, Elsevier, vol. 239(PE).

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