Assessment of the Feasible and Achievable Levels of Electricity Savings from Investor Owned Utilities in Texas

Executive Summary

This study presents the results of research undertaken by Itron to estimate energy efficiency potential in Texas and to respond to the Texas Legislature’s questions regarding energy efficiency goals and policies. The analysis was funded by the Public Utility Commission of Texas (PUCT) to estimate the technical, economic, and achievable energy efficiency potential for the state of Texas and for individual Texas utilities. Itron was also tasked with using the estimates of achievable potential to assess the reasonableness of the newly set energy saving goals for 2010 and 2015. Given the findings from the analysis, Itron was asked to recommend any policy changes necessary to increase the level of energy savings being achieved in Texas.

The study gathered and analyzed utility, ERCOT, and market data on energy and peak consumption, utility-reported program savings, baseline equipment characteristics, energy efficiency measure costs and savings, and the market penetration of energy efficiency measures. The study also included interviews with stakeholders in the Texas energy services market. Using the primary data collected in Texas and our previous experience estimating and evaluating energy efficiency program impacts, Itron analyzed the remaining technical, economic and achievable energy efficiency savings potential in Texas and for individual utilities. Based on this analysis, we conclude that the goals proposed by the legislature for 2015 can be achieved by the majority of investor-owned electric utilities (IOU) as long as certain restrictions to the IOUs current ability to expand and market their existing and expanded future energy efficiency programs are removed or mitigated. However, some utilities will face substantially more difficulty than others in meeting the legislature’s preliminary energy savings goals due to the development of goals based on a percentage of incremental load growth rather than goals based on other metrics, for example, total system demand or electricity consumption. Our analysis also suggests that the Legislature may want to consider delaying adoption of the initial proposed energy and peak savings goals from 2010 to 2012 to allow utilities sufficient time to ramp up their programs, better enabling them to achieve the new energy and peak demand savings goals.

In the following summary, we first review the results of the quantitative analysis and then provide answers to the qualitative questions raised by the legislature.