An Evaluation of the Consumer Costs and Benefits of Energy Efficiency Resource Standards Open Access
Of the modern-day policies designed to encourage energy efficiency, one with a significant potential for impact is that of Energy Efficiency Resource Standards (EERS). EERS policies place the responsibility for meeting an efficiency target on the electric and gas utilities, typically setting requirements for annual reductions in electricity generation or gas distribution to customers as a percentage of sales. To meet these requirements, utilities typically implement demand-side management (DSM) programs, which encourage energy efficiency at the customer level through incentives and educational initiatives. In Maryland, a statewide EERS has provided for programs which save a significant amount of energy, but is ultimately falling short in meeting the targets established by the policy.This study evaluates residential DSM programs offered by Pepco, a utility in Maryland, for cost-effectiveness. However, unlike most literature on the topic, analysis focuses on the costs-benefit from the perspective of the consumer, and not the utility. The results of this study are encouraging: the majority of programs analyzed show that the cost of electricity saved, or levelized cost of saved energy (LCSE), is less expensive than the current retail cost of electricity cost in Maryland.A key goal of this study is to establish a metric for evaluating the consumer cost-effectiveness of participation in energy efficiency programs made available by EERS. In doing so, the benefits of these programs can be effectively marketed to customers, with the hope that participation will increase. By increasing consumer awareness and buy-in, the original goals set out through EERS can be realized and the policies can continue to receive support.
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