In an effort to establish targets for energy efficiency -- similar to the existing Renewable Portfolio Standard intended to reverse the pattern of increasing energy use in New York -- the New York State Public Service Commission (PSC) initiated a proceeding to design an electric and natural gas Energy Efficiency Portfolio Standard (EPS).

The commission determined Wednesday that New York possesses sufficient potential energy efficiency resources to reduce electric usage by 15% of projected levels by 2015. The PSC noted these targets cannot be met by commission action alone, or solely by ratepayer funding. Also anticipated are legislative actions to strengthen building codes and raise appliance efficiency standards; Long Island Power Authority and New York Power Authority contributions; and New York City and other municipal and local initiatives.

"Renewing an aggressive energy efficiency program is of critical importance for future state energy policy," said PSC Chairwoman Patricia L. Acampora. "Energy efficiency is likely to be the most cost effective, and most immediate, means to reduce the burden of rising energy and environmental costs for low-income customers, residences, businesses and other institutions. In initiating this proceeding today, our objective is to balance cost impacts, resource diversity and environmental effects by decreasing the state's energy use through increased efficiency."

The commission said New York's electricity consumption is projected to increase approximately 1.3% per year through 2015. At current trends by 2015 electric energy usage in New York is estimated to be 13% higher than current levels. These factors, combined with fuel price and supply uncertainty, and the need to reduce greenhouse gas emissions, make it all the more necessary to carefully review New York's current energy efficiency programs and quickly find the most effective methods to reduce energy use, the PSC said. As a result, the commission instituted an EPS proceeding so that interested parties can work together to meet the state's goal of reducing electric usage by 15% of projected levels by 2015.

The PSC noted that the current portfolio mix of energy efficiency programs encompasses commercial, industrial, residential and low-income customers, research and development and peak load reduction measures. The benefits include:

Projected benefits are expected to significantly exceed costs, the PSC said. The commission's EPS proceeding will initially address end-use efficiency, which can be understood to include performance standards, technology standards and consumer information. This proceeding will consider a range of resources to collectively reduce electricity and gas demand. The proceeding will also investigate methods available to fund efficiency resources. The commission has directed staff to prepare energy efficiency program design proposals with associated benefit and cost analyses to focus the proceeding. The process will also provide opportunities for public input.

The PSC said its EPS proceeding sets in motion the most ambitious program of its kind in the country. Ten states have adopted or are considering energy efficiency portfolio or resource standards. In addition, a number of states now have greenhouse gas emissions reduction programs. Jurisdictions with specific energy efficiency savings targets and timetables either under consideration or in place include California, Connecticut, Hawaii, Illinois, Minnesota, Nevada, New Jersey, New York, Pennsylvania, Rhode Island, Texas, Vermont, New York City, as well as the European Union.

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