Pennsylvania Requires Utilities to Pursue Energy Efficiency

October 22, 2008

Pennsylvania Governor Edward Rendell signed a bill on October 15 that will require utilities to save energy, in part by installing smart meters on every home and business in the state. House Bill 2200 requires utilities to prepare plans for energy efficiency programs that would cut electricity use 1% by 2011 and 3% by 2013. In addition, utilities must prepare plans to cut their peak electricity demands by 4.5% by 2013. The plans will be subject to public review and approval by the Pennsylvania Public Utilities Commission (PUC), and once approved, the electric utilities must meet the energy efficiency targets. Electric utilities that fail to meet the law's requirements will face steep penalties. Additional requirements may be stipulated by the PUC in 2013.

The utilities will be directed to offer customers new pricing plans that reward customers who shift their electricity use to off-peak hours and to equip every home and business in the state with "smart meters" within 15 years. A smart meter gives consumers real-time information, such as the cost of power and whether or not they are in a peak rate period. Armed with this information, consumers can choose to use energy when it is cheapest and cut back at times when it is most expensive. The bill is expected to save the average Pennsylvania household more than 20% on its electricity bill. Those savings are expected to add up to $500 million by 2013. See the governor's press release and the full text of HB 2200.

Pennsylvania landed in 15th place in a recent ranking of states in terms of their energy efficiency programs, but the new legislation should boost its ranking next year. The American Council for an Energy Efficient Economy (ACEEE) issues its "2008 State Energy Efficiency Scorecard" in early October, placing California in the top spot and Wyoming at the bottom. Idaho won kudos as the most improved state since 2006 (when the last scorecard was issued), jumping from 25th place to 13th, and other states showing great improvement include Florida, Maryland, Ohio, Illinois, Louisiana, Arkansas, and Virginia. The scorecard ranks states based on their energy efficiency programs and policies; transportation policies; building energy codes; appliance standards; policies to encourage combined heat and power systems; support for energy efficiency research, development, and deployment; and incentive programs. See the ACEEE press release and full report.