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Download MD-PIRG-EE-scorecard-web-version.pdf - Frontier Group

Download MD-PIRG-EE-scorecard-web-version.pdf - Frontier Group

The High Cost ofEnergy

The High Cost ofEnergy Efficiency ShortfallsWhile the EmPOWER Marylandprogram has already deliveredsignificant benefits to the state,historic and projected shortfalls indicatethat the state is not taking advantage of itsfull potential for energy efficiency. Marylanders,therefore, are missing out on manyof the benefits EmPOWER Maryland wasdesigned to deliver.could save consumers up to $288 million,assuming that the efficiency savings arespread out evenly across the lifetime ofthe efficiency measures. 23 With strong,ongoing efficiency programs to cut consumption,consumers could save evenmore on an annual basis.Consumers Will Spend Moreon PowerAchieving EmPOWER Maryland goalsfor electricity savings would reduce theamount of electricity required to powerMaryland’s homes and business, resultingin lower rates of consumption and savingson electricity expenses. Because ofpotential shortfalls in electricity savingsfrom utility programs, consumers willuse an extra 3.9 million MWh of electricityin 2015, which will costs ratepayersaround $468 million. 22 (See Table 1.)However, investing in energy efficiencyto avoid producing 3.9 million MWhFewer Jobs Will Be CreatedEnergy efficiency creates jobs in two ways:directly and indirectly.Jobs can be created through new employmentopportunities in the energyefficiency sector. Workers are needed toimprove insulation and sealing of homes;skilled architects, engineers, and buildersare required to perform energy-efficientnew construction and remodeling; andtrained manufacturing workers are neededto build energy-efficient appliances. In2008, the American Council for an EnergyEfficiency Economy estimated that meetingthe goals of EmPOWER Marylandwould create an estimated 12,000 new jobsby 2015 and add $462 million in wages. 24The High Cost of Energy Efficiency Shortfalls 15

That level of employment is equivalent tothat created by 100 small-sized manufacturingfirms relocating to the state. 25Energy efficiency can also create jobsindirectly by giving people extra moneyto spend, stimulating Maryland’s economy.Because energy efficiency lowers electricitybills, Marylanders could reduce the amountof money they spend to import electricityevery year (about $1.8 billion) and insteadspend it on in-state goods and services. 26Maryland will only be able to capitalizeon all of the economic and job-creationbenefits projected under EmPOWERMaryland if it improves its progress towardthe EmPOWER Maryland goals.For example, an energy savings shortfallof nearly 52 percent in 2015 could meanthat the state would miss out on more than4,100 new jobs. 27Future Demand IncreasesCan Jeopardize SystemReliabilityA key factor that shapes decisions aboutMaryland’s electric infrastructure is theamount of power needed to keep the lightson during periods of peak demand. Thedemand for electricity varies widely overthe course of the year and the course ofany given day. Demand for power on ahot summer day when air conditioners arerunning can be two to three times as greatas in the middle of the night during a timeof moderate temperatures. Even thoughperiods of peak demand represent a tinyfraction of the time the electrical systemmust function, millions of dollars of infrastructuremust be in place to ensure reliableelectricity service during those times.Since the recession in 2008, Marylandhas experienced a significant drop in electricityconsumption, reducing pressureon the state’s power system. 28 However, aselectricity demand increases as the economyrecovers, Maryland may again need toaddress system reliability questions. Beforethe recession, the U.S. Department ofEnergy labeled parts of Maryland’s powergrid—such as the Baltimore/Washingtonmetropolitan area and the Delmarva Peninsula—“criticalcongestion areas,” wheretransmission lines were overcrowded andnearing inadequacy. 29 Proposed solutionsto this problem included multistatetransmission lines or a new nuclear powerplant that were projected to cost anywherefrom $1.8 billion to $9 billion. 30 Meetingthe EmPOWER Maryland goals wouldreduce or eliminate the need for expensiveinfrastructure upgrades paid for by allconsumers.Fortunately, Maryland’s utilities havebeen more successful at achieving reductionsin peak demand than they have atachieving electricity savings. In fact, BGEhas already met its 2011 goal and willlikely surpass its 2015 goal if it continuesto achieve progress comparable to 2010.But other utilities aren’t doing as well asBGE, 31 and if they do not collectively increasereductions in peak demand over thenext five years, Maryland could need anadditional 739 MW of generating capacitypower by 2015, which is roughly equivalentto building a new, coal-fired power plant. 32(See Table 2).Public Health and theEnvironment SufferEnergy efficiency could help the stateavoid many of the worst environmental andhealth impacts associated with the generationof electricity—including the emissionof harmful air pollutants that cause asthmaand other respiratory diseases. Unfortunately,every missed opportunity to save16 Falling Behind on Energy Efficiency

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