Finding the Right Mix for Energy Efficiency in Maryland

In pursuit of the Holy Grail of energy efficiency, regulators, utilities and policy advocates have struggled to assemble the most effective strategy.  Finding the right combination and timing of costs and benefits while respecting societal norms of equity, environmental concern and economic burden-sharing is far from easy.

It’s important to remember that there are many different tools in the energy efficiency toolbox.  These tools can be used together or separately.  Maryland is currently trying them all.

Demand-Side Management (DSM): DSM programs assist homeowners and businesses to acquire more energy efficient equipment and renovations.  These efforts can be funded by utility ratepayers or taxpayers.  Maryland utilities mostly abandoned their DSM programs after deregulation in 1999.  A second wave of DSM — the EmPower Maryland initiative — aims to cut per capita energy use by fifteen percent by 2015.

Education: Governments, utilities and retailers can all provide information to consumers about more efficient equipment and practices.  Education is an important component of EmPower Maryland.

Standards: Government has an important role to play in setting energy efficiency standards for new equipment and buildings.  Suppliers lack the right incentives to improve standards on their own but can collaborate with government to find standards they can all implement together.  Learn more about Maryland’s appliance efficiency standards.

Utility Decoupling: Whether as traditional integrated power companies or restructured distribution providers, utilities have a built-in incentive to sell more power to increase their revenues.  This approach aims to break the rigid connection between distribution revenues and the amount of power sold, freeing distribution utilities to take a more active role in energy efficiency.  The Public Service Commission approved decoupling in 2007, making Maryland the fourth state to do so.

Research, Development and Deployment: The federal government takes the lead in supporting investment in basic research, technology development and market-scale deployment of more energy-efficient products.  The U.S. Department of Energy has a major effort under way to guide development of solid-state lighting.  Maryland has also made grants to support research on SSL.

Electricity Pricing Strategies: Coming with the installation of Smart Meters will be new rate structures designed to encourage consumers to reduce peak usage.  In Maryland and the District of Columbia, regulators continue to raise questions about the design of these new rate plans.

Today, Maryland is a leader in energy efficiency.  Will these efforts pay off for businesses and homeowners?  Only time will tell.

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