With Ohio and Indiana having recently made major changes to their utility energy efficiency policy, and other states like Florida and Arizona considering it, this is an important time to review the evidence about the relative effectiveness of state policies designed to encourage cost-effective energy efficiency. States have embraced energy efficiency policies because the energy savings result in lower customer energy bills, investments in the local economy, improved reliability, and reduced emissions. But not all efficiency policies are equally effective at delivering results, so let's take a closer look at two commonly touted policies for achieving energy efficiency as a utility system resource: integrated resource planning (IRP) and energy efficiency resource standards (EERS).

ACEEE has examined the relationship between these two widely utilized state energy efficiency policies and their outcomes on efficiency. The two key indicators we used to measure performance are spending on energy efficiency programs ($ as a percent of utility revenues) and annual electricity savings achieved (kWh as a percent of annual sales). We drew upon data on customer-funded energy efficiency programs from the recently released ACEEE State Energy Efficiency Scorecard and supplemented that data with information from Synapse and the Regulatory Assistance Project (RAP), and Pamela Morgan.

It is important to note that every state has a unique mix of circumstances and traditions, as well as a mix of particular individuals in leadership positions at utilities and state government. These factors influence the performance of energy efficiency policies in any particular state. Nevertheless, we believe it is instructive to look at how patterns of performance vary across many states under different policy conditions. These results will be presented and discussed in more detail in a report to be released early next year, but here are our top-line observations...