M-RCBG Associate Working Paper No. 17

Unlocking the Power of Energy:
A Comparative Study of Energy Efficiency Portfolio Standards in Illinois and Massachusetts

Mike McMahon

2013

Abstract

Changing the way American citizens, families, and businesses use and conserve electricity and natural gas is an essential component of the nation’s energy future. Creating a more efficient energy system involves public policies that incentivize customers to commit to demand-side technologies and behaviors. Successful policies have the ability to curb the country’s energy usage, drastically reduce carbon emissions, help mitigate the economic effects of volatile fuel prices, create jobs, and reduce energy expenditures for
customers.

Today, a large driver of demand-side energy efficiency policies comes in the form of state-level Energy Efficiency Portfolio Standards (EEPS)—also known as Energy Efficiency Resource Standards (EERS). This report focuses on Illinois and Massachusetts and each state’s experience with its EEPS. Specifically, the report analyzes key components of the widely successful Massachusetts model to inform Illinois policymakers and energy efficiency advocates as they continue to shape the future of their state’s EEPS. Massachusetts, which has been pursing statewide energy efficiency since the 1970s, can provide valuable lessons to Illinois in its more recent statewide commitment.


As Illinois policymakers, utility companies, and members of the Energy Efficiency Stakeholder Advisory Group (SAG) continue to shape the state’s evolving EEPS, they will undoubtedly face important choices that affect utility companies’ ability and incentive to meet ever-increasing savings targets. This report analyzes several questions that Illinois will need to address concerning the future of its EEPS. Specifically, Section I provides an overview of EEPS policies and the rationale for their design and adoption across the country. Next, Section II offers in-depth look at the history and structure of the EEPS in Illinois and Massachusetts. Finally, Section III presents key questions to Illinois policymakers and stakeholders, describes research findings in Illinois, and describes best practices from Massachusetts to help inform these proposed questions.

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