Energy Efficiency involves using off the shelf technology to reduce energy use. This includes upgrading to more efficient appliances - furnaces, air conditioners, water heaters, smart thermostats, etc. It also involves insulating homes better, installing more efficient windows, and simple things like LED lightbulbs and weatherstripping around doors and windows.
Economic and Environmental Benefits
Energy efficiency is THE least-cost resource, meaning it’s much cheaper to save energy than it is to build and maintain energy generation sources, whether renewables or fossil fuels.
In the utility world, energy efficiency is often called Demand Side Management (DSM) because it targets the customer side of the meter, rather than the supply side (like power plants). Reducing energy use keeps money in customers' pockets! Because of this, energy efficiency is a critical resource to address Indiana’s ongoing crisis of unaffordable utility bills.
Energy efficiency also benefits our environment. Because Indiana is heavily reliant on fossil fuels, reducing energy use also reduces our use of these dirty fuels, benefiting our air and water quality and helping to combat the climate crisis. In addition, strengthening efficiency measures can also reduce our need for “peaker” plants that kick on during times of high energy use, called peak demand.
For years, Indiana utilities used old coal plants to serve peak demand. Today, many utilities use gas plants to serve this same function. For example, CenterPoint Energy plans to raise customer bills to build two gas peaker plants that will only operate less than 5% of the year. Stronger efficiency measures help to reduce the need for these expensive (and dirty) methods of meeting peak demand - saving customers money and helping our environment.
Decades of Energy Efficiency Advocacy
Since our inception in 1974, Citizens Action Coalition has advocated that energy efficiency is the best mechanism to make energy more affordable, improve public health, and protect the quality of our environment. In 2004, the Indiana Utility Regulatory Commission began an investigation into the benefits of DSM. For five years, we worked alongside utility companies, regulators, the OUCC, and other stakeholders to study DSM and develop a strong efficiency program. In 2009, the IURC ordered Indiana utilities to achieve an annual energy savings goal of 2% within 10 years. This was a major step forward for Indiana’s energy policy! To meet these energy savings goals, a state-wide program called Energizing Indiana launched in 2012, offering 5 core programs designed to reduce Indiana’s energy use.
Unfortunately, due to pressure from large industrial energy users and the monopoly utilities, the legislature ended Energizing Indiana in 2014 with SEA340. A final report showed that Energizing Indiana was cost effective and created 19,000 Hoosier jobs. In 2015, the IGA passed SEA412. While this was a major step backwards for Indiana’s energy policy, SEA412 requires utilities to submit energy efficiency plans to the IURC every three years.
Our Work to Strengthen Energy Efficiency Today
CAC intervenes in every 3-year energy efficiency (DSM) plan Indiana’s 5 investor-owned utilities (IOUs) file at the IURC. Although SEA412 allows utilities to dictate their own energy savings goals, we work hard to make sure utility programs are cost effective for consumers and save as much energy as possible.
CAC also engages in DSM oversight boards for each of Indiana’s 5 Investor-owned electric utilities. Oversight board meetings occur monthly for every utility except Indiana Michigan Power, which are quarterly. At these meetings, CAC and other stakeholders like the Office of Utility Consumer Counselor (OUCC) oversee the implementation and evaluation of utility DSM programs. This enables us to see how utility efficiency programs are progressing in between their 3 year DSM filings. We provide feedback and guidance in an effort to ensure efficiency programs are as effective as possible.
Low-Income Weatherization
Reducing monthly utility bills through energy efficiency can be a tremendous help for folks struggling to make ends meet, as lower utility bills free up resources for other essential needs. The federally funded Weatherization Assistance Program provides energy efficiency upgrades to low-income households, playing a vital role in lowering energy use and utility bills for vulnerable residents.
In Indiana, Community Action Agencies administer the Weatherization Assistance Program. Unfortunately, many households that are eligible to participate are unable to receive weatherization services due to significant home repair needs, health or safety concerns, or exceedingly high repair costs. In these instances, Community Action Agencies are unable to weatherize homes due to mold or structural problems.
CAC works to address this issue whenever possible, especially during rate case settlement negotiations. We work to increase health and safety funding for weatherization programs so that Community Action Agencies are able to help homes facing health or safety issues like structural damage or mold. This not only enables more low-income households to receive weatherization services, but also helps more people live in safe and healthy homes.