It is evident that corruption has infected energy policy and programs at all levels of American government, and that the state regulation of investor-owned utilities has failed to mandate activities that are in the public interest. While there are multiple examples of this, this paper focuses on energy efficiency programs. This Article proposes a complete redesign of energy efficiency programs to stimulate more useful programs, which need to be a critical part of our response to climate change. Under the framework proposed in this Article, states, not utilities, would administer energy efficiency programs. Each state would establish some type of independent organization–similar to those already in place in four states–that would completely remove the operation of energy efficiency programs from utilities.
In the abstract, energy efficiency programs are good, so it might seem counterintuitive to radically redesign them. They are a bit like “motherhood and apple pie'”–everyone is, ostensibly, for them. But, like much of our energy system, they need to change, and not in minor, incremental ways. They are subject to regulatory capture and political pressure by utilities, which has led to inefficient program designs, execution, and oversight. As a result, the majority of state energy efficiency programs don’t help the people they are designed to (or should) help, and allow utilities to pocket excessive profits while pretending to cut energy consumption.
This Article posits that existing state programs are woefully insufficient. To combat the ills of climate change, we need to do much, much more to decarbonize buildings–and, specifically, to improve building efficiency and the systems they use for heating, cooling, hot water, and cooking. The framework proposed here is a start. State governments need to commit to stringent energy efficiency programs that take utilities out of the picture for program design and administration. These programs should use smart meter data–currently unutilized data already paid for by ratepayers–and should achieve equity goals as well. We have all the pieces for successful, targeted programs-what we need now is action.