Energy Efficiency Reforms Stall in Texas as the Grid Staggers Under Record Demand

The Public Utility Commission of Texas (PUCT) began this year by engaging stakeholders on energy efficiency. The pace was ambitious, but now progress has stalled. Through the Energy Efficiency Implementation Project (EEIP), stakeholders participated in biweekly working groups that ran from January through March culminating in a number of recommendations and best practices for the Commission. But the trail has since run cold; Now as ERCOT, Texas’ primary grid operator, issues rapid-fire notices asking Texans to voluntarily reduce their electricity use to avert a grid emergency, we are left to wonder when the Commission will take up the EEIP’s recommendations and unlock Texas’ full energy efficiency potential. 

Energy efficiency is using less energy to achieve the same result. This is commonly done through a combination of upgraded technology and better building management. For example, an ENERGY STAR-certified dryer will dry your clothes using less energy than a dryer from 1999, and an LED light bulb will illuminate your room using less energy than older models. That’s technology in action to reduce unnecessary energy use. Better building management may look like turning an office building’s air conditioner off Friday evening, then using software to turn it back on remotely before employees return Monday morning rather than cooling the office through the weekend. Better building management empowers businesses to keep employees comfortable while using less energy overall.

Texas’ existing energy efficiency programs fall short of addressing reliability challenges associated with high energy demand. The goals set by these programs, and the budgets to achieve those goals, are simply too small to produce impactful results and the existing programs largely target industrial and commercial energy users despite significant energy demand from residential consumers. The EEIP workshops recommended several best practices to address these issues, including: 

• Focus on the customer by providing tangible value such as energy savings, demand reductions, and increased affordability. 
• Integrate energy efficiency and demand response, an incentive-based program where customers are paid to reduce energy under certain circumstances. 
• Coordinate between ERCOT programs, different market actors, and extend access to underserved customer segments. 

A key theme of the workshops was the need for changes to statutory and regulatory frameworks to support energy efficiency measures. The Texas Advanced Energy Business Alliance (TAEBA), United’s state chapter, provided comments echoing this need and continues to engage the PUCT on energy efficiency reform.

Due to the state’s competitive market, there are strong incentives to build more generation and to shore up more supply. But as demand for electricity breaks records, and as ERCOT calls for voluntary conservation despite more than 98,000 MW of expected supply this summer, it is clear that ensuring reliability requires a two-fold approach: adequate supply and demand reduction. As the saying goes: sometimes less is more. In this case, using less energy supports a more reliable energy system. 

We encourage the Public Utility Commission of Texas to prioritize reforms to Texas’ energy efficiency programs and to continue to make progress on the Energy Efficiency Implementation Project.