Energy Efficiency Resource Standards (EERS)

7/7/2020

Computer tablet showing efficiency program.

Updated July 2020

Background

In recent years, states have been actively updating and expanding their Energy Efficiency Resource Standards (EERS), which require utilities to achieve a certain percentage of energy savings based on the amount of electricity or natural gas sold in the state. States have implemented these long-term efficiency goals to decrease electricity and natural gas consumption and promote efficient technologies that reduce pollution associated with energy generation and use. A recent analysis by the American Council for an Energy-Efficient Economy found that in 2017, states with an EERS achieved annual incremental savings of 1.2% of retail electricity sales on average; by comparison, states without an EERS only achieved savings of 0.3%.  

Texas adopted the first EERS standards in 1999 and since then, 27 other states have successfully implemented EERS programs that remain in place today, with Virginia being the most recent. Some of the more recent state revisions to EERS policies include expanding standards to require efficiency targets for natural gas, extending standards to require efficiency targets in future years and establishing mandatory targets to replace voluntary goals. For example, in 2019 Washington for the first time expanded its EERS to include requirements for natural gas utilities and New Mexico enacted legislation requiring that the state set efficiency targets for 2026 through 2030 no later than 2025. During the 2020 session, Virginia enacted comprehensive clean energy legislation establishing statutory utility energy savings requirements for 2022 through 2025 and directing the state corporation commission to establish targets for future years. While most recent state action has targeted updating or expanding EERS policies, a few states—including Florida and Indiana—have enacted policies that effectively eliminate their EERS programs. 

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