Indiana cost consumers $140M by nixing efficiency program, AEC says

Dive Brief:

A new report from the Applied Economics Clinic (AEC) estimates Indiana's 2014 decision to do away with its energy efficiency requirements cost consumers more than $140 million, slashed electricity savings and reduced job growth in the state.
Researchers said customers of Duke Energy missed out on the largest savings, which would have combined to $54 million from 2015 to 2019.
Indiana became the first state to roll back energy efficiency rules, after the state passed legislation four years ago allowing utilities to set their own targets.

Dive Insight:

Several studies have highlighted the roll back on energy efficiency rules as a missed opportunity for consumers and clean energy policy. The American Council for an Energy Efficient Economy ranked Indiana 40th in the nation last year in terms of energy efficiency, saying the state's energy savings had "declined to below-average levels" since the decision to halt the efficiency mandate.

AEC's analysis, funded by the Citizens Action Coalition of Indiana, is the most recent contribution to a growing autopsy of the state's decision.

The report concludes utilities in the state could have saved an additional 136 GWh from 2015 through 2019. For ratepayers, the programs would have meant millions in steadily-increasing savings: from $16 million in 2015, to an estimated $44 million in 2019.

In total, the report estimates consumers will miss out on $140.1 million in savings.

Job growth was also impacted. AEC says Indiana’s efficiency standards and statewide program delivery resulted in the creation of 19,000 jobs — "and that, since its repeal, job creation has decreased dramatically."

Job creation in 2015 may have slipped by up to 37%, the report says, based on research from the Midwest Energy Efficiency Alliance.

In 2014, an analysis from the Energy Center of Wisconsin showed the energy efficiency program was saving Indiana $3 for every $1 spent on residential efficiency. The following year, an analysis from Good Cents found the program had saved more than 10 million MWh.