For Immediate Release - June 25, 2007

Governor Patrick, Legislative Leaders Set Aggressive Energy Efficiency Goal

Bowles directed to develop plan for meeting all additional electricity demand by energy efficiency, not power generation, within three years

BOSTON - Monday, June 25, 2007 - Governor Deval Patrick has directed Secretary of Energy and Environmental Affairs Ian Bowles to develop, by September 1, a plan to achieve an aggressive energy- and cost-saving goal set by the Governor, House Speaker Salvatore DiMasi and Senate President Therese Murray: meeting all growth in electricity demand by energy efficiency, rather than power generation, within three years.

The policy goal set by the three top state government leaders is intended to address high energy costs and provide environmental benefits at the same time.

"High electricity bills are a problem for our households, businesses, and entire economy," said Governor Patrick. "Reducing our usage through energy efficiency will save money, create jobs, and boost our clean energy economy. I look forward to working with the Senate President and the Speaker to achieve these ambitious conservation goals."

"The Governor, the Senate President, and I are committed to bold action on energy reform and setting this ambitious goal for energy efficiency shows we are willing to do the hard work necessary to make that happen," said Speaker DiMasi, who this spring filed an ambitious energy bill, which is now in committee. "Through our legislation, administrative actions, and private sector creativity, we will together ensure that energy efficiency and renewable energy are front and center in meeting the future energy demands of the Commonwealth."

On Friday, the state Department of Public Utilities launched an inquiry into utility rate redesign, for the purpose of removing regulatory disincentives for electric distribution utilities engaging in ambitious energy conservation measures. By "decoupling" utility distribution rates from the volume of electricity that flows through their wires, utilities can become stronger allies in making efficiency improvements that reduce energy consumption by their customers.

Currently, about one third of annual electricity demand growth is met by improvements in energy efficiency funded through charges on electric bills and administered by the distribution utilities. According to analysis by the Division of Energy Resources for 2003-05, energy efficiency improvements were one-third of the cost of power generation - 3.2 cents per kilowatt-hour for efficiency versus 8.9 cents for power generation.

"We will be looking at ways to unleash the power of energy efficiency and make it compete with generation for our energy dollars," said Secretary Bowles. "The key to meeting the target Governor Patrick and the legislative leadership have set is to capture all energy efficiency that is cheaper than the cost of generation. That will save money on our electric bills, reduce our dependence on fossil fuels, and reduce our need for new power plants."

It is estimated that using energy efficiency to meet all electricity demand growth will save consumers $65 million to $87 million simply due to lower wholesale supply costs. In addition, those customers who install products that use less electricity will reap savings of $1.2 billion over the life of those products. In addition, expanding the market for these services and products will create 3,500 new jobs in sales and installation of energy efficient lighting, air conditioning, household appliances, and industrial motors.

Secretary Bowles will work with legislative leaders, including committee chairs, to incorporate the plan into energy legislation this fall.


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